Find out how an act of CARE is translated into a USD 2.2 trillion economic stimulus package in the US! [Fridays: Mindfulness by Miles]
Miles Everson’s Business Builder Daily speaks to the heart of what great marketers, business leaders, and other professionals need to succeed in advertising, communications, managing their investments, career strategy, and more.
A Note from Miles Everson:
Each Friday, I am sharing my insights and advice on a topic or event that I find useful in my everyday business life and personal life. My hope is that my own experiences and personal interests can also help you in your own endeavors.
This week in particular, I’ll be talking about one of the webinars our firm conducted in April 2020. I had the honor of speaking in this event together with Gene Zaino, the Founder of MBO Partners.
You may listen to the recording of the webinar here.
I also encourage you to continue reading today’s article. Here, I’m highlighting what the CARES Act means for independent professionals and small business owners in the US amid the COVID-19 pandemic.
CEO, MBO Partners
Chairman of the Advisory Board, The I Institute
Mindfulness by Miles
The COVID-19 pandemic has shaken up every aspect of society. From families to industries, millions of people have been affected by the challenges and impacts brought by the virus.
… and just when the world is slowly opening up and recovering after experiencing two years of lockdowns, travel restrictions, and other devastations, a new virus has emerged:
The Monkeypox Virus.
While the World Health Organization (WHO) is yet to know more about this new health concern, the current spreading of the virus in 30 countries causes fear and alarm. Once again, the public is pondering the “what ifs” and the possible impacts of the new virus on their jobs, welfare, economy, etc.
Do news like these make you wonder what governments are doing to address these kinds of concerns in their countries and give aid to their most affected citizens?
Let’s take a look at what the US government is doing to show that it CARES for its people…
Photo from Berkeley Law
On March 27, 2020, former US President Donald Trump signed into law the CARES (Coronavirus Aid, Relief, and Economic Security) Act, a USD 2.2 trillion economic stimulus package that aims to help bolster the US economy amid the COVID-19 pandemic.
The new law covers a broad cross-section of the US economy, including the freelance sector. Additionally, this relief package gives jobless workers bigger unemployment checks over a longer period of time.
So… what does the CARES Act mean for the 41 million workers in America that consider themselves self-employed, freelancers, or independent workers?
Miles Everson, CEO of MBO Partners, and Gene Zaino, Founder of MBO Partners, talked about these benefits in a webinar they conducted on April 1, 2020.
The CARES Act: What It Means for Independent Workers, Self-Employed Professionals, and Freelancers
According to Everson and Zaino, determining the benefits of this new legislation may be difficult to understand and incorporate into a business. That’s why in their webinar, they discussed how the economic stimulus package can provide liquidity to Americans and aid the economy through provision of benefits, loans, grants, and deferred payments.
The discussion also covered:
- The qualification criteria for independent contractors based on their current work status
- The qualification criteria for self-employed professionals based on historical payroll
- How to file an actual tax return based on previous years
- How the CARES Act affects the new business models of multiple companies
Here are some of the CARES Act provisions that Everson and Zaino highlighted in their webinar:
- Direct Payroll Relief
Through the CARES Act, all individuals, whether employed or unemployed, are entitled to receive recovery checks of USD 1,200. This amount will increase by USD 500 for every child in the household.
These checks are based on a person’s 2019 tax returns (if filed). If not, the amount will be based on his/her 2018 tax returns. The rebate amount is reduced by USD 5 for each USD 100 that a taxpayer’s income exceeds the phase-out threshold.
Meanwhile, the amount of the recovery check is phased-out for incomes exceeding USD 99,000 (for single filers), USD 136,500 (for head of household filers), and USD 198,000 (for joint filers).
- Retirement Account Penalty Reduction
If workers need to withdraw their retirement savings, their penalties will be reduced for the meantime. The 10% early withdrawal penalty for distributions up to USD 100,000 from qualified retirement accounts will be waived.
Incomes attributable to such distributions will be subject to tax for 3 years. Additionally, the provision provides flexibility for loans from certain retirement plans for coronavirus-related relief.
- Expanded Unemployment Benefits
Unemployment benefits under the CARES Act are expanded for all types of workers. Specifically, a USD 600 payment per week is added to each recipient of the Pandemic Unemployment Assistance for up to 3 months.
Unemployment insurance is also extended by 13 weeks and includes a 4-month enhancement of benefits to allow workers to maintain their full salaries despite being forced out of work due to the pandemic.
- Individual Tax Deferral
The CARES Act defers tax deadlines for individuals and other pass-through entities like sole proprietorships from April 15 to July 15 of every year, as long as there’s a pandemic. This includes payment of quarterly taxes.
Pass-through entities may also take advantage of the Net Operating Loss (NOL) provisions outlined for corporate entities.
- Corporate Tax Deferral
Aside from individual tax deferrals, the CARES Act also provides 5-year NOL carrybacks for tax years 2018, 2019, and 2020.
Corporations may also defer paying the employer portion of certain payroll taxes through the end of 2020, and the amount may be paid in equal installments—the first half of the payment at the end of 2021 and the second half of the payment at the end of 2022.
This provision is not available for those who use the SBA 7(a) loans designated for payroll. Payroll taxes that can be deferred include the employer portion of FICA (Federal Insurance Contributions Act) and the half of SECA (Self-Employed Contributions Act) tax liability.
- Small Business Administration Loans and Grants
The CARES Act also includes provisions for USD 350 billion of federally guaranteed loans offered through the Small Business Administration (SBA).
According to the legislation, while these loans are structured for small businesses that pledge to keep their workers, these loans are also applicable for sole proprietors, independent contractors, and other self-employed individuals.
To indicate eligibility, workers must submit the required documents, including payroll tax filings reported to the IRS (Internal Revenue Service), 1099s, income reports, and expense reports.
As leaders of an organization that focuses on guiding, supporting, and advocating for the rights of independent professionals, Everson and Zaino say it’s important for them to explain what the new legislation means for this specific workforce.
They believe this law will go a long way in helping independents, corporate leaders, and small business owners figure out how to get their arms around the largest relief program in US history.
In fact, MBO Partners has set up a new web page dedicated to explaining the CARES Act. It’s called, “caresforindependents.com.” Check it out!
Here, the company offers great information in an easy-to-understand-and-share format, including calculators and functionalities to help site visitors determine if they qualify for a specific relief package.
MBO Partners also makes sure to update the web page as soon as new information about the CARES Act becomes available.
Through this, Everson, Zaino, and their entire team help workers gain the freedom and control to do the work they love without being bogged down by the “what ifs” of living and working amid a health crisis.
We hope you find today’s topic interesting and useful!
(This article is from The Business Builder Daily, a newsletter by The I Institute in collaboration with MBO Partners.)
About The Dynamic Marketing Communiqué’s
“Fridays: Mindfulness by Miles”
High-performance businesses are run by people who think and act differently.
In other words, these are people who are high-performing individuals.
Companies and individuals of this kind have found ways to escape the grind of commoditization and competition by focusing on the RIGHT goals.
High-performing businesses and individuals are also “return driven” businesses and “career driven” individuals. They conscientiously develop unique capabilities and resources that allow them to deliver offerings in ways no other firm or individual can.
Every Friday, we’ll publish tips and insights from MBO Partners and The I Institute’s “The Business Builder Daily” newsletter.
These will help you gain knowledge on the things that Miles Everson, the CEO of MBO Partners, often talks about regarding the future of the workforce.
We’ll also highlight other mindfulness advice on how you can be a high-performing individual both in your career and personal life.
Hope you’ve found this week’s insight interesting and helpful.
Stay tuned for next Friday’s “Mindfulness by Miles!”
Head of Marketing
Valens Dynamic Marketing Capabilities
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