The number one question that businesses are asking about the pandemic is when it will end. No one has an answer. No one is even speculating about it. Hopes of a vaccine are on the rise, but again, there is no set time for inoculations to begin. Beyond this big question, there are numerous other questions that business owners face now and need to address.
Here’s a rundown of some business questions to address, with what’s known to date.
|Q: I received a PPP loan. Can I deduct the wages, rent, utilities, and other costs covered by the loan forgiveness?|
|A: The IRS ruled that any expenses covered by loan forgiveness are not deductible. However, there is a push in Congress to change this, so stay tuned.|
|Q: I reopened my store and notified an employee who’d been furloughed that her job is now available. She doesn’t want to return because she doesn’t feel safe. Does her refusal to work impact may state unemployment tax payments?|
|A: Each state has its own rules on whether a refusal of an offer to work disqualifies an individual from continuing to receive unemployment benefits. Some states, such as Iowa, Oklahoma, and Tennessee, have already said this is “potentially” grounds for disqualification. Other states have yet to weigh in. Usually, decisions are made on a case-by-case basis. Check with your state unemployment department for details; here’s a DOL link to contact information in all states.|
|Q: Will my employees who’ve been working from home want to continue the arrangement?|
|A: The new acronym is WFH (working from home). Many large corporations, such as Facebook and other tech companies, are planning continued work-from-home arrangements for anyone who believes the arrangement increases productivity. But many small businesses haven’t defined their policies. Some are waiting until schools notify parents whether they’re reopening and parents are deciding on childcare arrangements. For those without children, WFH may be a preferred option. If the nature of your business lends itself to remote workers, why not poll your employees to learn their preference and then craft your company policy accordingly. Harvard Business Review has an article on developing a long-term remote work policy.|
|Q: My landlord has been kind enough to not hound me for the rent for the past 3 months. What does this mean taxwise?|
|A: This action by your landlord certainly helps with cash flow. From a tax perspective, you cannot deduct the rent until you pay it. Be sure to understand whether the landlord has postponed your payments or waived them entirely. Some landlords have reduced rents for a certain period. Remember that rent expenses are covered by PPP loans.|
|Q: I got a PPP loan but it’s just not enough. Is there another program I can use for help?|
|A: Congress is considering other incentives for small businesses, including new PPP loans. Also, many state and local governments have special loans and grant programs to help small businesses. Check in your area for potential assistance.|
|Q: My debts are overwhelming now. Should I file for bankruptcy?|
|A: There’s no easy answer. Bankruptcy is a legal process that stops creditor collection activities until things get settled. One bankruptcy option is to reorganize so you can continue the business. The other is to wind up your affairs and go out of business. Special bankruptcy rules apply to sole proprietors, who are treated as individuals, not businesses. Decide whether you think the business is viable enough to continue once debts are settled. Meet with a bankruptcy attorney to help make a final decision and move forward.|
Because there are so many unanswered questions, it’s very challenging for small business owners to move forward. But, as a group, small business owners are creative, determined, and have perseverance. Remember:
“The elevator to success is out of order. You’ll have to use the stairs, one step at a time.” -- Joe Girard, an American salesman extraordinaire