Debunking The Top ERC Myths

There's a lot of lies flying out around there about ERC...

I decided to put together a quick list of the common misconceptions & their truths.

Hope This Helps!

MYTH: A business that has already received Paycheck Protection Program (PPP) loans or had its PPP Loans forgiven, cannot claim ERC.

TRUTH: Businesses can utilize both programs! This limitation was removed in the Consolidated Appropriations Act (CAA) of 2021.

‍MYTH: A business did not have a drop in gross receipts of 50% or more and is therefore not eligible for ERC.

TRUTH: The (CAA) reduced the qualification from 50% to 20% for the first three quarters of 2021. ‍
 

MYTH: A business did not shut down during the pandemic, so it is not eligible for ERC.

TRUTH: A business impacted by a partial shutdown, disruption to supply chain, vendor, or business operations, limited hours and capacity or had restricted access to equipment or experienced a significant decline in revenue, may still qualify for ERC.
 

MYTH: A business was deemed essential, so it does not qualify.

TRUTH: A business that experienced an impact or change to operations or a decline in revenue may still qualify for ERC.

MYTH: A business must have fewer than 500 employees in order to be eligible for ERC.

TRUTH: A business’s employee count restriction is based on full-time equivalent (FTE) employees, rather than everyone in the workplace.

MYTH: A business had increased sales during the pandemic, so the business is not eligible for ERC.

TRUTH: Although a business has grown, it may still be eligible if it was impacted by a full or partial suspension of operations due to a governmental restriction.

MYTH: A business' sales rebounded in Q1 of 2021, so it is not eligible for ERC.

TRUTH: The (CAA) allows a business to determine its eligibility based on lost revenue in 2020 quarters or a suspension in operations.

MYTH: A not-for-profit cannot claim ERC.

TRUTH: Non-profit organizations such as non profit hospitals, churches, museums, etc. are eligible for ERC.

MYTH: The Employment Retention Credit Ended. It’s Too Late to Take Advantage

TRUTH: As long as the statute of limitations remains open, which is three years from the date of filing, you can still apply for ERC.

Best,

Doug

Affiliate, iHub Global

ERCfileNow.com

407-244-0972

PS: If you want to speak with me directly about your ERC refund, book a time here 

https://meetings.hubspot.com/dougmyrick

2023 Retirement Changes to Know About

Planning for retirement is one of the most important financial tasks most Americans have to consider. Almost no one wants to work forever, but those who fail to plan adequately for their retirement will find themselves either working into their golden years or unable to afford the type of life they want as they grow old. While the basics of retirement are fairly simple — save money, invest it wisely, withdraw it strategically — there are a lot of moving parts retirement savers have to be aware of. To make things more complicated, there are frequent changes that you have to be aware of to make sure you’re getting the most out of your retirement plan. Here are five changes to the retirement landscape that you should be aware of in 2023.

Retirement Change 1: New 401(k) Limits

Workplace retirement plans like 401(k) accounts are the most popular ways for Americans to save. If you have access to one, it’s a very convenient way to put aside money for your later years. You decide a percentage of each paycheck to put into an account tax-free, and invest in a menu of options; later, you take the money in dispersals once you’ve retired, paying taxes on it as regular income at that time.

There are limits, though, to how much money you can put aside each year. The limit is adjusted each year. In 2022, the limit was $20,500; for 2023, that goes up to $22,500. Furthermore, those 50 and older can make special catch-up contributions over the total. In 2022 the catch-up amount was $6,500. In 2023 it will be $7,500, meaning those 50 and older can contribute a total of $30,000.

Retirement Change 2: IRA Limits

If you don’t have access to a workplace retirement plan, an individual retirement plan is another good option. You lose some of the benefits, such as the possibility of having your employer match contributions, but an IRA is still a good option if you don’t have a workplace retirement plan.

An IRA works similarly to a 401(k), except you open it by yourself with no involvement from your employer. The limit for IRA contributions in 2022 was $6,000, which goes up to $6,500 in 2022. The catch-up contribution total remains $1,000.

Retirement Change 3: IRA Income Phase-Out Range

Americans who make a certain amount of money start to see their IRA contribution limits go down, if they are otherwise covered by a workplace plan.

For traditional IRAs, the phaseout range for 2023 starts at $73,000 and ends at $83,000 for single taxpayers covered by a workplace retirement plan — meaning that single filers who earn more than $83,000 in 2023 cannot contribute to an IRA if they are covered by a workplace plan. In 2022, the range was $68,000 to $78,000.

For married couples filing jointly in 2023, the IRA phaseout range is $116,000 to $136,000 if the spouse making the contribution is covered by a workplace plan. In 2022 this range was $109,000 to $129,000.

If one spouse does not have a workplace plan but the other does, the spouse who does not have a plan has a 2023 phase-out range of $218,000 to $228,000. That range was $204,000 to $214,000 in 2022.

A married individual filing a separate return who is covered by a workplace plan has a phaseout range of $0 to $10,000, unaffected by annual adjustments.

Note that these limits only apply to savers with access to a workplace retirement plan.

Retirement Change 4: Roth IRA Income Phase-Out Range

Roth IRAs operate similarly to traditional IRAs, but money is put in after taxes and no taxes are applied when money is withdrawn in retirement.

For singles and heads of household, the 2023 phaseout range is $138,000 to $153,000 — up from $129,000 to $144,000 in 2022.

For married couples filing jointly, the 2023 range is $218,000 to $228,000. In 2022 it was $204,000 to $214,000.

For married couples filing separately the phase-out range remains $0 to $10,000.

Retirement Change 5: Social Security Changes

While Social Security is not generally going to be enough for anyone to retire on alone, it is an important part of many retirement plans. Social Security payments are also set to increase in 2023.

The cost-of-living adjustment (COLA) for Social Security payments in 2023 is 8.7%. On average, Social Security payments will go up by $140 starting in January.

Claiming an Employee Retention Credit in 2022

Small businesses can still claim an employee retention credit on their 2022 tax returns. In fact, you can file until 2024, for 2020 credits.

Here's what you need to know:

• You can still claim an employee retention credit if you own a small business and had to partially or fully close because of COVID-19
• Your business can claim a maximum credit of 50% of the wages paid to staff in 2020 and 70% in 2021
• However, they must be permanent, full-time employees on the payroll, which excludes suppliers and contractors
• The tax credit is deducted from the taxes you owe as a business and is refundable

• You can still claim an employee retention credit (ERC) if you own a small business and had to partially or fully close because of COVID-19. If you haven’t filed for this credit yet but want to relieve your financial burden for 2022, there’s still a window to save.

  Your business can claim a maximum credit of 50% of the wages paid to staff in 2020 and 70% in 2021.  However, they must be permanent, full-time employees on the payroll, which excludes suppliers and contractors.

  The tax credit is deducted from the taxes you owe as a business and is refundable. Here’s what we know about the current deadlines for ERC, eligibility, and whether we’ll see this tax credit again in the near future.

  Is it too late for me to claim the employee retention credit?  

  It is still possible for you to claim the ERC because the original program allowed businesses to claim this credit for 3 years. This means you can claim 2020 expenses until April 15, 2024, and 2021 expenses by April 15, 2025.

  There is one exception: recovery startup businesses had a January 1, 2022, deadline under the Infrastructure Investment and Jobs Act.

  Given the rapidly approaching deadline, it may be a good idea to get a jump-start on tax season with your tax professional to ensure that filing for the credit makes sense for your business.

  Am I eligible for the employee retention credit?

  Before you apply for an employee retention credit, you must check whether you are an eligible employer.

  Eligible businesses are defined as:

  1. Your business needed to be partially or fully non-operational because of the COVID-19 pandemic.
  2. Your business experienced a decline in gross receipts. This is often referred to has the “gross receipts test” and it’s critical for determining your ERC eligibility. The 1st day of the 1st 2020 calendar quarter is marked as the beginning of the decline in gross receipts, which there are 50% less than in the same period during 2019. The decline then ends in the following calendar quarter, and here the receipts needed to be more than 80% of the previous calendar quarter in 2019. The same applies to gross receipts drops for your 2021 return.
  3. Another qualification is your supply chain and vendors were affected by the pandemic, meaning production and productivity were heavily slowed down.
  4. You were unable to offer the same number of services or products as you used to.
  5. Another qualification is that you could not visit your clients on-site due to the restrictions imposed by government order.
  6. You could not travel for business because of the restricted by government order.
  7. Business operating hours were heavily affected during either 2020 or 2021.

  It’s important to note that having experienced a lockdown is not a marker of ERC eligibility. Business operations must have been affected by a government order.

  What wages qualify for the employee retention credit? 

  Your business or organization size is what will determine the wages that qualify for the credit. For instance, if your business had more than 100 permanent employees during the 2020 period, qualified wages can be as high as $10,000 for each employee laid off.

  In 2021, the employee count was expanded to 500 employees or less. And you can earn up to 70% of wages. With that said, the amount will include only what you would pay the employee during the last 30 days before business closure. This includes both salaries and healthcare costs.

  There are some exceptions to consider:

  • If you are an employer that is currently a loan recipient of the Paycheck Protection Program provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you will not be eligible. If you have been granted a tax credit for paid sick leave under the Families First Coronavirus Response Act, you are no longer eligible for ERC. This also applies to employees that receive a Work Opportunity Tax Credit under section 51 of the Internal Revenue Code.

  What does the application process entail? 

  The employee retention tax credit must be filed through Form 941-X. This is a quarterly form that should be submitted the month after a each fiscal quarter. However, you can add this form as an amendment for underreporting or overreporting estimates based on the credit with your annual federal returns.

  If you’re eligible, there are 3 simple steps to apply the tax credit to your 2022 taxes:

  Collect your payroll data

  Because the ERC caters to full-time employees, you must collect your payroll data.

  Information you need includes:

  1. Current eligible employees who qualify for the ERC
  2. Those who left the company and details regarding when they left to determine whether it was during the COVID-19 pandemic
  3. Collect all PPP loan papers, which include the date that the loan was given and the amount. You cannot use the same wages listed under the PPP loans. However, the loan does not disqualify you from claiming an RTC.

  Compile the 2019 full-time employee information

  Having collected the payroll data, you’ll have to gather information on all the full-time workers that worked 20 hours per week in 2019. Information you need regarding the employees includes:

  1. Workplace name and address
  2. When your employee started and last worked for the company

  Collect 2019 and 2020 sales and revenue

  The employee retention credit requires money from sales collected from 2019 to 2020. Remember that your net income, loss, and the number of permanent employees determine the amount of credit computation.

  IT’S ESSENTIAL TO ENSURE THAT YOU COLLECT AS MUCH ACCURATE INFORMATION AS POSSIBLE TO BENEFIT THE MOST FROM THE ERC.

  It’s essential to ensure that you collect as much accurate information as possible to benefit the most from the ERC.

  How do I calculate the ERC amount that will be granted? 

  The total qualified wages and health plan expenses paid for each employee amount to the ERC granted.

  ERC for 2020 = 50% of 2020 qualified wages

  ERC for 2021 =70% of 2021 qualified wages.

  Currently, the maximum credit amount in the year 2021 is $10,000 in 1 quarter. In addition, wages used for PPP loan forgiveness are not eligible.

  Will the ERC be reinstated?

  The ERC may be making a comeback with the Employee Retention Tax Credit Reinstatement Act — H.R.6161. A bipartisan group of congressional representatives has introduced this act, sponsored by Senator Margaret Wood Hassan.

  But the draft is still in its early stages. The proposed bill still needs to pass the Senate, House, and the President.

  If this bill passes, eligible businesses may be able to continue to claim an ERC refund on their 2023 taxes or later.

• - Doug Myrick

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Hay! What About Horses?

New farm or ranch venture? People are buying farmland left and right, no two properties are the same. Fire and theft are the largest threats to horse safety. Some best risk management practices to keeping equine animals safe:

No smoking. Barns are full of flammable material, so make sure a non-smoking policy is in place for your barn areas and that cobwebs and dung piles are frequently removed.

Fire extinguisher. Have one, or several, onsite and stored properly. Easy enough.

Varied timetables. To thwart off thieves, visit the stable at different times and mix up your schedule; make the yard constantly look busy.

Security lights. Use sensor-operated lights on the grounds to make intruders more visible.

Burglar alarms. An acoustic alarm can signal when someone has entered the stable. This can also help alert others in the area. Become acquainted with neighbors so you can provide additional eyes on one another’s facilities.

Warning signs. Post signs around the property like ‘keep out” or directly mention that there is a security system in place.

Keep items out of sight. Tools, ladders and other possessions should be put away when not in use. Out of sight, out of mind.

Horse identification. Evidence of identification tags make thieves think twice, as they might dismiss taking a microchipped horse due to the ability to track it. Like dogs, it is wise to have your horses chipped in case they are lost or stolen.

- Myrick

Thanksgiving Important Conversations

𝗦𝗶𝗻𝗰𝗲 𝘄𝗲'𝗿𝗲 𝗮𝗹𝗹 𝗮𝗯𝗼𝘂𝘁 𝘁𝗼 𝗯𝗲 𝘀𝘂𝗿𝗿𝗼𝘂𝗻𝗱𝗲𝗱 𝗯𝘆 𝘁𝗵𝗲 𝗽𝗲𝗼𝗽𝗹𝗲 𝘄𝗲 𝗹𝗼𝘃𝗲 𝗺𝗼𝘀𝘁 𝗳𝗼𝗿 𝗧𝗵𝗮𝗻𝗸𝘀𝗴𝗶𝘃𝗶𝗻𝗴, 𝘁𝗵𝗶𝘀 𝗶𝘀 𝗮 𝗽𝗲𝗿𝗳𝗲𝗰𝘁 𝘁𝗶𝗺𝗲 𝘁𝗼 𝗸𝗻𝗼𝗰𝗸 𝗼𝘂𝘁 𝘁𝗵𝗲𝘀𝗲 𝗣𝗥𝗢-𝗧𝗜𝗣𝘀:

Make sure all bank accounts have direct beneficiaries. The beneficiary need only go to the bank with your death certificate and an ID of their own.

TOD = Transfer On Death house deed if you own a home. Completing this document and filing it with your county saves your heirs THOUSANDS. This document allows you to transfer ownership of your home to your designee. All they need to do is take their ID and your death certificate to the county building and the deed is signed over. Doing this will avoid the home having to go through probate.

TOD = also Transfer on Death your auto title(s). You can do that too. All these things will help your heirs avoid the probate process!

Living Will: Allows one to put in writing EXACTLY what you want done in the event you cannot speak for yourself when it comes to healthcare decisions as well as other final decisions.

Durable Power of Attorney: Allows one to designate a person to make legal decisions if one is no longer competent to do so.

Power of Attorney for Healthcare: This document allows one to designate someone to make healthcare decisions for their person.

Last Will and Testament: Designates to whom personal belongings will go too.

Funeral Planning Declaration: allows one to say exactly one’s wishes as far as disposition of the body and the services.

If the above documents are done, you can AVOID probate.

If all the above is not done, you have to open an estate account at the bank. All money that doesn’t have direct beneficiaries goes into this account. You have to have an attorney to open the estate account. The attorney also has to publicize your passing in the newspaper or post publication at the county courthouse, to allow anyone to make a claim on your property. - It’s a complete PAIN.

Make a list of all banks and account numbers, all investment institutions with account numbers, lists of credit cards, utility accounts, etc. Leave clear instructions as to how and when these things are paid.

Make sure your heirs knows where life insurance policies are located.

Make 100% sure SOMEONE knows your Apple ID, bank ID account logins and all passwords! A password keeper will streamline that - only one password needed to access all accounts.

Make sure you have titles for all vehicles, campers, etc in the SAME PLACE.

Set up a trust for intended beneficiaries that are too young and appoint a trustee of said trust.

MOST IMPORTANTLY!!!! - Talk with those closest to you and make all your wishes KNOWN. Talk to those whom you’ve designated, as well as those close to you whom you did not designate. Do this to explain why your decisions were made and to avoid any lingering questions or hurt feelings.

Hope this helps! I also hope this lights a spark to encourage all your friends and family to take care of these things to make it easier for those we all leave behind!

Do it! Start an important conversation with your loved ones.

7 Hard Ways to Build an Extraordinary Reputation in Business

Here are seven-character traits you can weave into your everyday life, which, over time, can help you build an extraordinary reputation and become someone people seek out with business opportunities…

1. Show Up - Because most won’t unless the result is guaranteed.
2. Do What You Say - Because most will talk shit and then give up when things get tough.
3. Be Kind - Because most are self-oriented, status-driven, and petty.
4. Give More Than You Take - Because most can’t see past what’s in it for them.
5. Have Conviction - Because most don’t the guts to believe in something.
6. Make Connections - Because most believe their network is a scarce resource to be guarded and defended.
7. Be A Mentor - Because most are too busy defending their status.

An extraordinary reputation is a gateway to opportunity in business. It greases the wheels of trust and respect. People don’t want to take the time to figure out if you’re trustworthy. They want to know you are trustworthy before engaging with you in business. An extraordinary reputation, built over time, is the ultimate job security. 

What does your reputation say about you?

Myrick

What to Do with All Your Home's Appreciation

Since January of 2020, the average home has dramatically increased in value! That's really an understatement, isn't it?

What does that increase mean to the average retiree? Not much! That's because "equity" has no value, unless it is unlocked and accessible. And this was traditionally done if you sold your home or took out a loan and made monthly payments.

 

But how can you unlock your growing piggy bank and use it strengthen your retirement without moving or payments? You can use the newly restructured reverse mortgage!

Today, the average retiree can unlock around 30-40% of their homes appreciated value and turn that into a growing reverse mortgage line of credit.

 

The chart above shows a 62-year-old couple in a $300,000 home. The reverse mortgage line of credit begins at around $106,000, but it does not stay there. Based on today's rates, it grows to nearly $500,000 after 20 years. Whoa!

 

How long has it been doing this? Since 1988 when Congress authorized the program under the auspices of the department of Housing.

 

How are you incorporating Housing Wealth into a retirement income plan? 

Myrick