Coronavirus Financial Implications: A Guide

The Senate unveiled an economic relief package as a response to the pandemic of coronavirus. This action came as a relief to people worrying about their income as they must stay at home, which means no work for some. However, it also left many confused.

The plan is yet to be finalized, but let's take a look at its implications and key takeaways.

Loans for Critical Industries

Airlines, tourist agencies, and other critical industries got struck by the pandemic. For this reason, they will get billions in loans, which is to be repaid in due time.

There are some restrictions on the usage of these funds, though. For example, executives won't be able to get raises for the next two years.

Limited Paid Leave

Small businesses have to continue paying salaries to employees forced to stay at home. The Senate plan intends to cap the daily amount that the employer has to pay to $200 maximum.

This Republican decision faced condemnation from the Democrats, though, who argued for significant relief for people having to miss work due to Covid-19.

Loans and Tax Cuts for Businesses

To aid them in paying employees, mortgages, and rents, the Government will get bridge loans for small businesses. As regards to large corporations, they will get temporary tax cuts to overcome the economic downturn.

Taxpayers Get Checks from the Government

When it comes to taxpayers forced to pay income tax, individuals will get amounts according to their earnings. Joint files from married taxpayers and children will also impact the quantities.

This decision differs from the first one proposed by Trump administration, suggesting that $2000 be sent to every citizen in two instalments if the country continued to face an economic crisis.

Extension of the Tax Return Deadline

Although the IRS did not extend the deadline for filing federal taxes in 2020, there will be some measures to make it easier. Individual income tax returns on the level of the federation are due April 15, 2020, as well as extensions.

However, the IRS is giving its taxpayers an extra 90 days, or three months, to pay their tax bills without penalty or interest.

So, the deadline for filing tax returns is still April 15, but you have until July 15 to actually pay the sum. If you aren't capable of doing so within the period, the IRS still offers assistance with payment plans.

Moreover, Americans who withdrew sums of up to $100,000 from their retirement accounts will not suffer typical penalties. There are also chances for deferring student loan payments.

When it comes to tax refunds, they are still processed as usual. So, if you're expecting a refund, file your request for 2019 as soon as possible. There's a possibility of a delay if the situation continues to worsen, but for now, there's none.

If you use an online service for submitting your returns, you can still expect to see your refund within 21 days, and there's also an IRS delivery schedule on their website.

If you still find all this too overwhelming to grasp, apart from the tools offered by the IRS, many independent lawyers can help you.

Such assistance may be the most necessary for businesses. If you own one, don't be afraid to seek out help. As the experts at fariscpa.com say, experts can provide services and advice to help you avoid issues or penalties.

The Bottom Line

From an economic perspective, the central issue lies in the level of disruption the economies are suffering due to containment measures.

The chances are that the global economy will weaken even further, so it's critical for each citizen to understand the implications and try to do their share right. That way, it will be much easier to regain footing once the pandemic is done.