COVID-19 Special Report: Financial Relief Info For Guides, Shops and Lodges

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innovative science based work by becoming a member or donating today at cal dot org. Hey. Welcome to another special episode of the marvelous five fishing podcast. I'm your host, chad A.

Today with me, I have Russ Kessler with, Kessler and Balling. They... These guys are tax attorneys. Based out... You guys are in Ohio.

Columbus Ohio. Yeah. Yeah.

And, Russ, reached out to me after,

he heard one of our episodes, that one of our Covid nineteen episodes where we talked about, you know, wanting to kinda dig in on what sort of relief is is available for, you know, financial relief and government programs

or that are available for business owners,

independent contractors like guides and whatnot. So he was kind enough to

you know, to reach out to us and offer, you know, his time and

consultation for you guys,

our listeners.

So,

before we get into it, Russ, I wanna just call out the date for everybody, so everybody knows what what day and time it is. So it's Sure. April eighth

twenty twenty, it's about

eleven twenty in the Am. And I do this just so everybody's got kind of a a time, you know, a time reference because this thing is is

evolving. I think the last time I called out,

no numbers have infected. We were below a hundred thousand and

from what I re... Read this morning, it looks like we're over three hundred thousand nationwide wide now.

But, it seems to be... It seems like Cal or New York's getting a cap on things finally. So we'll see how it goes I'm I'm optimistic. I'm I'm way more optimistic than I was say, two weeks ago, though, for sure.

So,

anyway... Yeah It's been kinda of kinda of funny here. You know, in know Ohio, we... Our governor was very aggressive with the early.

Corn... Not quarantined, but stay at home. Yeah. And our our cases have been

have stayed way down. They're they're way under or what they're projecting now. Yeah. I think that's kind of the the thing. Right? It's it's... You can see kind of the the folks that got on and early

aren't getting hit as hard,

you know, on state counties are doing it differently.

So that's good.

Hopefully, we can put this in a rearview review and have some mitigation steps in place going forward for when this, you know, comes up get, again, in light of any kind of,

vaccine, we're gonna have to put some sort of protocols in place.

Okay. So, Russ, can you give us, give a background for the listeners on what your background is and

know, what what you guys special in specific specialize in.

We're we're kind of a... What I call a boutique law firm, you know, Ohio actually practice in

Ohio, Pennsylvania, New York, so practice in three states.

You were both

attorneys and Cpa, so we... So we practice

effectively

in the financial areas of of law

and to some degree accounting to extent that that kinda crosses over with taxes and so forth,

been doing this since the

late seventies, so for relatively

long period of time.

Again, we're just

myself and one other partner

who are both, Cpa and attorneys, and then we have one associate who,

works with us who's

more of a

a state planning and attorneys than a tax attorneys. So it's basically the two partners or the tax attorneys. Cool. And then,

I I assume Fly fish because you were listening to a crazy show.

Right. Right. I've

I've all fished all my life that started

fly fish. I've actually got. I've got a cousin who's a

who was a guide who back, has been years ago.

We were at a family reunion out in Park City,

and he's a he's a guide in In us.

And he brought a fly rod with him and kinda converted me from conventional fishing to fly fishing, and Nice. Been a bit of a bit a bit of a freak about it every since then. Yeah. I kinda my wife My wife make my wife makes me inventory wear my firearm rod.

How many? How many are you are you sporting right now?

I don't know whether I wanna want that to be public and, but it it's it's up in the sixties. Holy shit. That's crazy. Yeah. You you have a problem.

That's probably. Someone are like, collected. While I gotta Yeah. Bamboo next stuff. Awesome. How how long have you been doing it

so far. It sounds like I feel if you got sixty sticks.

Fly fishing probably fifteen years. Okay. Cool. So you know this is why... One of the reasons I I wanted to have you on is you you kinda... You know, you know the industry, you kinda know how how things go with the the guides, the lodge and and everything in between and the retail shops and everything. So, you know, with that context,

and you with all the different relief packages that are coming out now,

you know to help with, you know, small business owners and contractors and everyone else.

Where do we start? Like, what what are some high level things

folks can get some phone. I guess just the the the first place would be just the basic,

relief,

the the twelve hundred dollar payment that they're sending out to everybody So that's really in specific to business. This is...

Pretty much to to anybody who's

below certain income levels is gonna get a payment back,

projected to be relatively soon

of twelve hundred dollars,

and it bumps up if you're filing joint return, there's two of you. So it's twenty four hundred bucks. And then for each kid you have is a dependent on your return it's another five hundred bucks.

So that that money is supposed to be coming back relatively quickly to pretty much

all taxpayers

below certain

income levels. And the phase outs are are not super high, but for most people,

particularly guide and I kind stuff they're probably all qualifying for this because the the phase out for on a joint return, for example, starts at a hundred and fifty thousand.

Gross income and on the individual

returns, a single return starts at seventy five thousand. Okay. Yeah. Cool.

Most people get that. Now the the question becomes out do you get it.

If the Irs has your

bank information, they're gonna direct deposits straight into your account in the way that they would typically have your bank information is if you filed a return before on which you had a refund and you had them directly deposit that into your bank account. Okay. Then they'll have your... They'll have your bank information. Now if they don't... Yeah. They're gonna send you a check, which that's gonna take quite a bit longer than than if it gets direct deposited. Is there anything

the people can do, you know, to to basically, like, set up electronic fund transfer even if they haven't done it before, or is that ship already filled? They're they're gonna. The the only way you could... I think you could do it at this point,

if you haven't filed your nineteen

return yet. Mh. You could file the nineteen return with

the electronic information on it even if you're not getting a refund, and that should get it into their system, Okay. The Irs also contend that you can call their general

helpline line and give them the information, and they'll put it into the system. I guess I don't have a great deal of confidence the number one you'll ever get through on the on the line.

And number two that it will actually get into the system if you do it by phone. Yeah. Yeah. Okay. That that sounds good. So what what else other than, you know, that that... So that step... That's basically, like, step one for anybody understand. K and that's one fifty point. Right.

Then if you start looking over to to businesses

specifically then kinda kind of a big program that everybody's talking about is the,

the paycheck protection program,

which

is in the form of a a loan program. So,

anybody who's a business which

when we talk about business that would include,

essentially,

anybody who runs business, that's not just an employee Other words, if if you're in a... If you work for a lodge, for example,

and

you're you just get a w two that you won't qualify for this. But if you're a guide

that works for a lodge as an independent contractor. In other that person's gonna... That person's gonna qualify for this program.

Oh, that's cool. And the the way that it works, it's it's being administered through the

Sba is the small business

administration.

And

but with that said, so it's a guarantee... It's federally guaranteed loan. But with that said, in order to apply for these loans, you have to go through

a financial institution.

So most people typically will have their banking relationship with some financial institution.

What I found from a practical standpoint is

banks at this point. Excuse me. I mean

know.

Banks at this point are so

backed up with

these loan applications for this that they're only willing to do

this type of loan for... For someone who's already a customer of that institution.

Okay.

So generally, you're you're probably gonna have to look to your particular banking institution. Now There's no reason they have to do that, but I found that most institutions are not taking essentially new customers just to apply for this type of a type of a loan. Does that makes sense down. Now... Go ahead. Sorry.

It that...

I call... I guess, I've called it a alone several times. This is

it's in the form of a per

loan, which means that it can morph into what effectively is a is a grant.

Where,

in other words, you get you get the money, and you don't have to pay it back.

And the way that that can happen is if you get the loan

approved and you get the cash

if you spend that cash on certain things over the sixty day period after you get the loan,

then you don't have to pay it back. And essentially, the things you have to spend it on would be...

Compensation, mh.

Rent

or

utilities

or,

mortgage payments. So if you have a business that rents are building

owns the building whatever you can spend it on those things. And then if you do that within sixty days, then you don't have to pay that portion at least back. So loosely

as operational

expenditures.

Right?

Yeah. Yeah. Kind of...

Now the at least seventy five percent of it has to go towards

compensation. Mh. So that it's limited to twenty five percent that can go to...

Rent and other utilities and other other expenditures.

Okay. And and this this applies to, like, if I... Just just to make sure I understand, if I have a lodge and all my guys are w nine contractors.

Or, I'm sorry, ten ninety nine,

contractors,

they would...

I I would qualify as long as I was paying, you know, up upwards to seventy five percent of of their payroll, my payroll.

Well, it be If all you... If all you're... If you're large, for example. Yeah. And all your guides are ten ninety nine, they're not gonna... They don't qualify. They qualify on their own, separately. Oh, oh. Got it. With the people that qualify would be

the law owner would qualify based on whatever

compensation they're deriving from it, plus whoever they have as employees. So it'd be the w two employees.

Okay. That that qualify.

Now this is sixty three hundred dollars. We're talking about it. What I'm reading. It's up up to that. Right?

No. No. It can be a lot lot bigger than that. It's it's up to

whatever whatever your...

Average

annual

payroll was Per month.

Okay. Okay. Times two and a half times. Wow So let's say, let's say you've got a lodge in your average payroll is

I'm just making up numbers ten thousand dollars a month.

You can get one of these loans for up to two and a half times that. So you can get a loan for twenty five thousand dollars.

Yeah. So this is significant. This is why people are Yeah. This can this can be... Fairly big money. There's actually... Yeah. There's a cap on it of ten million dollars per loan. So you think you'd have to have a lot of a lot of payroll to qualify after that. Yeah.

Okay.

That that sounds like the one that a lot of people are probably the most most I I think that's the one the one that's the most being pursued the most aggressively. It was funded

with round numbers three hundred and fifty billion dollars of,

initial funding

from the from the first from the act

and they're talking about... They're already talking about, they're gonna have to go back for another two hundred million dollars because there's been so many applications. Yeah.

Associated with it. And that one's the paycheck

protection program, and you need to run that through Sba,

it's

through. Through your through your own bank, which then

will

court will fund it run it through the Sba. Great. Okay. Got it. Okay. That... That's that's awesome. What what else is out there for folks?

So the the other... There's another... There's an emergency

injury disaster loan E d loan

that is available to

anybody who's been impacted by

a national disaster, which obviously this has it's actually been declared in national emergency,

but still still qualifies.

That one is a

Sba direct loan program...

So for that one,

anybody who wants to apply for that goes directly

into the Sba website, and there's an application there

that you can complete

to apply for that loan.

It's a little harder to say exactly what the the cap on it is,

because it it bay it's based on what you can

demonstrate that you've been harmed by the by the disaster.

But the important thing I think on this one is there's a canada up what I'll calling upfront,

called a freebie of ten thousand dollars

that's

there that you can get effectively as in advance,

and it doesn't have to be paid back.

Okay.

So it's

again,

to a certain degree a little bit of

free money. Yeah.

What else? Is there anything else out there? I know that there's some tax credit stuff that that... People may or may not be eligible for, but are there any Right kinda of, like, grant other

grant programs that are kind? Those are those are the two main grant or loan slash grant programs that that came out of the, of the act.

In addition, there was

some provisions in there that

give businesses the ability to

reduce

their

obligations associated with. Payroll taxes. In other words, normally, when an when an employer has an employee, they

have to pay, you know, withhold a certain amount of federal income tax, social security.

They have to match the Social security and Medicare taxes and so forth.

There's a credit available

for,

based on,

again, having been harmed

by the,

by by the disaster.

There's a credit available that can reduce the amount that employer has to pay in those taxes.

Again, that one is

essentially

just money that you would otherwise have had to have paid to the federal government

that they effectively

forgive and allow allow an employer to keep.

Okay.

And and

for individuals,

I'd I'd... I'm aware of a sick leave tax credit, and then a medical leave for family members that have been affected have been stricken by the illness, basically.

Right. They they've they've expanded

the this that statute expanded

paid sick leave and paid family leave

and applied it to most all employers. It used to be that paid sick leave and paid patron and leave

usually only applied to

what I'll call larger employers.

The

law essentially pushed that those provisions down and expanded them,

to where

many more employers are covered by that. So it allows an employee

to,

more likely be eligible for paid sick leave or paid

family medical leave.

Now there are some outs on these, so it's it's a little hard to make to generalize that this

applies across the board because there are provisions in there that allow

employers with less than five hundred

employees to opt out of this program if they can show

that

that to do so would cause them essentially a irr harm.

So it's there,

be aware of it

the then the other thing kind of along those same lines

is the federal

unemployment

also added on another, essentially six hundred dollars,

per,

six hundred dollars per week of unemployment insurance for somebody who is,

does become unemployed because of this they can be eligible for

an additional six hundred dollars and that would be in addition to whatever you'd normally be entitled to

under the state program because

unemployment is is generally administered by the state. Right. And so that's gonna vary from state to state.

But

the the federal government is kicking in another six hundred bucks in addition to what you would normally be entitled to under stable law.

And the... This is also important from the perspective of, from, particularly from, like, the guide standpoint.

These

provisions also apply to people who normally aren't eligible for unemployment like self employed people like most guides are.

The the additional six hundred dollars,

is

available to

in independent contractors and self employed people, even though they normally aren't covered by state unemployment because they don't they don't pay into the system,

on on a normal basis.

Yeah. Well, that... That's that's good. Yeah. Because we've been kinda talking mostly about federal programs. And if there aren't any other federal programs, I know, like, on a state level, their stuff, but it it varies from state to state. Based on brand you know whatever... Almost... He almost have to just look at what. Yeah. The provisions are in your in your particular Yeah. In your particular state. But, yeah,

obviously, a lot of a lot of states

have

have have enhanced programs that are available now. And just one other kinda of kind of side note,

they did.

One other thing that happened,

actually, not in the recent act, but just before that,

was all the tax due dates

have been pushed out by three months. So what would normally have been due

April fifteenth for virtually all,

people

individuals and

some businesses,

which are due April fifteenth, those due dates and payment dates. So if you... You not only don't have to pay the

or don't have file the return. You don't have to pay the tax until July fifteenth.

And that's true on the federal side, plus, I think it's almost universal done almost all states of

sales it definitely is in California, but or... We've extended to July fifteenth, and it does seem to be kinda down the line state by state they're they've... They're doing that.

Yep. Yeah. So the deadline and and the...

And when you can both pay or and file is Pushed out. And then their business tax returns under a million dollars or out

down to... Like, I guess, July thirty first.

Yeah. It is the business tax returns are a little weird because...

They... If you're a pastor entity, which is either a partnership or an S corporation,

those were due March fifteenth and those didn't get extended.

But there's really no tax due typically with that type of return because all the income passes through to the to the owner.

So you still would have had to have filed if you didn't wanna file your return,

for your

partnership or S corporation, which a lot of your lodge might be that type of entity. You still needed to have filed an extension on that return by March fifteenth. Okay.

Yeah. And I... It it looks like even at the city level, at least in California,

San Francisco, Los Angeles, San Diego, There's also some other... There's there's some other little rules around there. So I think it just boo hoops everybody that is in those areas and just any state really to kinda look at it from your federal level, your state level and then look at your uni municipal level and see if they're... What what programs are available.

Yep. Yep. And that and that's not even mentioning and just...

And these aren't really programs, but one of the things that can be important for people when you do get

kind of behind the eight ball from a financial perspective is,

you know, keep talking to your,

to whoever... To whoever your creditor is,

and I I think people are gonna tend to be fairly understanding under these circumstances,

and

and help help you out with expansions. And I I think there are formal programs also out there in terms of

mortgage

abatement and that type of stuff that that can help people who get behind on on mortgages

or equipment loans or whatever it happens to be,

you know, get out there. And and again, those aren't

by by no means universal, so it's hard to talk to him, talk about them generically, but

that all lenders are gonna be fairly

willing to to work with you in this in these circumstances.

Yeah. I mean, that that can't be overstated enough,

you know, communication with your creditors key, like, just for example, if you have a retail store, and you've got a lease on that, you can very likely talk to your landlord and they'll work something out.

Keep in mind that it... The pain for them to get you out of there and get somebody in, especially on the heels of this thing is gonna be more greater than keeping you on and working some deal out over, you know, some payment plan plan over time or or just giving you some sort of a discount as a wash. Yeah. You know. So keep that in mind, they've got... They're they're highly inc to keep you in that in that store or in that lease

situation that you're in,

do not think all hope is lost there just... You need to communicate though.

Right. And they're probably... They're probably not gonna be proactive about the communication either just because they're... I'm sure they're inundated with with

conversations. So just, you know, get the queue, get top of mind And work through it with them.

And let let me mention one other

in

individual provision that's in the

on the federal side, which we which we haven't talked about. And that is

if you've got people again, and this would be applied to a guide or a log owner or whoever it is that does that do have

some type of retirement plan either Ira or four one k or whatever you happen to have.

They put some special provisions in the in the new law

that allow you

even if you're under... Normally, if you make an early withdrawal of an Ira or a retirement plan,

prior to age fifty nine and a half, you normally have tax plus a ten percent penalty for withdrawing early.

There's a special provision that if you if you've got some money saved in that type of a program

that

you can take a withdraw up two hundred thousand dollars during

anytime during two thousand twenty,

and

you'll still have to pay tax on it, but there won't be any additional penalty.

And in addition, there two other provisions that kind of go along with that.

One provision is,

if whatever you draw it, So let's say somebody draws out sixty thousand dollars.

The tax law allows you to only have to pay tax on that one third each year for the next three years. So you can pay

Tax on twenty thousand in two thousand twenty.

Twenty thousand and two thousand twenty one and in twenty thousand and two thousand twenty two.

In in addition to that, kind of the third wing of that of that provision says that

if you do get back on your feet

and

get it to where you kind of

get that money back effectively. In other words, business gets up and going and you've got some money, and you'd like to put it back in

your retirement plan.

The normal rule is when you take money out of retirement plan. If you wanna put it back yet put it back within sixty days.

There's a special rule for this that any of these

provisions, any of these dollars that you take out during two thousand twenty,

you can put it back anytime within three years of the date that you took it out. Oh, okay. That's cool.

Put Good.

So,

are there any...

Any kind of things people that either have, you know, multiple properties that that are in kind of, like, a landlords that situation or they have a... They're a single family with one one home, like, a new homeowner.

Do you know of any relief stuff for them specifically targeted towards them?

I don't think there there's no... There's nothing on the federal side directly.

Again, those are those are gonna relate... Again, I... There's probably some state programs out there. But

nothing

nothing that's universal

across across the board.

Again, I think those those come back to just

just staying in the loop with your with your lenders and so forth. Yeah. Okay. Cool. Well, had do you think... Do you feel like we've covered everything?

I think we said most of the high points. Yeah k. Cool. Thank you. Again, it's a it's a look it's a little hard to

try to try to cover at all just because

that... It is so it's so pervasive. Yeah. And expansive that

but but it's... I I think the the key the key ones,

and one thing we haven't mentioned is

the... On that paycheck

protection

program,

those

applications are being accepted now

for

businesses with employees.

And the... For the guides,

who may... Who probably don't have any employees or most of your guys probably don't have voice it's just themselves. The applications open up for them this Friday on the on the tenth. Oh, good enough. Okay.

So

so it's assume this will probably get run after that date. But

but So by the time, this is this is aired.

Probably... You should the the

paycheck protection program, what loans

application should be available for everybody by that time. Yeah. I'll try and get it out actually, this... Either,

probably tomorrow. I've got an episode dropping tomorrow on the ninth. So we'll we'll try and get it out then as a bonus.

Well, cool. Well, Russ, thank you very much one for reaching out into, for, you know, basically offering to to consult with us for an hour on or half an hour on this and and and get that information out.

How how can folks reach you out to you if they if they wanted to, you know, talk more specifically about their, their situation and they're looking for someone like yourself to help him.

We're on the...

On the Internet, we're not...

Since we... We're we're basically, we that we don't do much promotion just because we're pretty much.

The practice is fairly full, so I don't have to do a lot to promote. But,

we do have a website. It's kessler ball

law dot com.

And

you can give us a call,

the direct, direct line to the office is very code. Six one four eight eight eight three one eight five. Yeah Cool. And I don't do anything with any social media.

You're lucky.

Well, cool, man. Thank you again, for for the time, I really appreciate it. And I know our our listeners will too. And and good luck fishing. And if I'm ever out in Ohio.

I'll love. I'll hate you up. Yep. Oh, man. And if you're in California...

Come here. We'll we'll take you on a on a musk trip or something. Oh, I've never caught a musk, I'd love to catch a Musk.

I'll I'll send you. I'll send you a shout

a couple of. Alright. Cool. Well, thanks again. I appreciate it.

Yeah. I appreciate it. Keep up the good word. Thank you, sir. Bye bye. Alrighty.

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