Keeping your small business healthy during virus outbreak

The coronavirus pandemic is causing many small businesses to adapt the way they’ve always done business. Things are changing daily and life is very fluid right now. But there are things you can do now to help mitigate the daily uncertainty.

Below are some tips to help keep you, your family, your employees and your business healthy during these unprecedented times.

Stay people-focused

The backbone of any business is its people, and it will be after things settle down. Right now, your customers and employees need to know you are taking precautions to maintain a healthy work environment. Your family depends on your own health, too.

Follow CDC guidelines for businesses and employers to maintain a safe, healthy work environment, and stay connected to your local government websites and social media channels to stay current on operating recommendations or policies.

At home, follow the same health and social distancing guidelines to keep you and your family healthy and safe.

Build a continuity plan

Think about scenarios that could impact your business, such as reduced foot traffic, supply chain gaps, and government mandated curfews or closures. Then, build out a plan to address each scenario that could develop as the situation evolves. Recommended areas to consider include:

• If your business is brick-andmortar with an online presence, consider quick ways to enhance your online revenue. This could include adding gift certificate ordering to your shopping cart and ramping up social media activity to alert customers you are virtually open for business.

• Talk with your small business lender if you have concerns around your accounts or are having trouble with cashflow. There are variety ways your local banker can help you or point you to some appropriate government programs.

• If you are a personal trainer, contractor, landscaper, etc., consider using alternative payment options so consumers can pay you for services without using cash, checks or need to meet in person. Zelle® is a great peer

to-peer service that can be directly connected to your bank account to send and receive payments instantly.

• Ensure you have reliable access to your banking accounts and monitor them closely. Unfortunately, fraudsters are even more active during times when business owners and consumers are stressed. Now is the time to set-up online banking or download your bank’s mobile app if you haven’t done so already. You should also set-up text alerts, so you are notified immediately of any changes to your account.

• Business banking customers can perform ACH, wire payments, remote deposits, mobile deposits, make payments and many other activities through digital channels. If you need to deposit cash or checks, consider using night drop to keep everyone safe.

• If your business is consulting or another field that requires face-to-face interaction, in-person training, guidance or other services, set up an account with online meeting and webinar solutions. Encourage customers to keep their appointments, now online, and reassure them your support and services will remain available.

• Establish and keep open clear lines of communication with your customers, employees, suppliers and other partners to ensure you all experience as little disruption as possible.

Relief for the small business community and steps to take

Federal government agencies, including the Small Business Administration, are developing programs to supports small businesses in financial need during the COVID-19 outbreak and its aftermath. Many of these programs, including 7(a) loans, are expected to be available through emergency funding in geographic areas impacted by the virus.

Lenders may also provide temporary relief for existing loans in some instances.

Visit the SBA’s website for updates on funding sources and loan programs and contact your small business banking lender about specific programs suited to your business’ short-and-long term needs. Additionally, the SBA is providing daily updates to support the needs of small businesses.

Prepare ahead for any loan applications and other business needs you may have by having full access to your financial, accounting and employee records. Be ready to provide these documents electronically — and quickly — to get the funds you need.

Small Business Banking Resources:

CDC for Business and Employers: https://www. cdc.gov/coronavirus/2019ncov/community/guidance-business-response. html

SBA Business Guidance and Loan Resources: https://www.sba.gov/ page/coronavirus-covid19-small-business-guidance-loan-resources

Employees usually have income taxes withheld from their paychecks throughout the year. Typically that’s not the case with side hustle income. Waiting until it’s time to file a tax return to pay the taxes can trigger not just a big tax bill, but penalties as well. The IRS wants people to pay taxes as they earn money, through withholding or estimated quarterly tax payments.

Most taxpayers can avoid penalties if, through withholding and estimated payments, they pay in at least 90% of the current year’s tax bill or 100% of the previous year’s tax amount.

Even those who dodge a penalty likely will still owe taxes on net self-employment income, however. (Net self-employment income is what’s earned from the side gig, minus deductible expenses and retirement plan contributions.)

McNeill suggests putting aside 25% to 30% of any side hustle income to cover the tax bill, since people who work for themselves usually have to pay a 15.3% self-employment tax to cover Social Security and Medicare contributions in addition to regular income taxes.

Ignoring retirement savings options

Tucking away some side gig income for retirement can help make your future more comfortable while reducing your tax bill today. Two good options for side hustlers are a SEP IRA and a solo 401(k). A simplified employee pension individual retirement account is easy to set up and allows people to contribute up to 25% of net self-employment income, to a maximum of $57,000 in 2020. A solo 401(k) has

the same $57,000 cap, but it allows contributions up to 100% of net self-employment income. Solo 401(k) s involve a bit more paperwork, and the contribution limit is per person, so contributions to an employer’s 401(k) or other retirement plan count against the cap.

McNeill has one final caution: Make sure your side gig is actually worth your time. Some people discover they’re making less than minimum wage after paying taxes and other expenses, such as fees to an online freelancing platform. Review what you’ve cleared against the time involved to determine whether the extra hours are worthwhile.

“If you’re going to do it, do it right,” McNeill says. “Make sure you’re going to make money.”

This column was provided to The Associated Press by the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.” Email: lweston@ nerdwallet.com. Twitter: @lizweston.

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