Monthly Archives: November 2020

Small Business COVID-19 Diaries: Part 4

Small Business COVID-19 Diaries: Part 4

COVID-19 upended economic activity and disrupted bandar poker online business owners’ lives. Here are stories from real entrepreneurs about how the novel coronavirus pandemic is impacting them.
As states begin easing restrictions that were put in place to thwart the spread of COVID-19, many small business owners still find themselves picking up the pieces. While the work never stopped – even while operations were suspended or limited – many are finding that a return to “normalcy” isn’t exactly what they expected.

In this installment of business.com’s small business COVID-19 diaries, we catch up with three entrepreneurs who have emerged from the initial shock of the pandemic in very different ways.

Looking for resources on how to help your small business through the COVID-19 pandemic? Visit the business.com COVID-19 resource page.

Todd Spodek, managing partner of Spodek Law Group
Spodek Law Group PC is a law firm in New York City that provides litigation services for criminal defense as well as divorce and family law. The firm employs 10 people.

Managing partner Todd Spodek, who is a business.com community member, was approved for a Paycheck Protection Program loan of $200,000 in April under the initial round of funding for the program. Since then, he has cut extraneous expenses, caught up with past clients and legal adversaries, established referral networks to help clients access needed assistance, and established a pro bono program for first responders.

While Spodek acknowledges his business has been interrupted, he is largely optimistic.

“To be honest, everything kind of worked out OK,” he said.

He attributes the success of the firm to effective planning at the outset of the pandemic, including an immediate cutting of expenses, pivoting to a remote work model, negotiating with landlords, and community outreach efforts that generated significant goodwill and helped to establish new referral networks.

“A lot of businesses are focused on sales … but the more you focus on sales when people are not in that mindset, the more distance you’re putting into that relationship,” Spodek said. “I took the approach that … our clients need the help now and need someone to organize things for them. We’re focused on providing help. When their life implodes, we’re there.”

According to Spodek, the firm does this through initiatives like the pro bono program for first responders. It also partnered with an organization called Blueground, which provides fast, furnished housing to people who find themselves without a living arrangement on short notice. Additionally, the firm partners with a service called Crisis Text Line, which offers 24/7 support with a counselor.

Small Business Owners Can Support Black Entrepreneurs

Small Business Owners Can Support Black Entrepreneurs

Despite systemic hurdles, Black business ownership is on the rise, booming by 400% in recent years. Even with this growth, though, Black entrepreneurs face unique challenges and could use some support from the rest of the small business community. With August slated as slot online Business Month, we’ve gathered some resources and suggestions for actions you can take to support Black small business owners, on both a local and national level.

Why Black businesses need your support
The small business community in America is a major keystone to the country’s economy. According to a 2019 study from the Small Business Administration, small businesses “create two-thirds of net new jobs” and account for “44% of U.S. economic activity.” As small businesses struggle through the pandemic, many Black businesses will fail without some support, resulting in a further decline in the U.S. economy.

Black-owned businesses are a significantly smaller group than white-owned ones. According to the U.S. Census Bureau, 4 million businesses are owned by members of minority groups, with more than half – approximately 2.6 million – of those being owned by the Black community. To put that in perspective, the SBA estimates that there are more than 30 million small businesses operating throughout the country.

One of the reasons that Black business owners struggle is a lack of funding. Small business owners have long decried how difficult it is to get loans to help them get their ventures off the ground, and this difficulty is amplified for Black business owners. In a recent report from Guidant Financial, experts found that 44% of Black small business owners fund their businesses with cash and 15% get help from their friends and family.

“Without the funds to invest in as many resources as other businesses, such as hiring talent or marketing and advertising, competing for contracts or attracting clients becomes exponentially more difficult,” the report states.

Business Owner’s Guide to FICA Tax That You Need To Know

Business Owner’s Guide to FICA Tax That You Need To Know

Most employers and employees are familiar with the payroll taxes they pay to fund Social Security and Medicare. These two taxes were established under the Federal Insurance Contributions Act, a federal law that requires virtually everyone to fund two of the most prevalent public benefits programs maintained by the federal government. The FICA tax is a shared tax burden for employers and employees, and even self-employed individuals have FICA tax obligations under most circumstances on qq.

What is the FICA tax?
The Federal Insurance Contributions Act established tax rates required of both employers and employees to fund Social Security and Medicare. The small tax that comes out of each worker’s paycheck is a portion of the FICA tax, with employers also contributing funds per employee.

“The Federal Insurance Contributions Act, or ‘FICA,’ is a federal tax that both employers and employees pay via their payroll tax obligations,” James Maio, director of tax at Slate Law Group, told business.com “The FICA tax is made up of two separate taxes, the Social Security tax and the Medicare tax.”

The FICA tax pays into federal retirement and disability benefits established under Social Security, as well as health insurance for American citizens age 65 and older under Medicare. [Read related article: Employer’s Guide to Payroll Deductions]

How does the FICA tax work?
The FICA tax is based on a set rate that can change through legislative action. Currently, the total FICA tax finances Social Security through a 12.4% payroll tax on wages up to a taxable earnings cap of $137,700. That cap is set to increase to $142,800 on Jan. 1, 2021. Any earnings above the cap are not subject to the Social Security portion of the FICA tax.

Medicare is funded through a 2.9% payroll tax with no taxable earnings cap. This means the Medicare tax rate still applies even when earnings surpass the Social Security cap. However, Maio said there is an additional Medicare tax for employees who fall into the “highly compensated” category – those who earn $250,000 annually if married and filing jointly, those who earn $125,000 annually if married and filing separately, and those who earn $200,000 annually and file as single or head of household.

“The law requires employers to withhold the additional 0.9% of Medicare tax from the wages of employees earning [highly compensated salaries],” Maio said.

Otherwise, the total FICA tax costs are split evenly amongst employers and employees.