DICKERSON DIGEST ISSUE FIVE - APR- 2020 RISKY BUSINESS

DOUBLE PAYMENT RISK FOR SHIPPERS

AND HOW TO REDUCE EXPOSURE

Imagine you hire a landscaping com-

pany to transform your backyard into your personal oasis. The landscaping company hires workers to do the job, then the company sends you a bill, which you pay. But suppose the land-scaping company doesn't pay the workers, and they send you a bill for the job. Obviously, you shouldn't have to pay again. If the workers take you to court, however, you may be ordered to do just that. In cases of double payment liability, innocent Shippers find themselves ordered to pay for services twice. The potential for double payment liability may arise any time a load moves—regardless if freight Broker or forwarder, is in-volved. The world of cargo contracts, insurance, and liability can be com-plex and possibly not be 100% ad-dressable. Shippers who aren't care-

ful can find themselves facing legal fees. Contracting with a reputable Broker can protect you from ending up in this situation. The following are steps to take to reduce the exposure to double payment risk. Characteristics of Reputable Bro-

kers and Carriers It is a well-known fact among the transportation indus-try that utilizing the services of Bro-kers to be intermediaries to ship goods makes economic sense. With-out Brokers or forwarders, Shippers would have to allocate additional re-sources to locating and negotiating with motor Carriers and would likely incur higher transportation costs. So how can Shippers avoid being taken to court for double payment liability cases? It starts by exercising due dili-gence and knowing the characteristics of a "reputable Broker".

Money matters If you do your homework, it is easy to determine a Broker's or forwarder's financial sta-bility. Require a prospective Broker or forwarder to provide you its D-U-N-S Number, an identification code as-signed to each physical location for companies registered with D&B. Use the number to help track the Broker during your due diligence. Of particu-lar interest in evaluating a freight Bro-ker is its D&B PAYDEX score, which evaluates a company's timeliness in debt payments. Scores range from one to 100, with higher scores gener-ated by a company's payment of debts prior to due date terms. If a company, on average, pays its debts on time (typically within 30 days), it earns a PAYDEX score of 80; if it pays 30 days before the due date, it earns a PAYDEX score of 100. A PAYDEX score of less than 80 raises a red flag.

PAGE 2

DICKERSON DIGEST RISKY BUSINESS

DOUBLE PAYMENT RISK FOR SHIPPERS AND HOW TO REDUCE EXPOSURE

Surety Bonds and Insurance You may consider being sure that any Broker you do business with post a surety bond greater than the amount of business you expect to do over a six-month time period. However, this may eliminate many Brokers from consideration as most sureties re-quire 150% collateral, which many smaller Brokers will not have. It may also increase your Brokerage fees, as they might insist that you pay the bond premium. Instead, when vetting for reputable Brokers, keep these three types of insurance in mind: insurance supplementing the Broker's bond/trust fund, contingent cargo insurance, and general liability insurance. The FMCSA requires regis-tered freight Brokers to post a mini-mum Broker's bond or establish a $10,000 trust fund so it can pay Ship-pers or motor Carriers if the Broker fails to carry out its contracts. Most Brokers just get by with the $10,000 minimum; however, a Broker can choose to purchase supplemental insurance/bond coverage for higher

limits. The supplemental limits pro-vide a layer of insurance protection in case a Broker defaults on its obli-gations and burns through the $10,000 bond/trust fund. Supple-mental coverage is typically offered in increments up to $100,000. While larger supplemental limits may be offered, premiums for these policies are correspondingly higher and must be passed on to a customer. A Broker that carries a higher limit supple-mental policy and remains price competitive is the Broker of choice for several reasons: • First, obtaining supplemental

coverage demonstrates the Bro-ker's commitment to fulfilling its obligations.

• Second, both the bond and sup-plemental policy/bond proceeds are available should the Broker fail in that commitment.

• Third, insurers offering such cov-erage require the Broker to meet more stringent underwriting re-quirements than one who simply

posts a minimum surety bond or trust fund. Think twice about working with a Broker who can't meet those underwriting re-quirements.

Voluntary higher limits coverage should be documented via a certifi-cate of insurance coverage. In addi-tion to bond/trust fund supplements, reputable Brokers also arm them-selves with contingent cargo insur-ance. To protect itself and its cus-tomers, the Broker should secure certificates of coverage for motor Carriers' primary cargo and motor vehicle liability insurance. Additional-ly, a Broker should carry its own con-tingent cargo insurance, which pro-vides coverage if the motor Carrier's primary cargo insurance denies cov-erage or is insolvent. Insurance levels should be adequate to cover the val-ue of the cargo on any one shipment. While $200,000 in contingent cargo coverage is typically adequate, a Shipper whose cargo will exceed that value should require a higher level, which can be accomplished by a spe-cial endorsement to the policy or via spot coverage. Finally, ensure the Broker carries adequate general lia-bility insurance, and get a certificate of coverage. Although your company probably will not qualify as an in-sured party under a Broker's general liability policy, the fact that the Bro-ker carries such insurance is a good sign. A Broker operating without a general commercial liability policy of at least $1 million should raise an-other red flag.

PAGE 3

ISSUE FIVE - APR- 2020

DICKERSON DIGEST RISKY BUSINESS

DOUBLE PAYMENT RISK FOR SHIPPERS AND HOW TO REDUCE EXPOSURE

Control Bill of Lading with Contracts Those in the transportation industry know that a Bill of Lading (BOL) is one of the most important docu-ments in the shipping industry. The Bill of Lading is a legally binding doc-ument providing the driver and the Carrier all the details needed to pro-cess the freight shipment and invoice it correctly. Preparing a Bill of Lading is a common practice in the transpor-tation industry, but I am proposing you add additional layers of protec-tion by drawing up contracts that will have control of the Bill of Lading. This means you will need to draft a con-tract with each Carrier that they WILL NOT Broker any freight. You should monitor this with each ship-ment receipt and confirm that no other Carrier charges were made. In addition, you should have a contract with each Broker in which they are required to have written contracts with all of the Carriers they intend to use, in which the Carrier specifically designates that the Broker is the sole

agent for collection and that the Car-rier waives any right to collect from the consignor or consignee if the Broker has been paid. Also require that copies of all contracts with all Carriers the Broker intends to use be forwarded to you for review and con-firmation. This needs to be reviewed and maintained on a regular basis. This is the key thing that must be done every time to ensure a result you can be happy about. This amounts to having to do a lot of work on your part. Creating a system for drafting contracts and reviewing contracts reduces risk and helps to ensure your protection, but of course, nothing 100% fool proof. Having a competent attorney on your team who is understands the issues you face is an important aspect of the success of your systems. I recom-mend looping in an expert attorney to do this for you. Armed with this information and research, the key will be to implement a three-part system of vetting Brokers and Carri-

ers (since they may likewise Broker the freight). The system, as men-tioned above, includes determining their financial stability, ensuring they have adequate insurance coverage and the key component of including an attorney familiar the logistics of logistics to draft contracts that con-trol the Bill of Lading. An attorney that can confidently draft and review contracts that control the Bill of Lad-ing will be instrumental to helping Shippers strategically avoid risk and lawsuits. And as I mentioned before, this system must be done every time for everyone. This will contractually bind the Carrier to seek payment from Broker and eliminate liability of the Shipper when the Broker has been paid. I end this article with one caveat. You can do all this and still get the screwed and sued, but imple-menting solid systems, the more you minimize your risk and liability. If you have specific questions on how to implement this three part system, I invite you to contact our firm.

PAGE 4

ISSUE FIVE - APR- 2020

ISSUE FIVE - APR- 2020 DICKERSON DIGEST SHARING IS CARING

3 ESSENTIAL DOCUMENTS

BUSINESS OWNERS IGNORE

You might be at the half-way

mark to the anniversary of your entity formation. Or you may have formed your business entity years ago. Either way, we found some startling statistics about business owners who’s business depends on them for it’s exist-ence and found that many had no plan for succession. Here are some survey results of more than 500 business owners that you may feel you are in “shoulder-to-shoulder” company with.

• 80% didn’t have a

power of attorney in place.

• Just 24% had a last will and testament.

• Only 13% had a living trust

• 65% of business own-ers had nothing at all!

What is the solution? Estate planning. Insurance, savings, and a good luck charm. These are the three effective elements busi-

ness owners use to protect their business, right? Well, not exactly. While insurance can cover you for unforeseen events like medical emergencies, only estate planning prepares your company for real life worst-case scenarios. Insur-ance, savings, and a good luck charm. Insurance and savings can keep many of your worries at bay, but even the most well-protected businesses can be exposed to risk if you don’t prepare core personal documents. These documents — a will, durable trust, power of attorney and others — get ig-nored if business owners fail to see the value they represent. As time goes by and their business grows, having these pieces in place becomes more than just important. It becomes critical. Defining Success At the core of a business owners’ success is a simple question: What happens when you’re no longer around, whether that’s through early re-tirement, incapacitation, or death? If you see yourself in this scenario, you need a succession plan. Have you thought about what you would do if you encoun-

ter a financial hardship or transfer your ownership to someone else? It might not be pleasant to think about, but succession planning doesn’t have to be a long, drawn-out process, either. It can be as simple as you want to make it. The most important issue here is putting a plan to paper and defin-ing “succession” as you see it. What you need As a business owner, you also have something else to think about. What hap-pens if you have unpredictable medical events that hurt your ability to do business? That be-comes more than just a financial question. It becomes a question of your company’s survival. That’s something the giant, Apple Inc., doesn’t have to worry about, which has a reported $250 Billion in cash reserves. But guess what? You do.

On the next page, I will share three essential legal documents business owners should consider when draft-ing an estate plan.

PAGE 5

DICKERSON DIGEST ISSUE FIVE - APR- 2020 SHARING IS CARING

3 ESSENTIAL DOCUMENTS BUSINESS OWNERS IGNORE

Durable Power of Attorney

You’re the person in charge. All decisions in your company must be run by you – until you need surgery that puts you out of com-mission for a few months. The questions start piling up. Who pays the rent? Who does business with your clients? Who accesses your bank accounts, and how? A Durable Power of Attorney al-lows you to transfer authority to another. This legal document will assign an “agent” to oversee your funds and make financial deci-sions on your behalf. This includes business operations, tax issues, stock transactions, insurance and even claims and litigation. Durable Trust You put your life’s sweat into your business. Then you die unexpectedly. What happens next? No one knows, be-cause you didn’t plan. Your prop-erty and other assets go through probate and someone else makes decisions about what you worked so hard to build. A living trust is the main tool in your estate-planning arsenal. Holding proper-ty in a trust ensures it will go to a trustee rather than through the court system. Last Will & Testament This simple document describes your intentions for your property and debt and perhaps even your buri-al wishes. Essentially, it’s the last “say” you’ll have. Through a will,

you can designate an executor to ensure your will’s terms are car-ried out. This should be someone you trust completely. Business owners are entrusting their exec-utors with not only their family’s well-being but their livelihood, too. It’s an important decision that requires someone very close to you. Making a succession plan

easy Drafting documents can feel uncomfortable, but the rewards

are significant. For the short time business owners spend with a board-certified estate planning attorney, they gain a sense of se-curity that goes beyond insurance and savings accounts. Business owners who have tackled this process usually find it easier than anticipated and the sense of relief is well worth the effort. We invite you to contact our firm today to learn more about succession plan-ning. We can assure you it will be time well spent.

PAGE 6

DICKERSON DIGEST ISSUE FIVE - APR- 2020 THE PROFIT LINE

PAGE 7

RESTAURANTS PIVOT

TO “POP-UPS” TO SURVIVE

Everyone knows

times are difficult

these days. With

social distancing

and limitations set

on where you can be, as well as, a cur-

few being enforced by the local police

department; there is likely stress and

tension at home. Working for a major

food supplier for local restaurants from

Laredo to Zapata, I see the restaurant

industry suffering the most through all of

this and I wanted to share my perspec-

tive on the current crisis and how local

restaurants can pivot their strategy to

survive.

“TO-GO” ordering is limited and not

available in most restaurants. Not to

mention, unfortunately, it does not pro-

vide enough income to have a restaurant

remain open. As a result, they are just

closing as a means to survive and cross-

ing their fingers for the future. Up and

coming restaurants that were just about

to open have been halted since the city

has sent notice that non-essential busi-

nesses must remain closed until further

notice. Instead of being furloughed,

most restaurant owners have had to

make the difficult decision to simply let

go of their employees with no promise of

rehire since they are unsure if they will

be capable of reopening once this coro-

navirus pandemic has ended.

Working in the food industry has given

me the opportunity to know certain

things that are not immediately known

to the public. In an effort to avoid as

much human contact as possible, preor-

dering several weeks ahead has made

fresh product scarce. Eggs and dairy

have shot up in price by an astonishing

amount, yet beef seems to be streaming

along just fine. Chicken is available, albe-

it, at a higher cost than normal. Fresh

chicken wings are mainly unavailable

with no set date on arrival until further

notice. As a result, restaurants have had

to purchase frozen wings, adding to la-

bor costs and time so they are thawed in

the correct way. I anticipate these res-

taurants will risk delaying orders and

losing customers for being without prod-

uct. As of the writing of this article,

Smithfield Foods, the world’s biggest

pork processor, said Easter Sunday it will

shut one of its 48 plants indefinitely due

to a rash of coronavirus cases among

employees and warned the country was

moving “perilously close to the edge” in

supplies for grocers. Slaughterhouse

shutdowns are disrupting the US food

supply chain, crimping availability of

meat at retail stores and leaving farmers

without outlets for their livestock. Here

locally, grocery stores are running low on

product and are in no hurry to restock;

they are using this pandemic to take ad-

vantage of back stock and getting rid of

product that is normally hard to sell.

The food service industry is suffering as

well. I’ve heard some are being faced

with having to let go of employees that

have been with their company for more

than twenty years and furloughing office

workers. Food service representatives

are being told to stay at home as much

as possible to avoid contact with people.

Food service drivers are being provided

with masks and paperless invoices to

minimize contact with customers. They

also are instructed to sanitize between

deliveries and are given a special sanitiz-

er at the dock to use before they go

By Christina Barrientos, Marketing Associate for Sysco Central Texas, Inc.

ISSUE FIVE - APR- 2020 DICKERSON DIGEST THE PROFIT LINE

home to their families. Because deliver-

ies have reduced to an extreme amount,

delivery trucks are now being leased

out to certain chain grocery stores

to help keep those drivers paid and

employed.

The food service representatives are

being faced the pressure to maintain

sales quotas. Without fresh product

at the ready to deliver, food service

providers want their salespeople to

sell as many cleaning supplies as

possible. The issue with that is the

product is currently unavailable and

dates for the supplies’ arrival contin-

ue to be pushed back. Reps are also

at a high risk of losing their job if

they do not keep up with sales quo-

tas and it causes stress amongst eve-

ryone. Their job security is also

threatened along with furloughed

office employees, who are critically

important and assist the outside

food service reps. Some in the inside

and outside sales departments are

not worried about being furloughed,

but of being fired if sales do not con-

tinue.

Liquor stores and beer sales are

booming, though. Here in Texas, the

people that deliver and stock these

items are considered essential work-

ers and are ready to present a docu-

ment stating their essential worker

status in the event they are deliver-

ing and restocking beyond curfew.

Beer is at an all time high, with dis-

tributors resorting to hiring tempo-

rary workers and offering overtime

to employees who will take it.

Certain towns are seeing an influx of

product rather than a lack as well.

For example, pinto beans are fully

stocked in New York while shelves

run empty in other sections. Locally,

we are fully stocked on fresh pro-

duce. Ramen is being purchased by

the case and milk is being purchased

in bulk. Buying in bulk can have its

downside. Consumers are upset

when trying to return it due to spoil-

age. Grocery stores are being wary

of over-buyers as well and refusing

to allow returns on items like toilet

paper, paper towels, milk, eggs and

beef. There is no shortage of dry

supplies, but this pandemic is caus-

ing mass hysteria and making people

feel as though they need to over

stock on certain items. By doing so,

it has forced retailers to limit certain

items in order to serve as many cus-

tomers as possible. Unfortunately,

people who are overstocking on toi-

letries, sanitizers and cleaning sup-

plies are being caught by law en-

forcement for trying to price gouge

product online. In these tough times

it is important to know that hoard-

ing product prevents others who

truly need the product from pur-

chasing it.

On a positive note, res-

taurants can become

“pop-up” shops, or

grocerants. The term

“grocerant,” merges the words

“grocery” and “restaurant,”. In re-

sponse to the empty grocery store

shelves across the country, Sysco is

providing an opportunity to transform

your restaurant dining area into a pop

up shop where your customers can shop

for essential pantry items, while getting

their meal to-go. The move is an effort

to provide a profitable solution and help

pivot foodservice operations, provide

nourishment and a sense of reassurance

in the community. This alternative, tem-

porary, business model during this crisis

will help restaurants bring in customers

safely to purchase the essential pantry

items that they need for their families.

Pop Up Shop products will vary by loca-

tion but will include essentials like as

eggs, condiments, bread, toilet paper,

etc. When local restaurants fill out a

sales exemption form from their

Sysco ordering representative and

participate in this program, Sysco will

provide them with a Pop Up Shop

Toolkit including marketing tools and

social media outlets, to drive the mes-

sage effectively to their customers.

PAGE 8

RESTAURANTS PIVOT TO “POP-UPS” TO SURVIVE

DICKERSON DIGEST ISSUE FIVE - APR- 2020 THE PROFIT LINE

RESTAURANTS PIVOT TO “POP-UPS” TO SURVIVE

These types of stores provide an ad-

vantage to the customer who wants

to avoid waiting in lines to enter a

grocery store for certain essentials. It

also helps maintain social distancing;

less furthering the risk of getting into

contact with an asymptomatic COVID

-19 carrier. Please reach out to me if

you would like more information or

to sign up. Once all of this is over,

restaurants and several businesses

are still going to have a difficult time

recovering if they are able to reopen.

Customers will continue to stay out

of these businesses due to lack of

funds and waiting lists for unemploy-

ment. The stimulus package has until

December to arrive to your house

thus further postponing funds. Bills

will have to be paid to catch up be-

fore we spend on dining experiences.

Restaurant owners will need to con-

tinue to pay bills and equipment leases

for frozen products. I anticipate this will

be a struggle for the long term. But there

is something we can do to ease the pain

many in the food industry face. In these

hard times, it is important to support

your local pop-up stores and grocerants.

Social media will be a great way to find

where these stores are appearing so you

can shop and make a difference. Re-

member to stay safe, practice social dis-

tancing, and take a positive outlook on

having to stay home by spending time

with your family by playing together and

laughing!

Contact Christina for more info at:

Barrientos.Christina@ctx.sysco.com

PAGE 9

ISSUE FIVE - APR- 2020 DICKERSON DIGEST TOOLS YOU CAN USE

COVID-19 STIMULUS PAYMENTS

READ THIS NOW! Informative note from Juan Pablo Gonzalez of JP&A Tax Services

The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently signed into law provides a one-time payment, among other items, to individuals to help ease the economic strain caused by the coronavirus epidemic.

Here are the details of the stimulus payment initiative.

Who qualifies to receive a payment? A one-time payment of $1,200 will be sent to most adults. For every qualifying child under age 17, families will receive an addi-tional $500. Retirees and people on disa-bility are also eligible to receive a pay-ment.

When will I get my payment? The IRS hopes to get the first batch of payments out the week of April 6. It may take up to a month for everyone to get their pay-ment, assuming everything goes as planned.

How are payments being made? If you included your bank account and routing information on your 2019 tax return, you would receive your stimulus payment via direct deposit. If you haven't filed your 2019 tax return, the IRS will use infor-mation from your 2018 tax return. If you did not include your bank account and routing information on either your 2019 or 2018 tax returns, the IRS will allow you to request direct deposit from a screen (under development) from their website. All others will receive their payment via a check in the mail.

Alert! Invalid bank information. If you have not filed your 2019 tax return AND the direct deposit information on your 2018 tax return is no longer valid (you have a new bank account or closed your old one), you will need to take action im-mediately! If you do nothing, the bank deposit will, hopefully, be rejected and you will receive your check in the mail. Expect a delay, however, as it may take some time to receive a check by mail. You can also try calling the IRS to update your information.

Will I get the entire amount? As with other government programs, there is an income phaseout. Here are the thresh-olds:

• Single adults with income of $75,000 or less get the full $1,200. The $1,200 payment is reduced by $5 for every $100 in income above $75,000. Full income phaseout is $99,000.

• Married couples with income of $150,000 or less get the full amount of $2,400. The payment is reduced by $5 for every $100, making the full payment phased out at $198,000.

• Head of Household adults (normally single adults with children or other dependents) will receive the full $1,200 payment if they earn less than $112,500. Reduced amounts will go out to Head of Household adults who earn up to $136,500.

How will my income be calculated? Your 2019 tax return will be used to deter-mine your income for purposes of wheth-

er you receive the full amount of the stim-ulus payment and how many qualifying children you have. If you haven’t filed your 2019 tax return, your 2018 tax return will be used.

Alert! File a tax return. If you have low income or someone who does not typical-ly file a tax return, you may wish to do so. A simple tax filing is all that is needed to ensure you receive the stimulus payment. Eventually, instructions to do this will be available on www.irs.gov/coronavirus.

Senior Alert! Seniors who did not file a tax return in 2018 or 2019 will automati-cally receive the payment based upon forms 1099-SSA and RRB-1099s. (April 1, 2020 U.S. Treasury press release)

Alert! Don't use my current situation. It may make sense to get your 2019 tax re-turn in immediately. Figure out if phaseouts using last year's information lowers your payment amount. If so, you may wish to file your 2019 now. So, pull out last year's return and take a look! Are the payments taxable? No. These pay-ments are not taxable.

Remember, this is only one of the

many relief components in recent-

ly passed legislation. There are

also unemployment benefits,

small business benefits and much

more to come.

PAGE 10

DICKERSON DIGEST ISSUE FIVE - APR- 2020 SOUND BITES

CLIENT SPOTLIGHT: GUME GARZA

Our client spotlight in this issue is self made success, Gume Garza. As a middle school student, he was nominated to compete in algebra. In college, his math skills led him to be asked by his teacher to tutor his fellow classmates and his love of numbers remains as a key to his current success. Gume began his 33-year career first as a mechanic and driver. He then made his move to having his own trucking company that has grown from one truck to 400! He is not only a leader in the trucking industry as the President and CEO of Royal Express, Inc., but also a health club visionary. He has transformed a former boat supply store into The Gym Legacy, a jewel of a gym, in North Laredo by IH 35 and Shiloh, full of thoughtful design and modern amenities. Here are some “sound bites” of our interview this month.

[JMD] What do you credit for

your success in business?

[GUME GARZA] The legal side of

the business is very important

and the advice you have given

me about how to structure my

businesses has made a differ-

ence for sure. But, I think

that persistence and being

there...I think pretty much,

that's what it is. You know,

anybody can do it. But, you

just have to be there.

[JMD] Do you mean “be there” as

in the business owner needs to

be at the business?

[GUME GARZA] I know people who

are about to have success or

who are already successful.

But, they feel like they're the

owners and we are never the

owners, I think. We’re the num-

ber one person responsible for

the success of the business,

you know, you have to be that.

You are never the owner. You

have to be the one to work

harder than everybody, harder

than anybody.

[JMD] So that kind of dovetails

with my next question. What

would your advice be to someone

who is wanting to start a busi-

ness?

[GUME GARZA] I like construc-

tion. I like to draw and every-

thing is related to a floor

plan of a house or anything you

want to create... trucking, a

gym, a hotel, whatever. When

you draw the floorplan of a

house, you draw some lines and

bathrooms and rooms and you can

move them pretty easily. Why?

Because they are just lines. I

always say, "Drawing doesn't

cost you anything. Neither does

paper”. So you can just draw

what you want and then make it

happen.

[JMD] What have you been

“drawing” lately? Anything you

can share?

[GUME GARZA] My daughter has a

project in mind and I grabbed a

little piece of paper and said,

"Okay. How many rooms do you

want? What size? Like the one I

have in the gym?" She said,

"Yes". So I start drawing. At

PAGE 11

DICKERSON DIGEST ISSUE FIVE - APR- 2020 SOUND BITES

CLIENT SPOTLIGHT: GUME GARZA

the end of the day, I said,

"Okay, so you will need five

thousand square feet and your

rent will be at least seven thou-

sand five hundred (dollars a

month). We discussed her project-

ed income and expenses to get a

clear picture. With more infor-

mation, I start drawing up the

numbers and told her, "You know

what? It makes no sense". And she

asked, "Why?". And I told her,

"Just look at the numbers" and

she was silent. I said, "I'm sor-

ry, but it is what it is". So, if

I was to give advice to someone

starting up like I gave to my

daughter, I would tell them they

need to draw first what it is

that they want. It's like a busi-

ness plan on a small scale. Just

draw what you want; focus in on

how much you are going to charge

and how much you are going to

spend and just look at it and

then go for it.

[JMD] How did she take your ad-

vice?

[GUME GARZA] We had a party pal-

ace I built by the strip mall

behind Times Square. Next door,

I bought a building for my son

when he was around 18/19, so he

could do party rentals for small

ones in a kind of club atmos-

phere. Now, in that little build-

ing, which is twelve hundred and

fifty square feet, I'm going to

build my daughter's project that

she wants to do. You know, the

building is paid for. Then we did

the numbers yesterday and over

the weekend, it NOW it does make

sense.

[JMD] Well that’s good news. We

will see you both soon, I hope,

to create her LLC (smiling). How

do you envision your business

after the pandemic?

[Gume Garza] I envision it very,

very well. It's going to be cra-

zy, yes. But I've been in the

trucking industry enough, for 33

years, but never a pandemic. But

I can call it a pandemic when the

peso goes down and when the econ-

omy goes bad. Those things are a

pandemic to me. I've learned that

it's always, always going to go

in reverse and I envision it is

going to be very crazy and very,

very busy and I’m getting pre-

pared for it.

PAGE 12

(956) 722-8891 (956) 728-7487

ISSUE FIVE - APR- 2020 DICKERSON DIGEST SPECIAL GUEST ARTICLE

US FEDERAL STIMULUS RELIEF

FOR COVID-19 FINANCIAL IMPACT

As the coronavirus (COVID-19) continues to affect local

communities and global economies, the US federal govern-ment unanimously passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748, This represents a $2 trillion aid package designed to help the economy while the containment efforts continue to stop the coronavirus pandemic. • COVID-19 has probably caused some concerns about

your financial well-being. However, there are relief measures available that may benefit you, such as:

• The IRS extended the April 15, 2020 federal income tax filing and payment deadline to July 15, 2020. However, we continue to work on filing returns as soon as possi-ble.

• First quarter estimated tax payments usually due April 15, 2020 are now extended to July 15, 2020.

• States are also providing tax relief for individuals and businesses.

• Emergency paid sick and family leave benefits are avail-able to employees (with some limitations and excep-tions).

• Employers, including those self-employed, have availa-ble refundable tax credits to offset the costs for provid-ing coronavirus-related leave benefits.

The following are some of the federal assistance included as part of the CARES Act. INDIVIDUAL TAX Recovery rebates will be sent to individuals in the following amounts:

• $1,200 per person/$2,400 to married couples and

• $500 per dependent child under age 17

Amounts will be phased out over the following ranges:

Determination made based on 2019 Adjusted Gross Income if return filed. Otherwise, 2018 will be used. If no returns filed, Social Security or Railroad Retirement benefit state-ments will be used. Treasury Department was directed to provide these rebates as soon as possible. BUSINESS TAX • Creates an employee retention tax credit for wages

paid by certain eligible employers adversely affected by the COVID-19 crisis;

• Postpones employer payroll tax payments, to Decem-ber 31, 2021, and December 31, 2022; Employers and self-employed individuals will be able to defer pay-ments of the employer share (6.2% of employee wages) of Social Security payroll taxes that would have other-wise been owed from the date of enactment of the leg-islation through December 31, 2020.

• Expands the use of Net Operating Losses (NOL) car-rybacks and carryforwards for corporate and noncorpo-rate businesses: 2018, 2019, 2020 NOLs to be carried-back 5 tax years, and removes 80% limitation to fully offset taxable income;

• NOL relief is extended to passthroughs and sole propri-etors by allowing excess business losses under section 461 for taxable years before 2021 and will allow

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By: Raul Garza, CPA, MPA, DABFA, Owner of Garza Accounting Professionals, PLLC

DICKERSON DIGEST ISSUE FIVE - APR- 2020 SPECIAL GUEST ARTICLE

US FEDERAL STIMULUS RELIEF FOR COVID-19 FINANCIAL IMPACT

carryover losses into subsequent taxable years as a technical correction to section 461(l)(2) enacted by the TCJA. • Increases the limitation, under 163(j), on the amount of interest expense businesses are allowed to deduct, to 50-

percent of taxable income, for 2019 and 2020; • “Qualified improvement property” classified as 15-year property under MACRS, which accelerates cost recovery and

makes it eligible for bonus depreciation.

SBA Loans Small businesses and not-for-profits in disaster declaration states can apply online for low-interest loans through the U.S. Small Business Administration (SBA). The government has declared the state of Texas as a state of disaster. • An SBA Section 7(b) Economic Injury Disaster Loan provides up to $2 million to help business with fewer than 500

employees pay fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the loss of revenue caused by a declared disaster. The loans cannot be used to cover lost profits.

• The interest rates for the loans are 3.75% for small businesses and 2.75% for not-for-profits. The SBA determines terms on a case-by-case basis, based on each borrower’s capacity for making monthly loan repayments. The maxi-mum loan term is 30 years.

• The loans also offer a one-year deferment on payments. This means that the first payment isn’t due until a year after the official date of the loan. However, interest starts accruing on the loan the moment the funds are disbursed.

Small businesses can apply for the loans at: disasterloan.sba.gov/ela. As of the date of this article, the SBA’s website was not accepting the online application due to the high demand. The best way to submit the applica-tion is to download the Business Loan Application (Form 5), complete and either upload through online portal or send via mail to the following address:

U.S. Small Business Administration Processing and Disbursement Center 14925 Kingsport Rd. Ft. Worth, TX 76155-2243

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1 0 7 C A L L E D E L N O R T E , S U I T E 1 5 A L A R E D O , T E X A S 7 8 0 4 4 - 2 6 6 4

T E L : ( 9 5 6 ) 7 2 7 - 4 1 2 2 E M A I L : C P A F I R M @ G A P - C P A . C O M

DICKERSON DIGEST ISSUE FIVE - APR- 2020 FINAL THOUGHTS

WHAT WILL YOU DO WITH YOUR GIFT OF TIME DURING QUARANTINE?

Dear Friends,

While many of us are home, it is easy to fall into the trap of Netflix binging, or spending too much time on social media. We find it hard to remain productive when we are out of the workplace. Some of you are also feeling anxious about what is going to happen next, when will we be back to normal. How quickly will be bounce back, both physically and fiscally. The frustration mounts because, for most of us there is not much we can do but follow the CDC guidelines, stay home and keep social distancing. As you know, I am a posi-tive person by nature, so when life gives you lemons make lemonade. You can take this time that you have with your family and really think about the important documents that you have been putting off, because you didn’t have time or wouldn’t make time before this quarantine. Now you have time and your family around to discuss how you would like things to be handled if you are ill, incapacitated or if you are to pass away. Here are my five “must have” key docu-ments that you need to have in place:

1) Durable Power of Attorney: Authorizes your agent to make financial, real estate and other fis-cal related decisions if you are incapacitated.

2) Medical Power of Attorney (Healthcare Pow-er of Attorney): Designates who can make health care decisions for you if you are incapacitated.

3) Designation of Guardian for Minor Chil-dren: Designates who can be your children’s guardian to care for them if you die or are incapac-itated.

4) Designation of Guardian in the Event of Later Need: Designates who will be your guardi-an in the event you are incapacitated, and a Guardian needs to be appointed. Also, you can specify who you do not want to be your Guardi-an.

5) Directive to Physician (Living Will): Directs your family and physician if you are in a terminal condition or if you are in an irreversible condi-tion.

These documents are a must if you find yourself incapacitated, the problem is we don’t know when that is going to happen. The key is to be prepare now, before something happens. At The J.M. Dickerson Law Firm, we make it easy for you to have your documents ready.

Let us help you to get this done and check it off your list. If not NOW, when. Go to the link I have provided below for our Guide to Lasting Peace of Mind, to get started. And as a bonus, I will also give you a copy of my ebook, The Tex-ans’ Guide of the Probate Process.

Stay safe and take advantage of this down time, it may not happen again.

*Website for download to Guide to Lasting

https://dickersonlaw.com/free-guide-to-lasting-peace/

*Website for download to Texan Probate Book: https://dickersonlaw.com/free-probate-guide-for-texans

Contact us today so we can visit on a one-to-one basis by calling (956) 267-5214.

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Best Regards, Joseph Michael Dickerson

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