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​​TAX & ACCOUNTING SERVICES FOR INDIVIDUALS & SMALL BUSINESSES​

IMPORTANT UPDATES ON THE SVB COLLAPSE: NEXT STEPS FOR TAXPAYERS AND SMALL BUSINESS OWNERS

Updates on the SVB collapse have been circulating, and while opinions vary, this post aims to provide valuable information and awareness for taxpayers and small business owners regarding their banking. 

The FDIC recently announced that it would insure deposits exceeding the previously established $250,000 limit. However, opinions on this matter differ widely, and further commentary will not be provided here. Instead, the focus will be on offering guidance and next steps for individuals and businesses.

Many affected payroll companies have assured that direct deposits not made last Friday should have been processed today or will be soon. If your situation hasn’t been resolved yet, calmly inquire with your employer or payroll provider for an update. Remember, they were not aware of this issue, so approach the matter with grace while seeking a resolution.

If you experienced an overdraft due to a delayed direct deposit, possibly because of auto-bill payments, you have two possible recourse options (not guaranteed). First, contact your bank to discuss the potential reversal of charges. Second, engage in a conversation with your employer or HR department. Although your employer is not obligated to cover these fees, they might choose to do so for employee goodwill. Ensure you bring or send a printout as proof of incurred bank fees.

For business owners, here are some next steps to consider, both in the short-term and long-term, based on insights from a recent webinar:

  • Diversify your banking relationships to avoid having all your funds in one bank.
  • Reconcile your accounts promptly up until March 10 to have a clear understanding of the money received or outstanding according to your accounting records.
  • Double-check payroll transfers and incoming funds to ensure smooth transactions.
  • Conduct phone confirmations for all wire transfers.
  • Stay vigilant against fraudsters and phishing attempts.
  • Approach situations with measured and tempered actions, following a ready, aim, fire approach rather than rushing into decisions.

Remember, staying informed and taking proactive steps can help mitigate potential risks and ensure the smooth operation of your financial affairs.