Taxes during the holidays
In case you missed it, after months of negotiations, there is another COVID relief bill which is over 5,000 pages long ! Most taxpayers are focused on the additional stimulus payment that is forthcoming. However, there is a lot more going on, some of which is related to the last bill. For business owners who received PPP loans and/or EIDL grants during the year, it appears there are some fabulous "wins" as follows:
1. The CPA community as well as others, pushed for and apparently won a change in the IRS' position that expenses paid with PPP funds are NOT deductible. This effectively secures the non-taxability of PPP funds that seemed to be at risk over the last several months.
2. It appears that EIDL grants will NOT reduce the forgivable amount of PPP loans, as was the case before. Another BIG win for those that received EIDL grants, effectively putting more money in business' pockets.
Of course, as always, rules and interpretations may change, as this bill is over 5000 pages and needs to be digested by all as we head into tax season.
2020 will certainly be a challenging tax year for taxpayers and tax practitioners alike. Don't hesitate to secure your tax preparation "spot". Many practitioners who seek to provide quality services will likely be in the position to be unable to take on new clients at some point soon, myself included. This is NOT the year to delay and wait until the last minute !
Last but certainly not least....HAPPY HOLIDAYS ! 2020 has flown by and in many ways has not been easy for most everyone. I hope this will be very different in 2021.