Economic Impact Payments (direct stimulus payments):
To complete your tax return, we will need to know to total amount you received in stimulus payments in both 2020 and the most recent payments sent in December 2020/January 2021. If you did not receive your payment, you may reconcile that on your 2020 income tax return. If you provide incorrect information regarding your EIP, your refund may be altered or you may receive a bill. It is our understanding if you received more EIP than you were entitled, you will not have to pay it back.
PPP Loans:
PPP loans that have been forgiven are not taxable and deductions are allowed for otherwise deductible expenses paid with the proceeds of a PPP loan. Basically, if your loan has been forgiven, it’s free money.
Distributions from IRA:
-RMD has been suspended for 2020, so there is no penalty if you did not receive your RMD.
-If you took an early distribution from your retirement plan due to a direct impact of COVID-19, the 10% penalty is waived.
-You may divide the income of distributions over three years and pay income tax accordingly if you were diagnosed with COVID-19 or were otherwise directly impacted by the virus. This is not automatic, and if you choose this election, we will ask you to sign a form indicating you were impacted.
EIC/Child Tax Credit:
You may use your income amounts from 2019 or 2020 in the calculation of EIC or CTC, whichever is greater benefit to you.
Family First Coronavirus Response Act:
For owners of businesses that were impacted by COVID-19 by having to quarantine, shut down due to government order, or had to stay home due to a childcare shutdown, please talk with us about your recovery options.
Deferral of Payroll Tax:
Self-Employed individuals may defer 1/2 of their SE Tax due, with half payable by December 31, 2021, and the remainder by December 31, 2022.