COVID-19 Relief Law Boosts Temporary Tax Deductions and Credits
Embedded in the COVID-19 relief law is $900 billion for financial assistance.
As you would expect in these unusual times, some of the relief is in the form of direct government financial assistance and some is from tax benefits that can impact both tax year 2020 and tax year 2021.
Most of the provisions create extra deductions or credits where Uncle Sam puts cash directly into your wallet.
Who Qualifies for First-Draw PPP Money Today?
Two things to know about the Paycheck Protection Program (PPP) first draw enacted on December 27, 2020:
Who qualifies for first-draw PPP money today? You, most likely—if you file a business tax return and have not yet received any PPP monies.
At the end of 2020, the new $900 billion coronavirus relief package became law. This relief expanded the existing “Economic Impact Payment” program with an additional $600 stimulus payment to taxpayers provided that they had previously filed a 2019 tax return. Unlike the first economic impact payment released in April of 2020 where the IRS determined the amount of the payment based on either a taxpayer’s 2018 OR 2019 tax return, this payment is again only based on the taxpayer’s 2019 tax return.
So that we can help you avoid getting costly repayment letters from the IRS, it is imperative that we know the exact amount of stimulus payments you receive in both the first round and second round payments. Please save proof of payment and provide it with your tax documents this year for verification.
We are super excited to be rolling out a brand new client portal system this month to replace our current client portal. Our new portal system is from a company called Canopy, and just like our current portal, it will be the most secure gateway for you to send us important documents and for us to send you important documents.
Hi Friends, what a crazy year it’s been!
In January 2020, I thought my largest challenge would be running the practice my mother founded, with her now in retirement. Turns out I was wrong. I could not have predicted the challenges that have faced us all. While we met with many of you in person this year, we did close the office to the public starting in March 2020 for a virtual tax year and it worked out well for everyone.
As I think about this past year and all of the people that I’m so lucky to have as a part of my life (my family, my staff, my clients), I can’t help but think of their safety and well being. It’s become an inescapable fact that we will continue to deal with this pandemic for a while longer. Most experts say that the soonest the general population will have had the chance to be effectively vaccinated will be April or May of next year. So after much thought and discussion with staff, we have made the decision to keep the office closed to the public (and continue to have virtual tax appointments) until at least May 2021 so that we can keep our staff, clients, and families as safe as possible.
We wanted to let you know that we are still processing 2019 tax returns. It has been quite a year between shutting down the office because of Covid-19, all of our staff continuing to work from home, the stimulus packages passed by Congress and the myriad of loans and employee protection programs we have had to navigate over the past few months for our clients.
Did you receive a strange looking Visa card in the mail and you’re not sure where it came from and worried it might be a scam or junk mail? Well as it turns out, it just might be your stimulus payment. Instead of sending you a paper check the Treasury Department is issuing prepaid Visa debit cards with your stimulus payment loaded on it. Who gets the card and who gets the paper check is still anyone’s guess. Some cards have also been issued with incorrect names on them so please, if you receive them, verify everything is correct.
Maryland Governor Larry Hogan has lifted the state’s stay at home order effective Friday, May 15, at 5 PM. His new order, while allowing some business to reopen at limited capacity, still gives businesses the freedom to determine for themselves when they choose to open their doors to the public. After discussing this matter, we have made the decision to maintain our office closure in order to continue to protect our clients, and our staff and their families, from exposure.
At this time we are reaching out to clients who had appointments in June and July for procedures to send us their tax documents. We are continuing to monitor data concerning Covid-19 and Center for Disease Control guidelines for reopening and want nothing more than for life to return to normal. When that time comes, we can’t wait to see you all again face to face.
The Maryland Department of Labor’s Division of Unemployment Insurance has posted four new tutorial videos on their website, social media pages, and YouTube to help Marylanders navigate the new BEACON One-Stop. All four videos can be found directly on their homepage at MDunemployment.com.
You may be eligible for up to 39 weeks of unemployment benefits if you are self-employed and your business income has been affected by COVID-19.
Recent legislation now provides small business owners the opportunity to collect unemployment which is not something they are normally able to do. As the majority of our clients are in Maryland we are going to cover how this is working in Maryland. If you live in a different state, please check with your state’s unemployment office.