Important Tax Reminders As We End 2020
The days are getting colder, the nights are getting longer, and the beautiful fall foliage we're lucky enough to have here in New England is nearly gone. That must mean this crazy rollercoaster of a year is almost over. Finally! And while we're gearing up to celebrate the holidays, we also want to share a few reminders and highlights for both our business and individual clients regarding various tax credits. Read through to see if any of these apply to your situation and then schedule some time with us to get everything in order.
If you own a business or are self employed
Small business owners and the self employed have been hit especially hard this year due to the Coronavirus pandemic. Check out these reminders and opportunities to put a little cash back in your pocket.
Be sure to take advantage of available tax credits for employers prior to 12/31/2020. To learn more about these opportunities, connect with your payroll processor.
Sick and Family leave covers two weeks of your employee's pay if they or someone in their family is quarantined. If you’re a business owner there’s a very good chance that you’ll face this at some point (if you haven’t already).
The Employee retention credit is up to $5,000 per employee on qualified wages, but keep in mind that if you received PPP money, you are not eligible for this credit. Read more info to see if you qualify.
If you received a PPP loan
Many of our business-owning clients applied for and received loans through the Paycheck Protection Program. If that’s you, here’s what you need to know.
The next step is to request forgiveness through the bank that issued you the loan. Rumor has it that congress may pass a bill allowing us to skip the forgiveness request for loans under $150,000. Stay tuned for more on this.
Reminder that even though this is not 'taxable', it is covering your payroll expenses. Since you will have fewer expenses to write off, it will feel like it's taxable. (Same with State Grants.)
If you received an EIDL (Economic Injury Disaster Loan)
If you do not pay these back, they will convert to a loan. The only free money associated with this was $1,000 per employee and likely was deposited into your bank account shortly after you applied.
For individuals
And finally for our individual clients, be sure to take note of these important reminders.
People First initiative gave people dealing with IRS debt a little breather. That ended 07/15. If you've been avoiding them - it's time.
If you need to tap into your retirement account as a result of Coronavirus the max loan about doubled to $100k and they've added an extra year to pay it back.
If you take a qualified distribution - there is no 10% penalty and you can spread the taxes out over 3 years. You can also reduce the tax consequence by putting that money back in within the 3 year window.
Folks receiving required minimum distributions do not have to take them in 2020.
This is a lot of information to hit with you with all at once and especially at this time of year. However, some of these opportunities come with deadlines, so don’t let them pass you by. Know that we're always here to answer questions and help in any way we can. Just give us a call.
603-432-8291
Powered by Weatherby Media
