Expert Network Team Podcast
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Consolidated Appropriations Act of 2021 and What it Means for You
Karl and Nathan Merrill, attorney at Goodspeed and Merrill, discuss the most recent tax reform passed through Congress at the end of 2020. Many people know about the $600 sent to families. But we discuss other details that may not have made the news. Some of the highlights include:
- Business expenses paid with PPP loan are deductible: For business owners who used their PPP loan properly, the loan is not taxable. This had been in doubt until this act passed. There are also four new types of expenses that qualify.
- PPP loan part 2: Business owners who have a downturn in revenues may be able to apply for a second loan.
- PPP loan simplified forgiveness: If the loan was less than $150,000, a one-page simplified forgiveness document is all that is necessary now.
- $600 charitable deduction instead of $300. Married people who do not itemize their tax returns may claim $300 each for their charitable deductions. In 2020, it was only $300.
- Medical expenses above 7.5% of adjusted gross income (AGI) are now deductible, for all future years.
- Lifetime learning credit instead of a deduction: Going forward, tuition and related expenses will no longer be tax-deductible. However, the lifetime learning credit helps people with higher incomes, up to $180,000 income for a married couple.
- Attention businesses who pay for employee’s educations—now a business can also pay for an employee to pay off their student loan and it is both a tax-deduction to the business and not taxable income for the employee. Capped at $5,250 per year.
- Business-related meal expenses are 100% deductible. That’s good news for restaurant owners!
Be sure to consult IRS.gov and your CPA for full details. Listen to the podcast to learn more!
If you are worried, please call your financial advisor!
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