You may have heard that Congress passed the Emergency Coronavirus Relief Act of 2020 (ECRA). This 5,465-page document is being presented to the President for signature. Assuming that it is signed, there are very significant changes to your business.
PPP and small business support: New Covid -19 package provides much needed support for small businesses.
- Business expenses paid for with the proceeds of the PPP loans are tax deductible.
- The loan forgiveness process is simplified for borrowers with PPP of $150,000 or less.
- If your initial loan was computed with less than the amounts entitled, you may get additional funds. If you already got forgiveness on the PPP loan, you may not be eligible for this part.
- Certain businesses that had a reduction of revenues of 25% or more may get additional PPP loans. This is a complex calculation, but many people experienced such a decline.
Economic Impact payment (EIP): Certain taxpayers will receive a second round with reduced amounts of $600 and $600 for a child. If you were eligible this spring, you will probably be eligible now.
There is Rental Assistance until January 31, 2021 and Student Loan forbearance through April 1, 2021.
There are payroll tax delays, tax extenders, charitable contribution changes and other tax law changes.
To Lynch, Malloy, Marini, LLP and the Peer Review Committee of the Massachusetts Society of CPAs: We have reviewed the system of quality control for the accounting and auditing practice of Lynch, Malloy, Marini, LLP (the Firm) in effect for the year ended April 30, 2017. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards).
As you have heard, there have been significant tax law changes for 2018. We have been carefully studying the changes, and know that it will affect all of our clients.
Here are some of our thoughts on the most significant changes:
- Your deductions will decrease – this is caused by a limitation on the state and local taxes that can be deducted, and because there are no miscellaneous deductions (investment costs, unreimbursed business expenses and tax preparation fees).
- Your standard deduction will increase which will result fewer people itemizing their deductions.
- If you bought a house or refinanced your mortgage after December 2017, the mortgage limitations changed to a maximum of 750,000, plus 100,000 if you have a line of credit. If you have or own a business, the rates may be less but there are some significant limitations which can impact your returns.
- If you are in real estate, there are deductions now available to you that may reduce your taxes.
- The Alternative Minimum Taxes changed – this will result in less people being subject to this extra tax.
- People which have had a reduced withholding, may result in additional taxes owed at the end of the year.
There are many more changes that may affect you.
We are here to answer your questions. Please contact Tony Marini or Rob Lynch for specific questions!
Telephone (781) 871-5850
Welcome to the accounting and tax update section of our website. We will post important updates here, to keep you informed of important changes impacting your accounting methods, tax changes, tax planning, and clarifications and rulings by the Internal Revenue Service.
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As always, if you have any questions, please reach out to us at any time. We are here to help you. Please contact Tony Marini or Rob Lynch for specific questions!
Telephone (781) 871-5850