In this post, we will highlight some of the important items noted in the new bill, passed by the Senate last night, we are just waiting on President Trump to sign off - called the Consolidated Appropriations Act, 2021.
We are going to cover the top 5 items of the 5600 pages bill.
1. The Stimulus Payment: The second round of stimulus payments will be going out starting next week. If you are an individual filing your tax return single with an AGI (Adjusted Gross Income) of $75,000 or less - you are getting $600.
If your AGI is above that number, your stimulus payment will be reduced by $5 for every $100 above the assigned AGI. For Example: If you are single and your AGI is $87,000 or above then you are not getting anything.
If you are married with an AGI of $150,000 or less - you are getting $1,200. If your AGI is between $150,000 and less than $174,000, the $1,200 will be reduced. If your AGI is over $174,000, then you will not get your $1,200.
Where to find your AI? go to your 2019 tax return and check line 8b.
2. PPP loans expenses: YOU CAN DEDUCT THEM! This is huge.
3. More PPP - 2.0: In this act there is $325B for small businesses, of that there will be about $284B released to PPP loans. We have not heard about how they are going to open this up for small business, we think that there is going to be limits on the size of businesses. We think they are going to decrease the number of employees that a business has, instead of 500 employees to 100 or 300 employee’s business size. In addition, you might have to prove that your business suffered during COVID. We do not know the details yet, but there is going to be another PPP loan coming to small businesses - be on the lookout.
4. Employee Retention Credit: Available to those businesses that received PPP. This credit is only available for the businesses that suffered during COVID. The original rule was that you had to show 50% decrease in revenues. In this new act, you would need to show 20% decrease in revenue. So, if you retain your employees and you can show that your business suffered during COVID, reach out to us.
5. Jobless aid (Unemployment): Continues to $300 per week for 11 weeks.
Finally, the BONUS (Meals and Entertainment): The rumor has it that now you can deduct 100% Meals and Entertainment. We think that is going to start in 2021 and it is a two years deal so (2021 and 2022) to encourage businesses to help restaurants out.
Please make sure to visit our website at https://www.wmcpagroup.com/services and schedule your 30 minutes appointment.