A Look at Proposed Legislation: Last Minute 2020 Curveballs

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Well, I do not know what would be more 2020 than a last-minute legislative action that would change some of our carefully planned yearend tax strategies. Senators on both sides of the aisle are working tirelessly to get this passed before the holiday.

The bill is broken up into two pieces – both of which are being negotiated together as if it was one large piece of legislation. Let’s break down some of the proposals on the table and where to read more.

On the business tax side, we have all been planning for nondeductible expenses if they were paid with PPP funds. There is a provision in the draft bill that would make these expenses deductible. I know every one of my clients that got a PPP loan will let out a big sigh of relief when this passes. There is additional funding for the PPP loans as well to continue the program for struggling small businesses, which includes a provision of a 30% reduction in revenue to qualify.

On the individual side – we are expecting additional stimulus checks to lower income taxpayers which is predicted to be around $600/person. There is money set aside for a rental assistance program to keep people in their homes. There is not clear information on how that money would be accessed by the general public. They are also negotiating a provision to provide additional assistance for unemployed individuals. Here is a good summary and where we stand with the bill from CNN: Hill leaders eye new round of stimulus checks as part of $900 billion Covid relief deal.

Some key pieces that are less relevant to use on the business side (but still relevant as we are humans) are as follows. There is money set aside for state and local governments that are hitting budget shortfalls to keep local communities alright. They have allocated funds for schools to handle pandemic related issues. And they have budgeted funds to assist with vaccine distribution.

Here is an article summarizing the provisions that I enjoyed from the NYT: $900 Billion Pandemic Relief Deal Takes Shape.

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Liz Mason
Liz Mason is a serial entrepreneur, a giant nerd, and an involved accounting vanguard. She is the Founder of High Rock Accounting, Rebel Rock Accounting, TheDepartment.Tax, and a few other related brands. Liz speaks on a national stage, guests stars on podcasts, publishes a YouTube show (The Hot Accounts), and writes frequently. To further her passion for the advancement of the accounting profession, Liz currently serves as a Xero National Ambassador and as the Content Strategist for Tax Practice News. Liz started her career in tax at Grant Thornton (at 20) and automated a portion of her job landing her in the national tax practice. She spent a decade in large public accounting firms working on highly technical tax consulting before branching off on her own. Liz utilizes her creativity and passion at her company to uproot traditional practices and replace them with innovative concepts. She finds joy in efficient technology and her core belief is that everyone and everything can continuously improve (she says "be better" too often). When Liz isn't planning world domination in accounting, she is a die-hard skier, down for any adventure, plays the ukulele, reads everything, and has a good sense of humor. If you're looking for her, you can find her traveling the world and enjoying new food and cultures with her husband and young son. Follow Liz and High Rock Accounting on Twitter at @LizzyNorMa and @HighRockCPAs.