SBA Announces Changes to How PPP Loans Are Calculated for Self Employed
This week, the SBA decided to make important changes in calculating the amount of PPP funds that a self-employed worker, such as a sole proprietor or independent contractor, may receive in PPP funds. For businesses with employees, PPP loans are generally 2.5 times payroll costs. But for one-person firms that don’t have a payroll, lenders used the net profit number from the IRS 1040 Schedule C, which includes deductions. Because of this, some workers saw very low loan amounts
Your gambling losses may be tax deductible.
If you itemize your deductions on Schedule A and keep a record of your gambling winnings and losses, you may be able to deduct your gambling losses. If you claim the standard deduction, then you cannot deduct gambling losses and you are still obligated to report and pay tax on all winnings you earned within the year. This deduction includes winnings and losses from: - Lotteries - Raffles - Horse and dog races - Casino games - Poker games - Sports betting However, the number o
Home Office Deduction: What You Need to Know About Working From Home
2020 was a long year that was full of unprecedented changes. Considering tax season, those changes may lead you to wonder how your taxes will be affected. If you began working from home as a result of the COVID-19 pandemic, you may qualify for the home office deduction. This deduction is for those who use part of their home for business to deduct expenses for business use. Who can claim this deduction? Self-employed individuals who use a part of their home to work or meet wit
Don’t Miss Out on Claiming the Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is a refundable tax credit given to taxpayers that earn a low-to-moderate income from a job or through self-employment. According to the IRS, around 25 million eligible filers received this credit in 2020 and the average EITC was approximately $2,461. However, many eligible taxpayers are missing out on this tax break, the IRS reports that an estimated 1 in 5 eligible taxpayers miss out on this credit because they either don’t know about it,
COVID-19 and Your Tax Return
This Friday, on the 12th of February, is the official opening date for tax season. On this day, the Internal Revenue Service (IRS) will begin accepting and processing our 2020 tax returns. This start date is around two weeks later than the usual start of the season due to the COVID-19 pandemic. The IRS has set a goal of 21 days or sooner to issue refunds, but before you quickly file your return here are some things to keep in mind: The pandemic brought us two economic relief
Educators May Deduct PPE Expenses Under New IRS guidelines
Last week, the IRS released Rev. Proc. 2021-15 as an update for the deductibility of personal protective equipment (PPE) paid for by educators. The new update provides a safe harbor for “eligible educators” to treat unreimbursed expenses for PPE paid out of pocket by the educator. According to the IRS, “this revenue procedure provides a safe harbor for eligible educators, within the meaning of § 62(d)(1) of the Internal Revenue Code (Code), to treat unreimbursed expenses paid
Why the Wait?
It’s only right that even the 2021 tax filing season start date has been postponed by the 2019 Coronavirus, but at least we know when it will return to normal. Why the Wait? All good things take time, especially if you want to get a second round of Economic Impact Payments. The IRS is programming, updating, and testing its systems due to the December 27th tax law change, and making sure that they run smoothly. When Can I File? You can begin filing your return now, but it can
Small Business, Big Benefits
Taxes are daunting, and especially for a small-business owner’s income. The following tips are six ways small businesses can get some tax relief from COVID-19 this year. 1. The Employee Retention Tax Credit If your business has fewer than 500 employees and had to partially suspend business due to the pandemic or had a revenue decline of 20% comparative to the same quarter in 2019 then you are entitled to some compensation. This credit is refundable and equal to 70% of each
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