Your 2020 Taxes: What to Look Out for if You Took Government Aid
Reducing taxes is complicated – who doesn’t cringe at the thought of tax season?! – but the 2020 tax season is shaping up to be one for the books with unprecedented challenges. Especially if you accepted government aid. From a financial perspective, this has been the craziest year I’ve ever seen!
If you took advantage of any of these government programs, here are a few things to watch out for when it comes time to file your 2020 taxes.
- Paid Leave: If your shop paid coronavirus-related leave to employees, the government is offering tax credits to reimburse that cost – up to $10,000 per employee!
- Deferred Payroll Taxes: You can defer your payroll taxes. But be prepared for added complexities when filing taxes since the program’s rules are extremely ambiguous and vague.
- EIDL: Because the EIDL program was designed as part-loan and part-grant, the grant portion is taxable and must be reported as taxable income.
- PPP: Okay folks, this is the big one and probably the one you’re least prepared for! Although the PPP was marketed as a tax-free loan, over 30 updates have been made to the program since it began – it seems like the rules change every day! – so, currently, it appears that you will owe more money if your PPP loan was forgiven.
So your tax bill will probably be way more than you planned for. That’s why we created 5 Tax Mistakes That Cost You Thousands, a $79 value available as a free download, to help you avoid costly tax mistakes that you and your CPA are overlooking!