What to Look Out for if You Took Government Aid

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.

  1. 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!
  2. 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.
  3. 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.
  4. 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!

If you have any questions or think you may be eligible, click here to schedule your assessment.