For those of you procrastinators who wait until the last minute to get your tax documents together, you now have company. Coming in during the final legislative minutes of the year, and after many months and countless proposals and counterproposals, it appears that Congress has agreed in principle to the terms on a $900 billion dollar relief package that aims to provide economic relief to both individuals and businesses. Coming in at just under 5,600 pages, the appropriations bill which combines the $900 billion COVID relief with $1.4 trillion of governmentwide funding is expected to be quickly passed by both houses and signed by the President.
For those of you who had previously received PPP funding and were disappointed in the IRS’ position that no deduction would be allowed for expenditures associated with borrowings that were forgiven or intended to be forgiven, you have been given a holiday present in the form of revisions to the original CARES Act language that makes clear that “no deduction shall be denied…by reason of exclusion from gross income” making such expenditures fully deductible.
The legislation also included a much needed second round of PPP funding for eligible borrowers and provided a simplified forgiveness process for existing borrowers.
Deductions for business meals has also been expanded from 50% to 100% for the 2021 and 2022 tax years.
The bill includes numerous other meaningful changes that may impact your tax situation.
Please feel free to reach out to us with any questions you have about the impact of this new legislation may have on you or your business.