IRS extends April 15th deadline to May 17th
The IRS has extended the April 15 deadline to Monday, May 17. This extension does not apply to estimated tax payments for businesses or individuals, corporate income tax payments and return filings, and trust income tax payments and return filings. These payments and returns are still due April 15.
States are still reviewing the IRS announcement and conformity will vary. Consult your tax advisor or state revenue department web page for state filing deadlines.
Paycheck Protection Program (PPP) application deadline extension
On March 16, the U.S. House of Representatives voted 415-3 to extend the PPP application deadline from March 31 to May 31. The legislation has been sent to the U.S. Senate for consideration.
Borrowers may use gross income instead of net profit to calculate their maximum PPP loan amount
The U.S. Small Business Administration (SBA) issued new Paycheck Protection Program (PPP) rules that allow self-employed individuals who file Form 1040, Schedule C, Profit or Loss From Business, to calculate their maximum loan amount using gross income instead of net profit.
This change opens the door for larger loans to self-employed individuals, who do not record material net profit on their Schedule C.
The rule change is not backward looking. The SBA and Treasury have ruled that borrowers whose PPP loans already have been approved cannot increase their loan amount based on the new parameters.
The first $10,200 of unemployment benefits is excluded from 2020 taxable income for people with adjusted gross income (AGI) of less than $150,000. There is no phase out. If AGI is $150,000 or greater, no exclusion is available. If both spouses receive unemployment benefits, each spouse may exclude up to $10,200. If you have already filed your 2020 return and did not take advantage of this exclusion, contact your tax advisor.
This is not a recommendation and is not intended to be taken as a recommendation. This material was prepared for general distribution and is not directed to a specific individual.
LPWM LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers.