If you’re watching the news lately, you know things are changing fast in many areas. Business owners are hard-pressed to keep up with the changes in PPP loans, forgiveness, tax changes, stimulus checks, etc.
Adams Accounting Solutions has compiled a list of updates that you need to know about. We’re always here to answer questions about anything related to running your business or preparing for tax season. Which, by the way, won’t officially open for another two weeks…
Read on for more information.
Tax Filing Season
The Internal Revenue Service announced on January 15 that the 2020 tax filing season wouldn’t officially begin until February 12, 2021. That’s the earliest that the IRS will start accepting and processing tax returns for 2020.
According to the IRS, the delay is due to additional programming and testing needed as a result of the December 27, 2020, tax law changes that provide a second round of Economic Stimulus Payments and other benefits.
Although the IRS won’t accept tax returns until February 12, the IRS urges people to file electronically as early as possible. Those who file through tax software companies, including IRS Free File partners, may file now; however, returns won’t be transmitted to the IRS until February 12.
Another note on the 2021 tax filing season: The IRS does not plan to extend the filing deadline this year. Income tax returns for 2020 are due on April 15, 2021. Plan accordingly.
Paycheck Protection Program (PPP) – Round 2
The SBA reopened the PPP for a second round of loans on January 11, 2021, and began accepting applications on January 13. This second round of funding allows for eligible borrowers who previously received a PPP loan to apply for a second loan to maintain business operations for up to an additional 24 weeks.
You may qualify for a second PPP loan if you meet the following criteria:
- You previously received a PPP loan and used it only for authorized purposes
- You have no more than 300 employees
- You can demonstrate a minimum 25% reduction in gross receipts between comparable quarters in 2019 and 2020
If you’re interested in applying for a second round of PPP funding, you have until March 31, 2021, to get your application filled out and submitted. Talk to your banker for more information.
Economic Impact (Stimulus) Payments
First check: By now, all eligible parties should have received the first stimulus payment. If you haven’t received your check and feel that you should have qualified for one, you may be eligible to claim a Recovery Rebate Credit on your 2020 income tax return.
Second check: On December 29, 2020, the IRS and the Treasury Department began delivering a second round of stimulus checks to the same parties who received the first round of payments in 2020. Similar to that process, checks are being deposited electronically into taxpayers’ bank accounts when possible. Paper checks began going out in the mail on December 30.
No action is required on your part to receive your second stimulus check. If you haven’t received your payment and want an update on the status, look for it using the Get My Payment tool. Similar to the first check, if you have not received the second check by the time you file your 2020 taxes, you may be able to claim it as a Recovery Rebate.
Adams Accounting Solutions Stays On Top of What Matters
At Adams Accounting Solutions, we know you have your hands full running your business. That’s why we keep up with breaking news that may impact you, whether it has to do with income or other taxes, stimulus checks, PPP loans, or other accounting and tax issues. If you have questions about any of the latest updates, give us a call at 913-888-9100. We’re here to help!
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.