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Between stimulus checks and rule changes, accountants suggest a closer eye on tax filings

Friday is the first day to file state and federal taxes, and small businesses have some good news this tax season.

News 12 Staff

Feb 12, 2021, 8:10 PM

Updated 1,223 days ago

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Friday is the first day to file state and federal taxes, and small businesses have some good news this tax season.
Certified public accountant David Gibbs says an act of Congress in December clarified small business expenses covered by forgiven loans from the Payroll Protection Program.
"For many months, we were dealing with a lot of uncertainty around PPP," he said. "PPP-covered expenses are fully deductible, which is a huge win for the taxpayer and the business community."
Congress also clarified that the money was non-taxable income, which is great news for all of Gibbs' business clients.
"[It] creates certainty, but it also creates liquidity -- good liquidity -- for many of these businesses," said Gibbs.
The IRS, however, made an exception for seniors in 2020 that might complicate some returns.
Gibbs said the IRS allowed many retirees the ability to suspend their required minimum distributions from their retirement plans. Taxpayers 72 years and older are normally required to withdraw a minimum from their retirement accounts each year. Those who withdrew less, or returned what they took, will have to take an extra step.
"You want to make sure you have the right form that tells your tax preparer that you returned a portion of your distribution, and you shouldn't be taxed on it," Gibbs said.
Additionally, he adds it's important to account for both stimulus checks received in 2020. That is non-taxable income, but he says if you didn't get the full amount you were entitled to, you may have more money coming.
The federal tax deadline is back to April 15 for 2021, after it was pushed to July last year.


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