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Coronavirus relief bill includes direct payments, tax breaks, airlines aid

The House and Senate are set to vote today (12/21/2020) on $900 billion in pandemic relief aimed at boosting the U.S. economy into the early spring, combined with $1.4 trillion to fund regular government operations for the rest of the fiscal year.

The bill includes help for small businesses, the jobless and direct payments to most Americans. It also provides funding for vaccine distribution, food assistance, tax breaks and money for education and child care.

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The IRS effectively canceled the tax break that made PPP loans so valuable

A time bomb is ticking in the Paycheck Protection Program loans that have kept millions of small businesses operating through the pandemic. It’s set to go off early next year unless Congress defuses it soon.

More than 500 national, regional, and state trade associations recently signed a letter pleading with congressional leaders to act. They asked House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, and others to bring a “spirit of urgency and cooperation before the end of this session to prevent an avoidable catastrophe for millions of small businesses.”

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IRS clarifies deductibility of PPP loan expenses, as AICPA criticizes forgiveness questionnaire

The Internal Revenue Service and the Treasury Department have issued guidance to clear up the tax treatment of expenses when a loan from the Small Business Administration’s Paycheck Protection Program hasn’t been forgiven by the end of the year, while groups including the American Institute of CPAs are complaining about a new, lengthy questionnaire from the SBA for forgiveness of loans of $2 million or more.

The IRS and the Treasury issued both a revenue ruling and a revenue procedure, essentially saying that since businesses aren’t taxed on the proceeds of a forgiven PPP loan, the expenses aren’t deductible.

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House Lawmakers Introduce Bill to Fix ‘Retail Glitch’ in Tax Law

A pair of lawmakers has introduced bipartisan legislation to make a technical correction in the Tax Cuts and Jobs Act that has kept many stores and restaurants from renovating their facilities, after similar legislation was introduced last week in the Senate.

The Tax Cuts and Jobs Act 2017 allowed businesses to immediately write off the costs associated with improving facilities, instead of having to depreciate the expenses over 15 years. An inadvertent drafting error required restaurants, retailers and other leaseholders to instead write off the expenses over a much longer period of 39 years, which has made the renovations more costly and stymied investment…

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