PPP Paycheck Protection Program
The PPP authorized up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. The loan amounts will be forgiven as long as:
Related Data - Unemployment Stats: In February, the unemployment rate was at a historic low of 3.5%. The U.S. economy lost a staggering 20.5 million jobs in April, pushing the unemployment rate to 14.7% according to data released by the U.S. Bureau of Labor Statistics. Among the hardest hit sectors were the leisure and hospitality industries -- which shed some 7.7 million jobs -- though employment fell sharply across all major industries. Other notable job losses occurred in food and drinking service sectors (which lost 5.5 million jobs), education and health services (which lost 2.5 million jobs) and retail employment (which lost 2.1 million jobs).
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RMD –REQUIRED MINIMUM DISTRIBUTIONS. The coronavirus stimulus bill suspended the RMD requirement for this year. But what if you already took your RMD for 2020, and now you wish you hadn’t?
RMD distributions are the government’s way of getting their hands on some of the money that has grown tax-deferred for sometimes decades in your 401K or IRA. The new RMD age when you need to start withdrawing the money was pushed out to age 72 from 70 1/2 last year for folks who had not yet begun their distributions. Unrelated to the CARES Act, there is a permanent rule on the IRS books that allows a withdrawal from a retirement account to be “rolled over” within 60 days without any tax consequence. In the case of an RMD, you could do the rollover back into the account you withdrew it from, or move the money into another retirement account. Are you already past the 60 day window? You can return the money if you have been directly impacted by COVID-19. The expectation is that the IRS will soon release guidelines that may make it possible for anyone to return an RMD taken out in January or February, regardless of whether they’ve been affected by the Coronavirus or not. Remember you will need to repay the entire distribution. If you already took a 2020 RMD distribution, you likely had taxes withheld. If you intend to return the money to a retirement account, you need to repay the entire amount, not just what landed in your pocket. For example, if you took $10,000 and had $1,000 in taxes withheld the net you received was $9,000. You will need to repay the entire $10,000 into a retirement account |
AuthorKim Kellly, EA is a professional serving business owners and personal tax filers around the world since 1993. She is based in San Diego California. Archives
January 2021
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