So, what’s happening on this fine day… first, New England reminded us it is still March with stiff winds and temps that will stay in the mid-20’s – all the talk of boating and golf can remain on hold for just a minute longer.
Also, today is a “15” so something must be happening in the tax world – and indeed there is. Today is the due date for calendar year S-Corporations (Form 1120-S) and Partnerships (Form 1065), as well as LLCs that file as one of these. Our batting average here is hall-of-fame worthy… more than 80% of the businesses we work with are safely and securely on extension – you’re welcome. All the “influencers” I follow are on extension, so obviously if you want to be one of the cool kids (like me) you get on the extension train. Seriously though, often, most times, it really is the best call, and especially in a year like this, proper planning but also giving things time to settle out seems prudent.
Anything else new out there? Just a little ditty called The American Rescue Plan Act of 2021; we’ll leave the politics out of it and just go over the immediate impacts. Last week we saw the new administration sign into law, another, pandemic funding/stimulus bill – this one for $1.9 Trillion, is it just me or is trillion part of the made-up numbers we said as kids… “I’ll bet you a trillion gazillion dollars you can’t make that jump!” These gargantuan amounts are getting too easy to accept… careful what we ask for.
$1,900,000,000,000
So, what was in the bill? It was a quick 600+ pages of dolling out dollars!
$123 billon, or 6.5% of the funding will be directed toward Covid-19 treatment.
$360 billion, or 19% of the funding will go to government ($155 B to locals, territories and tribes; and $195 B to states).
$410 billion, or 21.6% of the funding will go to the stimulus checks… $1,400 per eligible person.
$246 billon, or 13% of the funding will go to extending unemployment programs… up to 79 weeks.
$176 billion, or 9% of the funding will be directed towards education.
$143 billion, or 7.5% of the funding will expand tax credits.
$105 billion, or 5.5% of the funding will be directed towards health initiatives (expansion of health insurance subsidies).
$59 billion, or 3% of the funding will support small business, inclusive of $25 B in grants to restaurants.
$16 billion, less than 1% of the funding will go to agriculture.
$56 billion, or 3% of the funding will be directed towards transportation.
$194 billion, or 10.2% of the funding is defined as other, seriously.
Somewhere I lost track of .6 or .7 %… no big deal, that’s just $12 billion, basically a rounding error.
So now that you know where your money went (it really is just your money), what does it mean?
The headliner of this particular epic is the stimulus check. $1,400 for each eligible individual. Basically, you qualify if your single and your income is less than $75,000 or married with income less than $150,000 – there is a quick phase out this time – up to $80k and $160k, respectively.
When will you get your stimulus check? The Treasury started processing these on Friday 3/12 – amazing – one day after the bill was signed.
Speaking of the Treasury and IRS, what do they have to say about all of this – not much – literally just 2 quick paragraphs so far, basically saying they are assessing and to wait for additional guidance.
What else do you need to know about?
For your business: (see here for greater detail)
Extension and expansion of the Families First Coronavirus Response Act (FFCRA) Sick/Leave Pay;
Extension and adjustments to the Employee Retention Credit (ERC); and
Grants for restaurants and other food businesses.
For you, the individual: (see here for greater detail)
Taxation of Unemployment benefits has retroactive implications back to 2020;
2021 Recovery Rebates (stimulus checks);
Child Tax Credit expansion;
Advance payments thereon…;
Dependent Care Benefits are greatly increased; and
Setting the table for tax-free Student Loan Forgiveness.
Here are a few good articles that go into greater depth – for you geeks out there!
The American Rescue Plan Act Of 2021: Tax Credits, Stimulus Checks, And More That Advisors Need To Know!
American Rescue Plan Act passes with many tax components
House gives final approval to $1.9 trillion pandemic aid bill
Paycheck Protection Program (PPP) First & Second Draw – Last Call
It just wouldn’t feel like an “E-Blast” if we didn’t bring up PPP – so please consider this your last call to activate! The program currently runs through March 31, 2021 but many of the banks will stop taking applications soon, and some already have stopped. There is some energy out there to extend the program but no official word out – don’t wait – enhancing your balance sheet is one of the fundamental acts a business owner must do to help their business not just survive but thrive!
Until next time ~ stay safe, stay well, support local ~ SPM
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