Now that the Democrats are going to control the House and Senate as well as hold the Presidency, it seems incredibly likely that there will be more Covid-related stimulus.  They might increase unemployment, there might be more programs for small businesses, there will almost certainly be aid to states and localities, but what most people want to know it, are we getting $2000?

First, if we do it probably won't be $2000 on top of the $600.  It sounds like they want to give out an extra $1400 to bring the total of payments up to $2000. 

Second, the people most in charge of this are Sens. Joe Manchin (D) along with maybe Susan Collins (R) and Lisa Murkowski (R).  They are the most middle votes in the Senate right now, and at least one of them has to agree to $1400 checks in order for it to happen.  If all of them refuse to vote for that, we don't get it. And Joe has stated he is iffy about it, so if we lose his vote we need one of the Republican ladies to step up. 

If we do wind up getting it, how will that work?  Well it could go a couple of ways.  If they do it fast enough, like right after Joe Biden gets inaugurated, they could just make it a credit on your 2020 tax return and get it to you that way. But I'm guessing it will take longer than that.  In that case, they will do like they did before, and either direct deposit the money or mail out checks.  So to prepare for that, make sure the IRS has your current address, fill out a change of address form at IRS.gov if you need to.  When you file your taxes, provide your DD info even if you owe if you file early enough to get the check that way.  We just want to avoid your check getting mailed to an address you aren't at anymore!

Stimulus checks and extra unemployment are great, but there is also another major program in the stimulus, the Paycheck Protection Program (PPP)!  While it's referred to everywhere as a loan, in most cases it's completely forgivable, meaning it really functions more like a grant, totally free money.  For my clients, here is why you may or may not want or be able to get one:

1.   You need to have a Schedule C on your 2019 taxes. This means you had 1099-Misc from a contracting job, or some other self-employment work (like nannying, personal training, teaching lessons) that you reported on your taxes.  This is not for people who just had W2s, you must have had business income. 

2. You can't get BOTH unemployment and a PPP loan at the same time.  The PPP loan is meant to cover 10 weeks of income, so if you get the loan, you have to stop claiming unemployment for 10 weeks. Now there is some wiggle room about when you stop for 10 weeks, but you do have to stop.  So it's important to weigh the benefits of unemployment vs PPP carefully.

3.  You have to be able to prove you were "in business" as of Feb 15, 2020.  So if you just get random 1099s every now and again, that might not be enough.  If you don't have contracting or self-employment income that got paid somewhere in the range of late-Jan to early Feb 2020, your application will likely be denied. 

Other than that, there aren't a lot of additional requirements!  You can get the PPP loan and still be getting other income, there is no requirement that your business has stopped.  In fact, it's meant to help keep your business open, so you can get it if you business has slowed to nothing or if your business is humming along.  If you have completely closed your business, that might be a different story, but if you are intending to keep your business going, even if it's on pause, then this loan was designed for you!  

How much can you get?  Take the profit amount on your Schedule C (line 31), and divide by 12, then multiply by 2.5 (or you can just multiply line 31 by .208333)  And it's totally forgivable without you doing anything special, just filling out a short form.  To compare to unemployment, divide that amount by 10.  If you are getting more than that number on unemployment, you probably don't want to do this. 

How can you get one?  It's not a good idea to go through a big bank, your application will be low on their priority list.  I would recommend using a fintech service like KServicing, BlueVine, or even PayPal. There are many, just google.  They are the best places to go for small loans when you don't have an existing banking relationship.  There are no fees to apply, the Feds are paying the fees to the banks.

What about a SECOND PPP Loan?  Yeah, so in the new stimulus bill, if you already got a PPP loan last year, you can get another one for the same amount (or potentially more) if you meet some requirements.

1.  You already got a PPP loan.
2.  You can show that you had a 25% decrease in revenue either for the whole year of 2020 compared to 2019, or for any quarter in 2020 compared to the same quarter in 2019.  If you don't have Quickbooks or some other software to keep track of your money, you might want to invest in that to create the necessary reports to prove revenue loss.  Or we can do a draft Schedule C for 2020 if you are doing the year-over-year loss. This is about revenue, not profit, so deductions are not involved in this.  

So if you are one of my clients who already got a PPP loan, you might be able to get another one!

If you want my help with this, please set up a personal financial planning appt on the scheduling page, I will be happy to help with your application for the loan and for forgiveness.    

Hi folks! So the House and Senate FINALLY passed a new stimulus bill and Trump finally deigned to sign it. So what's in it?

1.  The biggie, $600 checks. As we speak, they are being direct deposited to accounts, and mailed out.  Even if you got your previous $1200 stimulus direct deposited (DDed), you might not get your new one directly into your account.  If you got a refund DDed when you filed 2019 OR specifically included direct deposit info when you filed your return then your stimulus should be DDed.  If you owed money for 2019, even if you paid with direct debit, you are getting your check mailed and not DDed.  And it's getting sent to whatever address the IRS has on file for you, which is likely the address you used when you filed 2019. If that's not where you are, you will need mail forwarding or hopefully a roommate or something at your old address who can grab it for you.  If you have moved, have no ties to your old address, and haven't set up forwarding in time, then you can claim the $600 on your tax return, but you will have to wait til you file. The IRS has set a deadline of Jan 15 to get the money out, if you don't get your money by then, you have to wait til you file your 2020 taxes.  Check to see where your money is here. My first stim check got DDed, but I just got my new one in the mail, so they are really churning them out.  

2.  More unemployment!  They extended emergency unemployment benefits, and added $300 a week to whatever your state benefits are.  So it's like the $600 extra per week you were getting last year, just, you know, less. 

3.  Opened up a new round of PPP loans!  If you had Schedule C income in 2019 (so 1099s or self-employment!) and are NOT on unemployment, a PPP loan might be a great idea for you.  They call it a loan, but it's 100% forgivable, so really, it's a grant.  You can't get it with unemployment though, because it's meant to cover wages for 10 weeks.  If you think you might benefit from a PPP loan, please do get in touch with me.  And if you already got one, you can get another one if you can prove you had 1 quarter of revenue in 2020 that was 25% lower than the same quarter in 2020.  Again, if this might be you, get in touch!