On Tuesday, October 6th Karen Snodgrass, CK Principal, joined Steward Advisors for an “Ask the Expert” webinar. Below are the key tax planning takeaways from the presentation and we invite you watch the full presentation for more information.
Business PPP Loans and Forgiveness
The intent was to provide a tax-free infusion of cash to businesses keeping employees on the payroll during the start of the pandemic. While it’s clear that the forgiveness of the PPP loans will be tax free, there is conflicting guidance on the deductibility of expenses paid with PPP funds. Without deductibility of the expenses, this is essentially a backdoor way of taxing the PPP loan forgiveness. You can click here to read more about PPP loans.
Illinois Fair Tax Implications
On Election Day, Illinois residents are voting on the Fair Tax plan. Under this plan, single and joint filers with a total income under $250,000 will see a slight tax decrease. With single and joint filers that make over $250,000, there will be significant tax increases. Note that this only applies to the individual side of taxes. If the plan passes, it will change the state’s constitution, paving the way for future tax rate changes to businesses and specific groups, and the ability of the state to tax income items, such as retirement income.
2020 Presidential Candidate Tax Proposals
At this point we can only analyze what has been proposed, so it is important to keep in mind that regardless of who wins the election, it requires Congress to change tax rates and plans.
Overall, Biden’s tax proposals would increase taxes for corporations and high-income individuals. You can click here to download a full chart comparing Biden and Trump’s tax proposals.
Year-End Tax Planning Tips
October is a great time of year to review your investment statements. Are there inherent capital gains or losses that you need to consider? Have you determined which tax bracket you fall into this year? Getting your ducks in a row now will help you work better with your advisor(s) in November. You can click here to find out the latest tax information.
If any of the content covered in this webinar raises questions for you or your business, please contact Cray Kaiser. We’d be glad to help you with your tax planning!