Roth Conversions

A good tax strategy for 2020 for some taxpayers who are expecting much less income or even losses would be to convert a portion of their retirement plan to a Roth. This would generate taxable income in the year of conversion but might not create a tax liability if you plan it right. This would set up a source of tax free retirement funds for the future which would not be taxable as long as you didn't pull any money out within 5 years. This also is a good strategy to maximize your 20% qualified business income deduction if your taxable income is lower than your qualified business income.

Are Paycheck Protection Loan (PPP) Expenses Deductible?

What the government gives you it can also take away. The IRS has come out with notice 2020-32 saying that PPP expenses such as payroll costs, qualified mortgage interest, rent and utilities are not tax deductible if the PPP loan is forgiven because the forgiveness is tax free income and they want to prevent a double tax benefit. I believe Congress intended the expenses to be deductible and 5 senators filed a bill on May 5 to make it so. Presently negotiations are going on between the senators and the IRS to withdraw notice 2020-32. We will see what happens.

Paycheck Protection Program (PPP)

This is a loan program designed to support small businesses in this crisis to keep their employees on the payroll. It will cover 8 weeks of payroll costs including benefits along with interest on mortgages, rent and utilities. The loan can be forgiven by the government if you qualify on the spending side. The details are fluid to say the least with constant changes. Check out this website to keep up with PPP: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses.

Georgia Scholarship Program

Georgia allows taxpayers to get a 100% tax credit for payments made to the Georgia scholarship program. Unfortunately, it is not as good as it used to be as it is no longer deductible on the federal return since August 27, 2018 per treasury decision 9864.