PPP Loans

 The new stimulus bill just signed by the President allows the tax deduction for any related payroll or other expenses that were the basis for the PPP loan even if you have a reasonable expectation of forgiveness . The IRS had ruled that the expenses were not tax deductible since the loan forgiveness was tax exempt income. So the taxpayers won one over the IRS. 

2020 Mileage rates

 The IRS standard mileage rates for 2020 are: 57.5 cents per mile for business, 17 cents for medical, and 14 cents for charitable. The 2021 rates are not yet available. 

Roth Conversions

 A really smart strategy for some taxpayers is to convert part of their regular IRA into a Roth IRA. Who should do this? If your income has dropped significantly in 2020, this might be the right move for you. You would have to recognize taxable income for the amount of the conversion but the advantage will come later when you retire and will have a pool of funds you can draw down when you want with no tax implications. There are  no required minimum distributions for your Roth. Your money grows tax free. All of your withdrawals after a five year holding period and age 59 and 1/2 are tax free. You will leave a tax free inheritance to your family. You will also want to consider other issues such as using nonretirement assets to pay the taxes, taxable Social Security benefits, Medicare premiums, and the level of income for the 0% rate on capital gains ($80,000 on a joint return and $40,000 for a single return).  

PPP Loans

 On 11/18/2020 the IRS issued Revenue Ruling 2020-27 which indicates that companies that received a PPP loan cannot deduct the related covered expenses like wages if the loan is expected to be forgiven because of the tax benefit rule. This is true even if the loan has not been forgiven by 12/31/2020. Actually no PPP loans have been forgiven yet as far as I know. There only has to be a reasonable expectation of forgiveness at 12/31/2020 which I believe relates to most  PPP loans.