Since the beginning of the coronavirus pandemic there have been a lot of bills passed to reduce the financial burden on Americans. Beginning with the CARES Act back in March 2020, the government has needed to support its citizens as the pandemic has continued. The most recent bill was the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, signed into law in December 2020. The Coronavirus Relief Bill (as it’s also known) has extended support for individuals, families, and small businesses. But what does the new bill mean for you and your taxes?
What Is the New Bill?
Working out what exactly the Coronavirus Relief Bill contains isn’t the simplest thing to do but essentially, it’s a continuation of the provisions first introduced in the CARES Act. The new $14 billion bill increased unemployment benefits and added a second stimulus check for eligible individuals and families. For individuals, this means an extra stimulus payment of $600 if you earn less than $75,000. For families who qualify, there’s an additional $600 for each child.
Small business owners also benefit from the new bill. Namely, businesses who had a revenue decline of at least 25% in 2020 can apply for a second Paycheck Protection Program (PPP) loan.
What This Means for Your Taxes
Of course, the coronavirus has already had a big impact on how people do their taxes and these new provisions do too. Unemployment benefits – something new to many Americans since the start of the pandemic – count as income and have to be included in your tax return. However, the opposite is true for your stimulus checks, which aren’t taxable – although if you haven’t received yours yet for whatever reason you can claim them on your return.
Small businesses who have taken out a PPP loan have seen a significant change with the new Coronavirus Relief Fund. Previously, any expenses paid for by a PPP loan weren’t tax-deductible, but you can now deduct with the new bill. However, the rule remains that at least 60% of the loan must be spent on payroll for it to be forgiven.
How Tax Software Helps
Tax returns are never easy, but this year you have to take into account all the significant personal circumstances you’ve faced, how your business has been affected, and the new rule changes from the relief bills. Of course, you don’t want to do this on your own, so we highly recommend using tax software to help out.
With tax software, all you need to do is input the relevant data and it quickly does all the hard work for you, giving you an estimated refund at the end. There are various solutions on the market, and they adapt quickly to any new rule changes. One such example is H&R Block, which has kept its customers constantly up to date with all the latest tax regulations. There’s also a particularly useful feature on the H&R Block website – the stimulus check calculator – where you just fill in your status, income, and the number of children you have, and it will show you exactly how much you’re owed. This is ideal if you haven’t yet received your check or were paid the wrong amount.
What really makes tax software so helpful is the customer service. For instance, TaxAct has exceptional customer support with a staff of tax experts to help you out. TaxAct offers live assistance over the phone or by email, so it’s easy to get in touch and much cheaper than hiring an accountant.