Faw Casson

Accounting and Accountability: Episode 12

March 12, 2021


The American Rescue Plan Act of 2021 and Covid Fraud
Welcome back to another episode of Accounting and Accountability!  Let’s dive in first with talking about the ARP, which is the American Rescue Plan. 
Just about the time the dust is settling and we’re thinking we’re not going to have anything else come up… Well, here we are, ARP, like I said the American Rescue Plan.  $1.9 trillion of relief. That's a lot of money. Yeah. Now, I'm not an economist, but $1.9 trillion?  Whoo, I don't know.  And that's, you gotta remember.  I don’t but it's a lot of money.  It's another 700 or 800 billion.   I'm not quite sure how inflation works but let’s just see.  We’ll have plenty of material in future podcasts, let's just say that.   Yeah.
So, currently it has passed the Senate. It’s in the House. And from what I've read ahead a little bit, you know it's got another round of stimulus, probably about the same AGI they do think it's going to reach a little bit less of Americans than the previous rounds have. There's of course some things in there for the business. I know that, you know, three alphabet letters put together, PPP, has been thrown in there again.
And then a lot around vaccination distribution too. Which is very much needed.  Right, so we are kind of on the edge of our seats waiting for this to get passed. How about I break it down a little bit further? I’d love that. So, stimulus - you know you've already had stimulus checks twice, and now they're talking about another $1,400.  And what you talked about AGI -So, previously it was for single at $75,000 you got this.  If you were below $75,000, you got money.  Right.  Then it was between $75,000 and $100,000 where it kind of phased out a little bit. Yeah.  Well they've changed that to $75,000 to $80,000. Wow. So it's a tighter, tighter window of phase out and then for married filing joint $150,000 to $160,000. So that's why less Americans will see.  So even though they weren't getting the full amount they were getting something. Sure.
There is also going to be some enhancements to Child Tax Credit, Child and Dependent Care Credit, Earned Income Credit…basically allowing more individuals to qualify.  Right.  And the Employee Retention Credit will be extended to December 31, which we've talked a lot about that. Yeah.  And the Paid Sick Leave Credit will be extended to December 31, which is supposed to expire 3/31. Yes, 3/31 and interesting you said that because on our YouTube we have recordings on Paid Sick Leave and ERC and we're about to update the ERC because there's even been some more clarifications on that, too.
A couple other quick things. There's an exclusion for forgiveness of student loans, meaning if your loan is forgiven you don't have to pick it up as income. The one that I think is interesting, get this, they want to have an exemption of $10,200 for unemployment benefits, meaning the first $10,200 of unemployment that you have received will be tax free. Oh, now.  Oh!  I know where you’re going. It was going to be for 2021. Now they're saying the first $10,002 that you got in 2020. So if you already follow the return folks, you're gonna need an amended return.  I love it because there was one senator and he was quoted saying - he was asked the question – “Wouldn’t you want to do something in 2021 since people already filed?” He said “Nah, it's just as easy as amending your return.”  Oh sure.  Just keep giving it to us.  And you know I feel bad because those are not that easy to do. And unfortunately, if you're on unemployment, it's probably because you have hit hard times. And now you're gonna have to go to a professional and pay them to amend.  So there was talk of maybe somehow partnering with the IRS and saying okay the folks that have filed if you've already paid tax on it, we'll cut you a refund check and we'll calculate. Oh well. They said no.  I can't see that happening. It’s already been a debacle with the stimulus payments.
Well, speaking of, you know, speaking of the stimulus so you know you and I have been really following letters that have been sent to the IRS from even our association, asking, begging the IRS to extend tax season, and they've pretty much been very reluctant. Yeah.  But they have said that they would consider it if another stimulus gets passed, which is this ARP, you know another Act. So if it does get passed, I mean do you think we could be looking at….   Yeah, so the House Ways and Means Committee is urging the IRS to extend to July 15th.  The AICPA, which is our organization, and some other trade organizations are urging to do it to June 15th and as, as you all remember, last year it was extended to July 15th meaning you didn’t have to file or pay tax due until then.  Right.  So, I think there's a good chance, Tammy, that that's going to happen, but we don't know yet and if they decided it will probably will be after the corporate deadline.  Right, Monday.  Which is Monday. That's what I was thinking. Maybe at least we will see it a couple of weeks ahead of April 15th, at least by the first.  It would be nice if they would give us a little bit of a heads up.
So if you're listening, you know….talk to your Congressman/woman.  Yeah. All right. Do you have do you have anything else regarding that. No. Well, the only other thing is there was possibly an extension of PPP, to be able to apply. Yeah, that's supposed to expire at the end of this month so they’re saying…. and there's still a lot of money left for that. Yeah.  So, they're saying that that might happen. Yeah, from what I read the first round funds never even got fully used.
Oh, I do have something, Tammy.  Oh, okay well please.  Thank you so much. You know it just pops in your head.  Yeah.  So, on the PPP, if you are a Schedule C Sole Proprietor. Yeah.  It was previously based off your net income on your Schedule C and a lot of folks are really struggling. They're seeing losses or they didn't have very much income at all. They're actually allowing you to take it off of Gross Income is what they say, but it's really Gross Profit, meaning Gross Income less your cost a goods sold right, which I think is line seven or eight of Schedule C.  So still, for a lot of you folks out there you might be able to get a PPP so take a look at that. Right. Yeah, I did see that.

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