RMDs new required age is 72
The Secure Act made changes to the RMD rules. If you reached the age of 70½ in 2019 the prior rule applies. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72. Please note that if you delay your first distribution to April 1 of the year after you reach 72, you will be required to take two distributions in one year.
New 1099-NEC Form
Beginning in 2020, Form 1099-NEC is the new form to report independent contractor income. The 1099-MISC form will be used to report miscellaneous income such as rent or legal fees. If you filed Form 1099-MISC in error, you should correct this by amending Form 1099-MISC and reissuing Form 1099-NEC.
In 2020 new programs were created to help small businesses including forgiven loans, grants, and unemployment benefits.
PPP Forgiven Loan
The CARES Act states the forgiven loan amount will not be included in your taxable income and you will not pay taxes on the money received. The second stimulus bill on December 27, 2020 clarified how the expenses covered by a PPP loan will be treated. Previously, IRS guidance stated anything you spent your PPP loan proceeds on were not going to be tax deductible. Congress clarified that – now your expenses are tax deductible. Schedule C filers will not be impacted by their PPP forgiven loans.
The second stimulus bill clarified that the EIDL grant will also be tax-free and will not need to be included in your taxable income. An EIDL loan will be treated the same way as any other loan.
Pandemic Unemployment Assistance (PUA) and Unemployment
PUA and Unemployment benefits are considered taxable income. You will pay state and federal taxes on money you received, but will not have to pay medicare or social security taxes on the income.