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CPAs discuss second round of stimulus and taxes

Taxes and the new stimulus can be confusing so NBC29 talked to a few certified public accountants to help make it easier this tax season.
Updated: Jan. 5, 2021 at 5:47 PM EST
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CHARLOTTESVILLE, Va. (WVIR) - Taxes and the new stimulus can be confusing so NBC29 talked to a few certified public accountants to help make it easier this tax season.

“A philosophy that I think every tax professional should have is taxpayers shouldn’t pay one penny more than than you’re supposed to,” CPA Henry Kaelper said.

At the end of December 2020, Congress passed another stimulus package giving people who qualify an additional $600.

“This is a refundable credit that’s paid out to you in advance so it’s not going to create taxable income for you,” Kaelper said. “It’s just it’s free money.”

Earlier in 2020, a first stimulus package was passed giving people $1,200.

“Those are similar to the ones that people received earlier this year that were $1200 an individual but this time around it’s half of that so it’s $600 per person,” Helene Downs, a partner at Hantzmon and Wiebel, said. “That’s per person in the household including dependents under the age of 17.”

She says people who were claimed as dependents before but are now filing on their own, can still receive this money.

“These economic impact payments are in fact, an advance on 2020 credit and so if you didn’t receive it previously, when you file that 2020 tax return, you’re going to indicate that you hadn’t previously gotten it and it will be received as a credit on your 2020 tax return,” Downs said.

As far as businesses are concerned, those with Paycheck Protection Program loans, won’t be taxed on them.

“CPAs were wringing their hands,” Downs said. “We weren’t sure what we were going to do come tax time but fortunately this bill did make clear that those expenses are deductible so in essence, the PPP money that that businesses received is not going to be taxable.”

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