Covering Your Assets: My Christmas list for 2020 (Voices)
Covering Your Assets
This article will be published three days before Christmas, so I thought it fitting to share with my readers what every business would appreciate for this first COVID Christmas.
If you must wear a mask to enjoy any amount of freedom, why not take some of the valuable real estate on the front of the mask and do a little brand building.
I got this idea from a co-worker’s daughter when taking her Christmas picture and demanded she keep the mask on during the picture because it was her Christmas mask.
Logo masks can also be given to patrons who show up to your business and realize they forgot theirs. It could be the gift that keeps on giving!
Let’s face it, wearing glasses this COVID season invariably ends up with your glasses becoming fogged. Granted, since I only need my glasses for reading, I can generally take the glasses off when I put on my mask. There still remains, however, the awkward balance of trying to re-direct my breath so I have some window on my glasses to read through.
Holding my breath is always an option for reading short sentences, but holding my breath for longer reads makes me dizzy. Seems like some enterprising entrepreneur should come up with a way for masks to not fog your glasses.
Tax-free PPP proceeds
When the CARES Act was passed, it stated clearly when the PPP loan was forgiven that it would not be taxable income. The whole purpose of the CARES Act was to keep employees employed rather than hitting the unemployment rolls.
The IRS then countered and said that expenses paid with tax free income are non-deductible. Basically, making the PPP loan forgiveness taxable. Senate Bill 3596 was drafted to make the expenses paid with PPP proceeds deductible.
Unfortunately, the election got in the way, and the bill languished. As of this writing (Dec. 16), there are discussions of another stimulus bill, and the fix to the PPP expenses. I am seeing some pushback on the PPP expenses, saying it is a “double-dip,” which I believe is unfounded.
The CARES Act was stimulus, let it stimulate! Without clear direction, many business owners have not invested the calculated tax on the PPP loan. Getting this legislation passed prior to Christmas will be a huge windfall for the employees as bonus checks.
Prepaid January rent
Many cash-based taxpayers can pay their January rent early and deduct the expenses on their 2020 tax return. Same goes with property taxes and other similar expenses.
A brand-new truck
I can hear the gasps! In the realm of full disclosure, note that these types of purchases generally consume wealth rather than create it. Nonetheless, the opportunity for a full deduction for the cost of the truck, even if it is financed, is hard to pass up.
Perhaps the thing that every business owner wants is your business. Now is a good time to visit your local favorite stores, restaurants and retailers and give them the gift of your business. As the business owner pays their employees, landlords and vendors, it is literally the gift that keeps on giving.
My hope and prayer for your holiday season is that you get all you hope for, and that as this crazy COVID Christmas concludes, this columnist finds you and yours happy and healthy and your business bountiful.
Mike Bosma, CPA, is Principal-in-Charge of the Reno office of CliftonLarsonAllen LLP. His NNBW column, “Covering Your Assets,” focuses on effective planning strategies for every business owner. Reach him for comment at firstname.lastname@example.org.
Reno-based design firm MBA Architecture and Design is assisting on the $47 million Caesars Entertainment project in downtown Reno.