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front entrance image1/6/2021 


You've probably heard that the recent stimulus legislation included a provision that removes the 50% limit on deducting business meals provided by restaurants in 2021 and 2022 and makes those meals 100% fully deductible. Here are the details.

In general, the ordinary and necessary food and beverage expenses of operating your business are deductible. However, the deduction is limited to 50% of the otherwise allowable expense.

The new legislation adds an exception to the 50% limit for expenses for food or beverages provided by a restaurant. This rule applies to expenses paid or incurred in calendar years 2021 and 2022.

The use of the word "by" (rather than "in") a restaurant makes it clear that the new rule isn't limited to meals eaten on the restaurant's premises. Takeout and delivery meals provided by a restaurant are also fully deductible.

It's important to note that, other than lifting the 50% limit for restaurant meals, the legislation doesn't change the rules for deducting business meals. All the other existing requirements continue to apply. Thus, to be deductible:

• The food and beverages can't be lavish or extravagant under the circumstances.
• You or one of your employees must be present when the food or beverages are served.
• The food or beverages must be provided to you or to a “business associate.” This is defined as a current or prospective customer, client, supplier, employee, agent, partner, or professional adviser with whom you could reasonably expect to engage or deal in your business.

If food or beverages are provided at an entertainment activity, either they must be purchased separately from the entertainment or their cost must be stated on a separate bill, invoice, or receipt. This is required because the entertainment, unlike the food and beverages, is nondeductible.

Please let us know if you would like more information about deducting business meals or any other aspects of the new legislation.

front entrance image1/4/2021 


At the end of 2020, Congress passed, and President Trump signed, a new law that provides for additional relief related to the coronavirus (COVID-19) pandemic. This law, the Consolidated Appropriations Act, 2021 (CAA, 2021), includes a second draw of Paycheck Protection Program (PPP) loans (PPP Second Draw Loans). It also allows businesses to deduct ordinary and necessary expenses paid from the proceeds of PPP loans.

This is very good news on both fronts, deductibility of expenses paid for with PPP funds and more PPP money available in 2021. NC, however, will not allow this same deduction of expenses.

Paycheck Protection Program Second Draw Loans.

The CAA, 2021 permits certain smaller businesses who received a PPP loan and experienced a 25% reduction in gross receipts in any one quarter of 2020 compared to corresponding quarter of 2019 to take a PPP Second Draw Loan of up to $2 million.

Loan terms. Borrowers may receive a PPP Second Draw Loan of up to 2.5 times the average monthly payroll costs in the one year prior to the loan date or the calendar year 2019.

Please let us know if you are interested in a PPP second draw loan. We are currently reviewing eligibility and possible loan amounts for PPP Second Draw Loans as a part of our year end compliance work for you. We will be in contact with you when we need additional information.

Loan Forgiveness for PPP Round 1.

As for the forgiveness application for first round PPP loans, if you have not already applied for forgiveness, our current guidance is to complete the application through your lender’s portal if your loan is more than $150,000. For those PPP loans less than that, we recommend you wait. The CAA,2021 provides for a simplified application process. SBA has 24 days from 12/27/20 to prepare the new form. We recommend waiting for the new form if you have not already applied for forgiveness and your loan was less than $150,000.

Please reach out if you have any questions on the above. You can now wrap up 2020 and send us the information we need to complete your 2020 work and also get you ready for PPP Second Draw Loans if applicable.

front entrance image12/31/2020 


Beginning Jan. 1, 2021, the standard mileage rate for the business use of cars, vans, pickup or panel trucks will be 56 cents per mile, down 1.5 cents from 2020. It's the second consecutive year the business use rate has gone down. The 57.5 cents per mile rate for 2020 was a slight drop from the 2019 rate of 58 cents.

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