We know that many of you are hunkered down for the holidays, and we wanted to be sure to update you on the new pandemic stimulus bill and share some news about Tesla stock that we think you will find interesting.
Before we get into any of that, though, it is important that we let you know about Maryland Form 510D, which may be a significant benefit to business owners. Because the federal government does not allow us to deduct state and local taxes above $10,000 anymore, Maryland has come out with a new way to pay your state taxes through your pass-through entity. Essentially, you pay your state taxes through the entity, which reduces your taxable income, and could save you 25-32% on your tax liability because your income is reduced for federal tax purposes.
Next, we’ll have a look into the new pandemic relief plan, which has been passed by the U.S. Senate and House of Representatives and is awaiting Trump’s signature.
This bill has good news for business owners who received a Payroll Protection Plan loan. When the initial CARES Act bill came out earlier this year, it addressed the fact that the PPP loan was forgivable but not taxable, but neglected to include anything about expenses. The IRS then said businesses could not deduct expenses if they got the PPP forgiven, running counter to what Congress originally wanted and would have made the PPP taxable in a backdoor way. In the new bill, expenses are now deductible, which is great for business owners.
Other elements of the new bill include a $600 stimulus check to some citizens based on their tax returns and $300 extended weekly unemployment benefits.
Because of all these changes, the tax planning you’ve done up to this point may have to be adjusted, so as always, give us a call if you have any questions.
For those interested in Tesla in particular or interesting stock market news in general, the new S&P 500 reshuffle is certainly noteworthy. Yesterday Tesla joined the S&P 500 as the largest company ever to do so–it has a market capitalization of $659 billion–making it the sixth-largest company in the index.
Tesla stock is also extremely volatile, meaning it’s prone to dramatic daily swings based on relatively insignificant company news. Because of Tesla’s size, those daily swings can sometimes surpass the entire market capitalization of other automakers such as BMW, Fiat, and Chrysler.
Tesla’s inclusion could have a notable impact on the S&P, and we’ll be watching closely as ever.
Past performance is no guarantee of future results. Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.