News

                                                                                                   

Looking ahead: Tax Law Changes for Your 2022 Tax Returns (due in 2023):

The tax rate for C-Corporations is planned to increase from 21% to 28% in 2022.  New legislation introduced by the Inflation Reduction Act of 2022 proposes to also impose a 15% alternative minimum tax on C-Corporations with net incomes greater than $1B to make sure that they are paying at least a minimum in taxes.

 

New Tax Law Changes for Your 2021 Tax Returns:

  • Your monthly Child Tax Credit ("CTC") payments may increase or decrease your refund. These monthly payments are advance payments of the CTC you are assumed to be receiving on your 2021 tax return.  If you received monthly child tax credit payments, you must report the amount on your 2021 tax return so any additional credit you may be due can be calculated (or if you received more than you were owed, how much you will owe back to the IRS). You should receive Letter 6419, which will state the total amount of child tax credit payments you received. 
  • 2021 Recovery Rebate Tax Credit for Third Stimulus Payments. Just like with the first two stimulus credits for 2020, this 3rd Stimulus Credit payment was sent to most taxpayers as an advance on the credit for their 2021 tax returns.  The IRS will send Letter 6475 in January 2022 to those who have received this advance credit.  This will need to be reported on your 2021 tax return in order to calculate any remaining credits due to you.  If you do not receive Letter 6475, you can view your stimulus payment amount by logging into your IRS.gov online account

 

3rd Stimulus Package (3/11/2021):

A 3rd Stimulus Package has been passed.  The most notable items that you will want to know about for the immediate future are the following:

  • $1400 stimulus check for each individual with income < $75,000 ($150,000 for married couple filing jointly "MFJ"), including dependents of all ages.  This amount begins to phase out for those above $75k single / $150k MFJ & is fully phased out (you don't receive a check) after $80k single / $160k MFJ.  You can check the www.IRS.gov website for more information.
  • 2020 Unemployment Income is exempted from tax for the 1st $10,200 if your income is < $150,000 in 2020 (or the 1st $20,400 for married people filing jointly).  The IRS will automatically process the refunds for those taxpayers who have already filed their tax returns with unemployment income who are affected by this retroactive change.

 

$900 Billion Stimulus Package (12/22/2020):

On 12/21/2020, Congress passed another $900 billion stimulus package with a veto-proof majority.  Included in its 5700+ pages were the following:
  •  $600 stimulus checks for each adult & child but with the same income thresholds as in the previous CARES Act
  • Congress will extend unemployment benefits of up to $300 per week (as compared to the $600 benefits through the CARES Act). The benefit could begin as soon as Dec. 27 and run at least through March 14
  • More PPP Loans 
  • More EIDL loans
  • Businesses that received PPP or EIDL loans and had them forgiven will be allowed to deduct the expenses covered by those loans on their federal tax returns.  Prior to this legislation, the IRS made clear in Notice 20-32 (see below) that the expenses paid for by these forgiven loans would not be deductible.
  • Meals Deduction for business meals. The deduction for business meals jumps from 50% to 100%. This applies only for 2021 and 2022.
  • Charitable Contribution Deduction. The deduction for charitable contributions from the CARES Act applied only to 2020. This bill will be extended to 2021. The non-itemizer deduction of $300 ($600 for married couples) applies in 2021, and the higher limitations for individuals and businesses also applies.


(updated 8/2/2022)