Newsletters

Tax Alerts
Tax Briefing(s)

Happy New Year 2021! 

 

Following is an update of a few of the new 2020 tax law changes.  If you are a returning client and would like a personalized client organizer for tax planning, request one via email at wendy@carefreetax1040.com.  An organizer is also on our website, www.carefreetax1040.com  under the info center tab.  There are about 90 financial calculators on the website, along with a number of financial and tax links including IRS and WI/IL Dept of Revenue websites.  This site is packed with lots of information that will be helpful for both tax information and planning. 

 

Our hope is to manage this season as normal as possible, while providing a safe environment.  We have taken extra precautions including an air purifier device that cleans the air every 30 minutes and can handle the covid micron size.  Cleaning will be done throughout the day.  We are trying to limit the number of clients in the office at this time.  Considering this, we would appreciate it if you would not bring children or additional people with you to your appointment.  If you are not comfortable with a face-to-face meeting, you are welcome to drop off or mail in your information.  We also have a secure link we can email to you if you’d like to submit the documents electronically.  Please do not email anything to us without asking for this secure link.

 

We hope 2020 was a year of being able to count blessings in the midst of such a challenging time in history.   Looking forward to seeing you soon!  Call 608-756-9930 to set up your appointment

 

Wendy and Robin


The IRS has issued the luxury car depreciation limits for business vehicles placed in service in 2021 and the lease inclusion amounts for business vehicles first leased in 2021.


The IRS has issued guidance for employers claiming the employee retention credit under Code Sec. 3134, enacted by section 9651 of the American Rescue Plan Act of 2021 (ARP), P.L. 117-2, which provides a credit for wages paid after June 30, 2021, and before January 1, 2022. The guidance amplifies previous notices which addressed the employee retention credit under section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), P.L. 116-136, as amended by sections 206 and 207 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, P.L. 116-260.


The Treasury and IRS have provided an optional safe harbor allowing employers to exclude the following amounts from their gross receipts solely for determining eligibility for the employee retention credit.


The IRS issued transition relief for certain employers claiming the Work Opportunity Tax Credit (WOTC) under Code Sec. 51. This would apply for certain employees beginning work after December 31, 2020, in response to legislation permitting the designation of an Empowerment Zone under Code Sec. 1393(b) to be extended from December 31, 2020, through December 31, 2025. Specifically, section IV of this notice provides transition relief by extending the 28-day deadline for employers to request certification from a designated local agency that an individual who begins work on or after January 1, 2021, and before October 9, 2021, is a member of the Designated Community Resident targeted group or the Qualified Summer Youth Employee targeted group.


The U.S. Small Business Administration ( SBA) is launching a streamlined application portal to allow certain borrowers to apply for Paycheck Protection Program (PPP) Loan forgiveness directly through the SBA. The SBA also is explaining why it discontinued use of Loan Necessity Questionnaires for PPP borrowers.


The IRS stated that families should use the Child Tax Credit (CTC) Update Portal to confirm their eligibility for the payments. If eligible, the tool also indicates whether taxpayers are enrolled to receive their payments by direct deposit. More information can be found at https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.


The IRS provided additional guidance on the application of the American Rescue Plan Act of 2021 (ARP) ( P.L. 117-2) relating to temporary premium assistance for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage. This notice supplements Notice 2021-31, I.R.B. 2021-23, and addresses additional issues.


The foreign tax credit did not apply against the net investment income tax (NIIT). The structure of the Internal Revenue Code made the credit inapplicable to the NIIT, and tax treaties did not override that fact.


A missing or unknown federal gift tax return could constitute reasonable cause for the late filing of an estate tax return.


For 2021, the Social Security tax wage cap will be $142,800, and Social Security and Supplemental Security Income (SSI) benefits will increase by 1.3 percent. These changes reflect cost-of-living adjustments to account for inflation.


The IRS has issued final regulations that provide guidance for employers on federal income tax withholding from employees’ wages.


Have a Carefree Tax Season!