Starting a new business and wondering how and when tax deductions will occur? Most important to know is that most expenses incurred before a business begins cannot be deducted or amortized until the year the business becomes active. Business Expense Basics Section 162 of the Internal Revenue Code allows current deductions for so-called ordinary and necessary business expenses. Section 162 …
To fund a family and economic security initiative, President Joe Biden outlined a proposal for individual tax increases totaling $1.5 trillion. While much of the proposal is consistent with what he delineated during his presidential campaign, there are several noteworthy differences. Biden’s major tax increase proposals include: Raising the top individual rate to 39.6% Raising the top capital gains rate …
On March 25th, Senator Bernie Sanders introduced the “For the 99.5% Act,” a proposal that could significantly reduce currently available gift and estate tax exemptions. If passed, the act could impact families not previously subject to gift and estate taxes. The act, whose potential enactment date is January 1, 2022, proposes the following major changes to estate and gift taxes: …
The earned income credit (EIC) has been around for years. But it’s never been worth as much as it will be for 2021 under the new American Rescue Plan Act (ARPA). Some favorable changes are only for the 2021 tax year, while others are permanent. The Basics The EIC is targeted at lower and moderate-income individual taxpayers who work for a …
The days of classic “tax shelters”— such as cattle breeding or oil drilling deals — are long gone. But at least one major tax shelter is still standing: Your home. If you own your principal residence, you can cash in on a bevy of tax breaks, saving thousands of tax dollars or even more. Here are six ways your home …
The President signed the American Rescue Plan Act (ARPA), also known as the COVID-19 Stimulus Package, into law on Thursday, March 11th. The new law will provide roughly $1.9 trillion in much-needed financial relief to individuals, businesses, not-for-profit organizations, and state and local governments during the pandemic. Here are some of the key ARPA provisions that will affect federal income taxes …
Another calendar year into the COVID-19 pandemic, the Payment Protection Program (PPP) stimulus initiative is accepting Second Draw loan applications until March 31, 2021. [1] Some things have remained the same: as with the initial administration, loan amounts are based on payroll expenses, and the covered period is eight to twenty-four weeks. Other elements of the program, however, are different. …
If you’re nearing retirement, you’ve likely paid into the Social Security system for the duration of your career. It’s only fitting that you cash in on the benefits you’ve long been contributing to, but when should you start receiving benefits — at the first available date, at the latest date, or somewhere in between? The answer depends on your personal …
Good news! Business taxpayers may still be able to take actions to lower their federal income tax liabilities for 2020, as well as for future years. Consider these ideas before you file last year’s return Claim 100% First-Year Bonus Depreciation — Or Maybe Not For qualifying assets placed in service in 2020, business taxpayers can deduct 100% of the cost in …
Individuals who are eligible for federal income tax credits can significantly lower their tax obligations. Here are five major credits for you to consider for your 2020 tax return. 1. Higher Education Credits The tax law gives parents a choice between two possible tax credits for higher education expenses: American Opportunity Tax Credit (AOTC).With the AOTC, the maximum annual credit …