Welcome to LIFE IN THE TAX LANE!!
YES!! That is ME!! (I wish..........)
The TAX LANE has been fast and furious this year. Picture Hanna and me standing and watching as the new tax law changes, all mostly inspired by that pesky COVID-19 Pandemic, our heads flipping back and forth violently as they fly by.
There were the EIDL Grants. Then PPP Loans. Then Stimulus payments. Then fooling with other tax laws just because. Then more PPP Loans. Then payroll tax deferrals. And now Congress has passed MORE LEGISLATION to change the tax laws even again. (More PPP Loans? More Stimulus Checks??)
Last week was Christmas (MERRY CHRISTMAS EVERYONE!), which means that TAX SEASON IS ALMOST HERE!! (We are seriously dancing for joy! Crazy enough, we actually enjoy preparing tax returns!)
YES! That's actually US!! Celebrating the tax laws!! (We wish................)
PS - I could never jump that high or have that flat of a stomach. Hanna on the other hand could totally pull that off.
And so, here is a list of the most famous tax law changes that we know about so far that will impact your 2020 tax return.
WARNING!! Unemployment benefits are taxable! That may surprise a lot of people.
You can now deduct up to $300 (per tax return) for charity without having to Itemize. (You have just HOURS left now to contribute to your favorite charity.)
That Stimulus Payment you got will need to be reported with your tax filing. It won’t be taxed, but if you didn’t get what you should have, the IRS will add it to your refund. If you got more than you had coming, no big deal, you get to keep the difference.
Required Minimum Distributions for those over 72 years of age have been suspended for 2020.
If you had a baby or adopted a child in 2020 and need some extra cash, you can take an early withdrawal of up to $5,000 from your retirement account without being penalized. (It will still be taxed).
Did you have your Social Security Payroll Taxes deferred? Unfortunately, that deferral has not been forgiven and starting in 2021, you will get to pay it back via payroll withholding.
The expenses you used your PPP loan to pay for ARE now deductible.
Well, that is enough to blow even an old, experienced accountant’s bright mind! If you have questions about any of those changes (or one of the many I didn’t even get into) please call or email. We’ll keep you informed and in compliance.
Until next time……………. LIFE IN THE TAX LANE!!! WOO HOO!!