April 2021

Each year around April 15th, I ask myself if our task can get any tougher. And every year, the answer is a resounding—of course!  2021 will not be the exception.  The new proposed tax rate increases, federal & state capital gains tax revisions and lower lifetime estate & gift exemptions will be monstrous! We are updating systems now to model the impact of the proposals and recommend you keep in touch with us as the year unfolds to avoid an unpleasant surprise!

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Featured Articles

Help A Charity & Catch A Break
With COVID-19 causing both a public health crisis and an economic crisis in the US, many charities are experiencing a decline in donations. To assist charities, Congress added a section in the CARES Act of spring 2020 that allows for deductions of $300 for qualified charitable donations for taxpayers who do not itemize deductions. This is an "above-the-line" deduction, which means it is used to calculate the adjusted gross income (AGI) before the standard deduction is applied.

All About Tax Return Extensions
Is anyone confused about this year’s tax filing deadlines? The IRS’s extension of the 2020 filing deadline to 5/17/2021 for individual tax returns has introduced much confusion. While the extension provides more time to pay your 2020 income tax and make IRA contributions (as outlined later in our newsletter), the extension does not apply to a host of taxes like State income taxes, foreign tax reporting, gift taxes, estimated taxes…

Federal Tax Deadline Extended To May 17
The federal income tax filing due date for individual taxpayers, including individuals who pay self-employment tax, has been extended to Monday, May 17, 2021, for the 2020 tax year. There is no need to file any forms to qualify for this automatic federal tax filing and payment relief.

Highlights of the American Rescue Plan Act
Signed into law on March 11, 2021, the American Rescue Plan Act (ARPA) contains several tax provisions affecting individuals and families. Let's take a look:

Economic Impact Payments: Round Three
On March 12, following the American Rescue Plan Act's approval and signing, the IRS began sending out the third round of Economic Impact Payments. Most payments were sent out via direct deposit, but approximately 150,000 checks were mailed by the Treasury Department as well. Taxpayers who received EIP1 or EIP2 but didn't receive a third payment (EIP3) via direct deposit will generally receive a check or, in some instances, a prepaid debit card (EIP Card).

Q & A: The $10,200 Unemployment Tax Break
Generally, unemployment compensation received under the unemployment compensation laws of the United States or a state is considered taxable income and must be reported on your federal tax return. However, a new tax break - in effect only for the 2020 tax year - lets you exclude the first $10,200 from taxable income. Here's what you should know:

PPP Loan Deadline Extended Through May 31
The Paycheck Protection Program Extension Act of 2021 was signed into law on March 31, 2021, extending the deadline to apply for a loan by an extra 60 days, from March 31 to May 31, 2021. The law also gives the Small Business Administration (SBA) an additional 30 days after the May 31 deadline to review and process loan applications.

Tax Tips