Major IRS Tax Changes
This is the one period of the year that everyone does not looks forward to! Tax Season is the most bothersome inconvenience and never anyone’s favorite time of the year. This upcoming tax season is a bit more complex, with unique and special twists to the norms. A lot of care must be taken when gather your information to file your business and personal tax returns. Keeping in mind, since the onset of the pandemic, expenses might have been harder to track; tax laws have been modified, amended, and repealed; business and personal government loans and grants have been disbursed, received, and paid back. Coupled with tax sanctions and loan forgiveness, taxpayers will need all the help they can get. Below are highlights of some of the changes that might be of interest to you, for this 2020 Tax Season.
THE IRS CHANGED MANY SERVICES IN 2020.
The due date for filing a 2020 return remains on schedule, Thursday, April 15, 2021.
The IRS, like many institutions, had to adapt to the changing times we are currently living in. Sooner than later however, we will look back at these years with awe at what we, as members of the human community, were able to accomplish when faced with challenges that seemed insurmountable.
PPP Loan Forgiveness
Wow! According to the IRS, if your loan was forgiven, taxpayers may be able to exclude from their business gross income the total amount of the forgiveness.
The Paycheck Protection Plan (PPP) is an employer assistance program was drafted under the Coronavirus Aid, Relief, and Economic Security (CARES) act. The PPP is structured like a loan and is disbursed to the business by the Small Business Administration.
Allowance of partial above-the-line deduction for charitable contributions
This is new: Under this guideline, taxpayers that do not itemize deductions can deduct up to $300.00 of cash contributions to charitable organizations per return.
Deferred payment of the employer shares of the Social Security tax
Here is an interesting one: For employers and self-employed individuals, payments of the employer share of Social Security tax can be deferred by half. The first half is due by December 31, 2021 and the second by December 31, 2022.
If your student loans have been a burden: The government has stepped in to help those with student loans as well. A good way to verify if you qualify is by calculating your Modified Adjusted Gross Income (MAGI).
According to the IRS: “Student loan interest deduction begins to phase out for taxpayers with MAGI in excess of $70,000 ($140,000 for joint returns) and is completely phased out for taxpayers with MAGI of $85,000 or more ($170,000 or more for joint returns)”.
How Alron Enterprises can help
We are here for you: Most customers of Alron Enterprises can attest to this, we are “The Little Guy’s Tax Advocate”. We would be more than happy to assist you navigate these new changes and make sure you get every dollar you deserve. Feel free to schedule an appointment with us, we are open Monday-Friday 9AM-5PM.
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