Resources

Tax Organizers

When you’re ready to prepare your tax paperwork, these organizers we put together can help you to get organized and prepared.

Helpful Links

Updated January 2021:

Recently the government passed a sweeping bill to provide help to those effected by the outbreak of COVID-19. We are providing links to some articles that can help you to navigate this bill and take advantage of SBA loans and  payroll protection programs. Please be assured that we are here to help you navigate this ever changing environment.

2020 Tax Updates

2020 Mileage Rates

  • Business 57.5¢ / mile
  • Medical 17¢ / mile
  • Moving 17¢ / mile
  • Charitable 14¢ / mile

2021 Mileage Rates

  • Business 56¢ / mile
  • Medical 16¢ / mile
  • Moving 16¢ / mile (disallowed except for military)
  • Charitable 14¢ / mile

Things that can impact this 2020 tax year’s tax return:

  • The 2020 tax filing season will begin on February 12th. Any returns claiming the EIC (Earned Income Credit) will not be processed before (we will not know until February 12th).
  • The due dates on Federal schedule 1040’s are May 17th, 2021. Also, form 1065 and 1120 are now due on March 15th, 2021.

Federal Rates and Limits 2020

  • FICA
    Social Security (OASDI) Wage Base $142,800
    Medicare (HI) Wage Base No Limit
    Social Security (OASDI) Percentage 6.2%
    Medicare (HI) Percentage
    1.45% (2.35% for
    individuals earning over
    $200,000)
    Maximum Employee Social Security (OASDI) Withholding $8,853.60
    Maximum Medicare (HI) Withholding No Limit
    Maximum Amount of Earnings to Still Receive Full Benefits Under
    Full Retirement Age $18,960
    Amount of AGI Causing SS Benefits to be Taxable (85%)
    Married/Filing Jointly $44,000
    Single $34,000
    Retirement Contributions
    Maximum Elective Deferral to 401(k) and 403(b) $19,500
    Maximum Elective Deferral to SIMPLE IRA Plans $13,500
    Maximum Annual Contribution to Defined Contribution Plans Lesser of 100% of
    compensation or $58,000
    Maximum Annual Contribution to Keogh or SEP-IRA Lesser of 25% of
    compensation or $58,000
    Maximum Annual Compensation Taken into Account for
    Contributions $290,000
    Threshold Amount for Definition of Highly Compensated Employees $130,000
    Threshold Amount for Definition of Key Employee in Top-Heavy
    Plans $185,000
    Catch Up Contribution Limits (Individuals at least age 50 by EOY)
    401(k) Plans $6,500
    SIMPLE Plans $3,000

2020 Tax Law Updates

Things that will affect your 2020 tax return:

Pandemic Relief

  • 10% Early-Withdrawal Penalty Waived on IRA Distributions: Up to 100k of distributions can be taken out and the 10% penalty waived if used for coronavirus related reasons. (This was not extended…only for 2020 tax returns).
  • Required Minimum Distributions Suspended: You are not required to take out your RMD if you choose not to.
  • PPP loans received will not be treated as income and the expenses will be deductible. (That is a big plus for taxpayers).
  • Unemployment benefits: The new stimulus bill enacted in March 2021 entitles taxpayers to exclude up to $10,200 of unemployment income per person on your 2020 income tax return.

Tax Changes

  • Standard Deduction: Increased to $12,400 for single taxpayers, $18,650 for head of household and  $24,800 for married couples.
  • Dependent Exemption: Eliminated
  • State, local and property taxes: They are now been limited to $10,000. (Schedule A)
  • New tax brackets are now in effect: 10%, 12%, 22%, 24%, 32%, 35%, 37%. This will reduce your overall taxes by anywhere from 1%-4% depending on your income levels, filing status, etc.
  • Capital Gains and Dividends: No change
  • Earned Income Credit: Maximum credit depends on the number of qualified children: $538(none); $3,584(one); $5,920(two); $6,660(three), subject to phaseouts.
  • American Opportunity Credit: $2,500 per year maximum (100% of the first $2,000 of qualifying expenses and 25% of the next $2,000). Phaseouts apply as well.
  • Section 179: Up to $1,040,000.
  • Bonus Depreciation: 100% of basis in first year available.
  • Estate Tax: You can pass your heirs up to $22 million tax-free (for married couples). This doubled the former $11 million estate tax limit.
  • S-Corporations, partnerships, LLC’s and sole proprietors: The majority of these companies get to deduct 20% of their income tax-free.
  • AMT: The final bill raised the threshold to $500,000 for individuals and $1,000,000 for married couples (Note: some families in the $200,000-$500,000 income range may end up paying this tax, but it will be greatly reduced compared to prior years).
  • Mortgage Interest: Under the new tax law, homeowners can only deduct interest they pay on home mortgage debt less than $750,000, down from the former cap of $1,000,000.
  • Child Tax Credit: This credit has been doubled to $2,000 per child, $1,400 of this credit is refundable even if you do not have any tax liability.
  • The Tax Bill suspends all miscellaneous itemized deductions that are subject to the 2% floor under present law. This includes the following deductions that an employee had been permitted to deduct under current law:
    1. Casualty and theft losses from property used in performing services as an employee;
    2. Business bad debt of an employee;
    3. Business liability insurance premiums;
    4. Damages paid to a former employer for breach of an employment contract;
    5. Depreciation on a computer a employee’s employer requires him or her to use in his or her work;
    6. Dues to a chamber of commerce if membership helps the employee perform his or her job;
    7. Dues to professional societies;
    8. Educator expenses;
    9. Home office or part of a employee’s home used regularly and exclusively in his or her work;
    10. Job search expenses in the employee’s present occupation;
    11. Legal fees related to the employee’s job;
    12. Licenses and regulatory fees;
    13. Malpractice insurance premiums;
    14. Medical examinations required by an employer;
    15. Occupational taxes;
    16. Passport fees for a business trip;
    17. Research expenses of a college professor;
    18. Subscriptions to professional journals and trade magazines related to the employee’s work;
    19. Tools and supplies used in the employee’s work;
    20. Costs for travel, transportation, meals, entertainment, gifts, and local lodging related to the employee’s work;
    21. Union dues and expenses;
    22. Work clothes and uniforms if required and not suitable for everyday use; and
    23. Work-related education.The Tax Bill suspends all miscellaneous itemized deductions that are subject to the 2% floor under present law. This includes the following deductions that an employee had been permitted to deduct under current law.

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