Tax – Federal Income – SimonCPA, PC

2021-02 What’s New With Federal Taxes

Certainly a lot going on with the Pandemic. Here is a brief update of what’s new.

Businesses

Business Loss Limitations – Does not apply for 2018, 2019 and 2020 due to Pandemic.
Business Interest Expense Limitations – Increase in amount allowed and elect to use 2019 income to calculate 2020 limit due to Pandemic
Fringe Benefits – Qualified Education Perks now include payment of student loans.
Meals – Usually qualified meals are 50% deductible, but for 2021 and 2022 they are 100% deductible due to Pandemic.
Net Operating Losses – Corporations now can temporarily carryback losses due to Pandemic
Payroll Protection Program – Second Draw PPP Loans now available for those that qualify.
Payroll Taxes

Individuals

Eligible Paycheck Protection Program expense deductibility update

The Treasury Department and the Internal Revenue Service issued updated guidance allowing deductions for the payments of eligible expenses when such payments would result (or be expected to result) in the forgiveness of a loan (covered loan) under the Paycheck Protection Program (PPP). Click on the links below for more info.

IRS News Release 2021-04

IRS Revenue Ruling 2021-02 PDF File

Employee Retention Credit

The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll. Click the links below for more info.

IRS News Release 2021-21

IRS Form 7200 – Advance payment of Employer Credits Due to Covid-19