Social Security Benefits and Taxes: The Facts

Social Security benefits include monthly retirement, survivor, and disability benefits; they do not include Supplemental Security Income (SSI) payments, which are not taxable. Generally, you pay federal income taxes on your Social Security benefits only if you have other substantial income in addition to your benefits. Examples include wages, self-employment, interest, dividends, and other taxable…

Eligibility for Certain Tax Credits

Some tax credits to consider: Premium Tax Credit. If you, your spouse, or a dependent was enrolled in healthcare coverage purchased from the Marketplace in 2020, you might be eligible for the Premium Tax Credit – but only if you chose to have advance payments of the premium tax credit sent directly to your insurer…

What’s New for 2020 Tax Returns

Recovery Rebate Credit/Economic Impact Payment. In January, the Treasury Department and the IRS began sending the second round of Economic Impact Payments (EIP2) to millions of Americans as part of the implementation of the Coronavirus Response and Relief Supplemental Appropriations Act. As with the first round of Economic Impact Payments (EIP1), taxpayers don’t need to…

CONGRESS EXTENDS AND EXPANDS EMPLOYEE RETENTION CREDIT (NOW AVAILABLE TO PPP LOAN RECIPIENTS)

The¬†Consolidated Appropriations Act of 2021¬†(Act), signed into law on December 27, 2020, contains significant enhancements and improvements to the Employee Retention Credit (ERC).¬† The ERC, which was created by the CARES Act on March 27, 2020, is designed to encourage employers (including tax-exempt entities) to keep employees on their payroll and continue providing health benefits…

Covid 19 Relief Bill Tackles Some Key PPP issues

Among many other things, the Covid Relief legislation, just passed by Congress ensures tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loans, provides fresh PPP funding, and offers businesses facing severe revenue reductions the opportunity to apply for a second loan. Additionally, the bill raises the PPP simplified forgiveness limit from…

Gifts

Gifts Make gifts sheltered by the annual gift tax exclusion before the end of the year if doing so may save gift and estate taxes. The exclusion applies to gifts of up to $15,000 made in 2020 to each of an unlimited number of individuals. You cannot carry over unused exclusions from one year to…

Charitable Donations

Charitable Donations Currently, individuals who make cash contributions to publicly supported charities are permitted a charitable contribution deduction of up to 60% of their AGI. Contributions in excess of the 60% AGI limitation may be carried forward in each of the succeeding five years. The CARES Act suspends the AGI limitation for qualifying cash contributions…

HSA

HSA If you become eligible in December of 2020 to make health savings account (HSA) contributions, you can make a full year’s worth of deductible HSA contributions for 2020 ($3,550 single coverage/$7,100 family coverage and an extra $1,000 catchup if age 55 and older).