UPCOMING EVENTS

Tax Tips - Pandemic Relief

By Michael Aston, E.A. Alhambra Tax Center

Michael Aston is an Enrolled Agent engaged in his family business at Alhambra Tax Center, 1009 E. Main St., Alhambra. Tax questions, or any other questions, can be e-mailed to michael@alhambrataxcenter.com, or call 626-282-1084.

Tax Tips

Pandemic Relief

By Michael Aston, E.A.
Alhambra Tax Center

The following is the Consolidated Appropriations Act, 2021, signed into law December 2020.

Charitable Contributions

  • The CARES Act permits taxpayers who claim the standard deduction a charitable deduction up to $300 (Married Filing Joint $600).
  • The increased charitable contribution deduction limit of 100% has been extended through 2021.

Tax Provisions Made Extended

  • Mortgage Premium Deduction (PMI).
  • Nonbusiness Energy Property Credit.
  • Residential Energy Efficient Credit.

Paycheck Protection Program (PPP)

PPP Loans that are forgiven are excluded from taxable income.  Expenses that are otherwise tax deductible and paid for with PPP loan proceeds are allowed a deduction on your tax return.

Payroll Tax Credit

  • The Paid Sick and Family Leave Credit was extended for wages paid through March 31, 2021.
  • The Employee Retention Credit was extended for wages paid through June 30, 2021.  Changes to the Employee Retention Credit, effective for calendar quarters beginning after December 31, 2020, include the following

o  The credit was increased from 50% to 70%.

o  The $10,000 limited applies on a per calendar quarter per employee basis, rather than a limit for all calendar quarters.

o  A significant decline in gross receipts means less than 80% of gross receipts for the same calendar quarter in 2019.

o  You may elect to use the immediately preceding calendar quarter preceding calendar quarter instead of corresponding calendar quarter year 209 for purpose of determining a significant decline in gross income.

o  The 100-employee threshold is increased to 500-employees.

To determine which filing status is best for you, consult your tax professional or go to IRS.gov.  This information is from Tax Material, Inc.

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