As a quick reminder, the purchase of personal protective equipment, such as masks, hand sanitizer, and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses.
PPP Loan Deadline Extended Through May 31
The Paycheck Protection Program Extension Act of 2021 was signed into law on March 31, 2021, extending the deadline to apply for a loan by an extra 60 days, from March 31 to May 31, 2021. The law also gives the Small Business Administration (SBA) an additional 30 days after the May 31 deadline to review and process loan applications.
Donating a Car To Charity as a Tax Write-Off — Special Rules
If you donate a car to a qualified charitable organization and intend to claim a deduction, you should be aware of the special rules that apply to vehicle donations.
Avoiding an IRS Tax Audit
Just 0.45 percent of taxpayers were audited in the fiscal year 2019. Still, with taxes becoming more complicated every year, there is an even greater possibility of confusion turning into a tax mistake and an IRS audit. Avoiding “red flags” like the ones listed below could help.
Tax Credits for Electric Vehicles and Plug-in Hybrids
Tax credits are still available for Qualified Plug-in Electric Drive Motor Vehicles, including passenger vehicles and light trucks. The credit applies to vehicles acquired after 12/31/2009 and is limited to $7,500. State and/or local incentives may also apply.
Renting Out a Second Home
In general, income from renting a vacation home for 15 days or longer must be reported on your tax return on Schedule E, Supplemental Income, and Loss. You should also keep in mind that the definition of a “vacation home” is not limited to a house. Apartments, condominiums, mobile homes, and boats are also considered vacation homes in the eyes of the IRS. Tax rules on rental income from second homes can be confusing, especially if you rent the home out for several months of the year and use the home yourself.
Tax Breaks for Families With Children
If you have children, one or more of these tax credits and deductions could help your family reduce the amount of tax owed. Let’s take a look:
Claiming the Credit for Other Dependents
Taxpayers with dependents who don’t qualify for the child tax credit may be able to claim the credit for other dependents. The maximum credit amount is $500. To take the credit, your dependent must meet certain conditions.
Small Business Tax Roundup
Due to recent legislation such as the Tax Cuts and Jobs Act and the CARES Act, tax changes affect both individual taxpayers and small businesses. In 2020, the IRS issued several guidance documents and final rules and regulations that clarified several tax provisions affecting businesses. Here are five of them:
Unemployment Benefits Identity Theft Scam Alert
During 2020, millions of taxpayers were impacted by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers who faced unemployment or reduced work hours applied for and received unemployment compensation from their state. As a reminder, unemployment benefits are taxable income and must be reported on tax returns.