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Tax Tips for May 2021

Tax Tips for May 2021

by | May 25, 2021 | ,

Click on the links below to jump to each section in this article: File on Time - Even if You Can't Pay Common Errors To Avoid When Filing a Tax Return Refunds for Nontaxable Unemployment Compensation Recovery Rebate Credit May Be Different Than Expected Deductions for Food or Beverages From Restaurants   File on Time - Even if You Can't Pay Generally, taxpayers should file their tax returns by the deadline even if they cannot pay the full amount due, but if you can't, there are several options. Let's take a look at a few scenarios: 1. An individual taxpayer owes taxes, but can't pay in full by the deadline. If this is the case, file a tax return or request an extension of time to file by the May 17 deadline. If tax is owed and a return is not filed on time - or an extension is not...

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Deducting Business-Related Car Expenses

Deducting Business-Related Car Expenses

by | May 20, 2021 |

If you're self-employed and use your car for business, you can deduct certain business-related car expenses. There are two options for claiming deductions: Actual Expenses. To use the actual expense method, you need to figure out the actual costs of operating the car for business use. You are allowed to deduct the business-related portion of costs related to gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments). Standard Mileage Rate. To use the standard mileage deduction, multiply 56 cents (in 2021) by the number of business miles traveled during the year. Deduct car expenses such as parking fees and tolls attributable to business use separately no matter which method you choose. Which Method Is Better For some taxpayers, using the...

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Avoiding Tax Surprises When Retiring Overseas

Avoiding Tax Surprises When Retiring Overseas

by | May 18, 2021 |

Are you approaching retirement age and wondering where you can retire to make your retirement nest egg last longer? Retiring abroad may be the answer. But first, it's important to look at the tax implications because not all retirement country destinations are created equal. Taxes on Worldwide Income Leaving the United States does not exempt U.S. citizens from their U.S. tax obligations. While some retirees may not owe any U.S. income tax while living abroad, they must still file a return annually with the IRS even if they transferred all of their assets to a foreign country. The bottom line is that you may still be taxed on income regardless of where it is earned. Unlike most countries, the United States taxes individuals based on citizenship and not residency. As such, every U.S....

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Saving for Education: Understanding 529 Plans

Saving for Education: Understanding 529 Plans

by | May 13, 2021 |

Many parents are looking for ways to save for their child's education, and a 529 Plan is an excellent way to do so. Even better is that thanks to the passage of tax reform legislation in 2017, 529 plans are now available to parents wishing to save for their child's K-12 education as well as college (two and four-year programs) or vocational school. The SECURE Act expanded the 529 Plan to include fees, books, supplies, and equipment for apprenticeship programs and repayment of principal and interest on student loan debt for the designated beneficiary or the beneficiary's sibling, up to a lifetime limit of $10,000. You may open a Section 529 plan in any state, and there are no income restrictions for the individual opening the account. Contributions, however, must be in cash, and the total...

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Tax Withholding for Seasonal and Part-Time Employees

Tax Withholding for Seasonal and Part-Time Employees

by | May 11, 2021 |

Many businesses hire part-time or full-time workers, especially in the summer. The IRS classifies these employees as seasonal workers, defined as an employee who performs labor or services on a seasonal basis (i.e., six months or less). Examples of this kind of work include retail workers employed exclusively during holiday seasons, sports events, or during the harvest or commercial fishing season. Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees. All taxpayers fill out a W-4 when starting a new job. Employers use this form to determine the amount of tax to be withheld from your paycheck. Taxpayers (including students) with multiple summer jobs will want to make sure all their employers withhold an adequate amount of taxes to...

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Tax Return Tips for Last-Minute Filers

Tax Return Tips for Last-Minute Filers

by | May 4, 2021 |

What You Need to About Tax Return Tips for Last-Minute Filers When it comes to working on your taxes, earlier is better, but many people find preparing their tax return to be stressful and frustrating and wait until the last minute. Complicating matters this year is tax reform and the newly redesigned Form 1040. If you've been procrastinating on filing your tax return this year, here are eight tips that might help. Don't Delay Resist the temptation to put off your taxes until the very last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error. Getting a head start - even if it is a week or two) will not only keep the process calm but also mean you get your return faster by avoiding...

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Integra International Audit & Accounting Alert – April 2021 (Issue 4)

by | Apr 24, 2021 |

Finding ways to improve audit quality and eradicate fraud are never ending tasks. Continued vigilance is a necessity. British authorities have been studying the issues from several angles over the past two years. The outcomes from three studies have been analyzed and incorporated into a comprehensive set of proposals that address the roles of corporate directors, shareholders, auditors and regulators alike. This issue of the Audit & Accounting Alert highlights significant aspects of the resulting consultation paper.

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PPP Loan Deadline Extended Through May 31

PPP Loan Deadline Extended Through May 31

by | Apr 22, 2021 |

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. The passage of the PPP Extension Act does not provide additional funding; however, as part of the American Rescue Plan Act, an additional $7.25 billion was earmarked for the Paycheck Protection Program to expand eligibility to additional nonprofits and digital news services. In February 2021, SBA also made four additional changes to open the PPP to more underserved small businesses, generally small and low- and moderate-income (LMI) businesses who have not...

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Q & A: The $10,200 Unemployment Tax Break

Q & A: The $10,200 Unemployment Tax Break

by | Apr 20, 2021 |

Generally, unemployment compensation received under the unemployment compensation laws of the United States or a state is considered taxable income and must be reported on your federal tax return. However, a new tax break - in effect only for the 2020 tax year - lets you exclude the first $10,200 from taxable income. Here's what you should know: What do I need to do to get the tax break? The tax break, which is part of the American Rescue Plan Act of 2021 (ARPA is available to all taxpayers whose 2020 modified adjusted gross income is less than $150,00 and allows you to exclude the first $10,200 of unemployment compensation received in 2020. For joint returns, the first $10,200 per spouse (i.e., $20,400 for two workers who are married filing jointly) is not included in gross income....

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Economic Impact Payments: Round Three

Economic Impact Payments: Round Three

by | Apr 15, 2021 | ,

On March 12, following the American Rescue Plan Act's approval and signing, the IRS began sending out the third round of Economic Impact Payments. Most payments were sent out via direct deposit, but approximately 150,000 checks were mailed by the Treasury Department as well. Taxpayers who received EIP1 or EIP2 but didn't receive a third payment (EIP3) via direct deposit will generally receive a check or, in some instances, a prepaid debit card (EIP Card).   Highlights: The third stimulus payment will generally be larger for most people. Most eligible people will get $1,400 for themselves (those filing joint returns will get $2,800) and $1,400 for each of their qualifying dependents claimed on their tax return. Eligible families will get a payment based on all of their qualifying...

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