The CARES Act makes two significant changes to the rules governing charitable deductions for individuals. Individuals will be able to claim a $300 above-the-line deduction for cash contributions made to public charities in 2020. This rule effectively allows a limited charitable deduction to any taxpayer claiming the standard deduction. For this deduction, married taxpayers who… Read More

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the IRS made economic impact payments (EIPs) to certain taxpayers. The eligibility for and the amount of an EIP generally depended on the taxpayer’s 2019 federal income tax return. If one wasn’t filed at the time of eligibility, the IRS used the… Read More

On Aug. 8, 2020, a Presidential Memorandum was issued allowing employers the option to defer withholding and payment of the employee’s portion of Social Security tax if the employee’s wages are below $4,000 on a bi-weekly basis. The relief is available for employers and generally applies to wages paid starting Sept. 1, 2020, through Dec.… Read More

The CARES Act suspends the required minimum distribution (RMD) rules for 2020. This means any RMD a taxpayer would have been required to make before Dec. 31, 2020, as well as any RMD required to be made by April 1, 2020, based on meeting the required beginning date in 2019, is not required. However, if… Read More

The year is almost over, and you want to reduce your taxable income. What options are still available? The answer depends on your specific financial position. If you have investments that are doing poorly, you might want to consider selling them so you can claim a capital loss. You can claim a capital loss to… Read More

Do you earn side income? Whether it’s something you’ve been doing for years or something you just started to make extra money, the IRS says taxpayers must report income earned from hobbies in 2020 on next year’s tax return. If it’s a business, certain expenses incurred in the operation are deductible. What’s the difference between… Read More

If personal income has been impacted by the COVID-19 virus, you might want to update your W-4 form to ensure that the IRS isn’t withholding too much or too little from your paycheck. People who should check their withholding include those: who received unemployment at any time during the year work two or more jobs… Read More

Attention teachers: Eligible teachers and other educators can deduct certain unreimbursed expenses on their tax return next year. Who is considered an eligible educator? The taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide. They must also work at least 900 hours a school year in a school that provides… Read More

Businesses can deduct vehicle expenses. There are two ways to take expenses: the standard mileage rate or the actual expenses. The standard mileage rate for 2020 is 57.5¢ per business mile. Actual expenses are the expenses you incur using the vehicle for business purposes. You must choose one or the other, you cannot take both.… Read More

Depreciation is a complex calculation that represents the wear and tear on property over its useful life. The amount of depreciation depends on the basis, the class life, the method and the convention. Generally, the basis of property purchased for your business is the cost plus any settlement costs. If you convert property from personal… Read More