Growth Series – Tips for Getting Your Business Financially Fit – Feb 23, 2022 – Yates County Chamber of Commerce (yatesny.com)
Check Your Refund
RECONCILING YOUR CHILD TAX CREDIT WITH YOUR 2021 TAX RETURN
If you received advanced child tax credit payments during 2021 the IRS will send you Letter 6419 to provide the amount that was disbursed to you. Please retain this letter and include it with your 2021 tax documents in preparation of filing your return.
UNENROLL AVAILABLE FOR ADVANCED CHILD TAX CREDIT
Individuals can now view eligibility, advanced payment amounts, and unenroll in the advanced child tax credit using the link below:
Advanced Child Tax Credit (CTC)
The IRS has announced the advanced CTC will begin July 15th and will be issued through direct deposit, paper checks, and debit cards on the 15th of each month there after.
Eligible families will receive up to $300 per month for each child under six years old and up to $250 per month for each child between the ages of 6 and 17.
The advanced payments will reduce the credit received when filing your tax return at the end of 2021.
Available soon there will be an option for taxpayers to opt out of the advanced payments and update personal information for change in dependents and expected income at the link below.
IRS Extendeds Individual Tax Deadline To May 17
1st Estimated Tax Payments for 2021 still due April 15th
2021 Tax Changes
Charitable Deductions – in 2021 single taxpayers can deduct $300 and married joint filers can deduct $600 when taking the standard deduction. Also, continuing into 2021 is the ability for those who itemized deductions on Schedule A to deduct charitable contributions up to 100% of AGI.
Business Meal Deductions – in 2021 and 2022 businesses may deduct 100% of meal and beverage expenses, an increase from 50% in 2020. This includes meals and beverages that are take-out and delivery.
BUSINESSES: EMPLOYEE SICK PAY CLIENT LETTER
Hurdles To Deduct Vacation Home Losses
Renting a vacation home allows for the deduction of certain expenses such as mortgage interest, property taxes, repairs, utilities, and insurance against the rental income. A loss may be taken if two tax hurdles are met.
Tax Hurdle #1: Personal use of vacation home cannot exceed the greater of (a) 14 days or (b) 10% of the time the home is rented out.
Tax Hurdle #2: If the taxpayer “materially participates” (i.e. spending more than 500 hours a year on the activity) in the vacation home rental activity they may avoid the passive activity loss rules that limit losses to the amount of other passive income.
Note that contemporaneous records must be kept documenting material participation.
2021 Retirement Plan Limits Unchanged
Contribution limits for 401k’s and IRA’s for 2021 won’t change for 2021. For 401k’s the maximum deferral amount is $19,500 (or $26,000 age 50 and over). IRA’s annual contribution limit is $6,000 (or $7,000 age 50 and over).