The CARES Act provides for payments to qualifying individuals in 2020. If you have not received your payment in 2020 visit the IRS Website to learn more about who qualifies and how to received your rebate if you have not yet done so.
The Consolidated Appropriations Act signed into law December 27, 2020, temporarily (for 2021 and 2022) allows businesses to deduct 100% of business meals provided by a restaurant with clients, up from 50% in 2020. We expect more guidance to be forthcoming. Click here for frequently asked questions about meals and entertainment rules.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed in to law December 20, 2019 enacted several significant changes to retirement accounts. Beginning in 2020 the SECURE Act:
Due to the new Tax Cuts and Jobs Act (TCJA), the new redesigned Form W-4 no longer relies on the concept of withholding allowances, since there is no longer a deduction for personal exemptions). A new W-4 is not required at your current job. It is only required if you are newly hired after 12/13/19, or if you wish to make a change. To complete the form, always complete Steps 1 and 5 and, if your income will be under $200,000 ($400,000 or less if married filing jointly) also complete, Step 3. Also, do the following:
Go to https://www.irs.gov/individuals/tax-withholding-estimator, for a fairly comprehensive withholding estimator created by the IRS.
Review this comprehensive document that provides income tax rates, standard deduction limits, mileage allowances, luxury depreciation limits, employee benefit plan limits, IRA limits, HSA limits, education credit limits, high income individual thresholds and more.
Many tax breaks had expired but recent legislation retroactively extends over 30 provisions through 2020. These are the few that we find to be most relevant for our clients/prospects.
Qualifying property can be found here. The credit is 10% of the cost, up to a $500 lifetime credit. In addition, solar electric, solar water heating or qualified small wind energy or geothermal property are eligible for a 26% tax credit if purchased in 2020. It then drops to 22% for 2021.
In the past, Illinois allowed a tax credit to residents for wages and taxes paid to non-reciprocal states. This allowed such employee to not be taxed in two states when their work in the other states was considered temporary. For the past few years, however, Illinois became aggressive and did not allow the tax credit, causing double state tax for these employees. For 2020, Illinois passed a tax law allowing employees to take a tax credit in order for there not to be this double tax. So, if you have a 2020 W-2 with wages in other states (in addition to Illinois) you will NOT be subject to this double state tax.
Contact us if you would like to discuss how these laws might impact you.