Month: August 2021

2021 Tax Changes For Personal Filing

Before you know it, tax season will be here, and unless you’re an accountant or working for the IRS, you’re probably not too excited to look at W2s. As it goes, personal taxes will be a little bit different than it has been in previous years. 2022 brings with it new rules and changes that may take you by surprise if you’re not prepared early in the season. What specific new tax changes should you watch out for before you send in your return?

The Expanded Child Tax Credit

Was your family eligible for the expanded child tax credit? The American Rescue Plan boosted the credit to $3,000 for families with children 17 years of age or younger. In addition, an extra $600 was made available for children under 6 years of age to help families struggling during the pandemic.

While millions of Americans received advanced credits, some filers ended up earning more than expected in 2021 and may need to pay some of the credit back. How do you know if you may need to pay back some (if not all) of the credit?

Recipients can also easily check their advanced payments on the IRS website and determine whether they qualified for the payments received.

Health Insurance Premiums

In March 2021, Congress increased health insurance premium subsidies, capping premiums at 8.5 percent of household income, helping millions of Americans save money on their monthly premiums.

Did you get a raise or a new job in 2021, meaning an increase in wages? If so, your subsidies may not have been appropriately reflected throughout the year. What does this mean?

Similar to the child tax credit, 2022 filers may owe money back. Take time now to get an estimate of how much money you may need to set aside come tax season to offset these subsidies.

Required Minimum Distributions

In 2020, the CARES Act waived required minimum distributions, meaning that retirement plan participants, IRA owners (including beneficiaries) did not have to take RMDS from their IRAs.

The waiver has since ended, as did the RMD age, which changed to 72 from 70.5 years of age. If you’re unsure of the rules, deadlines, and requirements, visit the IRS’s site, check by plan, and learn about potential penalties.

Donohoo Can Handle Your Taxes

We realize these changing tax rules are hard to follow and stay on top of year after year. Donohoo Accounting Services is here to help make tax season easy for you while also helping you find every tax deduction you are entitled to.

When it comes time to file your 2021 taxes, you don’t have to do it on your own. We have been filing tax returns for individuals in the Greater Cincinnati area and beyond for more than 20 years, and our team is well versed in tax laws and rules, saving you time and money. Contact us today to schedule your free consultation! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

Donohoo Accounting Services

2021 Tax Changes For Businesses

Filing taxes for your small business is likely one of your least favorite things about being your own boss. Tax season might be months away, but now is the time to determine if you will need any extensions. Plus, waiting until the week before the deadline might increase your risk of making a mistake and getting unwanted attention from the IRS!

Work-From-Home Related Deductions

Were you working from home for a majority of 2021 due to the pandemic? If so, you might have loved the quick commute from your bedroom to the home office and being able to spend more time in comfortable clothes.

You may be eligible for a home office deduction, adding extra money to your pocket. A home office deduction is usually reserved for those who are not employed by a company that provides a W2, but if you’re self-employed or an independent contractor, it might be worth looking into, as it could save you hundreds of dollars.

Paycheck Protection Program Loans

In 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act helped small business owners keep their heads above water during shutdowns, layoffs, and COVID surges by offering Paycheck Protection Program (PPP) loans.

These loans were used on business expenses like payroll, mortgages, utilities, rent, but became effectively exhausted in May 2021. Were you one of the business owners who were eligible and received loans in the first part of 2021? If you’re looking into having your loans forgiven, you must submit a loan forgiveness application and have it approved by the Small Business Administration.

Charitable Donation Deductions

2021 has been a hard year for us all as we worked to recover as a nation in the midst of a pandemic. Many non-profits and shelters found themselves in dire need of supplies to help feed and clothe those who were laid off or struggling to make ends meet.

Did your restaurant or food-related business donate to food banks or shelters during 2021 to help feed others in need? If so, you may qualify for an increased deduction limit on your 2021 taxes if you meet certain requirements outlined by the IRS.

Donohoo Can Handle Your Taxes

Donohoo Accounting Services is here to help make tax season easy for your small business by finding every tax deduction you are entitled to, saving you time that can be spent focusing on keeping your business running.

We have been filing tax returns for small businesses in the Greater Cincinnati area and beyond for more than 20 years, and our team is well versed in tax laws and rules, saving you time and money. Contact us today to schedule your free consultation! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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