The last day for a tax interview appointment
with one of the CPA's is Tuesday, March 23rd.
If you need to schedule an appointment,
please call our office ASAP.
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California & PPP loan expenses
We still have no update on AB 80, California’s proposed partial conformity to allowing PPP deductions. We have heard two things from reliable sources: It could be in a week or so; and it may not happen until June, along with the budget. So we still recommend extending affected California returns.
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Tax Payments & Estimates
When paying your tax liability and estimates for the coming year, you should always write separate checks. The IRS and FTB rarely split a check between tax years. Consequently, if you pay your current year liability and future year estimates all on the same check they will likely record it all to just one tax year. As you may guess, this will create chaos with your account resulting in unexpected refunds of your estimates or notices of balances due for the past year. Do yourself a favor and write two checks....one for the balance due with the return and one for the estimates.
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If you have an S corp or LLC, don't forget to pay your $800 annual estimate to the Franchise Tax Board by April 15th. This is due whether you are on extension or not.
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American Rescue Plan Act
Individual tax provisions
- A $10,200 per individual unemployment insurance exclusion for the 2020 taxable year, only for households with modified AGI of $150,000 or less. Taxpayers who have already filed returns reporting 100% of their unemployment will need to supersede or amend their returns to get a refund;
- A third round of Economic Impact Payments of $1,400 per individual and dependent (including dependents over age 17); The phase out for individuals is $75,000 - $80,000 and for married couples it is $150,000 - $160,000;
- Extension of Pandemic Unemployment Assistance until September 6 with the $300 boost;
- Increased and fully refundable Child Tax Credits and Dependent Care Assistance Credits for the 2021 taxable year; Child Tax Credit increases to $3,600 for dependents under 6 years and to $3,000 for dependents age 6 thru 17.
- An increased employer-provided dependent care assistance exclusion;
- A five-year Cancellation Of Debt exclusion for student loan forgiveness;
- An expansion and increase of the Earned Income Tax Credit;
- Tax relief for excess advanced Premium Tax Credits received in 2020, and an increase in the Premium Tax Credit for 2021 and 2022; and
- Six months of free COBRA benefits.
Business tax provisions
- Extension and expansion of the Employee Retention Credit;
- Extension and expansion of the employer credits for paid sick and family leave benefits;
- Credits for providing subsidized COBRA benefits; and
- Restaurant revitalization grants to cover restaurant business losses.
To access the full text of the bill, go to:
www.congress.gov/bill/117th-congress/house-bill/1319/text
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Please note that if you have a tax return that is affected by these retroactive changes, we will need to wait for our tax software to make the necessary updates before filing your return.
This could result in a slight delay in the completion of your return.
If we have already filed your return, we will need to amend it.
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