Refresher on the Home-Sale Gain Exclusion Tax Break

In many areas, residential real estate markets have surged, and some are still surging. In these sellers’ markets, big home-sale gains are likely. That’s great news if you’re a seller — but will you owe taxes on the profit? (more…)

How to Salvage a Casualty Loss Deduction

So far, 2021 has been a rough year for casualty losses. Hurricane Ida wreaked havoc in the south and east. Wildfires have destroyed millions of acres in the west. Catastrophes in other parts of the country this year — including tornadoes, earthquakes and floods — have caused significant damage to personal property. (more…)

Employers Eligible for Emergency Paid Sick Leave Tax Credits under American Rescue Plan Act of 2021

Through September 30, 2021, employers can offer emergency paid sick leave for COVID-19 related reasons under the American Rescue Plan Act of 2021 (the “Rescue Plan”). The “Rescue Plan” grants tax credits to employers with 500 or fewer employees who voluntarily elect to provide qualified employees with emergency paid sick leave (EPSL) or expanded FMLA (EFMLA) leave for COVID-19 related reasons. (more…)

Reap Tax Rewards from Securities Harvest This Fall

With autumn coming up in a couple months, it’s time to think about “harvesting” capital gains or losses from sales of securities. In addition, unfavorable tax law changes proposed in President Biden’s American Families Plan (AFP) may create an added sense of urgency for some taxpayers. (See “Proposed Tax Law Changes” at bottom of article for details.) (more…)

Tax Implications for Vacation Homes Classified as Personal Residences

Do you own a vacation home? If so and you rent it to third parties, you may be confused about the federal income tax rules that apply. Confusion is especially common if you changed your usage pattern during the pandemic. It may have caused your property to be classified as a personal residence — rather than a rental property — for federal income tax purposes. (more…)

Child Tax Credit 2021: Eligible or Opt-Out? 

Child Tax Credit 2021: Eligible or Opt-Out? 

Many Americans received their first advance payments from the child tax credit program on or around July 15, 2021. These payments were passed as part of the American Rescue Plan as an advance on the child tax credit for the 2021 tax year. However, some recipients may be surprised to learn they may not be eligible for the payments already received because of changes in taxable income for 2021 or children who turned 18 during 2021. (more…)

REMINDER: Apply Now for PPP1 Loan Forgiveness 

For businesses which received PPP1 loans during the early wave of funding, the time to apply for forgiveness is now. The first PPP loan payments are due 10 months after the end of your covered period. For example, if you received a PPP loan on April 17, 2020, your 24-week covered period ended on October 1, 2020 and your first loan payment will be due on August 1, 2021. Your bank will need time to process your application so the time to apply is now.

A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.

Reminders about applying for loan forgiveness:

1.    Determine which forgiveness application you will complete: The SBA provides 3 different versions of the PPP loan forgiveness application form, verify with your accountant or bank that you are using the correct form.

2.   Gather your documents: There are specific documents you will need to retain and/or submit for your application. If you plan to start gathering documentation on your own, here’s what you may need: payroll documents for all payroll periods that overlapped with the covered period, full-time equivalent (FTE) documents and certain non-payroll documents.

3.   Submit the forgiveness form and documentation to your PPP lender: Complete your loan forgiveness application and submit it to your lender with the required supporting documents and follow up with your lender to submit additional documentation as requested. Consult your lender for additional guidance and provide requested documentation in a timely manner.

For those of you receiving PPP2 loans in 2021, the earliest you can apply for loan forgiveness is 8 weeks from your loan funding date.

 

Qualifying for Tax Breaks for a Dependent Parent

For many families, the tables may turn, and adult children provide financial support for their parents. For example, you might have moved your in-laws from a long-term care facility into your home during the pandemic for safety and convenience. Or your widowed father might still live in his own home, but his pension might not be enough to cover his living expenses, so you pay his rent and substantial medical costs. (more…)