As interest rates rise across the board so does the IRS underpayment penalty rate for estimated taxes. The rate is scheduled to increase from 4% to 5% starting on July 1, 2022. With the rising rates, it becomes more important to make estimated tax payments accurately and on time. For the official IRS announcement see the following news release here.
Expanded monthly Child Tax Credit payments start hitting bank accounts today, July 15th. For more information on qualifications and program specifics, see the White House announcement here.
President Biden’s team has released additional information on the Made in America Tax Plan outlining proposed tax changes including raising corporate and individual tax rates. Other proposals include taxing capital gains for high income taxpayers at ordinary income rates, changes to basis step up on inherited property and 1031 exchanges.
Additional details can be found here. With the 2018 Tax Cut and Jobs act there were many revisions from the initial proposals in 2016, but this gives us an idea of what the White House is looking to accomplish.
Today the U.S. Department of the Treasury has officially announced that States are allowed to conform to Federal law on PPP loan deductibility. A few weeks ago California AB 80 was stalled as the state asked for clarification on limitations in the American Rescue Plan over concern that passing AB 80 would limit Federal funds available to the state.
While this doesn’t mean PPP loan expenses will be allowed quite yet, the state legislature has been given the green light to act.
For the official press release click here:
The IRS and FTB have just extended the filing deadline for 2020 individual tax returns and payments from 4/15 to 5/17 giving tax professionals and individuals more time to file returns complicated by retroactive tax law changes and Covid delays.