sarahschultz

On December 27, 2020, congress passed the Consolidated Appropriations Acts (CAA).  It includes a temporary provision that provides for a 100% deduction for meals purchased from a restaurant after December 31, 2020, and through December 31, 2022.  Please note that all other legislation regarding the meals and entertainment deduction did not change.

For bookkeeping purposes it may be wise for businesses to create a separate account dedicated to restaurant meals.

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The IRS announced that the tax season will start on Friday, February 12^th 2021.  This is when they will begin accepting and processing 2020 tax year returns.  The deadline will still be Thursday, April 15^th 2021 for the vast majority of taxes.  The IRS plans to have the first refunds be administered during the first week of March.

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The new secure act has some tax benefits for families who have children with student loan debt and for growing families. It would allow 529 accounts to qualify for student loan repayment of $10,000 a year. If parents have funds remaining in educational savings loans accounts they can now help their graduated child by paying up to $10,000 a year in their student loan debt. Also the new law would allow for a penalty-free withdrawal of up to $5,000 for your 401(k) to help with the cost of having a child or adopting a child.  For more information click here.

Starting in 2020, a new law takes into effect that will help expand opportunities for individuals to increase retirement savings. There is no longer a restriction to the age limit that contributions can be made into a traditional IRA. After reaching age 70 ½, you can make qualified charitable contributions of up to $100,000 per year directly from your IRA. As of 2020, the new minimum age for distributions from IRAs and retirement plans is now 72. The exception to this is if you are still working as an employee and do not own over 5% of the outfit that employs you, then you can postpone distributions until you retire.  For more information click here.

The new Secure Act that takes into effect starting 2020 will allow for more individuals to qualify for 401(k) plans and will make things easier for employers. The new law will allow an increase from 10% of wages to 15% of wages in which they can automatically enroll workers in “safe harbor.” The new law will also give employers a $500 maximum tax credit if they create a 401(k) or Simple IRA with automatic enrollment. Part-time employees who work 1000 hours a year or have 3 years of 500 hours of service are now eligible to enroll in retirement plans from their employers. The Secure Act also allows employers to offer annuities as investment options withing 401(k) plans (the fear of legal liability if the annuity provider fails is now […]