We hope this correspondence finds you and your family well! We know this now two-year long pandemic has brought challenges and disruptions that may have significantly affected your personal and financial situations – COVID-19, economic relief measures, new tax laws and political shifts. We look forward to discussing your tax situation so we can develop a customized plan that works to maximize your benefit.
Over the past two years many tax provisions were implemented under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the American Rescue Plan Act of 2021, and other the year-end coronavirus relief legislation, known as the Consolidated Appropriations Act, 2021 (H.R. 133), all were aimed to help individuals and businesses deal with the COVID-19 pandemic and its ongoing economic disruption.
Here are some key considerations for this tax season:
Enhanced Child Tax Credit
- The American Rescue Plan increased the child tax credit to $3,000 for families with kids 17 and under for 2021, with an extra $600 for children under age 6. Like other credits the amount is phased out depending on adjusted gross income. To qualify for the full credit, single filers need a modified adjusted gross income of less than $75,000 and married couples filing jointly must earn under $150,000.
Charitable Deductions
- Similar to 2020, individuals who do not itemize their deductions can take an above-the-line charitable deduction of up to $300 ($600 for married filing jointly). Such contributions must be made in cash and made to qualified organizations.
Student Loan Relief
- As part of the COVID relief bill, beginning in 2021, loan cancellation for post-secondary education is no longer considered taxable income. Ad if your employer helped you pay down your student debt, you can exclude up to $5,250 from taxable income.
Virtual currency/cryptocurrency
- Virtual currency transactions are becoming more common. There are many different types of virtual currencies, such as Bitcoin, Ethereum and Ripple. The sale or exchange of virtual currencies, the use of such currencies to pay for goods or services or holding such currencies as an investment generally has tax consequences. We can help you understand those consequences.
Fraudulent activity remains a significant threat
Our firm takes security seriously and we think you should as well. Fraudsters continue to refine their techniques and tax identity theft still is a significant concern. Beware if you:
- Receive a notice or letter from the Internal Revenue Service (IRS) about a tax return, tax bill or income that does not apply to you
- Get an unsolicited email or another form of communication asking for your bank account number or other financial details or personal information
- Receive a robocall insisting you must call back and settle your tax bill
Make sure you are taking steps to keep your personal financial information safe. Let us know if you have questions or concerns about how to go about this.
For the benefit of both you, our valued clients, and our team, we will continue to also perform services entirely contactless through our virtual office. We effectively use virtual tools, such as Zoom teleconferencing, our client-friendly 256-bit encrypted client portal, and our redesigned and informative website. Our commitment is still to provide the exceptional professional service you deserve. You can access the client portal via our website, www.tanfs.com, or clicking portal access.
Our secured portal can be accessed on your computer, tablet, or mobile device. Simply login in or use the guest exchange, take a picture of your tax documents, and upload… we will take care of the rest!
Please contact our office here or call 980.434.2044 if you would like to set up a year-end consultation.
We look forward to connecting with you soon!