* HAPPY SUMMER *

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We hope you are enjoying your summer and want to give you a few updates on recent events

Lazy days of summer...

Things slow down a bit for us in the summer so we have not sent an electronic newsletter since early June. However, hopefully you received our Tax Bulletin we mailed out (old school..) in July with some key updates on RMD's from retirement accounts, revised Child Tax Credit and a few other topics. If not, click the button below to see the bulletin

Tax Bulletin

Washington Update

Unfortunately, we do not have any firm updates on potential changes to the tax landscape as talks continue on the three key bills that could impact taxes

  • The infrastructure bill
  • The budget bill
  • The reconciliation bill.

Below are the key aspects we are keeping a watchful eye on:

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Personal Tax rate - most indications are that the top rate (37%) will move closer to 40%

Corporate Tax rate - most likely to go up from current 21% level

Long term capital gains rate - top rate (20%) likely to go closer to 40% for those above $1M

SALT (state & local tax) deductions - $10,000 cap may be raised ($50,000 or $100,000)

Cryptocurrency - continued debate on if and when these will be more regulated/taxed

Sec 199a (QBI) - one bill has talked about more limits on the 20% deduction from small business

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COVID and RELATED STIMULUS/RELIEF PROGRAMS


PPP

  • This program ended with 11.5M loans worth $800B.
  • Only 5M applicants (44%) with loans of $470B (59%) have applied for forgiveness
  • 99% of the forgiveness applications processed have been APPROVED
  • A good portion of the 56% that have not applied for forgiveness will have to start paying back the loans soon (recall loan repayments start 16 months after receipt)


ERC

  • We have been slow rolling the ERC as we needed guidance from the IRS on how to treat owner compensation. Unfortunately the IRS issued guidance last week that owner compensation (and compensation to owner's spouse/children) are NOT eligible for ERC
  • In addition, unlike PPP, any wages used for the ERC cannot be deducted for tax purposes so this mitigates some of the credit benefit (but it is still worth doing). However, this means that if you claim a retroactive credit for 2020 wages, we will need to amend the 2020 tax return
  • One version of the Infrastructure Bill noted above included a provision to end ERC as of September 30th (as opposed to current December 31st expiration).
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2020 Income Taxes


For those that took advantage of extensions, returns are due as follows:

  • Business Returns - September 15, 2021
  • Personal Returns - October 15, 2021

We greatly appreciate your cooperation getting us any missing data ASAP


2021 Income Taxes

We have started setting up tax planning meetings to discuss year to date results and any major life/business changes so that we can implement any tax planning strategies as needed. Feel free to reach out if we have not contacted you and you are interested in this.