PPP Loan Forgiveness applications are winding down. Employee Retention Credit has expired as of September 30, 2021;
Section 179 equipment expensing has been increased to $1,050,000 ($1,080,000 for 2022);
Qualified Business Income Deduction remains at 20%, with restrictions, particularly for certain businesses;
100% bonus depreciation extended through December 31, 2022;
AMT exemptions are increasing for 2021. The Tax Cut and Jobs Act increases the AMT exemption for joint filers to $114,600 and $73,600 for others.
Estate and gift tax exemption rises to $11,700,000 in 2021 ($12,060,000 for 2022); after December 31, 2025, the amount returns to 2017 exemptions.
De minimis safe harbor for taxpayers with no AFS (applicable financial statement) raised to $2,500.
The standard mileage rate increases to $.585 per mile for 2022 ($.56 in 2021).
Individual Provisions Available for 2021 and Future Years
Deduction for expenses of elementary and secondary school teachers - $250 ($300 for 2022)
Mortgage debt forgiveness
Above-the-line deduction for charitable contributions (even if you claim the standard deduction) - $600 for married couples; $300 for single people
Deduction for state and local taxes limited to $10,000 deduction in 2021 and thereafter
Tax-free distributions from individual retirement plan for charitable purposes
Cyber currency transactions must be reported. Contact our office for more details.
We advise you to visit us soon to determine your 2021 tax liability and potentially prepay it before it becomes a penalty issue in April. For 2021, the Tax Cuts and Jobs Act of last year continues the new rate brackets, increased standard deduction, reduced deductions for personal mortage interest and state and local taxes, and decreased corporate income tax rates. Miscellaneous itemized deductions (such as deductions for unreimbursed employee business expenses and investment advisory fees) continue to be nondeductible in 2021.
If you have any questions about any of these provisions, please contact us!