Tax Snacks

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The perfect portion of tax news and information.

As a reminder, MyTaxRights.org is not affiliated, associated, authorized, endorsed by, or in any way officially connected with any government entity. External links are provided solely for convenience and informational purposes only. Always check the official government source for the latest information and updates.

BIG NEWS FOR BUSINESSES!

The IRS and Treasury Department issued guidance today that allows a business to deduct eligible expenses paid for with Paycheck Protection Program (PPP) loan funds, regardless of whether the business's PPP loan is ultimately forgiven. The new guidance reflects the changes in the COVID-related Tax Relief Act of 2020, enacted into law on December 27, 2020.

Under previous guidance, businesses were prohibited from deducting eligible expenses if PPP loan funds were used to pay the expenses. Now, businesses need not worry about segregating and accounting for expenses paid with PPP funds vs. non-PPP funds. This is a BIG win for small business owners!

IRS approves temporary use of e-signatures for certain forms

The IRS announced it will temporarily allow the use of digital signatures on certain forms that cannot be filed electronically, including: (a) Form 3115, Application for Change in Accounting Method;
(b) Form 8832, Entity Classification Election;
(c) Form 8802, Application for U.S. Residency Certification;
(d) Form 1066, U.S. Income Tax Return for Real Estate Mortgage Investment Conduit;
(e) Form 1120-RIC, U.S. Income Tax Return For Regulated Investment Companies;
(f) Form 1120-C, U.S. Income Tax Return for Cooperative Associations;
(g) Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts;
(h) Form 1120-L, U.S. Life Insurance Company Income Tax Return;
(i) Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return; and
(j) Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms.

Charitable contribution deduction available to all in 2020

Under the CARES Act (enacted earlier this year in response to the COVID-19 pandemic), taxpayers may now deduct up to $300 for cash contributions made to qualifying organizations in 2020. Taxpayers may claim the deduction even if they take the standard deduction (normally this option is only available to those who itemize deductions). And even better, for taxpayers who itemize deductions, the CARES Act temporarily suspends the limit on the amount these taxpayers can deduct for cash contributions made this year to qualified organizations. Just be sure to keep those receipts!

New filing requirements to report nonemployee compensation

Do you own a business and pay or receive nonemployee compensation? Beginning January 1, 2020, taxpayers must complete Form 1099-NEC (Nonemployee Compensation) to report any payment of $600 or more made to a person in the course of their trade or business. Generally, payers must also file all Forms 1099-NEC with the IRS by January 31st.

IRS extends EIP registration deadline for non-filers to Nov. 21st

On October 5th, the IRS extended the deadline for non-filers to register to receive an Economic Impact Payment (EIP) to November 21st. The deadline extension applies specifically to non-filers, that is, people who do not normally file a tax return and have not filed a 2019 tax return. The extension also covers only these individuals who have not received an EIP yet.

$500 per Child Catch-up Payment - Deadline Today!

Today is the deadline for individuals who do not typically have a tax filing requirement ("Non-Filers") to register their qualifying children in order to receive a $500 per child catch-up payment. This includes individuals who have not yet received their Economic Impact Payment (Stimulus Check). Non-Filers must use the IRS’s Non-Filers tool to register any qualifying children. Note, though, that individuals who already received an Economic Impact Payment based on their 2018 or 2019 tax return should not use the Non-Filers tool, even if they think they did not receive the full amount. These individuals may be able to claim an additional payment when they file their 2020 tax return next year.

Tax Relief for Hurricane Laura Victims

Those affected by Hurricane Laura may be eligible for certain tax deadline extensions. Affected individuals and businesses now have until December 31, 2020 to file tax returns and pay any taxes that were originally due after August 22, 2020. The relief does not apply to returns and payments that were due on July 15th.

IRS reopens registration for $500-per-child supplement payments

On August 15th, the IRS reopened the registration period for certain taxpayers who did not receive the supplemental $500-per-child amount as part of their Economic Impact Payment. Taxpayers who did not file a tax return in 2018 or 2019 may use the IRS’s Non-Filers tool (https://lnkd.in/dBNJHrB) to enter the information for their qualifying children to receive the supplemental $500 payments. These taxpayers have until September 30th to submit the required information.

IRS unveils "Dirty Dozen" list of tax scams for 2020

The Internal Revenue Service recently announced its annual "Dirty Dozen" list of tax scams with a special emphasis on aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments. Everyone should remain vigilant to these threats during the pandemic and in its aftermath.

IRS temporarily suspends limits on charitable contributions

Under the CARES Act, individuals may now deduct qualified charitable contributions up to 100 percent of their adjusted gross income. Corporations may deduct qualified charitable contributions up to 25 percent of its taxable income. To qualify, the contribution must be: (1) a cash contribution; (2) made to a qualifying organization; and (3) made during the calendar year 2020.

Tomorrow, July 15th, is the deadline to file and pay 2019 taxes!

Taxpayers have until tomorrow, July 15th, to file and pay their 2019 taxes. Remember, if you made under $69,000 in 2019 and have yet to file your return, strongly consider using the IRS Free File program to do so. It's easy, fast, secure, and best of all, FREE! Learn more at taxly.org/free-file.

The SBA reopened the Economic Injury Disaster Loan (EIDL) for ALL applicants.

Yesterday, June 15th, the SBA reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to ALL eligible applicants experiencing economic impacts due to COVID-19. The EIDL program offers long-term, low interest assistance for a small business or non-profit. EIDL assistance can be used to cover costs for payroll, inventory, debt, and other expenses. Additionally, the EIDL Advance provides up to $10,000 ($1,000 per employee) of emergency economic relief to businesses, and these emergency grants DO NOT have to be repaid. Apply through the following link: https://covid19relief.sba.gov/#/

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