211 South Wheaton Avenue
Timely points of particular interest
Scam Alert—Watch out for a new scam identified by the “Security Summit” comprised of the IRS, other agencies and tax community stakeholders. According to recent reports, criminals are trying to trick individuals into revealing their banking information by promising to send them $1,200 economic impact payments (EIPs). The Security Summit cautions taxpayers that legitimate representatives would never ask them to text their banking information to receive EIPs. Retirement Plan Limits—The IRS recently released new retirement plan limits for 2021 based on cost of living adjustments (COLAs). Generally, the figures are the same as they were for 2020. For instance, the limit on deferrals to a 401(k) plan for 2021 remains $19,500 or $26,000 if you are age 50 older. Similarly, the IRA contribution limit is still $6,000 or $7,000 if you are age 50 or older. Other COLAs for retirement plan provisions resulted in modest changes.
PPP Loan Forgiveness—Under the Paycheck Protection Program (PPP), loans may be forgiven if certain requirements are met. As opposed to most loans, the forgiveness does not result in taxable income. Accordingly, the IRS recently said that expenses relating to PPP loans are not deductible. Now, under new guidance, if a PPP loan was expected to be forgiven but it is not, a safe-harbor rule provides that the business will be able to deduct those expenses. Additional guidance is expected.
Happy Holidays—A trying year is coming to an end. Looking ahead, our firm would like to wish you and your family a happy holiday season and a healthy and prosperous New Year.