Fall 2021 Tax Updates
November 18th, 2021
The 2017 Tax Cuts and Jobs Act introduced a $10,000 limit on the amount of state and local tax (SALT) deductible on individual tax returns. Several states have enacted legislation that allows for SALT deductions at the entity level for pass-through entities. This will allow an opportunity for members and partners in pass-through entities to still benefit from taxes paid in excess of the $10,000 limit.
In order to avoid surprise bills, recipients of loans received under the Paycheck Protection Program should remember to apply for loan forgiveness. More information on the loan forgiveness application can be obtained directly from the lender.
Under IRC 6501(a), the IRS generally has three years after a return is filed to assess tax. However, when more than 25% of gross income is omitted on a tax return, tax may be assessed within six years after the original return was filed.
Generally, gains in the amount of 250,000 (single filers) or 500,000 (MFJ) are excludable from tax when certain criteria is met when selling your residential property. When selling a main home previously used as a vacation home – some or all of that gain may be ineligible for exclusion if the house was converted to personal use after 2008.
Retirement plan loans are generally tax free if no greater than the smaller of $50,000 or 50% of the vested account balance. Loans in excess of those amounts may result in a taxable distribution.
The employee retention credit will no longer be available to most employers, beginning with wages paid starting October 1, 2021.