It's A New Year
“Out with the old, in with the new” has special meaning after our collective pandemic experience in 2020. Unfortunately, we are still dealing with the same things we were in 2020. Fortunately, we are in the process of receiving vaccines and Congress has finally passed the long delayed additional stimulus help.
The new Congressional package includes another round of Economic Impact Payments which will be mailed or direct deposited for you shortly, if your income is below phaseout limits. There is also another round for the Paycheck Protection Program that starts by mid-January. Check with your accounting firm to see whether your business will qualify. You will need at least one quarter in 2020 that had revenue down by twenty-five percent or more compared to the same quarter in 2019.
Tax filings for 2020 during the upcoming tax season will be more complex given all the pandemic programs that were put in place. It is best to get the tax preparation process started earlier this year with your tax professional.
To keep safe during this pandemic, you will likely appreciate our firm’s ability to communicate and share documents in a secure online application called Liscio and to do meetings by video call. You will be amazed at how convenient the virtual process can be. We will still hold some in person meetings if pandemic protocols are observed. Documents can be placed in our Cortland dropbox without having to enter our office.
A reminder for all of us is to make sure to save in a file or envelope all the 2020 W2s, 1099s, 1098s, and so forth that you will receive in the mail later this month into early February. In the Resources section of our firm’s EquusCPA.com website there are forms and documents to help remind you of what you will need to send to your tax professional.
If you project to owe tax with your tax return there is still time to make an estimated tax payment to the IRS and New York State by the January 15 deadline. Otherwise, be prepared to make the payment with your tax return. I suspect that the size of tax refunds and tax payments due may vary widely from previous years results.
One of the encouraging messages from 2020 is the amount of charitable giving and volunteering that has occurred. If you have made charitable contributions in 2020, you can now deduct up to $300 without having to itemize your deductions. Please note that claiming lost profit on goods or services you donate is not tax deductible.
While we will have to deal with some added complexity to our upcoming tax season, I believe we can see light at the end of this pandemic tunnel. May our new year end much better than it started and may our social interactions be able to return to normal soon!