While many taxpayers already know about Individual Retirement Arrangements, or IRAs, and have set up an IRA with a bank or other financial institution, a life insurance company, mutual fund or stockbroker, there are other taxpayers such as those new to the workforce who may not understand how IRAs help them save for retirement. With this in mind, here is a list of basic terms to help people better understand their IRA options:

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Unfortunately, disaster can strike at any time. If you’ve been affected by a disaster this year, here are six tax-related things to keep in mind that usually happen after a major disaster strikes:

1. FEMA Declaration of Major Disaster Area

Before the IRS can authorize any tax relief, FEMA must issue a major disaster declaration and identify areas that qualify for their Individual Assistance program. Recent examples of federally declared disaster areas include the California and Oregon wildfires, Iowa derecho, and Hurricanes Delta, Sally, and Laura.Continue reading

Final regulations have been issued by the Treasury Department and the Internal Revenue Service implementing the 100% additional first-year depreciation deduction that allows businesses to write off the cost of most depreciable business assets in the year they are placed in service by the business.

The 100% additional first-year depreciation deduction was created in 2017 by the Tax Cuts and Jobs Act and generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances, and furniture generally qualify. While the bonus depreciation has been around for a while, the TCJA amended it to include certain used depreciable property and certain film, TV, or live theatrical productions and increased the first-year depreciation deduction to 100 percent (up from 50 percent).

The deduction applies to qualifying property (including used property) acquired and placed in service after September 27, 2017. The final regulations provide clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property.

Additionally, the final regulations provide rules for consolidated groups and rules for components acquired or self-constructed after September 27, 2017, for larger self-constructed property on which production began before September 28, 2017.

To claim the deduction, taxpayers should use Form 4562, Depreciation and Amortization (Including Information on Listed Property). For more information about this and other TCJA provisions, please call.

Under the Affordable Care Act, certain employers – known as applicable large employers – are subject to the employer shared responsibility provisions. You might be thinking about these topics as you make plans about 2021 health coverage for your employees.

If you are an employer that is subject to the employer shared responsibility provisions, you may choose either to offer affordable minimum essential coverage that provides minimum value to your full-time employees and their dependents or to potentially owe an employer shared responsibility payment to the IRS.

Here are definitions of key terms related to health coverage you might offer to employees:

Affordable coverage: If the lowest cost self-only health plan is 9.5 percent or less of your full-time employee’s household income, then the coverage is considered affordable. Because you likely will not know your employee’s household income, for purposes of the employer shared responsibility provisions, you can determine whether you offered affordable coverage under various safe harbors based on information available to you as the employer.

Minimum essential coverage: For purposes of reporting by applicable large employers, minimum essential coverage means coverage under an employer-sponsored plan. It does not include fixed indemnity coverage, life insurance, or dental or vision coverage.

Minimum value coverage: An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan.

Please call if you have any questions or need more information about the employer shared responsibility provisions.

Per the Interim Final Rule – Additional Revisions to Loan Forgiveness and Loan Review Procedures, businesses with PPP Loans totaling $50,000 or less are not subject to the reductions related to FTE or salary reductions. An additional loan forgiveness application (3508S) should be used if loans are $50,000 or less, which is basically a self-certification.

If there are any questions, the PPP Team is available to assist. You can reach us at ppp@wheelercpa.com.