Alpha’s Tax Tips

Stimulus Update

Democratic lawmakers got a legislative win with passage of the American Rescue Plan Act of 2021. It includes a long-standing Democratic goal: fighting child poverty through the tax code. There’s a revamped child tax credit for 2021. The law hikes: The $2,000-per-child credit to $3,000 $3,600 for kids under 6 Let’s 17-year-olds qualify Makes the […]

Avoid 7 Common Filing Blunders

It happens every year: taxpayers in a hurry to complete their returns make mistakes or omit certain items. Then the IRS catches up to the error of their ways and imposes additional tax, penalties or interest – or all three. Don’t commit the types of blunders that often plagued taxpayers who have rushed in the […]

5 Ways to Deduct ‘Commuting’ Costs

If you’re self employed and have resumed work related driving, you may be entitled to deduct some vehicle expenses. Squeeze every last deductible dime out of your business travel. Keep detailed records to back up your claims. For instance, here are five ways you may be able to deduct “commuting” costs. Short stops. It may […]

5 New Tax Breaks on ’20 Returns

When you file your 2020 tax return, you may be in line for a pleasant tax surprise, thanks to the latest tax legislation. The Coronavirus Aid, Relief, and Economic Security (CARES) Act created several new tax-saving opportunities for 2020. For individuals, the changes will be reflected on the return you must file by May 17. […]

Did you return your RMD Withdrawal in 2020?

Did you return a 2020 Required Minimum Distribution from your IRA after learning RMDs were waived in 2020? You’ll need to know how to report it on your return, and it’s a tad tricky. We have written before that required minimum distributions from IRAs and 401(k)s were suspended for 2020. People who took out an […]

Unused Flexible Spending Accounts Balances

Unused funds in a dependent care FSA at year-end can’t be carried over, IRS confirms privately. Nor can the FSA refund you the extra money, even if you know that you cannot use the funds by December because your child’s day care after-school program is shuttered as a result of the Coronavirus pandemic. Earlier this […]

Tax Breaks for Business Cars

Buying a new or used passenger auto for your business can lead to tax breaks. If bonus depreciation is claimed, the first-year depreciation cap is $18,100 for vehicles bought after September 27, 2017, and put in use this year. The second-and third-year caps are $16,100 and $9,700. After that…$5,760. If no bonus depreciation is taken, […]

Paycheck Protection Loan Forgiveness

More bad news from the IRS for firms that took out paycheck protection loans. In May, the agency issued public guidance saying that small businesses that have their Paycheck Protection Program (PPP) loans forgiven cannot deduct expenses that result in forgiveness of the loan. The IRS now confirms companies can’t deduct such expenses paid or […]

Avoid Tax Trap on 529 Withdrawals

If you’re like many parents of children in college, your kid is currently learning remotely from home, even though you signed up for room and board at the school. Watch out for a hidden tax trap. If you’ve withdrawn funds from a child’s Section 529 plan and don’t return them, you could be hit with […]

Shift Tax Gears on Car Donation

Are you thinking about donating a car or other vehicle to charity? If you give away the car without any strings attached, you might forfeit some extra-tax saving mileage. Specify that the charity must use your vehicle in furtherance of its tax exempt-purpose. As a result, you can deduct an amount equal to the vehicle’s […]