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Back-To-School Tax Breaks On The Books

Despite the COVID-19 pandemic, students are going back to school this fall, either remotely, in-person or under a hybrid schedule. In any event, parents may be eligible for certain tax breaks to help defray the cost of education.

Here is a summary of some of the tax breaks available for education.

1. Higher education tax credits. Generally, you may be able to claim either one of two tax credits for higher education expenses — but not both.

With the American Opportunity Tax Credit (AOTC), you can save a maximum of $2,500 from your tax bill for each full-time college or grad school student. This applies to qualified expenses including tuition, room and board, books and computer equipment and other supplies. But the credit is phased out for moderate-to-upper income taxpayers. No credit is allowed if your modified adjusted gross income (MAGI) is over $90,000 ($180,000 for joint filers).
The Lifetime Learning Credit (LLC) is similar to the AOTC, but there are a few important distinctions. In this case, the maximum credit is $2,000 instead of $2,500. Furthermore, this is the […]

By Linkenheimer LLP|2020-09-03T20:01:58+00:00September 3rd, 2020|Blog, college tax credit, education credit, New Tax Laws|0 Comments

5 Key Points About Bonus Depreciation

You’re probably aware of the 100% bonus depreciation tax break that’s available for a wide range of qualifying property. Here are five important points to be aware of when it comes to this powerful tax-saving tool.

1. Bonus depreciation is scheduled to phase out

Under current law, 100% bonus depreciation will be phased out in steps for property placed in service in calendar years 2023 through 2027. Thus, an 80% rate will apply to property placed in service in 2023, 60% in 2024, 40% in 2025, and 20% in 2026, and a 0% rate will apply in 2027 and later years.

For certain aircraft (generally, company planes) and for the pre-January 1, 2027 costs of certain property with a long production period, the phaseout is scheduled to take place a year later, from 2024 to 2028.

Of course, Congress could pass legislation to extend or revise the above rules.

2. Bonus depreciation is available for new and most used property

In the past, used property didn’t qualify. It currently qualifies unless:

By Linkenheimer LLP|2020-09-03T20:01:58+00:00September 2nd, 2020|Blog, bonus, depreciation, New Tax Laws|0 Comments

California Tax Updates for August 28

Post 1:

The California Employment Development Dept. (EDD) has released the latest issue of its quarterly newsletter for employers. Among other things, it includes information about COVID-19 employer resources and a list of additional COVID-19 business resources and changes to CA’s Paid Family Leave Program. You’ll also find pdfs reporting the latest figures for unemployment benefits in CA by week. It does not include new information about withholding. Here’s the newsletter from EDD: https://bit.ly/30YYvJk

Post 2:

The California Franchise Tax Board (FTB) just updated its COVID-19 Frequently Asked Questions (FAQs). The FAQs now state that paper returns and other documents must be signed with an original signature by a taxpayer, the taxpayer’s representative or both, but the FTB will not require an original signature through December 31, 2020. This is an extension from the previous end date of July 15, 2020, except for Powers of Attorney. The update is in the section on “Original signatures for paper returns and other documents” and is the only update the FTB made.

If you have […]

By Linkenheimer LLP|2020-09-03T20:01:59+00:00August 28th, 2020|Blog, ca, CA tax, New Tax Laws|0 Comments

IRS Provides Tax Relief For Victims Of California Wildfires; Oct. 15 Deadline, Other Dates Extended To Dec. 15

Victims of the California wildfires that began Aug. 14 now have until Dec. 15, 2020 to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

The IRS is offering this relief to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. Currently this includes Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties in California, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 14, 2020. As a result, affected individuals and businesses will have until Dec. 15, 2020, to file returns and pay any taxes that were originally due during this period. This means individuals who had a valid extension to file their 2019 return due to run out on Oct. 15, 2020, will now have […]

By Linkenheimer LLP|2020-09-03T20:02:01+00:00August 25th, 2020|Blog, business, fire, individuals, irs, New Tax Laws, tax deadlines|0 Comments