Retirement distributions:

The CARES Act (COVID-19 relief bill) paused Required Minimum Distributions (RMDs) in 2020. If you opted not to take an RMD in 2020, please remember to  resume your minimum distributions from your retirement accounts before the end of 2021.  

Advanced Child Tax Credit:

For parents of kids 17 and younger, if you received any monthly advanced child tax credit (CTC) payments during 2021, please watch your mailbox for IRS Letter 6419. This letter will list the total amount of payments received in 2021. Please note that these payments are NOT taxable, but any payments received in advance reduces the child tax credit on your return, so IRS Letter 6419 will be necessary to accurately complete your tax return.

Charitable contributions:

The special COVID-19 charitable deduction has been extended for 2021. For the approximately 90% of taxpayers who claim the standard deduction, you will be able to deduct up to $300 in charitable contributions (or $600 for married filing jointly) without itemizing. Last year was a limit of $300 per return. Contributions to qualified charitable organizations are deductible, such as nonprofit organizations and churches. Please note that this only applies for contributions of money, household goods do not count for this special deduction.

Student Loans:

Student loan payments have been suspended since March 2020 but will resume in February 2022 unless Congress takes further action.

Business Meals Deduction increased for 2021 and 2022.

Good news for business owners (including Sole Proprietors), The Consolidated Appropriations Act, 2021, permits a 100% deduction for food and beverages provided by a restaurant during calendar years 2021 and 2022.

2020 Tax Refunds:

Many refunds were delayed this year due to IRS backlog. If you received a refund for 2020, the IRS may have added interest due to the delay in processing. Taxpayers who received more than $10 in interest will receive Form 1099-INT by mail from the IRS. Please keep this form with your 2021 tax documents, as the interest income must be reported on your tax return.