News
IRS Announces 401(k) Limit Increases for 2022
The Internal Revenue Service announced today that the amount individuals can contribute to their 401(k) plans in 2022 has increased to $20,500, up from $19,500 for 2021 and 2020.
Additional retirement plan limitations can be found through following link:
IRS announces 401(k) limit increases to $20,500 | Internal Revenue Service
UPDATE - Employee Retention Credit
The employee retention credit will terminate early.
The infrastructure legislation makes wages paid after September 30, 2021 ineligible for the employee retention credit. An exception are wages paid by an eligible recovery startup business which is a business which started on or after February 15, 2020 and meets other eligibility requirements.
Annual Gift Limit Increase for 2022
The annual exclusion for gifts increases to $16,000 for calendar year 2022, up from $15,000 for calendar year 2021.
Changes to Employee Retention Credit (ERC) for First and Second Quarters of 2021
Modifications to the gross receipts test
For purposes of the first and second quarter 2021 ERC, an employer is eligible if they have a 20% reduction in gross revenue during the current or preceding quarter. For first quarter 2021, you would compare first quarter 2021 to first quarter 2019 to determine if you have a 20% reduction in gross revenue. If you do not have a 20% reduction, you would compare fourth quarter 2020 gross revenue to fourth quarter 2019 gross revenue to see if there is a 20% reduction.
The other way to qualify for the ERC is if you have been completely or significantly shutdown due to government order. For this category, you would qualify for ERC during the period of government shutdown which would not necessarily be a full quarter.
If you do not have a 20% reduction in gross revenue during the current or preceding quarter and you were not subject to a government shutdown, you do not qualify for the credit.
There are special rules if you are a new business.
IRS extends additional tax deadlines for individuals to May 17
The IRS has extended the 2020 tax year Individual filing deadline to May 17th. For more information, please refer to the IRS newsroom posting by clicking this link: https://www.irs.gov/newsroom/irs-extends-additional-tax-deadlines-for-individuals-to-may-17
Recent Changes All Businesses Need to Know
Forms 1099
Form 1099-NEC is a new form for 2020. The Form 1099-NEC reports nonemployee compensation which was previously reported in Box 7 of Form 1099-MISC. The Form 1099-NEC needs to be mailed to recipients and filed with the IRS via paper or electronically by February 1, 2021.
Forms 1099-MISC, 1099-INT, 1099-DIV and 1099-R need to be mailed to the recipients by February 1, 2021. These 1099 forms are due to the IRS by March 1, 2021 for paper filing and by March 31, 2021 for electronic filing. A 30-day extension is possible to obtain for all Forms 1099 except for the 1099-NEC.
Below is a list of helpful tax links:
Arizona Tax Credits - https://azdor.gov/tax-credits
Arizona State Tax Payments - https://aztaxes.gov/Home/Page
Track your Arizona Tax Refund - https://aztaxes.gov/
Track your IRS Refund - https://www.irs.gov/refunds
Federal Tax IRS Payments - https://www.irs.gov/payments
Taxpayers have until July 15 to file and pay their taxes
COVID Tax Tip 2020-52, May 6, 2020
The federal income tax filing deadline has been extended to July 15. Taxpayers also have until July 15 to make any federal income tax payments that were originally due on April 15, without penalties and interest, regardless of the amount they owe. This extension applies to all taxpayers.
There's no need to file any additional forms to qualify for this automatic federal tax filing and payment relief.
Taxpayers expecting a refund should file electronically. Many taxpayers used Free File last year. The benefits of filing electronically include:
- It's available online and can be done from home.
Taxpayers can file using tax software from their home computer if they don't qualify for Free File. The bottom line is that filing electronically is much more convenient than filling out and mailing paper tax forms.
COVID-19 paid leave tax credits for small and midsize businesses
COVID Tax Tip 2020-53, May 7, 2020
Small and midsize employers can claim two new refundable payroll tax credits. The paid sick leave credit and the paid family leave credit are designed to immediately and fully reimburse eligible employers for the cost of providing COVID-19 related leave to their employees.
Here are some key things to know about these credits.
Paid sick and family leave
For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave when they are sick or caring for someone else who is, and up to 10 weeks of paid family leave when their children's schools or place of care are closed, or child care providers are unavailable due to COVID-19.
Taxpayers act now to receive Economic Impact Payments by direct deposit
COVID Tax Tip 2020-54, May 11, 2020
People must use Get My Payment by noon Wednesday, May 13, for a chance to get their Economic Impact Payment by direct deposit.
After noon Wednesday, the IRS will begin preparing to mail millions of additional payments to those who haven't received one yet. Taxpayers can expect to receive these payments beginning in late May. People who use Get My Payment before the deadline can still take advantage of the direct deposit option. Get My Payment is available in English and Spanish.
How Get My Payment works
The Get My Payment tool provides eligible taxpayers with an estimated deposit date for their Economic Impact Payment. The information is updated once a day, usually overnight. There is no need to check more often. Taxpayers who didn't choose direct deposit on their last tax return can use this tool to enter bank account information to receive their payment by direct deposit.
