Visit our NEWS page for frequent Tax Updates.
Your business may have to comply with new reporting requirements that took effect on January 1, 2024.
In this ever changing environment, we have been given a constant stream of updates as laws change and clarifications are provided. Below are two updates related to the provisions of the Consolidated Appropriations Act (CAA), 2021 that we provided in our year-end letter, that have since, changed. Below is clarity regarding the 2020 charitable contributions and PPP second draw loans.
Individual Provision Update
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Certain Charitable Contributions Deductible by Non-Itemizers: For 2020, individuals who normally do not itemize deductions may take up to a $300 above-the-line deduction for cash contributions to qualified charitable organizations. For tax year 2020, $300 is the maximum deduction per tax return, regardless of filing status. The CAA, 2021 modifies the deduction for 2021 and increases the maximum amount that may be deducted to $600 for couples that are married filing jointly.
Business Provision Update
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Paycheck Protection Program (PPP) Second Draw Loans: The CAA, 2021 permits certain smaller businesses who received an initial PPP loan AND experienced a 25% reduction in gross receipts in the 1st, 2nd, or 3rd quarter of 2020, relative to the same 2019 quarter, may take a PPP Second Draw Loan. For applications which are submitted on or after January 1, 2021, the gross receipts from the 4th quarter of 2020 may be utilized for the comparison as well.
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We anticipate there will continue to be additional updates as we go throughout 2021. Please keep an eye out for our newsletters for up-to-date information.
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