Tax

With the IRS now sending monthly advanced payments of the 2021 Child Tax Credit (CTC) to qualified families – the first installment hit taxpayers’ bank accounts this month – it’s important to know the details of this federal benefit and whether it makes sense for your family to take advantage of it. While the CTC has been in place for many years, this is the first time it’s being sent out automatically on a monthly basis, as part of ongoing pandemic-related relief for Americans. About 35 million U.S...

This is the first in a series of articles explaining the importance of exploring estate planning strategies in anticipation of expected tax changes that could be enacted under the Biden administration. The proposed American Family Plan (AFP) legislation currently working its way through Congress underscores the importance of thorough and agile estate planning because it challenges several longstanding tax concepts and strategies: capital gains deserve a lower tax rate than wages and are an incentive to invest without discouraging sales; people should inherit assets without paying capital gains taxes based on unrealized gains; and taxes should be limited on income already taxed at another level, such as assets purchased with after-tax funds. Most economists agree estate and capital gains taxes amount to a second or third layer of tax on the same income. The Tax Cuts and Jobs Act of 2017 (TCJA) addressed this situation by increasing estate, gift tax, and generation-skipping tax (GST) exemptions and effectively eliminating the federal estate tax for all but the ultra-wealthy...

In early 2020, Governor DeWine issued executive order EO 2020-01D, which declared a state of emergency due to the COVID-19 pandemic and required most employees to work from their homes.  Additionally, emergency relief was passed via HB 197, Section 29, that temporarily permitted employers to continue to withhold Ohio city income taxes based on an employee’s principal place of employment, not taking into consideration whether they were forced to work from their homes due to the pandemic. Governor DeWine lifted executive order EO 2020-01D on June 18, 2021.  This triggered the expiration of the emergency withholding relief provision effective as of July 18, 2021...

Michigan taxpayers taking part in the federal Paycheck Protection Program (PPP) will not be taxed on loans forgiven through that program, according to the Michigan Department of Treasury. This tax treatment conforms with federal tax treatment of these loans. PPP loans, originally created under the CARES Act to provide aid to businesses impacted by the pandemic, may be partially or completely forgiven when borrowers use the loan proceeds to pay qualified expenses. The state Treasury’s recent tax notice also provides guidance for both individual and corporate taxpayers relating to the calculation of sales apportionment, gross receipts for corporate taxpayers, and the calculation of total household resources when taking into consideration the impact of PPP loan forgiveness...

If you’re thinking about installing solar energy – at your home or your business – federal tax credits are available for investments in certain solar energy property. And with these credits scheduled to decrease in the next few years, now is a good time to consider this dollar-for-dollar reduction in tax liability that’s based on a percentage of the cost of the qualifying solar property. Solar energy credits Thanks to recent federal legislation – the Consolidated Appropriations Act, 2021, approved late last year – the “phase-down” of solar energy credits was extended for both commercial and residential properties. If you have started work on a solar property, or you’re considering doing so, it’s important to make plans to ensure maximum tax savings...

 In the current environment of changing tax laws, Rehmann is committed to providing updates to potential changes that could affect our clients with international activity.The Treasury Department’s General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals "Green Book" was released on May 28th. The Green Book provides explanations of the tax proposals included in the Biden Administration’s fiscal year 2022 budget. U...

The client, a packaging manufacturer based in southeast Michigan, decided it was time to sell. A tax analysis on the sale of the business soon followed. During this process, our team suggested – and they agreed – that the family-owned and operated business could benefit from a deeper dive into their financials, to ensure that after closing this chapter of their lives, they’d be in the best position possible for their future plans. Makes sense, right?..

Updated: 3/20/21 We are watching state and local authorities for updates and will keep you informed of additional developments. Please note that despite these extensions, we’re continuing to focus on filing returns by April 15. Extended Tax Deadline  The IRS extended the due date for filing Form 1040 to May 17, 2021 (this includes the payment of any amount due with the return). As of now, the extension is only for individual income tax returns (not business returns or trust returns)...

With the 2020 tax-filing season well underway, here are 7 tips to help you file safely. Keep your radar out for scammers. The IRS and tax preparers are among the few parties who do need your personal information; be sure to verify the identity of anyone who asks for it. Also be wary of tax preparers who refuse to sign off on returns they complete...

Many people have found themselves working from home during the COVID-19 pandemic. If you’re one of them, you might wonder, “Can I claim the home office deduction on my 2020 tax return?” The short answer is: Only if you’re self-employed. Employees can no longer claim home office expenses, and even self-employed taxpayers must follow strict rules to claim a deduction...