Theresa Arndt, CPA

Each calendar year provides unique challenges and updates to tax law impacting businesses and individuals. This post will highlight some of the major changes for individuals. If you wish to see tax law changes affecting businesses, you can go here. Article Highlights Economic Impact Payments – Third Round Educator Expenses Charitable Contributions for Non-Itemizers Charitable Contributions for Itemizers Child Tax Credit Child & Dependent Care Credit Earned Income Tax Credit Premium Tax Credit Education Credits Dependent Care Assistance Plans Cryptocurrency Reporting Student Loan Discharge Student Loan Relief New Above-the-Line Deductions Pell Grants Unemployment Benefits Net Investment Income Tax Surcharge on High-Income Taxpayers Required Minimum Distributions (RMDs) and COVID Distributions The Home Office Deduction IRS Processing Challenges On December 27, 2...

With the fiscal cliff stealing the spotlight over the holidays, very little attention was given to two new taxes that started January 1.   Thanks to the Affordable Care Act (also known as Obamacare) the first wave of tax increases rolls out in 2013 to help fund the massive 2010 health care reform.   The new taxes on wages and investment income are expected to raise about $318 billion over 10 years.   Granted the bulk of these taxes fall mainly on the wealthy and the health care industry, but sooner or later we will all be paying more.   To find out who pays and how much, keep reading: Increased Medicare payroll tax Currently, the Medicare payroll tax is 2.9% and it applies to earned income only.   An employee is responsible for 1.45% of the tax and it’s deducted automatically from the paycheck.   The employer kicks in the other 1.45%.     Under the new tax provision, most taxpayers will continue to pay the 1.45% Me...