Tax & Accounting Update
Deadline extended to May 17th.
Regardless of where you are in the USA the IRS has extended deadline to May 15th. No interest, penalty, or addition to tax for failure to file a federal income tax return or to pay federal income taxes will accrue between April 15, 2021, and May 17, 2021, for any return or payment postponed. The notice also automatically postpones to May 17 the time for affected taxpayers to make 2020 contributions to their individual retirement arrangements (IRAs and Roth IRAs), and health savings accounts (HSAs). American Institute of CPAs is not necessarily happy about this decision and they have requested for deadline to be extended to July 15th. What will happen remains to be seen.
Extended Deadline for Payroll Protection Program (PPP)
Last Thursday the Senate voted 92-7 in favor of legislation that would delay the PPP’s loan application deadline to May 31 from March 31, sending the bill to President Joe Biden for his signature. We can expect this bill to be in effect in next day or two. For more details click on the link below.
Am I supposed to report sales if I sell online?
Making a sale online does not necessarily mean you need to report it for tax purposes. However, if you are running a business online and selling various services or products, you should be reporting those sales on your tax return. Internal Revenue Service will most likely not be aware if your sales are less than $600 however if you exceed this threshold you will most likely be getting a 1099-K or 1099-NEC from the platform that you have been using for sale or collection of payment. Venmo is currently popular application where payments can be transferred from one person to another without consequences, however I believe that in a near future they will start implementing stricter rules on those transactions as well. Here is an interesting article about online sales.
Unreimbursed Employee Expenses
Many clients have been asking why they no longer can deduct their cellphone or travel expenses that they pay for their work. Unreimbursed employee expenses were eliminated by the IRS in 2018. Since then, the Internal Revenue Service no longer allows any unreimbursed employee expenses to be deducted. As a trade, the IRS has raised standard deduction so that today it is rare to see an individual who would be able to itemize. Individuals who usually get to itemize are those who donate tens of thousands of dollars to their preferred charity. Currently itemized deduction for single is set at $12,400 while for married 24,800. Unreimbursed expenses provision will not be in effect until 2025 when they will reassess and see if this provision will be brought back.
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E-mail: dragana@dcmtax.com
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