2021 tax code change: summary from ARP (American Rescue Plan Act) and BIJA (Bipartisan Infrastructure and Jobs Act)
- Child tax credit
. $3,000 for under age 17 and $3,600 for under age 6
. 50% of child tax credit for 2021 was paid from July 2021 in advance by monthly basis.
. Check the received the credit before e filing.
- EIC: increased a lot
- $10,200 of Unemployment Benefit: not applied for 2021 ?
- Obamacare: subsidies for more than 4 times federal poverty level (FPL)
- ERC (Employer Retention Credit): terminated as of 12/31/2021
- IRS Enforcement
. IRS has decided to increase the reporting responsibilities of taxpayers in recent years. This includes partnerships providing capital account information to the IRS and partners on a tax basis for 2020 and later years. This requirement was unilaterally imposed by the Service through a change in its instruction. It has also created draft versions of new Form 1065 Schedules K-2 and K-3 to provided additional information, particularly with respect to foreign transactions. The Service sees partnerships as entities through which high earners can hide income.
. The Service is also requiring additional reporting for 2021 for S Corp through a proposed Form 7203 which would provide information on the tax basis of stock and debt held by shareholders.
- $300 (joint: $600) of charity contribution: the same as 2020
Itemized: 100% of AGI
C Corp: up to 25% of taxable income
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