Month: March 2020

CARES Act Overview: The Impact on Taxpayers and Businesses

CARES Act Overview: The Impact on Taxpayers and Businesses

The Senate has passed and the House is expected to vote Friday on the latest COVID-19 relief bill: Coronavirus Aid, Relief, and Economic Security (CARES) Act. The bill brings with it several elements of relief expected for businesses, employees, and families in an effort to maintain livelihoods throughout the crisis and after. The expected cost of the bill is nearly $2 trillion and includes nearly $500 billion for economic distress relief for companies.

For funding dedicated to taxpayers and businesses, the bill currently includes provisions related to taxes, unemployment, small business loans, and a large business lending program. Below is a summary of what we know so far about the bill. This must still get approved by the House and signed by the President, so some provisions may change.

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Stay Informed About the Coronavirus — A Comprehensive Guide

New York City Comprehensive List of Contacts and Agencies for Coronavirus Help

by New York Assemblywoman Linda Rosenthal

My office is fielding many calls from constituents with questions about unemployment insurance. The State is aware that there is a substantial wait time for online or phone inquiries and is actively working to hire more staff to handle the increased demand. More detailed information about unemployment insurance is below.

In addition to the anxiety caused by COVID-19, the social isolation that accompanies the voluntary quarantines and social distancing can cause stress, anxiety and even depression. In addition to changes to vital programs and services listed below, I have also tried to provide access to mental health services. If you or anyone you know is experiencing suicidal thoughts, please contact immediately the National Suicide Prevention Lifeline – 1-800-273-8255.

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Home Equity Loan Interest Still Deductible

The Tax Cuts and Jobs Act has resulted in questions from taxpayers about many tax provisions including whether interest paid on home equity loans is still deductible. The good news is that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labeled.

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Are Social Security Benefits Taxable?

Social Security benefits include monthly retirement, survivor, and disability benefits; they do not include Supplemental Security Income (SSI) payments, which are not taxable.

Generally, you pay federal income taxes on your Social Security benefits only if you have other substantial income in addition to your benefits such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return.

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Tax Treatment of State and Local Tax Refunds

The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, limited the itemized deduction for state and local taxes to $5,000 for a married person filing a separate return and $10,000 for all other tax filers. The limit applies to tax years 2018 to 2025.

As in prior years, if a taxpayer chose the standard deduction then state and local tax refunds are not subject to tax. However, if a taxpayer itemizes deductions for that year on Schedule A, Itemized Deductions, part or all of the refund may be subject to tax – but only to the extent that the taxpayer received a tax benefit from the deduction.

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Worker Classification: Employee vs. Contractor

If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees.

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Form 8962: Reconciling the Premium Tax Credit

Form 8962, Premium Tax Credit, reconciles 2019 advance payments of the premium tax credit and may also affect a taxpayer’s ability to get advance payments of the premium tax credit or cost-sharing reductions. Taxpayers who don’t file and reconcile their 2019 advance credit payments may not be eligible for advance payments of the premium tax credit in the future. Furthermore, filing Form 8962, with a return avoids possible delays in processing tax returns and subsequent delays in receiving tax refunds.

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It’s Not Too Late to Make an IRA Contribution

If you haven’t contributed funds to an Individual Retirement Account (IRA) for tax year 2019, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15th due date, not including extensions.

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New Tax Law Affects Tax-Exempt Organizations

The Taxpayer Certainty and Disaster Tax Relief Act, passed on December 20, 2019, includes several provisions that may apply to tax-exempt organizations’ current and previous tax years. As such, tax-exempt organizations should understand how these recent tax law changes might affect them. With this in mind, let’s take a look at three key pieces of legislation that affect nonprofit organizations:

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