01/24/2022
Broadway Tax and Financial
Services
1812 Broadway, Toledo, OH 43609
Phone (419) 241-6611
Fax (419)241-8241
e-mail/[email protected]
Serving Toledo for over 50 years
We would like to take this opportunity to thank all of our clients whose patronage has permitted us to celebrate our 55th year in business.
As always our experienced Tax Specialists are here to correctly prepare your income tax returns and
Make sure you receive every consideration to which you are entitled.
Beginning January 24th and continuing through April 18, 2021 our hours will be:
Monday 9am-7pm
Tuesday 9am-7pm
Wednesday-CLOSED
Thusday 9am-7pm
Friday 9am-7pm
Saturday 9am-2pm
Sunday-CLOSED
Last year was a learning experience for us all as Covid-19 forced us to change the way we conduct business and view our lives. We will be doing tax returns by drop off only again this year to minimize contact. We appreciate your patience and understanding as we try to keep our and clients healthy. Any questions or concerns regarding your 2021 return can be expressed by phone contact with one of our consultants.
The IRS will start processing returns on 01/24/2022 and releasing EITC refunds the middle of February. As of
this time we have no idea if the IRS will extend the filing season
The IRS requires us toe-file all returns. We will need signatures for returns before they can be e-filed.
THE CARES ACT & PAYROLL PROTECTION PROGRAM
• Economic Impact Payment-EIP 3: received is not taxable for federal income tax purposes but will reduce your recovery rebate credit
• Recovery rebate credit: This credit is figured like last year except we use 2021 information. You should have received a notice 1444-C• showing how much you received.
• Capital Gains and Dividends: will continue to receive the favorable rates, if you are in the 1O or 15% tax bracket your tax on capital gains and dividends will be 0% and 15% if you are in the middle tax brackets and 20% if you are in the higher tax brackets.
• Canceled Debts: If a creditor canceled a debt you owed to them this could be taxable income to you. Please bring in the 1099C and any information about the debt so we can determine if it's taxable or not.
• Education Credits: you must have proof of payment from the Bursar's office
• Charitable contributions: Non-itemizers $300 per return
CHILD AND DEPENDENT RELATED ITEMS
Earned Income Credit Changes:
• Minimum age has been lowered to 19
• You no longer have to be under 65 without a qualifying child.
• Income phase out limits have been increased.
• The investment income limit to claim the credit has been increased to $10,000.
• Again you can use your 2019 earned income if it produces a better credit.
Child and Dependent Care Expenses:
• Qualifying expenses increased from $3,000 to $8,000 for one qualifying person.
• Qualifying expenses increased from $6,000 to $16,000 for two or more qualifying persons
• The maximum credit is 50%of allowable expenses.
• Credit phase out begins when adjusted gross income exceeds $125,000
• The Child Tax Credit: has been extended to cover children under age 18 increased from 17. You may receive a enhanced credit of up to $3,600 for qualifying children under age 6 and $3,000 for children over 5 and under age 18.
The Advanced Child Tax Credit Payments: You should receive an IRS Letter 6419 telling you how much child Tax Credit you received and we will need this to file your return.
DEDUCTIONS
Standard Deduction and Personal Exemptions have been combined and the deduction for Married Filing Joint is $25,100, $18,800 Head of Household and all others $12,550. The additional exemption for blind and elderly for single is $1,300 and head of household is.
Medical deductions for 2021 that exceed 7.5% of AGI are allowed The medical mileage deduction is 16 cents a mile.
State and Local taxes (Real estate, State, School District and City) can't exceed $10,000 ($5,000 MFS)
Home Mortgage Interest deduction for acquisition debt is limited to $750,000 and Home Equity debt is limited to $100,000. There are other rules depending on when the debt was incurred.
Charitable Contributions to public charities (ex religious, goodwill and educational) are limited to 60% of AGL You must have receipts for contributions over $250. Charitable mileage rate for 2018 is 14 cents a mile.
Gambling Losses to the extent of gambling winnings.
The deduction for self-employed people who pay for their own health insurance is 100% of insurance paid in 2018. You may be able to deduct 100% of your health insurance cost off your Ohio income.
The standard mileage rate is 56 cents per mile in 2021. Those subject to DOT hrs of service limits may deduct 80% of meal cost or 80% of $63 a day for 2018. These deductions are only allowed on business returns. Sch C, E and F, plus partnership and corporate returns.
If you pay subcontractors more than $600 during the year, you are required to file a 1099 on them and it must be mailed by 1131119.
IRA's AND RETIREMENT
The AGI phase out range for deductible IRA and Roth IRA contributions varies depending on your situation and type of IRA so you should call or ask your preparer if you have any questions.
Max contribution limit to traditional and Roth IRA's is increased to $6,000 ($7,000 for taxpayers over 50). If you have turned 70 ½ and have IRA's or other retirement plans you may be subject to Required
Minimum Distributions.
HEALTH INSURANCE
You will need to bring us any 1095-(A)s you receive. As you will be required to reconcile the allowable credit to the actual amount you received.
2020 OHIO RETURNS AND UNEMPLOYMENT
We are aware that the 2020 filing season may have been somewhat confusing and frustrating as the government worked to figure out how to implement the changes made by the House and Senate. We have two issues with the State of Ohio Unemployment benefits. The first issue is the IRS exempted the first $10,200.00 of unemployment received .The problem is if you filed before they did this exemption you may have paid Ohio tax on unemployment and you may have to amend your 2020 Ohio income tax return. The second issue is the increase in fraudulent unemployment claims. If you receive a 1099 from Ohio Jobs and Family Services and did not file for unemployment or the amount shown on the 1099 is more than you received these issues must be addressed.
ESTIMATED PAYMENTS & EXTENSIONS
If you expect to owe taxes, to avoid penalties you will need to make estimated payments on a quarterly
If you file an extension and owe the government will charge a 0.5% per month penalty for late filing and
Interest. The extension gets you out of the late filing penalty which is 5% a month if your return is filed by the extended due date. Both of these penalties are capped at 25% each. States and cities also charge late filing and paying penalties. Remember the extension is for filing, not paying.
WORK RELATED ISSUES
The deduction for self-employed people who pay for their own health insurance is 100% of insurance paid in 2018. You may be able to deduct 100% of your health insurance cost off your Ohio income.
The standard mileage rate is 56 cents per mile in 2021. Those subject to DOT hrs of service limits may deduct 80% of meal cost or 80% of $63 a day for 2018. These deductions are only allowed on business returns. Sch C, E and F, plus partnership and corporate returns.
If you pay subcontractors more than $600 during the year, you are required to file a 1099 on them and it must be mailed by 1131119.
IRA's AND RETIREMENT
The AGI phase out range for deductible IRA and Roth IRA contributions varies depending on your situation and type of IRA so you should call or ask your preparer if you have any questions.
Max contribution limit to traditional and Roth IRA's is increased to $6,000 ($7,000 for taxpayers over 50). If you have turned 70 ½ and have IRA's or other retirement plans you may be subject to Required
Minimum Distributions.
HEALTH INSURANCE
You will need to bring us any 1095-(A)s you receive. As you will be required to reconcile the allowable credit to the actual amount you received.
