Message from Joyce Burchett

January 28, 2021

 

Dear Friends and Clients,

 

As I sit and think about what to write, I think of all the happenings of 2020. Then I thought I do not want to talk about 2020 and will move on to 2021 and wish everyone a better year. I wish for all of you health, happiness, and peace in your life. The last two tax seasons have been the hardest of my 33 years. As I go into the 34th year, I am being optimistic that it will be one of my best. I want you to know how much I appreciate your business and support in the years past and the ones left to be.

 

I know several of you were concerned about me but I’m here for another year and Congress is to blame for the late newsletter. The last (2nd stimulus) tax bill was passed December 28th so IRS is having to delay the opening of tax season to Friday, February 12, 2021. The program is being updated for the changes thus  all tax professionals must met IRS protocol.

 

The BFS home team will have a few new faces but the same heart. It is being led this year by Angus, a 6-year-old, 19 lb bouncing westie boy. He joined the team in May and has been hitting home runs since. I call him a Denise the Menace. He is too funny and keeps us on our toes here daily. Riley is still the “main man” on this team, coming in at 14 years old but a run or two. But those long naps are a favorite with him as well. Alyssa, Fran, and Joyce will continue to pull the weight here with some additional support team members to be added.

 

As the pandemic continues to linger around, we will continue our meetings at your comfort level. We can meet face-to-face, mail in, drop-offs, Zoom, and over the phone. We will observe all social distancing protocols and perform additional deep cleaning. We are at our level doing everything we can to make it a safe environment for our clients and ourselves.

 

Please follow the Governor’s directions as far as mask, social distancing, shut down, etc. We will be following all Federal, state, and local directions for all our safety.

 

We provide you with a 2-page checklist to review and go through before you come to your meetings so please use it and update your contact information on the Update/ Drop-off sheet before your appointment times. If you want direct deposit then give me your RT# and account # before I print out the returns, not after you have been called to pick up. These forms are for both of out benefits.

 

Finally, please help my staff keep me on schedule and allow me to have some time off. I am cutting back on hours at the office so I can get more rest and I can be more effective. So be prepared for your appointment time, bring all necessary paperwork to your appointment times, have all your amounts ready to give me when I get to the itemized deductions, and business expenses. If you need future tax planning, retirement plan or financial advice then we will schedule these appointments during non-tax season times beginning May 1st.

 

I want to thank each one of you for your years of friendship, business support, kind words, thoughtful gestures, and the many referrals during my 33 years in business and looking forward to the 34th year of doing taxes. I have been blessed with good friends, clients, and family. It is my greatest accomplishment to have wonderful people in my circle of trust, and in the words of Chevy Chase “we are going to have the happiest, happiest year in 2021.”

Highlights of the 2020 & 2021 Tax Changes

 

  • The Traditional IRA and Roth IRA goes to $6,000 for 2020 and if you’re 50 and over, you can contribute $1,000 more.

 

  • For 2020, maximum 401K, 403B and 457 contribution rises to $19,500 and over 50 can contribute

       an extra $6,500.  The cap on simple plans goes to $13,500 and over 50 can put in $3,000 more.

 

  • The 2020 standard mileage rate for business driving goes to 57.5 cents a mile and medical/moving is .17 cents. Business miles for 2021 is .56 cents per mile, medical is .16 cents and charity is .14 cents.

 

  • The batch of expired tax breaks from 2017 and some for 2018 have been extended until 2021.  This means you can go back and amend returns for 2017-2019.

  • Deduction for MIP, energy tax incentives, and shorter depreciation for racehorses is extended through 2021

  • Retirement savings legislation is in the package.  The Secure Act increases age for RMD’s from  70 ½ to 72 and others.

 

  • The 7.5 adjusted-gross income threshold for medical expenses on Schedule A is permanent.

 

  • There is a $300 above the line for not Schedule A deduction of charitable donations. For 2021 only, the ceiling is $600 for MFJ.

 

  • This year brought PPP loans which are not taxable and the expenses paid with the loans are deductible.

 

  • Secure Act which brought updating and changes the RMD age from 70 ½ - 72 beginning 2020.

 

  • Stimulus checks – there was in the summer a 1st round and a 2nd round starting in January 2021. If you did not receive these then we are able to recover on the 2020 tax returns.

 

  • Beginning in 2021 & 2022, businesses can deduct 100% of business meals. This removes the 50% Haircut. Does not apply 2020.

 

We certainly live in a changed world these days. We have to worry about scams, fraud, political divide, unemployment, COVID-19, stay at home orders, & etc. It is beginning to take it’s toll on all of us but we do need to stay safe and healthy. Best to all our clients and friends.

 

 

We can’t include everything here but I will be updating the website at www.burchettfinancial.com

We have included on the website the highlights of the 2018 tax reform and beyond (2025) tax law changes. Please check it out and we will keep you updated during the tax season and beyond --------

 

 

 

That’s all folks & See you Soon!

 

Joyce

Burchett Financial Services