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COVID-19 Tax Relief Measures

Covid-19 — Thomasville, AL — Golden Tax Relief

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) made many temporary changes in the tax law. The new Consolidated Appropriations Act (CAA) adjusted some of these and left others to die on December 31, 2020.



Below are insights into some of the changes.

Borrow $100,000 from Your IRA and Pay It Back within Three Years with No Tax Consequences

Thanks to the CARES Act, IRA owners who were adversely affected by the COVID-19 pandemic were eligible to take tax-favored coronavirus-related distributions (CRDs) from their IRAs during 2020—but only during 2020.


You could take as much as $100,000. You can then recontribute a CRD back into your IRA within three years of the withdrawal date and treat the withdrawal and later recontribution as a federal-income-tax-free rollover.


In effect, the CRD drill allowed you to borrow up to $100,000 from your IRA(s) and then recontribute (repay) the amount(s) at any time up to three years later, with no federal income tax consequences when all is said and done. There are no limitations on what you can use CRD funds for during the three years.



Status report. The CAA does not extend the CRD deal beyond 2020, but it clarifies that similar tax rules can apply to IRA distributions taken by folks who are affected by specified future disasters.

Suspension of Retirement Account Required Minimum Distributions

In normal times, you must begin taking annual required minimum distributions (RMDs) from traditional IRAs and tax-deferred retirement plan accounts after you reach age 72 (or age 70 1/2 if you turned 70 1/2 before 2020). The CARES Act suspended RMDs for calendar year 2020 as a COVID-19 tax relief measure, but only for that one year.



Status report. So far, lawmakers have not extended this deal.

Small-Employer Tax Credits to Cover Required COVID-19-Related Employee Paid Leave

The Families First Coronavirus Response Act (FFCRA) granted a federal tax credit to small employers to cover mandatory payments to employees who take time off under the FFCRA’s COVID-19-related emergency sick-leave and family-leave provisions.



Specifically, a small employer could collect a tax credit equal to 100 percent of qualified emergency sick-leave and family-leave payments made by the employer pursuant to the FFCRA. But the credit under the FFCRA covers only leave payments made between April 1, 2020, and December 31, 2020. Equivalent tax credit relief was available to self-employed individuals who took qualified leave between those dates.

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Surviving Your Taxes: How planning your taxes makes it feel less like the apocalypse.

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Introduction: In the gripping narrative of "The Walking Dead: The Ones Who Lived," characters are thrust into a world of constant threats and uncertainties. At Golden Tax Relief, we understand that while tax season may not involve literal zombies, the feeling of dread and complexity can feel just as daunting. Let's explore how the survival tactics employed by the show's characters can be a metaphor for effective tax planning and how our team can be your ally in this journey. Survival against Odds: Just as the survivors in "The Walking Dead" face a new world of challenges, taxpayers encounter the labyrinthine complexities of the tax system. Preparation and knowledge are your armor and weapons. At Golden Tax Relief, we arm you with the latest tax strategies and regulations, ensuring you're well-prepared long before deadlines approach. Our expertise is your guide through the treacherous terrain of tax season. Community and Contribution: In the post-apocalyptic world, strength lies in numbers and collective wisdom. Similarly, in the realm of tax planning, leaning on the expertise of professionals can make all the difference. At Golden Tax Relief, we foster a community approach, working alongside our clients to understand their unique financial landscapes and ensuring their contributions work in their favor. Like a well-coordinated survival group, we combine our strengths to protect and advance your financial well-being. The Threat of Penalties: In the world of "The Walking Dead," the consequences of missteps can be severe. In the tax world, mistakes can lead to audits and penalties. Our role at Golden Tax Relief is akin to that of a vigilant lookout, helping you steer clear of common pitfalls and ensuring compliance with all tax laws and regulations. We stay at the forefront of tax legislation to shield you from unexpected threats and keep your financial journey on track. Unexpected Challenges and Adaptability: Just as the survivors in the series must adapt to new threats and environments, so must taxpayers in the face of changing tax laws and personal circumstances. Golden Tax Relief prides itself on our adaptability and foresight. Whether responding to an IRS notice or adjusting strategies mid-year, we're equipped to help you navigate the ever-evolving tax landscape with confidence. Resource Management: Resource management is crucial for survival in "The Walking Dead," as it is in effective tax planning. Maximizing deductions, strategizing for future tax liabilities, and ensuring efficient financial planning are paramount. At Golden Tax Relief, we approach your financial health holistically, ensuring every decision is made with your best interests and long-term stability in mind. Conclusion: While the stakes may differ dramatically between a zombie apocalypse and tax season, the principles of survival remain the same: preparation, community, vigilance, adaptability, and resource management. At Golden Tax Relief, we embody these principles in our approach to tax planning, ensuring you're not just surviving tax season, but thriving beyond it. Let us guide you through the complex tax landscape, providing peace of mind and a clear path forward. Welcome to a new era of financial survival, with Golden Tax Relief leading the way.

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S Corp Owners: Important Updates regarding 2023 Health Insurance for S Corporation Owners

12 Jun, 2023
Its time for some good news for those S Corp Owners who own more than 2% of your S Corp: there are some good updates when it comes to your health insurance. First things first -- ensure that your health insurance deductions are in order, and avoid the $100-a-day penalties for violating the rules of the Affordable Care Act (ACA). To do this, take the following steps: Get the cost of the health insurance on the S corporation’s books, either by making the premium payments directly or through reimbursement. Ensure that the S corporation includes the health insurance premiums on the owner-employee’s W-2 form, including the additional compensation in box 1 but not in boxes 3 or 5. If you are an owner-employee with more than 2 percent ownership, claim the health insurance deduction as “self-employed health insurance” on line 17 of Schedule 1 of Form 1040. However, there are 2 rules you must meet: not having access to employer-subsidized health insurance and having adequate salary. While the S corporation does not have to provide health insurance benefits for its rank-and-file employees, but if it does, it must use an acceptable ACA plan, such as (among others) the qualified small employer health reimbursement arrangement (QSEHRA) or the individual coverage HRA (ICHRA). Its important to note that the S corporation can reimburse more-than-2-percent owners for individually purchased insurance without any penalties, BUT if it reimburses rank-and-file employees without using the QSEHRA or ICHRA, it faces the $100-a-day penalty per employee. If you are looking to provide health benefits to employees through the S corporation, there are many tax-advantaged options available. If the S corporation provides group health insurance to all employees, including the shareholder-employee, the same rules apply. This, and many other important tax savings strategies could help save you thousands of dollars each year through a qualified tax plan! Call us today at 844-229-8936 to set up an appointment with our certified tax planner and tax coach! Let us put you on the path to savings!
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