Tax Tips 2021

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Tax Tips 2021

The US is slowly beginning to open up following the global pandemic, and the Government has enacted some changes to the tax deductibility of charitable contributions and to business meals.

You may have noticed when you prepared your taxes for 2020 that you were allowed to take a deduction of up to $300 in cash given to an accredited charity.  For tax year 2021, that deduction will be increased to $600 for taxpayers who file Married Filing Jointly.  To claim this deduction, the contribution needs to be in cash, and you need substantiation for proof of the donation such as a cancelled check, payroll deduction form or written acknowledgement from the charity.  Contributions of $250 or more given to a charity in any one day require a written acknowledgement.

For business owners, meals for a business purpose with employees, clients/vendors or prospective business clients are 100% deductible for tax year 2021 and 2022.  This is being done in part to help the struggling restaurant industry by encouraging business owners to support restaurants.  Entertainment expenses are non-deductible for businesses. This may change as Congress is looking for ways to assist the tourism industry.  We will have to wait and see what new laws pass later this year.

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