The cost of printing and mailing catalogues has now exceeded our ability to send them, so our office has designed a PDF version of our 2021 catalogue listing topics, live courses, webinars, etc. Click here to view or download the catalogue.
Reference Citation Information
In March 2021 Congress passed the American Rescue Plan Act (ARPA) which greatly expands, for 2021 only, the child tax credit in Act Section 9611. This is the credit for having dependent kids, not the dependent care credit for taking care of kids! Additionally, Act Section 7527A provides for advance payment of the child credit. The original Child Credit is contained in Internal Revenue Code Section 24
. In May the IRS released Revenue Procedure 2021-24 that explained many of the rules implementing the credit for people not required to file a return.
Summary of old (2020) rules for the child credit
2020 individual tax returns qualified for a child credit of $2,000 for children under age 17 on the last day of the year with a social security number claimed as a dependent on the return. Up to $1,400 was refundable. The credit began phasing out at $400,000 of AGI for joint returns and $200,000 for other returns. Key points of old law:
Summary of new (2021 ONLY) rules for the child credit
- Permanent part of law
- Under age 17 on last day of year
- Must be a dependent with a social security number by the due date of the return
- $2,000 credit per dependent
- $1,400 refundable credit per dependent
- Credit obtained when filing return for the year
2021 individual tax returns qualify for a child credit of $3,000 ($3,600 if under 6 at 12/31/2021) for children under age 18 on the last day of the year with a social security number claimed as a dependent on the return. The full amount is refundable. The increased amounts begin phasing out at $150,000 on a joint return down to $2,000, which begins phasing out at the 2020 levels as before. $112,500 and $75,000 begin the higher amount phaseouts for heads of household and single returns respectively, also dropping to $2,000 and phasing out at the 2020 amounts. This means for 2021 there is a stairstep phaseout of none up until $150k (MFJ), then partial to a $2,000 safe harbor until $400k MFJ, and complete after that.
Additionally, ARPA requires the IRS to pay ½ of the credit in advance in 6 monthly payments beginning in July, 2021 for individuals maintaining a principle residence in the United States for over ½ the year. This advance payment will be estimated based on 2020 returns (2019 if not yet filed) and then reconciled upon filing the 2021 return. The IRS will have a primary portal open by 7/1/21 where taxpayers can elect out of advance payments or update their 2021 income, filing status or qualifying children. Key points of new law:
The advance credit will then be reconciled when filing the 2021 return. Any additional credits due will be refunded with the return. The advance payments are to be electronically paid using the same mechanism used to send the stimulus checks. The portals can also be used to add new babies or dependents which would increase the 2021 credit.
- One year only (2021) change under current law
- Under age 18 on last day of year
- Must be a dependent with a social security number by the due date of the return
- $3,000 per dependent
- $3,600 if dependent is under age 6 at 12/31/2021
- Fully refundable
- 50% of credit paid in 6 payments in advance beginning 7/15/2021
- Remainder refundable with 2021 return when filed
Any excess payments are taxable with the 2021 return (Act Sec. 7527A(j)(2)(A))
A secondary portal will be open within the month for taxpayers that did not file a 2019 or 2020 return. See the Rev. Proc.above.
Older dependents will still qualify for the old $500 credit, but it will not qualify for the advance payment program. Unlike the stimulus check where divorced parents might have qualified for a dependent credit, the child credit will only apply to whomever claims the child on the 2021 tax return.
OTHER CPE INFORMATION
Our 2020 webinars were blessed with hundreds of compliments regarding quality. While our competitors sat at their desks with laptop cameras and headphones, we presented with TV cameras, professional lighting and sound, interactive Vibe whiteboards and actual studios using fiber optic internet. This year we are building a national newsroom TV studio set for many of our webinars to bring you a level of professionalism in webinars unmatched in the industry. Our IT Director (Ryan Jennings) has designed an incredible new studio system utilizing the latest amazing TV-studio tools for a webcast presentation!
We are completing our multi-month build-out of our new TV studios and will be presenting a special “Mid-Year Tax Update” live webinar on June 17 from 1-3 EASTERN TIME to introduce you to this new webinar TV studio and fill in all of those blank spots of rule changes that occurred during tax season. We are also holding down the price for this special class at $30 as a live webinar only.
Upcoming Live, In-Person classes
June 2-Security-Ocean City, MD (Bob & Ryan Jennings) (also simulcast webinar)
-Prep., Comp & Review
-Ocean City, MD (Bob Jennings & Bill Leonard) (also simulcast webinar)
-1041’s for estates and trusts
-Jeffersonville, IN (Bill Leonard), or live webinar
-Best Tax Planning & Retirement Ideas
-Jeffersonville (Bob Jennings & Bill Leonard) or live webinar
-In Depth Tax Update
-Kona, Hawaii (Bob Jennings)
1040 Boot Camp August 19-20 Live, in-person at Denver Embassy Suites
As most of you know, up until 2 years ago I was answering all email questions myself. When the volume approached over 500 weekly (yes you read that correctly) my office did an intervention, particularly since 80% of the questions are repeats. They came up with the idea of a subscription-based Q&A series at $200 annually where I answer 50-100 questions each month (weekly in tax season), and make them available in a recorded video.
Here is what we have coming over the next few months.
First, we will also provide written answers to the questions in our Q&A program-these are non-authoritative but give you ideas of where we stand on things and lead you to the research area.
Second, we are going to schedule each one of our speakers into 1 week of their own specialty, in advance. If you are a Q&A subscriber
, you may submit your questions to Matt Johnson via email@example.com
, for the specific topics each speaker will discuss, and as long as we have it 2-3 days or so before the presentation the speaker will try to get to it. The question must be 1 paragraph or less of no more than 5-6 sentences so that we can answer it in a timely manner. I will continue to answer questions in the other weeks.
The dates, topics & speakers:
June 8 Estates, trusts Bill Leonard
June 22 Sole proprietors, gambling, itemized, military Gregg Goodsell
June 29 LLCs and partnerships Mark Mirsky
July 13 Opportunity Zones, 199A (QBI), 1031 exchanges Ron Roberson
July 20 Security, technology Ryan Jennings
Seminar & Webinar Confirmations
As some of you may have already noticed, we have revamped our seminar and webinar confirmations to better serve you. When you sign up for anything on our website, you will automatically get an email with your receipt. Just be sure that you have added firstname.lastname@example.org to your address book so you do not miss any of the emails.
For seminars, you will now get a reminder email 3 days before the scheduled event. If signing up after that, you will automatically get them as soon as the order is complete. Included in the details you will find the name of the course, date, time, address, contact details, and attendee requirements.
For webinars, you will now get a reminder email 3 days before the scheduled event. If signing up after that, you will automatically get them as soon as the order is complete. Included in the details you will find the name of the course, date, time, and the direct link to take you straight into the webinar. You will also find instructions on how to test your system, downloading your materials, CPE information, evaluation information, the proctor form, etc.
**Note: All of our webinars are listed in EASTERN TIME zone.***
In Order to Receive Full CPE Credit for online webinars
- Per NASBA & IRS, you must answer 75% of the polls that come up on your screen. To ensure you see each poll, be sure that the speaker is always on your screen and that there are no other windows blocking your view.
- If you are using a tablet to view the webinar and you notice some of your screen is cut off, you can double tap the screen to adjust the aspect ratio.
- You must download the Zoom App to watch this webinar. If watching through your browser, the polling questions, which are required by NASBA & IRS to get your CPE, will not show up, resulting in no CPE being issued.
- If you experience any issues, or need help downloading the Zoom app, please call us at 877-466-1040, at the time you are having the issue, to ensure you get full CPE credit.
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You have questions. Bob has answers.
This week's questions are below! To access this and other "Talking With TaxSpeaker" videos, click the image above and subscribe. Your subscription will grant you access to past, present, and future videos for the duration of your subscription. The cost is $20/mo or $200/yr (17% less!). Submit your questions to email@example.com and tune in weekly for answers from Bob!
This week's questions:
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- Are you having clients ask you about moving to Puerto Rico and become citizens to avoid Capital Gains taxes on their bit coin holdings? If so, what are you telling them?
- A client spent $200 using CoinBase to purchase 2.24985483 Coins of virtual currency LTC. Two weeks later, the client converts the 2.24985483 LTC to 2.61264275 Coins of Virtual Currency AAVE. CoinBase reports conversion as a conversion of 2.24985483 LTC to 2.61264275 Coins of AAVE., and lists a spot price in U.S. Dollars on each transaction date. Is this conversion considered a sale and a purchase or is basis of the initial investment simply carried forward onto the new coins?
- How is passive income from Crypto holding treated? I would assume that the income would be submitted on a 1099-INT or 1099-DIV. However, this link from ABRA states that if income is greater than $600 it would be reported on a 1099 Misc. This is from 3 years ago, so my concern is that it will be reported in 2021 on a 1099 NEC --- subject to SE tax which wouldn’t be right. Looking forward to hearing, thanks! https://support.abra.com/hc/en-us/articles/360002527192--Does-Abra-provide-tax-reporting-information-
- I have a client who has set up an LLC to invest in Cryptocurrency. He has very large gains. He actually has become a day trader. Is he in a trade or business? Is he an investor? Are his expenses deductible? Do you have any great reference materials for this business?
- How much or how are you charging your clients for this mess? Per trade… flat fee…?
- Can an employee be paid in crypto? Where and how would that be handled?
- Can I just attach the proforma 8949 forms from Cointracker to the electronic file instead of having to input each transaction into my software?
- Do I have to file any foreign reporting forms when dealing with Crypto? How do I know if a crypto wallet is held domestically or offshore?
- I have a client who has an AirBNB where they rent out the basement of their home. What expenses are deductible and how do I apportion them?
- How do I know when the short-term rental is a business that should be reported on the Schedule C, or a rental reported on the Schedule E?
- My client decided to put their home on ABB for the one week they were not in their home, and they rented the entire home for one week. What can they deduct, and can they take a loss? How do we compute what is deductible?
- If I have a client servicing a business in the marijuana industry and they receive cash as a method of payment, is there any reporting required by my client? Do I have any professional risk in servicing their business if all I do is tax and accounting? What if I do attest work?
- Can my client, who takes legal medically prescribed marijuana, for their glaucoma take a medical deduction?
- I have a client who has a full-time job and decided to make some extra money by driving for Uber. What miles qualify as deductible? The car is 10 years old, is there a limitation on the Standard Mileage Rate since the car is fully depreciated? What else can they deduct?
- When preparing my client’s 2020 business return, I realized that they were eligible to take the Employee Retention Credit, even though they already received, and had forgiven, a PPP loan. Is there any way to take that credit on the business return without having to amend the 941s for 2020?
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