August News To Know
Dear Clients & Friends,
We can’t believe summer is almost over. With September only a few days away, we are hard at work finalizing extended tax returns. If you filed an extension last spring, please reach out to your CJBS team member if you have any questions about your return or extension. All of the extension deadlines are listed below.
Now that we are closing out Q3 and about to enter Q4, there’s no time like the present to take advantage of year-end tax planning strategies to optimize your financial situation. With key pieces of legislation recently passed, we share a brief overview of what you need to know below, and have linked some longer articles you can click to read. Pour yourself a cup of coffee and take some time to understand how these changes can affect you. Or better yet, take advantage of the 100% meal and entertainment deduction that is available through the end of the year and go grab coffee with a client.
New Bills Passed By Congress
Over the past couple of months, Congress has been busy enacting new measures to help support our country and economy. Just a couple of the bills they have passed include:
- CHIPS and Science Act—With the massive disruptions experienced as a result of overextended supply chains during the Covid pandemic, this act seeks to “revitalize domestic manufacturing, create good-paying American jobs, strengthen American supply chains, and accelerate the industries of the future.” (Source)
- Inflation Reduction Act of 2022—The most recent legislative change comes in the way of the Inflation Reduction Act of 2022. This key piece of legislation “will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030.” (Source) The Act is a huge piece of legislation (730 pages) that incorporates climate, healthcare, and taxes with a goal of slowing the pace of rising consumer prices. To learn more about how this significant piece of legislation may affect you, check out our recent article.
- Illinois Family Relief Plan—Starting the week of September 12th, Illinois residents who qualify will receive one-time individual income and property tax rebates. To follow are the amounts being sent, qualification requirements, and information on how to receive your rebate(s):
- The individual rebate amount is $50 ($100 for couples who file jointly), with additional rebates for dependents up to $300 ($100 per dependent, up to a maximum of three). To qualify for individual rebates, you must have been an Illinois resident in 2021 and have an adjusted gross income (per your 2021 Form IL-1040) under $200,000 (if filing as a single person) or under $400,000 (if filing jointly)
- The property tax rebate amount is based on the property tax credit you were qualified to claim on your 2021 IL-1040, up to $300. To qualify for the property tax rebate, you must have been an Illinois resident and paid property taxes in 2021 on your primary residence in 2020, and your adjusted gross income (per your 2021 Form IL-1040) is $250,000 or less (if filing as a single person) or $500,000 or less (if filing jointly).
- If you already filed your 2021 IL-1040 and you qualify, you will automatically receive your rebates. If you have not filed your 2021 IL-1040, you have until October 17th to file the appropriate forms to receive these rebate(s). Please reach out to us to answer any questions you may have, including what additional forms may be needed.
Upcoming Tax Deadlines
As summer winds down, and extended tax returns are due, here are some important tax dates to remember:
- Partnerships and S Corporations
- Individuals – including sole proprietors
- C corporations
With the end of the year around the corner, now is the time to focus on utilizing Tax Planning Strategies, if you haven’t already.
One (often-overlooked) strategy you can use before the end of the year is to take advantage of depreciation. With 100 percent bonus depreciation expiring at the end of 2022, there are opportunities to maximize this year that won’t be available in the future. If you’d like to learn more about how you can use this strategy, please reach out to your CJBS team member.
The temporary 100% Business Meal Tax Deduction for eligible business meal expenses remains in effect through the end of the year. That means there’s still time to benefit from tax-saving opportunities. This is a great time to host office events (such as holiday parties) or entertain clients to help build stronger relationships with them and your team. Plan accordingly to take advantage of the expanded business meal deduction by December 31, 2022. As of January 1, 2023, the deduction will return to its 2020 rate of just 50%!\
As always, if you have any questions about your unique situation or how you can optimize your finances, please contact us. We are here to help.
Stay safe & healthy,
The CJBS Team