Tax Credits for Paid Leave Under the American Rescue Plan Act of 2021 for Leave After September 30, 2021

The COVID leave tax credits under the American Rescue Plan Act of 2021 (ARP) expired on 9/30/21.  These credits are based on the date of the paycheck, not the days missed. For any paycheck after 10/1/21, any employee taking COVID leave would need to utilize vacation/sick pay or the time off will result in unpaid leave.

As an employer, you may decide to offer voluntary leave at company cost and without the tax credit benefits. If employers offer such leave, they must do so in a consistent manner and for all employees.

How to get the most out of deductible meals

In this month’s video, I explained what types of business meals are deductible.  Since meals can be frequent and for small dollar amounts, I get more questions about tracking these receipts than any other expense.  In the case of travel meals, an IRS rule allows you to throw those receipts all away.  Instead of tracking and deducting each specific expense, you can deduct a per diem rate for your travel meals. Continue reading

Backdoor Solo-401k plans

It happens every year:

  • Doctor is being paid by 1099 for extra shift work or locums.
  • Doctor is covered for retirement at her day job – doesn’t know a 2nd plan may be an option.
  • Doctor is looking for ways to reduce her income while filing her taxes.
  • Doctor finds White Coat Investor – in January!

If a similar situation has happened to you, don’t despair! You can still fund a solo-k via the back door.

Here’s how: Continue reading

Planning to Maximize Your Section 199A Deduction

TCJA (Tax Cuts and Jobs Act) 2017 took away employee business expenses, along with much of our ability to itemize. In particular, we can now deduct mortgage interest on only $750k of debt and are limited to a deduction of $10k/yr. for SALT deductions. On a positive note, the Pease Limitation – which reduced itemized deductions for high earners, is gone along with AMT for most high-income taxpayers. Continue reading