2021 Roundup: The Important Tax Stories You May Have Missed

The world is constantly changing — as last year reminded us in no uncertain terms! And taxes, well, they are no exception. 

There is always plenty to unpack with a topic as complex as the United States tax code, and 2021 was a hectic year for tax-related news. From the IRS rules and regulations that business owners need to understand to vital tax-advantaged tips for individuals and more, you can rely on Rosenberg & Chesnov to keep you informed with the latest insights and updates. 

This easy-to-scan roundup of the most important tax-related highlights from 2021 will help you keep pace with the changing landscape of the tax code. 

To discover the most valuable federal, state, local, and international tax updates you may have missed last year, keep reading. 

What does the Advance Child Tax Credit mean for you?

In July, eligible parents nationwide saw their first payment hit their bank accounts this week. 35.2 million families qualify, so there is a good chance if you have children, you received a payment as well. However, this new tax relief measure also raised many questions. 

Click here to find answers and clarity on what the Advance Child Tax Credit means for you. 

Pass-Through Entity Taxes: What New York and New Jersey Residents Need to Know

Most small businesses in the United States operate as pass-through entities. This allows business owners to avoid the “double taxation” encountered by C corporations, which pay corporate income and dividend taxes.

Previously, no limitation on itemized state and local tax (SALT) deductions existed, and individuals with significant state income and real estate tax expenses could deduct them in full. However, the 2017 passage of the TCJA imposed that $10,000 cap on individual SALT deductions. As a result, many individuals in high-tax states, like New York, saw a significant increase in their federal income tax liabilities. So, businesses began to seek workarounds to minimize their tax burden, leading to the passage in some states of Pass-Through Entity Tax (PTET) laws which allow pass-through businesses to pay income taxes at the entity level instead of the personal level.

Click here to learn what New York’s PTET law means for small business owners, and click here to discover more about New Jersey’s similar Business Alternative Income Tax (NJ BAIT). 

Understanding the health insurance marketplace

Feel like the health insurance marketplace is challenging to understand? You’re not alone, and many Americans feel the same way. To make things even more complex, the implementation of state-level marketplaces has varied. The Affordable Care Act of 2010 has undergone several changes over the years, and in March 2021, the American Rescue Plan shook things up again by increasing access and affordability.

In this post, I examine how the health insurance marketplace works, what was new in 2021, and how you can start shopping and applying for coverage with confidence. 

Changes to the tax-deductibility of R&D costs

The Tax Cuts and Jobs Act (TCJA) of 2017 included changes to the tax-deductibility of Research and Development expenditures which went into effect for tax years beginning after December 31st, 2021. 

To understand how the new requirements surrounding R&D expenses will impact your business in 2022 and beyond, and for guidance on the tax-planning strategies, you should develop moving forward, click here

Received this notice from the IRS? Here’s why you may not have to return your stimulus money

If you claimed your pandemic stimulus payment as a tax credit on your return in 2020, you might be among the millions of people who received a confusing math error notice sent last year by the IRS.

The letters, mailed between January 1st and mid-August of 2021, informed recipients that they had to pay back their stimulus funds partially or that their refunds had been reduced due to an overpayment.

However, the IRS sent many such notices by mistake. 

To learn more about this IRS notice, why you may have received it, why you may not have to pay back your stimulus money, and what you can do, click here.

What does the infrastructure bill mean for you?

Last year, one of the most extensive federal infrastructure packages in United States history became law after months of debate and negotiation. 

The sweeping bill called the Bipartisan Infrastructure Investment and Jobs Act allocated $1.2 trillion in funding for roads and bridges, public transit, electric energy, broadband internet, clean drinking water, and more. 

Additionally, some tax provisions included in the bill impact businesses and investors (especially cryptocurrency investors).

This blog post summarized critical highlights of the Bipartisan Infrastructure Investment and Jobs Act and examined the tax implications for business owners and investors. 

Cryptocurrency Tax Rule Changes

One provision of the infrastructure law helped fund the new spending by increasing tax compliance among cryptocurrency traders. 

The new rule expanded the definition of the word “broker” to include digital asset traders, thus requiring them to report the names, addresses, and gross proceeds associated with their transactions. That means that cryptocurrency traders will no longer be able to avoid certain tax consequences. 

It’s worth noting that this part of the bill does not take effect until January of 2024.

Before the passage of the infrastructure bill, I took an in-depth look at what the changes to cryptocurrency tax rules would mean to taxpayers. You can read that article here.

Year-End Tax Planning

Between ongoing disruptions caused by Covid-19, supply chain complications, and economic uncertainties, 2021 was full of significant changes to the tax law for individuals and businesses. What’s more, recent adjustments to the tax code have presented both new opportunities and possible pitfalls.

This article recaps what changed in 2021 and outlines essential year-end tax planning tips and considerations for individuals and business owners.

Important Personal Tax Deadlines for 2022

Since 1955, Tax Day has typically fallen on or around April 15th. However, pandemic-related extensions issued by the IRS in 2020 and 2021 have left many wondering: What will the tax deadlines be in 2022? 

Barring unforeseen circumstances, the answer is that 2022’s tax calendar is likely to return to normal. However, you may not be aware of other deadlines, aside from Tax Day, which may apply depending on your tax situation. 

Depending on your circumstances, paying your taxes this year may not be as simple as just remembering to file by April 18th. 

Take a look at this article for the information you need to meet your tax deadlines and avoid late fees, penalties, and interest payments in 2022.

What else do you need to know?

While last year certainly brought a fair share of changes to tax law, there are also plenty of areas where conventional wisdom still applies. That’s why in 2021, our blog was also a critical resource for information on evergreen topics, such as:

…and more! 

You can find plenty of helpful information by exploring our blog and joining our newsletter. If you have questions, don’t hesitate to get in touch. As always, we stand ready to assist with trusted counsel. 

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Jeff Coyle, CPA

Jeff Coyle, CPA, Partner of Rosenberg Chesnov, has been with the firm since 2015. He joined the firm after 20 years of business and accounting experience where he learned the value of accurate reporting, using financial information as a basis for good business decisions and the importance of accounting for management.

He is a diligent financial professional, able to manage the details and turn them into relevant business leading information. He has a strong financial background in construction, technology, consulting services and risk management. He also knows what it takes to create organizations having built teams, grown companies and designed processes for financial analysis and reporting.

His business experience includes:

Creating and preparing financial reporting, budgeting and forecasting.
Planning and preparation of GAAP and other basis financial statements.
Providing insight on financial results and providing advice based on those results.

Jeff also has a long history of helping individuals manage their taxes and plan their finances including:

Income tax planning and strategy.
Filing quarterly and annual taxes.
Audit support.
General financial and planning advice.
Prior to joining the firm in 2015, Jeff was in the private sector where he held senior financial and management positions including Controller and Chief Financial Officer. He has experience across industries, including construction, technology and professional services which gives him a deep understanding of business.

Jeff graduated from Montclair State University, he is a CPA and member of the American Institute of Certified Public Accountants, New York State Society of Certified Public Accountants and New Jersey State Society of Public Accountants.

Jody H. Chesnov, CPA

Jody H. Chesnov, CPA, Managing Partner of Rosenberg Chesnov, has been with the firm since 2004.  After a career of public accounting and general management, Jody knows the value of good financials.  Clarity, decision making, and strategy all start with the facts – Jody has been revealing the facts and turning them into good business results for more than three decades.

He takes a pragmatic approach to accounting, finance and business. His work has supported many companies on their path to growth, including helping them find investors, manage scaling and overcome hurdles.  His experience and passion for business reach beyond accounting and he helps businesses focus on what the numbers mean organizationally, operationally and financially.

He has a particular expertise in early-stage growth companies.  His strengths lie in cutting through the noise to come up with useful, out of the box, solutions that support clients in building their businesses and realizing their larger visions.

Prior to joining the firm in 2004, Jody was in the private sector where he held senior financial and management positions including General Manager, Chief Financial Officer and Controller.  He has experience across industries, which gives him a deep understanding of business.

Jody graduated with a BBA in Accounting from Baruch College, he is a CPA and member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants.

In addition to delivering above and beyond accounting results, Jody is a member of the NYSCPA’s Emerging Tech Entrepreneurial Committee (ETEC), Private Equity and Venture Capital Committee and Family Office Committee.  

He is an angel investor through the Westchester Angels, and has served as an advisor for many startup companies and as a mentor through the Founders Institute.

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