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Miscellaneous Tax Changes 2020

Charitable Contributions

For 2020, you will be allowed to deduct up to $300 in charitable contributions on your tax return, even if you use the standard deduction.  Donation of goods will not count for this special deduction.  In 2021, the deduction increases to $600 for married filing joint tax returns.

Educator Expenses

Teachers may now include Personal Protective Equipment as qualified education expenses for the classroom.  The deduction is still limited to $250 per year.

Health and Dependent Care Flexible Spending Arrangements

Normally these payroll deduction items are a use or lose benefit each year.  The CARES Act will allow unused benefits to be rolled over from 2020 to 2021 and from 2021 to 2022. 

Business Meals – 2021 and 2022

For 2021 and 2022, restaurant provided business meals will be 100% deductible.   We are awaiting guidance from the IRS to determine if this is only limited to restaurant meals eaten in the restaurant.

Earned Income Tax Credit & Child Tax Credit

In determining the above credits, you are allowed to substitute your 2019 earned income instead of 2020 earned income if it provides you a larger refund.  This substitution is allowed only for determining these credits amounts.

Allowance of Net Operating Loss Carryback

As part of the 2018 tax package, Net Operating Losses (NOL) could no longer be carried back to prior years; they were required to be carried forward.  The CARES Act allows you to again carry back your NOLs.

Age Limit Removed for Contributions to an IRA

Previously, a taxpayer could no longer make IRA contributions after reaching the age of 70 ½.  That limitation has been removed.

Required Minimum Distribution (RMD) Pushed Back

Under the new law, a taxpayer is not required to take distributions from his IRA until he is 72.