Tax Updates for 2021 Individual Planning and Due Diligence

Author: Annette Nellen

The American Rescue Plan Act made many changes for individuals and 2020 COVID-19 legislative changes continue to affect 2021 returns. Changes affecting individual tax compliance and planning, including charitable contributions, passive activity losses, and various grants will be explained. IRS guidance and state tax changes affecting the SALT deduction for partners and S corp shareholders are covered. Highlights of changes to individual tax forms for 2021 are described. Finally, tax reform proposals are covered. Planning and due diligence reminders are addressed throughout this 4-hour federal individual tax update.

Publication Date: December 2021

Topics Covered

• American Rescue Plan Act changes
• Treatment of various grants, loan forgiveness, and other COVID-19 items
• Charitable contributions
• Partner and S corp shareholder treatment of SALT workaround laws
• Changes to individual tax forms for 2021
• Key judicial cases
• Legislative proposals
• Planning and due diligence reminders

Learning Objectives

• Recognize changes affecting individual ax compliance and planning
• Identify changes to individual tax forms for 2021
• Describe tax reform proposals
• Identify the maximum 2021 recovery credit for EIP3 per adult
• Identify the maximum child tax credit for 2021 if under the age of 6
• Identify an area where California appears to conform to §139 with slight employment tax modification paid by employer
• Recognize which Form is used for credits for sick leave and family leave for certain self-employed individuals
• Differentiate cases dealing with a settlement from an employer not entirely for physical injury
• Recognize which issues were considered with respect to the Whatley case
• Differentiate which state's Board of Tax Appeals referenced the "internal consistency test" under interstate commerce clause
• Identify which Form 1040 Schedules relates to additional taxes
• Identify the due diligence penalty per violation
• Recognize which IRS forms relates to credits for qualifying children and other dependents
• Identify which type of documents is published in IRB
• Identify the OASDI wage limit for 2022

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
Basic understanding of tax preparation.

Advance Preparation
None