Let’s say you discover a deduction that was overlooked on a federal tax return that has already been filed. Or you realize that you didn’t report some income. Perhaps you heard about a recently passed tax law that includes retroactive tax breaks you can benefit from.
Whatever the reason, an amended tax return may be the answer. Amended returns generally must be filed within three years from the date you filed the original return, or within two years after the date you paid the tax, whichever is later.
However, there are exceptions to this rule. For example, when it comes to amending a tax return to claim a loss for worthless investments or non-business bad debts, for example, you have up to seven years.
The earned income credit (EIC) has been around for years. But it’s never been worth as much as it will be for 2021 under the new American Rescue Plan Act (ARPA). Some favorable changes are only for the 2021 tax year, while others are permanent.
On March 25th, Senator Bernie Sanders introduced the “For the 99.5% Act,” a proposal that could significantly reduce currently available gift and estate tax exemptions. If passed, the act could impact families not previously subject to gift and estate taxes.
Starting a new business and wondering how and when tax deductions will occur? Most important to know is that most expenses incurred before a business begins cannot be deducted or amortized until the year the business becomes active.
