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Although electric vehicles (or EVs) are a small percentage of the cars on the road today, they’re increasing in popularity all the time. And if you buy one, you may be eligible for a federal tax break.

electric charger inserted into a vehicle tank; image used for blog post about electric vehicles tax credit

The tax code provides a credit to purchasers of qualifying plug-in electric drive motor vehicles including passenger vehicles and light trucks. The credit is equal to $2,500 plus an additional amount, based on battery capacity, that can’t exceed $5,000. Therefore, the maximum credit allowed for a qualifying EV is $7,500.

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Continue Reading What to Know About Tax Credit for Electric Vehicles

Attending college and pursuing higher education is one of the biggest investments that parents and students ever make. If you or your child (or grandchild) attends (or plans to attend) an institution of higher learning, you may be eligible for tax breaks to help foot the bill.

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The Consolidated Appropriations Act, which was enacted recently, made some changes to the tax breaks.

Here’s a rundown of what has changed.

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Continue Reading Understanding Revised Tax Benefits for Higher Education

The new COVID-19 relief law that was signed on December 27, 2020, contains a multitude of provisions that may affect you.

graphic with "COVID-19 Relief Law" and coins and dollar bill

Here are some of the highlights of the Consolidated Appropriations Act, which also contains two other laws: the COVID-related Tax Relief Act (COVIDTRA) and the Taxpayer Certainty and Disaster Tax Relief Act (TCDTR).

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Continue Reading What You Need to Know About the COVID-19 Relief Law

The fourth 2020 estimated tax payment deadline for individuals is Friday, January 15, 2021. If you’re self-employed and don’t have withholding from paychecks, you probably have to make estimated tax payments. These payments must be sent to the IRS on a quarterly basis.

graphic with a hanging red and white calendar with "January 15;" image used for blog post about estimated tax deadline for January 15

Even if you do have some withholding from paychecks or payments you receive, you may still have to make estimated payments if you receive other types of income such as Social Security, prizes, rent, interest, and dividends.

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Continue Reading Is Your Next Tax Deadline January 15?

Holiday-inspired generosity and the desire to reduce tax liability makes the end of the year a busy time for charitable giving. According to Network for Good and other sources, approximately 30% of charitable gifts are made in December alone. For not-for-profits, an important part of processing these donations is sending thank-you letters that acknowledge donor gifts.

a note card with the word "thanks" sits on a wooden table with a black marker; image used for blog post about not-for-profits acknowledging donor gifts

To ensure your letters contain everything they should, here’s a refresher course.

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Continue Reading The Importance of Acknowledging Donor Gifts

Contributing to a tax-advantaged retirement plan can help you reduce taxes and save for retirement. If your employer offers a 401(k) or Roth 401(k) plan, contributing to it is a smart way to build a substantial sum of money.

two people sitting outside in lawn chairs under a tree watching a sunset; image used for blog post about saving for retirement with your 401(k)

If you’re not already contributing the maximum allowed, consider increasing your contribution rate. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions can have a major impact on the size of your nest egg at retirement.

With a 401(k), an employee makes an election to have a certain amount of pay deferred and contributed by an employer on his or her behalf to the plan. The contribution limit for 2020 is $19,500. Employees age 50 or older by year end are also permitted to make additional “catch-up” contributions of $6,500, for a total limit of $26,000 in 2020.

The IRS recently announced that the 401(k) contribution limits for 2021 will remain the same as for 2020.

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Continue Reading Save for Retirement by Maximizing Your 401(k) Plan

As we approach the end of the year, it’s a good time to think about whether your business needs to buy business equipment and other depreciable property. If so, you may benefit from tax savings with Section 179 depreciation tax deduction for business property. The election provides a tax windfall to businesses, enabling them to claim immediate deductions for qualified assets, instead of taking depreciation deductions over time.

Even better, the Sec. 179 deduction isn’t the only avenue for immediate tax write-offs for qualified assets. Under the 100% bonus depreciation tax break, the entire cost of eligible assets placed in service in 2020 can be written off this year.

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But to benefit for this tax year, you need to buy and place qualifying assets in service by December 31.

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Continue Reading Tax Savings for Small Businesses – Before Dec. 31

thumbnail image of a PKF Texas white paper about the November 18 PPP Loan ruling impacting tax planningThe IRS released new ruling and guidance on November 18, 2020 for businesses who received a Paycheck Protection Program (PPP) Loan, Revenue Ruling 2020-27 and Revenue Procedure 2020-51, which clarifies the tax deductibility of expenses related to loans that have not been forgiven.

The PKF Texas team wants to share with you a special…