B.A. Harris Blog

2020 Tax Updates and Year in Review

With 2020 rapidly coming to a close, many of us are eagerly looking forward to 2021 in hopes that less tumultuous times are ahead. While we are all anxious for a better tomorrow, it’s important that we take the time today to look back upon the year and use this opportunity to take advantage of any changes to the tax code that occurred during 2020, and possibly consider a change in our own personal tax strategies.


Accountable Plans and Fringe Benefits

As an increasing number of individuals begin to work from home, either by choice or otherwise, many employers have begun to pay for expenses incurred by their employees in an effort to support their remote working environment, while others have begun offering certain fringe benefits to boost morale or show appreciation. We have fielded many questions from our clients as to the tax consequences to both the employers and employees in these types of situations, and ultimately the deciding factors are:


Tax Strategies: Reducing Taxable Residential Rental Income

For landlords of residential rental properties, one of the most powerful tools in tax planning is the appropriate timing of major expenditures. Coupled with an understanding as to whether those significant costs are fully deductible in the year they are incurred, or expensed over 5 to potentially 27.5 years, can play a significant factor in the decision-making process for property owners. Due to the sweeping changes in tax law with the passage of the Tax Cuts and Jobs Act of 2017 (TCJA) and the recent CARES Act, many of our clients have understandably been faced with confusion over this matter as there are elections for immediate expensing, accelerated depreciation methods, Section 179, Bonus depreciation, and the deduction for “qualified leasehold improvement property.


Changes to FORM 1099-MISC and New FORM 1099-NEC

Last used in 1982, and to alleviate confusion caused by the PATH Act, the IRS has reinstated Form 1099-NEC which will be used to report Nonemployee Compensation (NEC) for tax year 2020. The new 1099-NEC is used to report any payment of $600 or more to payees which was previously reported in Box 7 on Form 1099-MISC. While the 1099-NEC remains largely unchanged, the new form 1099-NEC will only be used for reporting NEC.


Surviving the CPA Exam

There are three components to becoming a CPA: education, examination, and experience. For most candidates, examination is the most intimidating part. The Uniform CPA Exam – standardized nationally – is comprised of four sections: Auditing and Attestation (AUD) Business Environment and Concepts (BEC) Financial Accounting and Reporting (FAR) Regulation (REG) Each exam is made up of multiple-choice questions and task-based simulations “SIMS”. BEC includes a written communication portion as well.


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