COVID -19 UPDATES

We hope that you are keeping yourself, your loved ones, and your community safe from COVID-19 (commonly referred to as the Coronavirus). Along with those paramount health concerns, you may be wondering about some of the recent tax changes meant to help everyone coping with the Coronavirus fallout and we are here to help and keep you informed:

Below are links to COVID - 19 tax legislation and updates:

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Tax Extenders Passed!

01/30/2020

Tax Extenders Passed!

~ Author - Barb Brecht, CPA, Deluzio & Company, Tax Manager ~

The President has signed the Further Consolidated Appropriations Act, 2020, which provides extensions to many provisions in the Tax Code for individual and business taxpayers.

The following tax benefits have been extended:

  • Energy Efficient Homes Credit – Extended for homes acquired after December 31, 2017 through December 31, 2020. An eligible contractor may claim a tax credit of $1,000 or $2,000 for a qualified new energy-efficient home. An eligible contractor is the person who builds a qualified new energy-efficient home or manufactures a qualified new energy efficient manufactured home. The applicable amount of the credit depends on the energy savings achieved by the home. The maximum credit is $2,000 for homes and manufactured homes that meet more rigorous energy requirements. Manufactured homes that meet a less demanding test can qualify for a $1,000 credit. (Note that the energy efficient homes credit had expired at the end of 2017. The new legislation allows taxpayers an opportunity to amend their return for 2018, to take advantage of a potential tax savings.)

  • Tuition and fees deduction – Extended for expenses paid after December 31, 2017 through December 31, 2020. The tuition and fees deduction may be claimed for qualified tuition and related expenses paid for the enrollment or attendance at an eligible education institution. The student may be the taxpayer, the taxpayer's spouse, or the taxpayer's dependent. Qualified tuition and related expenses include books, supplies, and equipment used in a course of study. It also includes nonacademic fees such as student activity fees, athletic fees, or other expenses if they are required to be paid as a condition of enrollment or attendance. Qualified tuition and related expenses are also reduced by any tax-free educational assistance received. (Note that the tuition and fees deduction had expired at the end of 2017. The new legislation allows taxpayers an opportunity to amend their return for 2018, to take advantage of a potential deduction for tuition and fees paid for post-secondary education.)

  • Employer Tax Credits – Extended through December 31, 2020

    • Employer Credit for Paid Family and Medical Leave: The family and medical leave (FML) tax credit is available for employers that provide paid leave (wages) to qualifying employees under the Family and Medical Leave Act (FMLA), during an employer’s tax year that begins in 2018 and 2019. The credit is equal to the applicable percentage of wages paid to qualifying employees during the period that the employees are on leave. The applicable percentage is 12.5 percent increased (but not above 25 percent) by 0.25 percentage points for each percentage point by which the rate of payment exceeds 50 percent of the wages normally paid to the employee.

    • Work Opportunity Credit: Employers may take a work opportunity credit (formerly known as the targeted jobs credit) for employees who are members of targeted groups and who begin work before January 1, 2021. In general, the credit is not available unless the worker is employed for at least 120 hours. The work opportunity credit terminates effective for wages paid to persons who begin work for an employer after December 31, 2020. The credit is part of the general business credit and may be carried back and forward as part of the credit subject to its limitations and rules.

  • Medical and Dental Expenses – The Act provides a reduction in the medical expense deduction floor from 10% to 7.5% for tax years ending after December 31, 2018 and beginning before January 1, 2021

  • Mortgage Insurance Premiums – Extended for qualified premiums paid or accrued after December 31, 2017 through December 31, 2020 – Mortgage Insurance premiums paid or accrued in connection with acquisition indebtedness are deductible as home mortgage interest, subject to the taxpayers Adjusted Gross Income (AGI) limitation. The deduction had expired at the end of 2017, but taxpayers may amend their 2018 tax returns to take advantage of the restored deduction, subject to the limitations.

Please call our office if you would like assistance on reviewing your income tax situation and the opportunity to amend your tax return to claim a potential deduction or credit.