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New Stimulus Law Grants Eight Tax Breaks for Individual Filers

1/27/2021

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As you know, Congress recently passed a massive new stimulus bill that was enacted into law on December 27, 2020. Most of the public’s attention has been focused on the bill’s authorization of additional stimulus checks, new PPP loans, and other aid targeted to struggling businesses.


But Form 1040 American taxpayers who are not in business are struggling as well. The stimulus bill contains a hodgepodge of eight new or extended tax breaks intended to help Form 1040 filers.


None of these tax breaks are earthshaking by themselves, but together they add up to a nice tax present for COVID-19-weary Americans. 


Here are the eight new tax breaks that can help you:


  1. Deduct cash contributions to charity if you don’t itemize.
  2. Deduct up to 100 percent of your adjusted gross income (AGI) as a charitable deduction.
  3. Lengthen to one year the time you have to repay your 2020 employee Social Security taxes if your employer deferred them.
  4. Deduct medical expenses in 2021 using the now-extended 7.5 percent of AGI floor for these deductions.
  5. Carry over unused flexible savings account (FSA) funds to next year.
  6. Use your 2019 income to qualify for the earned income tax credit and/or the child tax credit if you’re a lower-income taxpayer.
  7. Deduct out-of-pocket expenses for personal protective equipment (PPE) if you’re a teacher.
  8. Take advantage of the lifetime learning credit in 2021 if you’re a higher-income taxpayer.


If you have any further questions or need my assistance, please contact us!
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    Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

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    To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
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    These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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    Author

    Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion.  Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

    Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

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