Given the careful consideration to financial planning and changing tax legislation, Acumen Wealth Advisors would like to provide some general tax reminders as well as guidance regarding the reporting of strategies you may have implemented in the 2021 tax year.  As a courtesy, we have tried to include information which may pertain to you.  However, we are not tax professionals and encourage you to consult with one in filing your return.

Charitable Deduction – The CARES Act allowed for individuals to take up to a $300 and those filing jointly to take up to $600 above-the-line deduction for cash donations made to qualified non-profit organizations in 2021.  If you are taking the standard deduction, be sure to claim this deduction if you have donated.  If you are itemizing your deductions, be sure to report all charitable contributions made for the year. 

HSA Deduction – We believe an HSA is one of the most tax efficient accounts available as contributions (up to the limit) are deductible on federal taxes (and some state taxes), growth is tax free, and distributions for qualified medical expenses are non-taxable.  If you are a participant in a high-deductible health plan which is HSA eligible, you should be able to contribute to the plan for the 2021 tax year until April 15th.  The individual limit for 2021 is $3,600 and $7,200 for family coverage.  If you are age 55 or older you can contribute an additional catch-up contribution of $1,000 per year.

Capital Gains – With the increased need for active portfolio management, Acumen’s Portfolio Management Committee implemented many changes in 2021 to client portfolios.  As a result, there may be additional capital gains liability for the 2021 tax year.  Nonetheless, Acumen strives to minimize short-term gains and defer gains to another year when and if appropriate and in line with our investment thesis. 

529 Plan Contribution – You may reside in a state and have a state-sponsored 529 plan for which contributions are deductible from state income tax, up to a limit.  Tennessee is not a state for which 529 plan contributions are deductible on a state tax return.  Since we are not able to track contributions for 529 plans for which we are not the investment adviser, it is up to you to report contributions yourself, to your tax preparer, or to us so we can research the deductibility of contributions for your state. 

2021 RMDs – Remember you can direct some or all your RMD amount to a qualified non-profit organization for a Qualified Charitable Distribution.  These funds will result in a distribution which will not count as taxable income while also fulfilling your RMD.  Charles Schwab will not track the taxability of these distributions.

IRA Contributions – The deadline to contribute to a Traditional, SEP, or Roth IRA for the 2021 tax year is April 15, 2022.  For Traditional and ROTH IRAs, the limit is $6,000 unless you are 50 or older which allows you to contribute $7,000.  Contribution eligibility, amount, and deductibility is based upon income.  Please reach out to us if you would like to make this contribution so we can assess which IRA type is appropriate to fund.

Please feel free to reach out regarding any questions you may have.

This document is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

The September 13th tax proposal included numerous tax changes that could directly impact many of our clients.  The Build Back Better framework, released by the White House last week on Thursday, October 28th, removed many of the initial provisions including the attack on backdoor and mega-backdoor Roth conversions.

The tax proposal released last week would include two key tax changes:

  1. Net Investment Income Tax (NIIT) would apply to S Corp profits if the taxpayer’s Modified Adjusted Gross Income (MAGI) exceeds $400,000 for a single filer ($500,000 for married filing jointly.)  The current NIIT of 3.8% does not currently apply to S Corp earnings but would apply if the bill passes.
  2. The proposed “Surtax” threshold has now been increased to taxpayers with MAGI over $10 million.  A surtax of 5% would apply to income over $10 million and an additional 3% (total of 8% = 5% + 3%) would apply to MAGI over $25 million. 

Increased capital gains and ordinary income tax rates, targeting of Roth accounts, a reduced estate tax exemption, extension of the child tax credit past 2022, and strict limitations on grantor trusts were all absent from the released draft.

However, just as Roth accounts were taking a sigh of relief… as of November 4th the latest tax proposal being passed around has reinstated scrutiny on retirement accounts. This week’s latest round of proposed tax legislation introduces a few more key changes:

3. Retirement savers with large account balances could face additional scrutiny and required minimum distributions. IRA accounts will be prohibited from holding any securities if the issuer requires a certain minimum level of assets or income. Individuals with combined account balances more than $10 million will face required minimum distributions of 50% of the amount that exceeds $10 million. This will apply to taxpayers above certain income thresholds ($400k individual, $450k for a joint return.)

4. Beginning after 2028 further contributions to Roth or traditional IRAs will be banned for anyone with account balances exceeding $10 million who also has income above $400k ($450 for a joint return.)

5. Back door Roth contributions would be disallowed starting in 2022 regardless of income level. The back door may officially be closed at the end of this year.

6. Limits on Roth conversions are back starting after 2031.  This limitation would impact taxpayers with income over $400k ($450k for a joint return.)

Based on the back and forth over the past week, it is hard to say what will actually make the final bill. The roller coaster ride continues, but we will make sure to stay on top of the proposed changes as the conversations continue.

The opinions expressed in this commentary should not be considered as fact. All opinions expressed are as of the published date and are subject to change. Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investments in securities involves risk, will fluctuate in price, and may result in losses. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.   It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Debate continues in Washington over the proposed tax changes contained in the Build Back Better Act and the Bipartisan Infrastructure Bill.  These tax proposals would raise the top marginal income tax rate from 37% to 39.6%.  The increased top marginal rate, combined with the expanded 3.8% net investment income tax, would apply to active business income.  In addition, a new 3% surcharge for high-income taxpayers with adjusted gross income above $2.5 million ($5 million for married couples) creates a maximum federal tax rate of 46.4%.  The maximum capital gains tax rate would increase from 20% to 25%, but earlier the proposed rate was as high as 39.6%.  While both proposals contain numerous provisions affecting both individuals and businesses, one key area under scrutiny in both proposals are Roth IRAs.

You may have seen news articles pointing out Peter Thiel’s $5 billion Roth IRA was originally funded with $2,000 worth of his initial PayPal shares.  Coincidence or not, restrictions on Roth IRAs are very likely to be implemented under the current tax proposals.  Wealthy savers won’t be allowed to contribute to Roth or traditional IRAs if the combined value of their defined contribution plans exceed $10 million in the prior year.  This would apply to single individuals earning more than $400,000 or married joint filers earning more than $450,000.  Furthermore, “back-door” Roth conversions of after-tax traditional IRA or 401(k) will be off limits for those earning more than $400,000 per year.  Historically through “Mega-backdoor” Roth conversions, wage earners could contribute up to $58,000 in after-tax money to a 401(k), roll it into an IRA, and then make a Roth conversion.  This process would be banned for everyone.  “Backdoor” and “mega-backdoor” limitations would be banned starting in January 2022.  All Roth conversions would be banned for high-income earners starting in 2032.

If the combined balance of an investor’s IRA, Roth IRA, 401(k) and other defined benefit plans exceeds $10 million, they would be required to distribute the excess balances.  The new required minimum distribution (RMD) would be 50% of any amount over $10 million.  An RMD of 100% would apply to any balance beyond $20 million.  Mr. Thiel could be facing a rather large RMD with a 40% tax rate.

It is important to note the estate tax exemption is proposed to return to the pre-Tax Cuts and Jobs Act limit of $5 million in 2022.  This exemption creates a significant estate tax issue for some who were not previously exposed to estate taxes under the higher estate tax exemption.  With more estates being affected by estate tax, it is possible to avoid an estate tax trap using Roth accounts.  Traditional IRAs are subject to estate tax and essentially taxed on an embedded income tax liability.  To help illustrate this scenario, assume a $1 million traditional IRA is within an estate subject to estate tax.  The $1 million traditional IRA would be subject to a 40% estate tax.  However, when the $1 million is distributed to the beneficiaries, the distribution would be subject to ordinary income tax, potentially at 39.6%.  The net cash after estate tax and ordinary income tax on $1,000,000 would only leave $204,000 remaining.  If this $1 million traditional IRA was converted to a Roth IRA in 2021 and we assume the highest tax rate of 37%, the resulting Roth would be subject to estate tax, but not the ordinary income tax on distribution.  While it’s never fun to pay a 37% tax rate, this strategy could generate $174,000 in tax savings as shown here:

Example Savings

Traditional IRA$1,000,000Roth IRA$1,000,000
Cash outside of IRA$370,000Cash outside of IRA (After Tax on conversion)$0
Estate Tax($548,000) ($400,000)
Ordinary Income tax on distribution($396,000) $0
Net Cash$426,000 $600,000
Savings$174,000

There may be an extra incentive for 2021 Roth conversions even at higher ordinary income tax rates, especially for those with estate tax considerations.  Keep in mind the tax proposals are still being negotiated.  However, Roth conversions and the estate tax exemption are both known points of scrutiny.

This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. The opinions expressed in this commentary should not be considered as fact. All opinions expressed are as of the published date and are subject to change. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.   It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Last week the House Ways and Means Committee released a draft of Biden’s proposed tax legislation.  Acumen’s team is diligently staying focused as changes occur to advise our clients.  None of these changes have yet to become law, but we anticipate major changes on the horizon.  We would like to share a few key highlights from the potential legislation: 

Individual Tax

Retirement Planning

Business Tax

Estate Tax

The opinions expressed in this commentary should not be considered as fact. All opinions expressed are as of the published date and are subject to change. Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investments in securities involves risk, would fluctuate in price, and may result in losses. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.   It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Many of you may be contemplating your needs and options for LTC insurance. This can be a complicated analysis, dependent upon an individual’s age, health, financial circumstances, wealth transfer goals, and general philosophy. You may struggle and be reluctant to weigh the risks and benefits, and to assess the potential value of LTC coverage.

We have added this checklist to help guide you through covering key issues to consider prior to purchasing LTC coverage, including:

You may find this checklist on Acumen’s Resources page here: What Issues Should I Consider when Purchasing Long-Term Care Insurance?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

A pay stub is a valuable source of information when building financial models and evaluating cash flow. It provides insight into income, tax, retirement savings, various insurance costs, etc.

A periodic paycheck review can be a productive exercise, demonstrating how your earnings translate into net pay. As you guide a client through their pay stub, you can help them to understand the automated tax withholdings, savings, and payments that they make each pay period, and appreciate any employer benefits that augment their compensation package.

This flowchart helps you lead through a series of considerations when reviewing your paycheck. It covers:

You may find this flowchart on Acumen’s Resources page: Pay Stub Review 2021

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

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IMPORTANT DISCLOSURE INFORMATION
This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.

Report Not a Solicitation
This report is not a solicitation or recommendation to make changes to your tax withholdings. Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

This checklist can help guide your conversations regarding the highlights of President Biden’s tax plan. Please take a look at this and the companion piece “As A High-Income Taxpayer, How Might President Biden’s Tax Plan Affect Me?” and consider how these resources may be of use to you. You may find this checklist on Acumen’s Resources page: How Might President Biden’s Tax Plan Affect Me?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. This information is hypothetical in nature as no tax plan has been finalized as of publication. The final tax plan could vary.

Report Not a Solicitation
Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice
specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may
be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

President Biden’s administration has outlined a tax policy built upon the agenda introduced during his campaign. Biden’s tax plan focuses on raising taxes on corporations and affluent households, while increasing credits for moderate- to lower-income households. With Democratic control of Congress, changes outlined in President Biden’s tax plan have an increased possibility of becoming a reality. At what time, in what form, and to what extent remains to be seen; however, another round of tax law changes is likely on the horizon.

Having adapted to frequent, and sometimes major, legislative changes in recent years (namely the TCJA, the SECURE Act, the CARES Act, and most recently, the American Rescue Plan Act), you may be understandably concerned about what changes could be imminent. High-income households, in particular, have been targeted for tax increases under Biden’s tax plan.  By familiarizing yourself with President Biden’s tax plan now, you can be positioned to take action and seize planning opportunities when changes are implemented.

Take a look at this checklist to help guide you through conversations regarding the highlights of President Biden’s tax plan, along with the companion piece “How Might President Biden’s Tax Plan Affect Me?”.

You may find this flowchart on Acumen’s Resources page: As a High-Income Taxpayer, How Might President Biden’s Tax Plan Affect Me?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. This information is hypothetical in nature as no tax plan has been finalized as of publication. The final tax plan could vary.

Report Not a Solicitation
Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Income tax planning is critical to solid financial planning. Navigating our complicated federal pay-as-you go income tax system can be difficult. Adding further complexity, you must understand and adapt to changes in tax laws and in your personal circumstances. In each tax year, it is important to ensure you are properly paying your federal income tax liability in order to avoid penalties. Frequently, you may need to make estimated payments to avoid penalties for late payments and/or underpayments.

We have a flowchart to help you guide through an estimated payments analysis. The decision points identify factors that may trigger a need to make or increase estimated payments, including:

You may find this flowchart on Acumen’s Resources page: Do I Need to Start Making Estimated Federal Income Tax Payments for 2021?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.

Report Not a Solicitation
Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 11, 2021. This $1.9 trillion stimulus bill aims to provide additional economic relief to taxpayers, businesses, and other employers through various provisions including a third round of direct payments to eligible individuals, an expansion of the Child Tax Credit, additional funding for the Paycheck Protection Program (PPP), and many more. Approximately, $850 billion is directed towards individuals and $65 billion is directed to businesses. Key provisions we find to be relevant for individuals, businesses, and other employers include $1,400 direct payments.

Direct Payments

ARPA provides a third round of stimulus payments up to $1,400 for individuals ($2,800 for taxpayers filing jointly) and qualifying dependents (as defined in Sec. 152). Eligibility for this recovery rebate credit is based on 2020 or 2019 Adjusted Gross Income and the limits are as follows:

Filing StatusEligible for Full PaymentIncome Phaseout BeginsNot Eligible
SingleLess than $75,000$75,000Greater than $80,000
Married Filing JointlyLess than $150,000$150,000Greater than $150,000
Head of HouseholdLess Than $112,500$112,500Greater than $112,500

Child Tax Credit

For 2021, ARPA expanded the Child Tax Credit amount to $3,600 for children under 6 and $3,000 for children 6 – 17. The standard Child Tax Credit amount and phaseout amounts still apply but this additional tax credit is available to those whose Modified Adjusted Gross Income (MAGI) are as follows:

Standard Child Tax Credit:

Filing StatusMAGI ThresholdReductions
Single or Head of Household< $200,000This credit is reduced by $50 for each $1,000 of income over these limits.
Married Filing Jointly< $400,000

Additional Child Tax Credit through ARPA:

Filing StatusMAGI ThresholdReductions
Single$75,000This expanded portion of the credit ($1,000/$1,600) is reduced by $50 for every $1,000 of income over these limits.
Married Filing Jointly$150,000
Head of Household$112,500

This additional credit is fully refundable meaning, if eligible, no tax liability is necessary for the full refund amount. Advanced payments for this 2021 credit will be distributed from July 2021 through December 2021 and will be based on the most recently filed tax return unless eligible individuals opt-out of advance payments through a soon-to-be established IRS online portal.

Earned Income Tax Credit

For 2021, the applicable minimum age is decreased from 25 to, in most cases, age 19. Special conditions apply to students and other youth. The maximum age a childless taxpayer can qualify is eliminated and the maximum EIC amount for childless households increases from $540 to $1,502.

Child and Dependent Care Tax Credit

ARPA increases and expands the Child and Dependent Care Tax Credit from $3,000 for one qualifying individual or $6,000 for more than one qualifying individual to $8,000 for one qualifying individual and $16,000 for more than one individual child. If AGI is less than $125,000, the credit is 50% of the expense amount; this credit phases out completely for AGI over $440,000. This credit essentially means the maximum credit is $4,000 for one qualifying individual and $8,000 for more than one qualifying individual. This credit is fully refundable.

Unemployment Benefits

ARPA increases the total number of weeks benefits are available to individuals who cannot return to work safely from 50 to 79 weeks. Supplemental unemployment payments will remain at $300 per week after March 15, 2021 until September 6, 2021. For those who claimed unemployment benefits in 2020, up to $10,2000 of unemployment benefits can be excluded from income for those with AGIs less than $150,000.  For married couples filing jointly who both received unemployment in 2020, each spouse can exclude up to $10,200.

Student Loan Discharge Taxability

Qualifying student loan debt forgiven between December 31, 2020 and January 1, 2026 will not be taxable as income.

Expanded PPP Eligibility and Funding

ARPA provides additional funding for eligible businesses under the Paycheck Protection Program as well as expands eligibility to additional nonprofits and digital news services. Applications are due by May 31, 2021.

Employee Retention Credit and Paid Leave Credit Programs

The American Rescue Plan extends the availability of the Employee Retention Credit for small businesses through December 2021 and allows businesses to offset their current payroll tax liabilities by up to $7,000 per employee per quarter. This credit of up to $28,000 per employee for 2021 is available to small businesses who have seen their revenues decline, or even been temporarily shuttered, due to COVID.

The American Rescue Plan also extends the availability of Paid Leave Credits through September 2021 for small and midsize businesses offering paid leave to employees who may take leave due to illness, quarantine, or caregiving. Businesses can take dollar-for-dollar tax credits equal to wages of up to $5,000 if they offer paid leave to employees who are sick or quarantining. More details are provided in IRS Notice 2021-20: https://www.irs.gov/pub/irs-drop/n-21-20.pdf

Targeted Grants

Additional funding for targeted Economic Injury Disaster Loan grants is available for small businesses in low-income communities as well as targeted grants for restaurants, bars, lounges, and food trucks.

Excess Business Loss Limitation

ARPA extends the excess business loss rule (Code Section 461(I)) through 2026 which limits the deduction for excess business losses for noncorporate taxpayers. This provision was enacted under the Tax Cuts and Jobs Act of 2017 and originally was set to end at the end of 2025. Section 461(I) limits up to $250,000 for individual filers and $500,000 for joint filers but the CARES Act removed these limitations for the 2018-2020 tax years.

To learn more about how Acumen can help you Invest Intentionally®, please contact us.

Sources:

https://www.congress.gov/bill/117th-congress/house-bill/1319/text#toc-H5A2CF32D1697421DA46ACD1A7E094453

https://home.treasury.gov/news/featured-stories/fact-sheet-the-american-rescue-plan-will-deliver-immediate-economic-relief-to-families

https://www.journalofaccountancy.com/news/2021/mar/tax-components-coronavirus-relief-bill.html

https://www.natlawreview.com/article/american-rescue-plan-act-2021-tax-reports

https://www.jdsupra.com/legalnews/the-most-important-items-in-the-1-9t-4232245/

This report is provided as a courtesy for informational purposes only and nothing herein constitutes investment, legal, accounting, or tax advice. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.   It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.