Looks like 2020 has not been exempt from anything, and taxes are definitely one of them! The global COVID-19 pandemic caused a lot of ruckus this year, and nothing was safe from its reach. Additionally, every year there are new updates in tax laws anyway, and we at Prestige Auditors are always right on track to bring you the latest ones, so let’s take a look at some of what 2020 has brought for tax exemptions.
- The first change which occurred was a change in the quarterly tax payment date. Due to COVID-19 complications and many businesses being forced to shut down during the quarantine, the payment date of April 1st was changed to July 15, so business and individuals had more time to calculate things through.
- The lifetime gift and estate tax exemption rose to $11.52 million per one person, which was an increase from 2019, when it stood at 11.4 million dollars.
- According to the IRS, there was an increase in the foreign income exclusion compared to 2019. The amount increased to $107,600 from what was previously $105,900.
- There was a $280 increase in the maximum credit which is allowed for adoptions in the current year, boosting the number to $14,300.
- The Alterantive Minimum Tax devised to help those with high incomes at circumventing individual taxes also saw an increase. For single individuals, the exemption amount was raised to 72,900 and for married couples who file taxes together (joint), the amount currently stands at 113,400 dollars.
These are just some of the changes which occurred in 2020, and not just limited to tax exemptions. There are many more changes every day, especially following the aftermath of COVID-19.
That being said, one thing which did not change for the 2020 tax year was the personal exemption. Just like in 2019, it remains at 0 owing to the Tax Cuts and Jobs Act.
Other than these changes, there was also a change in sales tax regarding Amazon. This is an update which is especially important for resellers on the platform. From 2020 onward, you are required to charge sales tax in every state in which your products are being stored in Amazon’s warehouses, and if you’re not careful, you’ll trigger a nexus in that state. If you fail to file your taxes correctly, you’ll get hit with heavy state fines which may take away 10% of your total revenue.
Luckily, our team of professionals at Prestige Auditors are equipped to handle any tax-related sensitivities your business might have. We can help you not only with your tax exemption process, but our buddies and business partners over at Got Suspended Clients will be able to extend a helping hand if you’re facing issues on Amazon, such as suspensions and other common problems! If you’re interested, book a call with us today! And by the way, one thing that hasn’t changed in 2020 is the need to do a business entity search in the area you’re located in. For example, if you want to set up your business in California, you should definitely do a California business entity search right off the bat!