LA MIRADA, Calif./ACCESSWIRE/April 19, 2022/ Enacted in March 2021, the American Rescue Plan Act (ARPA) includes many provisions that impact Americans’ 2020 tax returns. “Within the provisions set forth in ARPA, there are several that are important for taxpayers to understand, particularly because they help alleviate certain economic burdens for U.S. citizens,” says Philip L. Liberatore, CPA. , a California-based provider of accounting, tax and financial management services. ARPA extends financial assistance to taxpayers in two ways: by offering tax-free cash payments directly in the form of $1,400 Economic Impact Payments for eligible Americans and the Child Tax Credit for families and reducing the tax burden for unemployment and health care. advantages.
One of the key elements contained in ARPA is tax relief for unemployed Americans. “For the 2020 tax year, all eligible U.S. citizens earning less than $150,000 in modified adjusted gross income are eligible to receive tax-free unemployment benefits of up to $10,200,” says Philip L. Liberatore , CPA. For families with more than one unemployed taxpaying member, it is important to note that each person is eligible for $10,200 in tax-free benefits. However, people earning more than the $10,200 threshold will have to pay taxes on any amount over the limit.
In addition to tax-free unemployment benefits, ARPA also has significant implications for Americans who purchase health coverage independently. For these people, the federal government offers a premium tax credit (PTC) designed to reduce the cost of health insurance. Philip Liberatore notes, “Although the PTC was created under the Affordable Care Act, ARPA expands the scope of who receives this benefit and how much they ultimately collect.” Several factors determine the final benefit each family can obtain, including family size and overall income. Households can choose to accept their PTC through advance payments based on expected income, and any difference in income will be reconciled when filing income tax.
Although the pandemic has had a huge impact on the economic stability of many American families, ARPA is in place to alleviate some of these difficulties. By directly providing tax-free cash injections, easing the tax burden on unemployment benefits, and lowering health coverage premiums, ARPA is helping to keep more money in the hands of hard-working Americans. “As banal as it may seem, in the end, we are in the same boat”, comments Philip Liberatore. “The key for Americans is to understand how the ARPA provisions impact their taxes so they can keep more money in their pockets.”
Launched in 1988, Philip L. Liberatore, CPA was started by veteran CPA and entrepreneur Philip Liberatore. Based in La Miranda, California, the company provides financial advice and accounting services to individuals and businesses in Southern California. With a reputation built on providing personalized customer service and maintaining the highest professional standards, Philip L. Liberatore, CPA is a trusted firm offering a comprehensive service portfolio and a firm focus on maximizing results for his clients.
Philip L. Liberatore, CPA – Financial support and advice: http://philliberatorenews.com
Philip L. Liberatore, CPA on Tax Inflation Adjustments for Tax Year 2022 Provided by IRS: https://www.yahoo.com/now/philip-l-liberatore-cpa-tax-023000208.html
Philip L. Liberatore, CPA, explains Child Tax Credit (CTC) advance payments in 2021: https://www.yahoo.com/now/philip-l-liberatore-cpa-explains-173000580.html
Philip L. Liberatore, CPA
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THE SOURCE: Philip L. Liberatore, CPA
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