Staying on top of tax law changes these last few years has been a full time job

Your Guide to State, Local, Federal, Estate + International Taxation

Ask anyone who is currently working actively in the tax profession, and we will tell you that there have been many tax law changes in the past three years. Yes, I am just talking about the past three years. There have been major tax overhauls such as The Tax Cuts and Jobs Act (TCJA), and there have been other changes that seemingly only affect certain areas of the tax code, such as The SECURE Act. And then there are the provisions of pandemic relief that had many tax provisions associated with it, from The Coronavirus Aid, Relief and Economic Security Act (The CARES Act), to the Consolidated Appropriations Act (CAA) and to the American Rescue Plan (ARP).  Don’t forget about the a lesser known laws such as The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTRA).

And that is not even going into decisions from Tax Court, regulations from the IRS on various code sections, and the other ways that modify or clarify how the tax rules are implemented and interpreted.

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All of that is a long way of saying that it is impossible to know everything in the tax law. Many things we just know, from years of experience, or perhaps from researching a specific item. But many times we need to look something up because the rules change so much.

I was reminded of this when a client sent me a seemingly “quick question” in an email over the weekend. All he wanted to know was whether the charitable contribution limit for 2021 was still at 100% of adjusted gross income (AGI).

So, what did I do? Did I look it up? No, of course not. Because I “knew” that the increased AGI limit only applied to 2020 – because that is what was said in The CARES Act. And he responded thanks – he must have misread something that he had read. So then what did I do? Did I look it up? Nope, I mentioned another part of the CARES Act.

But then, the curiosity got to me – and you know what? I was wrong. The law in this area was updated again in TCDTRA.  This update applied the 100% AGI limitation to 2021, as well. So I immediately responded to the client and apologized.

And once again, I realized that it is actually impossible to know everything with all these tax law changes. If anyone tells you that they know it all – please run away from them very quickly. If you find yourself overwhelmed or just curious, contact your Henry+Horne advisor with any tax questions you may have.

Donna H Laubscher, CPA