AICPA Tax Insider (October 29, 2020): Offer-in-compromise Scams Expected to Increase; 2021 Inflation Adjustments and Tax Tables Issued; Inflation-adjusted Income Ranges for 2021 IRA and 401(k) Plans; and More!

Offer-in-compromise scams expected to increase
By Dave Strausfeld, J.D.
What can be done about predatory firms that make exaggerated promises of being able to settle tax debt? A recession provides fertile ground for their scams.

2021 inflation adjustments and tax tables issued
The IRS issued the 2021 inflation adjustment amounts and tax tables for use in preparing 2021 tax returns in the 2022 filing season. Many of the over 60 items increased from 2020.

Inflation-adjusted income ranges for 2021 IRA and 401(k) plans
The IRS announced that the income ranges for employee participation in workplace 401(k) plans and IRA contributions will increase from 2020 to 2021. Most of the other retirement plan contribution limits stayed the same, however.

Time to consider a Roth conversion
By Kim T. Mollberg, CPA, CGMA
In these uncertain times, a qualified rollover contribution to a Roth IRA can be an attractive option because it provides a higher net present value of cash flow from retirement savings. Find out how to maximize these benefits.

Tax consequences of data breaches and identity theft
By Patrick M. Ryle, J.D.; Leonard Goodman, CPA, Ph.D.; and Jay A. Soled, J.D.
Treatment by individual and business taxpayers differs. For individuals, losses are not likely to be deductible through 2025, but free identity theft services may be nontaxable.

Draft instructions for partnership capital account reporting released
The IRS released draft instructions for Form 1065, U.S. Return of Partnership Income, to calculate partner capital accounts using the tax-basis method.

Posted by Bella Hoang, Managing Associate Editor, Wealth Strategies Journal.

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