According to the FBI’s Internet Crime Complaint Center (IC3) most recent Internet Crime Report, the number of internet crime complaints more than doubled in 2020 (791,790 complaints) compared to 2019 (300,000 complaints).  The 2021 report should be released soon but is sure to show the number of complaints continue to increase.

The ease with which a criminal can open a bank account now thanks to the banking industry providing consumers with the opportunity to open a bank account online is a primary reason for this trend.

Have you or has your business been the victim of a cybercrime?  Have you lost money as a result? Compass Law attorneys have experience recovering the money you lost.

The American Rescue Plan temporarily converted the child tax credit into a fully refundable credit of up to $3,600 per qualifying child under the age of 6 and $3,000 per qualifying child between ages 6 to 17. This change was originally for the 2021 tax year only Congress is working to renew the credit for 2022. A fully refundable credit is a credit that is payable to a taxpayer, even if you do not owe any taxes.

Using 2019/2020 income tax numbers, many taxpayers have been receiving child tax credit monthly payments since July. Please be aware that if your income has increased in 2021, you may be required to repay some or all of the credit paid to you. Further, if one of your children is no longer considered a qualifying child, in some circumstances you may need to pay back some or all of the credit received.

While most people love receiving “free money” on a monthly basis, you should also be aware of the potential downside of accepting these payments. You are able to opt out of the payments by clicking here! (link to contact page)

President Biden, as part of The American Families Plan, proposed an overhaul of the treatment of capital assets after death.  Under current law, all capital assets owned by a person when they die receive a “stepped-up” basis. This means that your beneficiaries would typically receive the capital assets from your estate with a higher tax-basis so, if they then turned around and sold those assets, there would be little or no capital gains tax due.

President Biden’s proposal would eliminate the automatic step-up in basis for estates with total unrealized capital gains in excess of $1 million.  Instead, the unrealized capital gains would be subject to capital gains tax at a potential rate as high as 39.6% rate (also part of the proposal).

It is particularly noteworthy that the estates subject to this new capital gains tax at death may also be subject to the federal estate tax at its 40% tax rate.  Further, the estates may also be subject to State estate tax if the estate is located in Maryland or DC.

At this point, it seems unlikely that Congress will pass The American Families Plan with these proposed changes to the capital gains tax law but the capital gain tax is increasingly becoming a target so these types of proposals should continue to be monitored.

As 2021 winds down, now is a good time to consult a tax attorney who can assist with your estate planning needs!