December 30, 2020 - Published by IAG Wealth Partners

Categorized in:


On Sunday the President signed into law H.R. 133, The Consolidated Appropriations Act, 2021.” It is a culmination of months of negotiations regarding both COVID-19 relief measures and the federal budget for fiscal year 2021.

If printed, each copy of this 5,593-page piece of legislation would consume 5.5 reams of paper (assuming you printed on both sides) and stand over 11 inches tall. It includes some provisions that will impact financial planning and others that are “just interesting.”

Here are a few of the financial planning provisions included in this new law:

  • Permits employees to rollover their unused flex spending for health care and dependent care accounts from 2020 to 2021 and from 2021 to 2022.
  • Expands the above-the-line charitable deduction from $300 per tax return to $300 per taxpayer in 2021 (2020 is still limited to $300)
  • Extends temporary increases in permitted itemized charitable deductions through 2021
  • Allows an itemized deduction for health care expenses that exceed 7.5% of Adjusted Gross Income.
  • Overturns an IRS ruling that businesses could not deduct expenses covered by a Paycheck Protection Program loan
  • Revises the FAFSA (Free Application for Federal Student Aid) application and qualification process beginning in 2023
  • Simplifies higher education tax deductions and tax credits
  • Extends tax-free employer benefits that pay employee student debt through 2025

As always, please discuss your personal circumstances with a qualified tax professional as some of these provisions may not apply to you.

“Just interesting” provisions included in this new law:

  • Provides funding for a “project to modify the project for navigation, Milwaukee Harbor, Wisconsin” (p. 3,884)
  • Ensures that employees and interns of Congressional offices can offer guided Capitol tours (p. 1,162)
  • Eliminates laws on the transportation of water hyacinths (p. 2,487)
  • Includes the Horseracing Integrity and Safety Act of 2020 (pp. 2,981 to 3,045)
  • Permits the U.S. Forest Service to sell 93 acres of land to the Teddy Roosevelt Presidential Museum in North Dakota (p. 5,557-5,580)
  • Includes 714 references to COVID


Quote of the week: Alexander Fraser Tytler: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury.”

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

Page references are to the Rules Committee Print 116-68 found here.

Other News Articles