Over the last year, home prices have soared in many parts of the country. In addition to benefitting from an appreciating asset, eligible homeowners enjoy several tax advantages. Here are eight reasons why it’s better to be an owner, rather than a renter, from a federal income tax perspective. (more…)
On Wednesday, Governor Youngkin signed into law tax conformity legislation so Virginians can begin appropriately planning for their 2021 tax year filings.
Most notable in the new law, taxpayers who received Paycheck Protection Program loans (PPP) and Economic Injury Disaster Loans (EIDL) in calendar year 2021 will be able to fully deduct the forgiveness on these loans. This only applies to PPP and EIDL loans received in 2021 and is not retroactive to 2020. The 2020 law limited the deductibility on these loans to $100,000, a fact that has remained unchanged.
The law also confirmed that $100,000 of the PPP loan proceeds and Rebuild Virginia grant proceeds would be deductible for entities with other fiscal year ends in 2020, such as June 30th or September 30th. As a result, any non-calendar year-end filers may be able to amend their 2019 returns for these deductions if not previously taken.
The new law advanced the conformity dates with the Internal Revenue Code through December 31, 2021 on things such as special depreciation allowances and carry-back of net operating losses. The law also ensures full conformity for the American Rescue Plan Act, including the Restaurant Revitalization Fund.
According to a statement from Governor Youngkin, this bill is expected to save Virginia individual and business taxpayers $201 million in taxes.
For additional information:
KWC is proud to announce that the firm was named as one of the 2022 Best Places to Work in Virginia. The firm is a repeat winner of the award, based on satisfaction surveys completed by our employees. The annual list of the Best Places to Work in Virginia was created by Virginia Business Magazine and Best Companies Group. (more…)
Good news: You just found out that your high school senior son or daughter will be receiving a sizeable scholarship at a prestigious university next fall. But what are the tax consequences? (more…)
Many companies are experiencing a buildup of accounts receivable on their balance sheets as customers — especially large corporate buyers — are stretching out their payment terms. While these bills may eventually be paid, delays are causing a cash flow crunch across many supply chains. (more…)
For empty nesters and other homeowners who don’t need a large house anymore, downsizing may seem like the perfect solution. From a practical standpoint, a smaller home generally takes less time to maintain, unless it’s much older than your current one. Plus, in today’s booming real estate market, you’ll likely come away with a financial windfall from the difference between what your current house might sell for and the price of a smaller one. (more…)
The holidays often inspire a spirit of generosity. So, at year end, many people decide to give money or assets to their loved ones. Over time, lifetime gifts can also be an effective way for wealthy people to minimize their taxable estates. Here are the basic federal tax rules for these transactions. (more…)
The IRS recently released several revenue procedures to provide clarity around the tax treatment in connection with forgiveness of Paycheck Protection Program (PPP) loans. The issues addressed by the IRS are threefold:
• Timing issues: Taxpayers may treat PPP income as received or accrued when any of the conditions are met: (1) expenses eligible for forgiveness are paid or incurred; (2) an application for PPP loan forgiveness is filed; or (3) PPP loan forgiveness is granted. This provides a wide range of options and allows for all likely scenarios.
• Allocation issues: Partners and partnerships may allocate their distributive share of PPP loan forgiveness tax-exempt income, the related deductions and make corresponding adjustments to the partners’ bases in their partnership interests.
• Amended returns: The IRS allows partnerships to file amended Forms 1065 and issue amended Schedules K-1 for the above purposes for tax years ending after March 27, 2020. These amended returns and Schedules K-1 must be filed or furnished on or before December 31, 2021.
For more information on these Revenue Procedures: https://www.journalofaccountancy.com/news/2021/nov/irs-guidance-ppp-loan-forgiveness.html
You still have time to significantly reduce this year’s business federal income tax bill even with all the uncertainty about proposed tax law changes. Here are five possible moves to consider — but stay tuned for developments. Congress is currently considering some major tax changes. If approved, it’s unclear when they will all take effect. (more…)
With year end rapidly approaching, it’s time to consider making some moves that will lower your 2021 federal income tax bill — and potentially position you for future tax savings. Unfortunately, tax planning is particularly challenging this year, because the tax rules for 2022 aren’t yet certain. In fact, they may not even be certain for 2021.
Here are nine planning tips for you to consider making before year end. But you also may want to be ready to take last-minute corrective actions if Congress works out a deal on the Build Back Better Act and the Bipartisan Infrastructure Bill before year end.