Tax Alerts
January 15, 2021
Tax Briefing(s)

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January 2021- The second version of the PPP loans (PPP2) is now avaialble.  The rules are similar to the original PPP but you need to have incured a reduction in revenue of at least 25% when comparing a quarter in 2020 vs. the same quarter in 2019.  You only need one quarter with the reduction to qualify for the PPP2.  This is free money, and if you have been hit hard by the pandemic and are trying to keep your employees employed, then you should seriously consider applying.  Patrick Nix, CPA, in our office is our PPP expert, and you can contact him at Patrick@a-ccpa.com.

Details of the PPP and PPP2 programs can be found in the Info Center tab above (or via the dropdown menu if accessing our website with a mobile device).

Dec 27- In the new Stimulus Bill the expenses paid for by your PPP proceeds will be tax deductible. The law has been signed and is in effect now.  This is wonderful for those that received PPP loans. If you have not applied for forgiveness, please do so NOW.

The new law is also supposed to give us an easier forgiveness application for those loans less than $150,000.  Those forms will probably be out mid January. 

There are also $600 stimulus checks to be issued under the new law.  Remember that if you did not get the original $1,200 check or you don't receive this $600 you still have a chance to get it on your 2020 income tax returns.  If your income qualifies you and if you havent received the prior checks, you can take the amounts as a refundable credit on your 2020 tax returns.  YOU WILL NEED TO KNOW WHETHER OR NOT YOU RECEIVED A STIMULUS PAYMENT FOR YOUR 2020 TAX RETURN PREPARATION. YOU CAN CHECK USING THE IRS WEBITE https://www.irs.gov/coronavirus/get-my-payment

CORONAVIRUS ALERT-WE ARE OPEN FOR BUSINESS WITH OUR NORMAL HOURS (8-5 Mon-Fri). MASKS ARE REQUIRED. HOWEVER, WE HIGHLY ENCOURAGE YOU TO DROP-OFF, MAIL, EMAIL OR UPLOAD YOUR TAX INFORMATION TO US.  WE WILL CALL TO GO OVER THE DATA WITH YOU AND DISCUSS WHAT MIGHT BE MISSING OR PLANNING IDEAS. Your can use the File Share box at the bottom of this page to upload your documents to us safely. When using File Share, click on the cloud with the up arrow to upload files.

Working on your PPP forgiveness application?  We recommend you wait until you have reached the 24 week measuring period.  Then, don't rush. There is a possibility of some sort of blanket forgiveness that Congress might enact, so we are encouraging our clients not to rush in processing the forgiveness paper work.  We can help you with your PPP computations when you are ready.

There is a free PPP forgiveness tool developed by the AICPA that you can use at https://www.pppforgivenesstool.com/

If you did not get a stimulus check- The stimulus check is really a rebate on your 2020 income taxes, so if you didn't receive one in 2020, you can claim it on your 2020 return if you qualify then.

A good number of stimulus payments are being paid out by debit card. If you get one in the mail, don't throw it away. It is legit. It is issued by MetaBank and comes in an envelope marked "Money Network Card Services"

If you have any questions, you can get details on the IRS web site (www.irs.gov).

This year's tax law changes include the waiver of RMDs for 2020 (Required Minimum Distributions) from IRAs and Retirement Plans and business deferrals of Payroll Tax Deposits. You do NOT have to take a Required Minimum Distribution for 2020 from your IRA, SEP or Profit Sharing Plan.

More tax law changes are here! (when will it ever stop?)

The rules for IRAs and company retirement plans have changed (Dec 2019) with the passage of the SECURE Act that will allow you to wait until age 72 before you have to start taking IRA distributions, and will allow IRA contributions up to age 72 also. All starting in 2020. But, it will not allow you to stretch the distributions for your heirs. The person inheriting your retirement account may have to pull it all out within 10 years. 

Have huge capital gains?  You have up to 180 days to completely shelter those gains using an investment in a Qualified Opportunity Zone.  Ask us about QOZs.

Use our secure portal to upload your data and documents to us. It's safe (fully encrypted) and easy.  Click on the File Share box at the bottom of this page.

The Corporate income tax rate is now 21%.

The Federal Estate Tax exclusion jumps to over $11 million a person. But some states, such as Maryland and DC still have much lower thresholds for when the estate tax starts.  The annual gift tax exclusion amount goes is $15,000. 

Virginia is moving towards almost all payments to the state having to be electronic.  For businesses, everything has to be paid electronically, and individuals with high Virginia estimated payments must pay electronically.  You can make these payments through the VA Dept of Taxation web site. (https://tax.virginia.gov/).

You can upload your investment information directly into your tax return by using our Intuit Link system.  Let us know that you want to have your interest, dividends and stock sales imported directly in, and we will send you an invite to register with Intuit and select the accounts you want to upload. 

Starting a business?  We can help. Generally we recommend that most businesses start as an LLC (Limited Liability Company). If there is only one owner, it will be a single member LLC and the income and expenses will just be reported on the owner's tax returns.  If there is more than one owner, the LLC will be taxed as a partnership and will file a partnership income tax return.  The entity itself does not pay income taxes, in that the income flows through to the owners on their tax returns. 

The LLC form of business helps protect you from legal liability if done correctly.  Most businesses can benefit from that, especially high risk activities such as real estate (rentals, construction and flipping), restaurants and services.

LLCs generally have to register with the State and you want to obtain a Federal Employer ID number (EIN) from the IRS.  That way you do not need to use your Social Security Number.

The IRS does NOT call you to say they are suing you, taking you to court or demanding you make a payment to them today.  These are scams. The IRS warns that there are now scam IRS CP-2000 notices (tax adjustments) being emailed out. The IRS also does NOT send out emails regarding a tax refunds or rebates or request that you set up a PIN number in order to get your refund. These are phishing schemes and phone scams, and you should not respond to them and NEVER, NEVER, NEVER click on a link from one of those emails. Never make a payment to the I.R.S., in that all payments to the government are paid to the U.S. Treasury.  If your notice or call says anything different, it is fake. PLEASE REPORT THESE TO http://www.treasury.gov/tigta/contact_report_scam.shtml 

A wonderful video on this is


Setting up a 529 Plan for your kids or grandchildren?  While there is not a Federal tax deduction, there are state tax deductions available if set up with your state of residence or its approved plan.  You can maximize your state tax deductions by splitting the accounts between husband and wife (Virginia) or by the different type of plans (Maryland). 

Virginia Employers, including individuals with rental properties, must file a BPOL license with their county or city by March 1.  Landlords with properties in DC must file a Franchise Tax return. Every jurisdiction has its own rules on this. Fairfax County requires a business license if you rent three or more residential properties or one commercial property.

Get a heads up on the new laws-subscribe to our NEWSLETTER.  Our monthly newsletter will be emailed to you each and every month.  Click on the Subscribe button at the bottom of the page. This is a free client service that we want you to take advantage of.  There are always a lot of good tax planning ideas in each monthly newsletter.

Thinking about using a Tax Relief company to reduce your balance due to the IRS? Check out the news article, in Links on the top menu line, then in News.

Are you maximizing your retirement plan deductions? Is all of your estate planning (wills, trusts and medical directives) up to date? Please make sure that we have the current version of your Will and Trust documents. 

Be sure to catch our monthly newsletter, updated on the first of each month. Clicking on the Newsletter tab above can access the newsletter. We provide this newsletter service for you to keep up with the latest changes in the tax laws and newest ideas for tax and financial planning.

We have many calculators in our FINANCIAL TOOLS section (tab above) including a full 1040 tax calculator, estate planning and mortgage loan calculators, including refinance savings computations and amortization schedules. There are so many powerful calculators; you will be able to calculate things that you never thought existed!

Driving directions to our office can be found in the CONTACTS section.

In addition to providing you with a profile of our firm and the services we provide, this Website has been designed to become a helpful resource tool to you, our valued clients and visitors. Our dedication to superior client service has brought us to the Internet as we endeavor to continue to provide the highest quality professional service and guidance.

As you browse through our Website, you will see that not only have we highlighted background information on our firm and the services we provide, but have also included useful resources such as informative articles (in our Newsletter section) and interactive financial calculators (in our Financial Tools section). Check out the nifty refinancing calculators to determine if you should refinance now, and how much it may save you.

In addition, we have taken the time to gather many links to external Websites that we felt would be of interest to our clients and visitors (in our Internet Links section).

While browsing through our Website, please feel free to contact us with any questions or comments you may have - we'd love to hear from you. We pride ourselves on being proactive and responsive to our clients' inquiries and suggestions.

Special note to our File Share users.  To improve security, the portal requires a fairly current browser version.  If your browser is IE 10 or prior, you will get a "cannot find page" error message.  If you do, please update your browser (they are free, and you should not be using an older version anyway). 

If you are uploading your QuickBooks file, we suggest that you send a Portable Copy (.QBM) in that it is smaller and contains less data than a regular Backup file (.QBB). It also does not contain your sensitive customer data. Please note that you also need to send us your current QB password.