As we have seen since 2008, the banking industry has undergone a significant transformation. The COVID pandemic years and the recent interest rate changes in response to inflationary pressures have brought unique challenges to the banking industry. Unfortunately, not all banks have navigated these challenges successfully, as we saw in the case of Silicon Valley Bank (SVB) and Signature Bank. SVB’s failure was due to several missteps, which we have outlined below: The bank invested excess deposits into fixed-rate securities that became underwater as interest rates increased rapidly. SVB classified these securities as “Held to Maturity” on its balance
Read More +SBA RULE MODIFCATIONS UPDATE GOVERNNING 8A FIRMS
There have been several updates to the rules governing the Small Business Administration’s (SBA) 8(a) Business Development Program. These changes are designed to provide more flexibility and support for small businesses participating in the program. Below is a summary of some of the key changes: Increased eligibility for certain small businesses: The SBA has increased the maximum net worth and income thresholds for eligibility in the 8(a) Specifically, the net worth threshold has been increased from $750,000 to $1.5 million, and the income threshold has been increased from $350,000 to $400,000 in 2022. New rules for economic disadvantage: The
Read More +Taxability of Lawsuit Settlements
If you receive proceeds from the settlement of a lawsuit, you may have questions about whether you must include the proceeds in your income. This publication provides information about whether you must include the proceeds of certain kinds of settlements in your income. Whether you must include the settlement proceeds in your income depends on all the facts and circumstances in your case. A settlement payment may consist of multiple elements that have been allocated by the parties. For example, an agreement may include allocations to back pay, emotional distress, and attorneys’ fees. Generally, the IRS will not
Read More +INFLATION REDUCTION ACT HIGHLIGHTS
This week, President Biden signed into law the 2022 Inflation Reduction Act (the Act). The Act includes numerous tax provisions – most notably an array of new tax credits relating to energy-efficient homes, businesses, and vehicles. It also provides several new healthcare and prescription drug benefits for individuals, including a $2,000 Medicare out-of-pocket cap for prescription drugs, a $35 Medicare monthly insulin cap, and a three-year extension of the expanded Affordable Care Act health insurance subsidy. The following is a summary of the Act’s key provisions that may affect you: Extension and Modification of Plug-In Electric Vehicle Tax Credit
Read More +Under legislation enacted by the 2022 General Assembly Virginia established a new elective pass-through entity (“PTE”) tax.
This law established, for tax years 2021-2025, an optional entity-level income tax at a rate of 5.75% for electing pass-through entities (“PTE Tax”) such as partnerships and S-Corporations. The law provides Virginia resident owners of PTEs a credit for taxes paid to other states (“OSC”) on their share of entity-level income taxes paid by the PTE (partnerships and S-Corporations) to other states that are “substantially similar” to Virginia’s PTE Tax. Entities that are eligible to elect the Virginia PTE Tax are those that are 100% owned by individuals, or in the case of S-Corporations, those eligible to be shareholders
Read More +Tax Law Changes effective 2022
Executives responsible for the tax provision should be aware of numerous tax changes which are effective for the first time beginning in Q1-2022. Companies should consider the impact these changes will have on their income tax provision, and whether they should be accounted for discretely or through the annual estimated effective tax rate. Here are a few of the most impactful developments: IRC Sec. 163(j) Limitation of Interest Expense – Base Limited to EBIT As was planned since the TCJA first imposed a limitation on interest expense in 2018, beginning in 2022, the IRC Sec. 163(j) interest limitation
Read More +Don’t forget to factor 2022 cost-of-living adjustments into your year-end tax planning
The IRS recently issued its 2022 cost-of-living adjustments for more than 60 tax provisions. With inflation up significantly this year, mainly due to the COVID-19 pandemic, many amounts increased considerably over 2021 amounts. As you implement 2021 year-end tax planning strategies, be sure to take these 2022 adjustments into account. Also, keep in mind that, under the Tax Cuts and Jobs Act (TCJA), annual inflation adjustments are calculated using the chained consumer price index (also known as C-CPI-U). This increases tax bracket thresholds, the standard deduction, certain exemptions and other figures at a slower rate than was the case
Read More +SILVER MEDAL OF VALOR
MillerMusmar CPAs is proud to join the Reston Chamber of Commerce as a signature sponsor of the Valor Awards 2021. Managing partner, Joey Musmar, presents the Silver Medal of Valor Colonel Edwin C. Roessler Jr. Fairfax County Police Department Colonel Edwin C. Roessler Jr. is proudly recognized as a 2021 Silver Medal of Valor recipient. In July 2020, Col. Roessler was off duty at his church during a bible study class. The session was interrupted by an assailant, armed with a knife, who stabbed both the church pastor and a bystander. Amidst the chaos that ensued, Col. Roessler was
Read More +AASHTO Overhead Rate Audits
August 18, 2021: MillerMusmar CPAs is pleased to launch our website’s new AASHTO (American Association of State Highway and Transportation) Audit section. MillerMusmar has performed overhead rate audits for architecture & engineering (A/E) firms in compliance with AASHTO guidelines for over a decade, but we have recently expanded our resources dedicated to this specialized service line. As state and federal agency regulation and compliance continue to evolve, MillerMusmar remains committed to providing exceptional support throughout every phase of audit readiness. For more information about AASHTO audit service offerings, please feel free to contact us at 703-437-8877 or info@millermusmar.com. MillerMusmar
Read More +SBA raises EIDL loan limit to $500,000
The Small Business Administration is more than tripling the maximum amount that small businesses and nonprofits can borrow under the Economic Injury Disaster Loans (EIDL) program. Starting the week of April 6, 2021 the loan limit for COVID-19 EIDL loans will jump from six months of economic injury with a maximum loan amount of $150,000 to up to 24 months of economic injury with a maximum loan amount of $500,000. “More than 3.7 million businesses employing more than 20 million people have found financial relief through SBA’s Economic Injury Disaster Loans, which provide low-interest emergency working capital to help
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