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

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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

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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

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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

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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

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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

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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

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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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IRS Announces New Extended Tax Deadline for Individuals

March 17, 2021- The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest, and additions to tax will begin to accrue on any remaining unpaid balances as

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Maryland Extends State Income Tax Filing Deadline to July 15th

Maryland Comptroller Peter Franchot today announced that he is extending the state income tax filing deadline until July 15, 2021. No interest or penalties will be assessed if returns are filed and taxes are paid by the new deadline. The extension, which applies to individual, pass-through entity, fiduciary, and corporate income tax returns with due dates between January 1 and July 15, 2021, inclusive, including first and second quarter estimated payments, is due to recent and pending legislation at the state and federal levels that impact 2020 tax filings and provide economic relief for taxpayers harmed by the COVID19

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