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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SBA Issues Final Rule On Calculation Of Average Annual Receipts For The Purposes Of Certain Size Standards

Many people think that they know a small business when they see one. But when it comes to eligibility for various government programs designed to assist small businesses, agencies must have a definition of small business that is applied consistently for all. The U.S. Small Business Administration establishes such definitions for small businesses by industry, as identified by OMB-approved industry NAICS codes. These “size standards” are widely used throughout government and are published in the Code of Federal Regulations.  Most are based on either a firm’s number of employees or its amount of average annual receipts. The SBA published a final

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IRS Suspends Several Automated Collection Notices

The IRS recently announced the suspension of more than a dozen automated collection taxpayer notices, including collection notices, balance due notices, and unfiled tax return notices. The change comes after calls from lawmakers and tax professionals for the agency to catch up on its unprocessed backlog of several million original and amended returns filed by individuals and businesses. “IRS employees are committed to doing everything possible with our limited resources to help people during this period,” IRS Commissioner Chuck Rettig said in a Feb. 9 statement. “We are working hard, long hours pushing creative paths forward in an effort

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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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CHILD TAX CREDIT

The American Rescue Plan’s expansion of the Child Tax Credit supplements the earnings of families receiving the tax credit. Specifically, the Child Tax Credit has been revised in the following ways: The credit amount has been increased. The American Rescue Plan increased the amount of the Child Tax Credit from $2,000 to $3,600 for children under age 6, and $3,000 for other children under age 18. The credit’s scope has been expanded. Children 17 years old and younger, as opposed to 16 years old and younger, will now be covered by the Child Tax Credit. Credit amounts will be made through

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Taxpayers can protect themselves from scammers by knowing how the IRS communicates

If the IRS does call a taxpayer, it should not be a surprise because the agency will generally send a notice or letter first. Understanding how the IRS communicates can help taxpayers protect themselves from scammers who pretend to be from the IRS with the goal of stealing personal information. Here are some facts about how the IRS communicates with taxpayers: The IRS doesn’t normally initiate contact with taxpayers by email. Do not reply to an email from someone who claims to be from the IRS because the IRS email address could be spoofed or fake. Emails from IRS

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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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Business Education Series: PPP Round Two – What You Need to Know

PPP Round Two – What You Need to Know MillerMusmarCPAs is a proud sponsor of the Business Education Series. The Small Business Association (SBA), in consultation with the U.S. Treasury Department, reopened the Paycheck Protection Program (PPP) for loans in January.  The program will now provide loans to both first-time borrowers as well as businesses that already received a PPP loan. There is still time to submit your application! David Hincapie, Economic Development Specialist at, Small Business Administration (SBA), will present timely information for applying for this round of funding. We will also be joined by Dayana Villanueva, Vice President, M&T Bank, and Joey Musmar,

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