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 +

Maryland Property Exemption Raised From $2,500 to $20,000

The Maryland State Department of Assessments and Taxation (SDAT) announced this week that  House Bill 268 — which raises the exemption from personal property assessment for all Maryland businesses from $2,500 to $20,000 — has taken effect. This legislation will save 14,217 businesses from paying taxes on $44.2 million in assessment, according to an SDAT press release. It is also an extension of HB90, which SDAT sponsored in 2018 and exempted 28,493 businesses from $10.8 million in assessment. “Thanks to these legislative efforts, 42,000 of Maryland’s smallest businesses will not have to pay taxes on $55 million in assessment,” SDAT Director

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 +

MillerMusmar CPAs is proud to be Platinum Sponsor of Titans of the Toll Road

MillerMusmar CPAs is proud to be Platinum Sponsor of Titans of the Toll Road. Join us for the Titans of the Toll Road, produced by the Innovation Council of the Greater Reston Chamber of Commerce. Hear from successful area innovators as they share how they leverage their satellite infrastructure to develop significant opportunities through data aggregation and analytics. They will discuss the industry’s impact on our local economy. We will also hear their thoughts on the current state of our workforce, including workplace challenges, hiring trends, and other insights on navigating this challenging skilled labor market. The Right Connections

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 +

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

Read More +

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

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 +

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

Read More +