Christina Villeneuve, CPA

Christina Villeneuve, CPA Tax Preparation and Tax Planning Services. Over 30 years experience!
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Quarterly Estimated Tax Payments - ReminderIf you are making quarterly estimated tax payments to the IRS, the due date f...
01/13/2020

Quarterly Estimated Tax Payments - Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the September 1 – December 31 quarter of the previous year is January 15, 2020.

For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be considered on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

Filing Season Start - Did You Know?The IRS has confirmed that the individual tax filing season will start on Monday, Jan...
01/07/2020

Filing Season Start - Did You Know?

The IRS has confirmed that the individual tax filing season will start on Monday, January 27, 2020 and the deadline to file 2019 tax returns and pay any taxes owed is Wednesday, April 15, 2020.

Although the IRS systems open for processing on January 27, you do not have to wait until then to begin preparing for your tax return.

Smart Tax Planning for Those with Irregular Income – Did You Know?If your income varies from year to year – for instance...
12/31/2019

Smart Tax Planning for Those with Irregular Income – Did You Know?

If your income varies from year to year – for instance, if you change jobs often or get a significant part of your income from the gig economy – tax planning can get complicated. Certain activities that increase your tax bill during higher-income years might have little impact during lower-income years. Similarly, an expense that results in a sizable tax deduction during a lower-income year might not be deductible at all during a year when your income is higher.

For example, if your income for a particular year falls into the 10% or 12% IRS tax bracket ($39,475 or below for single filers, or $78,950 or below for joint filers), you might qualify for a 0% long-term capital gains tax rate. Therefore, it might be an especially good year to sell property that you have held for 12 months or longer. Meanwhile, the two major advanced education tax credits, the American Opportunity Credit (AOC) and the Lifetime Learning Credit (LLC), have different income limits. As a result, some years might be more favorable than others for pursuing particular educational goals.

A qualified tax advisor can help you determine which activities with potential tax implications would be most appropriate to undertake this year, and which others you might want to defer until a later year. Thoughtful planning can yield substantial tax savings over time.

'Tis the Season for Important Tax PaperworkKeeping your records organized will help make sure you don't miss out on valu...
12/23/2019

'Tis the Season for Important Tax Paperwork

Keeping your records organized will help make sure you don't miss out on valuable deductions when it is time to file.

Some documents to be on the lookout for are:

Wage and income statements (like W-2 or 1099-MISC)
Health Insurance statements (like Form 1095)
Proof of qualifying educational expenses (like Form 1098-T)
Mortgage interest statements
Retirement distribution statements
Investment account statements

AOTC or LLC Education Tax Credit – Which Is Best for You? The IRS offers two important tax credits for higher education ...
12/19/2019

AOTC or LLC Education Tax Credit – Which Is Best for You?

The IRS offers two important tax credits for higher education expenses: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). You may claim both credits on the same tax return, but not for the same person. For example, you might claim the AOTC for your college-age dependent children and the LLC for your spouse.

If two or more members of your household are enrolled in qualifying post-secondary education programs, you may be able to claim multiple AOTCs. The LLC, on the other hand, may only be claimed once per return. The biggest advantage of the LLC is that you may use it an unlimited number of times for the same person over the years. By contrast, a student can qualify for the AOTC a maximum of four times in a lifetime.

In addition, although the AOTC offers a larger maximum credit and higher income limits than the LLC, it places more restrictions on the student's enrolment status and the nature of the educational program. A qualified tax advisor can help you determine which combination of these credits will serve your family best.

Retirement Plan Contribution Limits Increase in 2020 – Did You Know?IRS limits for individual contributions to employer-...
12/09/2019

Retirement Plan Contribution Limits Increase in 2020 – Did You Know?

IRS limits for individual contributions to employer-sponsored retirement plans are increasing in 2020. If you are an employee who participates in 401(k), 403(b), the Thrift Savings Plan for civil and uniformed service members, or most types of 457 plans, you may contribute up to $19,500 in 2020, up from $19,000 in 2019. The catch-up contribution limit for employees 50 years of age or older also increases in 2020, from $6,000 to $6,500. Therefore, if you are an employee age 50 or over, you may be able to contribute as much as $26,000 to your 401(k) in 2020.

The contribution limit for SIMPLE retirement accounts likewise increases by $500 in 2020, from $13,000 to $13,500. In addition, income limits for both Roth IRA contributions and tax-deferred contributions to traditional IRAs are higher. A qualified tax advisor can help you develop a strategy to take advantage of all these increases to boost your retirement savings in the New Year.

Giving Tuesday and Charitable Donations - Did You Know?Giving Tuesday is an annual event that highlights charitable givi...
12/03/2019

Giving Tuesday and Charitable Donations - Did You Know?

Giving Tuesday is an annual event that highlights charitable giving after Thanksgiving.

If you are considering charitable donations, you may be able to donate to a Donor-Advised Fund (DAF) every two or three years instead of every year. This may qualify you to receive tax benefits now, allow the amount to grow tax-free, and the decision on which qualified charity to fund can be made later.

If you are 70.5 years or older, you may be able to make a qualified charitable distribution (QCD) from your IRA this year, and this may satisfy all or part of the required minimum distribution (RMD) each year.

The IRS has released a tool to make it easier to get information about qualified charitable organizations. The Exempt Organizations Select Check tool can be found at: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search.

IRS Announces New Per Diem Rates – Did You Know?The IRS recently raised the per diem rates for employee travel expenses,...
11/26/2019

IRS Announces New Per Diem Rates – Did You Know?

The IRS recently raised the per diem rates for employee travel expenses, effective October 1, 2019. Within the Continental U.S., the new basic daily rates are $297 for high-cost regions (of which $71 is allotted for meals), and $200 for low-cost areas (with $60 for meals). The "incidentals only" per diem, which covers expenses like tipping bellhops, remains at $5 for all locations.

Per diems allow companies to reimburse employees for travel expenses at fixed rates, rather than having to process receipts for actual expenses. In most cases, per diem reimbursements can be deducted on the employer's tax return and do not count toward employee wages, as long as employees file appropriate expense reports showing the location, dates and purpose of the trip. Note, however, that the meals portion of a per diem is subject to the standard 50% deduction limit for meal expenses.

Because the Tax Cuts and Jobs Act (TCJA) eliminated most deductions for unreimbursed employee expenses, finding the most efficient way to reimburse employees for travel expenses is more important than ever. An experienced tax pro can help you determine whether it is best for your company to use standard per diems or to track actual employee travel expenses.

Renewing ITINs - Did You Know?Individual Taxpayer Identification Numbers are used for taxpayers who are required for U.S...
11/19/2019

Renewing ITINs - Did You Know?

Individual Taxpayer Identification Numbers are used for taxpayers who are required for U.S. tax purposes to have a U.S. taxpayer identification number but do not qualify to get a social security number.

If you use an ITIN, you should check if it expires this year. If it does, information about how to renew your ITIN can be found at: https://www.irs.gov/credits-deductions/individuals/how-do-i-renew-my-itin. Keeping your ITIN current helps avoid tax refund and processing delays.

Taxpayers who have not used their ITIN to file a federal return at least once in the last three years will see their number expire Dec. 31, 2019. Additionally, ITINs with middle digits of 83, 84, 85, 86 or 87 (e.g. 9NN-83-NNNN) will also expire at the end of the year.

Claiming the Other Dependent Tax Credit – Did You Know?If you have a dependent who does not meet the criteria for the Ch...
11/12/2019

Claiming the Other Dependent Tax Credit – Did You Know?

If you have a dependent who does not meet the criteria for the Child Tax Credit (CTC), you may still qualify for a $500 credit called the Other Dependent Credit. Also called the Family Tax Credit, this nonrefundable credit was created under the Tax Cuts and Jobs Act (TCJA) of 2017. Examples of qualifying dependents include children of age 17 or 18 (or up to age 23 if they are full-time students), and adult relatives who are unable to support themselves due to a disability.

Your claimed dependents must be US citizens, resident aliens, or nationals, and must have a taxpayer ID number (SSN or ITIN). Children must not have been claimed for the CTC by you or anyone else, must rely on you for at least half of their financial support, and generally must live with you for over half the year. Claimed adult dependents (called “qualifying relatives” by the IRS) must have a gross income of less than $4,200 for 2019, and must either be your true relative or live with you full time. The term “true relative” covers a broad range of relationships, including in-laws and stepchildren.

A qualified tax advisor can help you determine your eligibility for the Other Dependent Credit. If you have more than one qualifying dependent, you may be able to take the credit for each of them.

Tracking Utilities for Home Office Expense – Did You Know?If you plan to claim a deduction for Expenses for Business Use...
11/05/2019

Tracking Utilities for Home Office Expense – Did You Know?

If you plan to claim a deduction for Expenses for Business Use of Your Home (home office expense) on your tax return, you need a reliable method to calculate your deductible utility costs. IRS rules require that you separate utility expenses that apply to only the residential portions of your home (such as cooking gas or electricity used by your refrigerator) from those that pertain to the entire property. Only the latter type can qualify as home workspace expenses.

For example, if your cooking range, water heater and furnace all run on natural gas, you may need to figure out the gas cost associated specifically with heating your home. One way to do this is to average your gas bills from summer months when you did not use heat. This average shows how much of your gas bill is attributable to your range and water heater. By subtracting this amount from your gas bill for every month, you can calculate how much money you spent specifically on heat during the year. You may then be able to deduct a portion of this total as a home office utilities expense, based on the area of your workspace.

An experienced tax pro can give you other ideas for tracking and calculating the allowed utility costs associated with your home office. The IRS does not require perfect accuracy, but your calculation methods must be logical, reasonable and based on written evidence such as monthly utility bills.

QBI Tax Deduction for Self-Employed Individuals – Did You Know?If you are a freelancer or otherwise participate in the “...
10/29/2019

QBI Tax Deduction for Self-Employed Individuals – Did You Know?

If you are a freelancer or otherwise participate in the “gig economy”, you may be able to claim a new tax deduction under the Tax Cuts and Jobs Act (TCJA). The Qualified Business Income (QBI) Deduction applies to self-employment earnings (basically, any income you receive in a setting where you are not classified as an employee). Under the provision, individuals may be able to deduct up to 20% of their self-employment income on their tax returns.

Because the QBI deduction is claimed “above the line,” you can reduce your gross income without itemizing deductions. However, the deduction is subject to a number of rules, including income restrictions for certain self-employment activities, and limits on the size of the deduction relative to your taxable income. A qualified tax advisor can help you understand how these rules apply to your situation.

Saving Receipts to Document Expenses – Did You Know?For most personal or business expenses that you claim as deductions ...
10/24/2019

Saving Receipts to Document Expenses – Did You Know?

For most personal or business expenses that you claim as deductions on your tax forms, the IRS requires that you preserve written documentation of each expense. Acceptable forms of written evidence include receipts, invoices, canceled checks, and credit card and bank account statements. These documents should clearly show the date, location, amount and, if possible, nature of each expense. An experienced tax pro can help you review your supporting evidence to make sure it satisfies IRS rules.

Importantly, your documents need not be originals. Photocopied, scanned or photographed receipts are okay, as long as they clearly show all the information on the original document. However, since you may be required to present your evidence on paper in the event of an audit, you should save digital files in a form that allows you to print hard copies.

In most cases, IRS rules require you to save your written documentation for three years after you file your return. However, if there is any chance that you have omitted income from your tax return that you should have reported, you must maintain your records for six years after filing.

IRS Removes Computers from Listed Property – Did You Know?Historically, the IRS classified many computers and computer p...
10/15/2019

IRS Removes Computers from Listed Property – Did You Know?

Historically, the IRS classified many computers and computer peripherals (such as printers) as “Listed Property.” If your business use of Listed Property is less than 50%, you are usually required to distribute the business portion of the property's cost over your tax returns for multiple years, using a depreciation method that is unfavorable to the taxpayer.

However, computer equipment placed in service after December 31, 2017 has been removed from the Listed Property category. This change in classification makes it much easier to deduct computer costs as business expenses on your tax returns. Under the new rules, you may be able to deduct the business-use portion of the cost of computer equipment put in service in 2018 or later using any appropriate depreciation method, even if your business use is less than 50%.

In particular, you may be able to use the 100% bonus depreciation option that is available through 2022 under the Tax Cuts and Jobs Act (TCJA). This option could allow you to deduct the entire business-use portion of the cost of computer equipment in a single year, usually the year in which you put the equipment into service. If you use your computer for both business and personal tasks, a qualified tax advisor can help you determine the proper business-use percentage to use in order to calculate your deduction.

Six Month Filing Extension DeadlinesIf you requested an extra six-month extension in April to file your 2018 personal in...
10/07/2019

Six Month Filing Extension Deadlines

If you requested an extra six-month extension in April to file your 2018 personal income tax return, that deadline to file is coming up on Tuesday, October 15th.

If you are an employer that makes contributions into employee Simplified Employee Pension IRA accounts, October 15th is also the six-month extension deadline to make those deposits.

Higher Education Tax Credits – Did You Know?If you or any of your dependents are enrolled in a higher education program ...
09/30/2019

Higher Education Tax Credits – Did You Know?

If you or any of your dependents are enrolled in a higher education program this fall, you may qualify to claim one or more credits on your 2019 tax return.

The American Opportunity Tax Credit (AOTC) is a credit of up to $2,500 for a student pursuing a degree or certified credential at a college or vocational school. You may claim the credit for up to four years for each qualifying student, and you may claim multiple AOTCs if you have more than one student in your household. The AOTC is partially refundable, meaning that if your tax is reduced below zero, up to $1,000 of the credit may be refunded to you.

The Lifetime Learning Credit (LLC) is available for household members enrolled in one or more courses at a higher learning institution, or in a qualifying course to develop or improve professional skills. A maximum nonrefundable credit of $2,000 (regardless of the number of qualifying students) may be claimed per year, for any number of years.

Both credits are subject to income limits and other eligibility restrictions. A qualified tax advisor can help you determine your eligibility for both credits.

Age-Limited Child Tax Deductions – Did You Know?Several key tax credits end when a dependent child reaches a specified a...
09/24/2019

Age-Limited Child Tax Deductions – Did You Know?

Several key tax credits end when a dependent child reaches a specified age. Here is a quick summary of the age rules for three of the most important tax credits for parents, as well as the most important exceptions:

Child and Dependent Care Credit: Child must be under 13 years of age (12 years old or younger), OR live with you more than half the year and be incapable of self-care.

Child Tax Credit (also called “Per-Child Credit”): Child must be under 17 years of age (16 years old or younger), no exceptions.

Qualifying Child for the Earned Income Tax Credit (EITC): Child must be under 19 years of age (18 years old or younger), OR a full-time student and under 24 years of age (23 years old or younger).

For both the Child Tax Credit and the Qualifying Child for EITC rule, the child must meet the age requirement at the end of the tax year (usually, December 31). However, for the Child and Dependent Care Credit, the child only has to be below the age limit when the care is provided.

If you will lose a tax credit this year due to a child surpassing the age limit, you may need to adjust your withholding to allow for the likely increase to your total tax for the year. A qualified tax advisor can help you determine whether an adjustment is needed.

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Leesburg, VA
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Christina Villeneuve, CPA

Christina Villeneuve, CPA has been helping her clients implement tax saving strategies for over 30 years. Her practice specializes in tax planning and tax preparation for high net worth individuals as well as representation before the IRS and state tax authorities when the need arises.

Over the years, Christina has worked with thousands of clients and strives to give her clients the highest level of customer service and personal touch which has resulted in a very loyal client base. Although she has worked with many small business customers spanning a variety of industries [retail, construction, medical, commercial real estate, and publishing to name a few], her highest satisfaction comes from her individual [1040] client base, strategically working together to minimize their tax liability.

Professional Affiliations:

American Institute of Certified Public Accountants

Virginia Society of CPA's

National Association of Tax Professionals

National Society of Tax Professionals

Northern Chapter of the VSCPA's

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