Christina Villeneuve, CPA

Christina Villeneuve, CPA Tax Preparation and Tax Planning Services. Over 30 years experience!
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2020 Adjustments to Standard Deductions and Tax Brackets – Did You Know?The IRS has updated the 2020 inflationary adjust...
05/28/2020

2020 Adjustments to Standard Deductions and Tax Brackets – Did You Know?

The IRS has updated the 2020 inflationary adjustments for both standard deductions and the income limits for marginal tax rates. For individual taxpayers, the standard deduction for 2020 will be $12,400, up $200 from the 2019 amount. The deduction for joint filers will increase by $400 to $24,800, while the head-of-household deduction will be $18,650, an increase of $300 from 2019. As a reminder, there are no personal exemptions for tax year 2020, since the Tax Cuts and Jobs Act (TCJA) eliminated them through tax year 2025.

The maximum income for every tax rate bracket is also increasing in 2020. For example, in 2019, the jump from the 24% to the 32% tax rate occurred for individual incomes over $160,725 ($321,450 for married filing jointly). For 2020, the 32% rate will apply to incomes above $163,300 for individuals, or $326,600 for joint filers.

IRS Adjusts Tax Residency Rules for Travelers Affected by COVID-19 – Did You Know?As part of its COVID-19 (coronavirus) ...
05/19/2020

IRS Adjusts Tax Residency Rules for Travelers Affected by COVID-19 – Did You Know?

As part of its COVID-19 (coronavirus) tax relief package, the IRS is offering waivers of certain tax rules for individuals and businesses affected by coronavirus-related travel disruptions. Under standard IRS policies, anyone who spends time within the U.S. on a certain number of days during the tax year (for example, 31 days for most nonresident aliens) must pay taxes as a U.S. resident. This rule is known as the “substantial presence test.” Similarly, American taxpayers living in foreign countries must spend a specified number of days in their claimed country of residence in order to exclude foreign income from U.S. taxation.

Key IRS tax residency rules adjustments for 2020 include:

- For a person who visited the U.S., up to 60 consecutive days of presence in the U.S. may not be counted when determining if the person meets the “substantial presence test” for taxation as a resident. In most cases, this “COVID-19 Emergency Period” must have begun on or after February 1, 2020.

- For residents of foreign countries, certain days spent away from their home countries may not jeopardize their national residency status for the purpose of excluding foreign income from U.S. taxation.

- When performing calculations to determine if they are “engaged in a U.S. trade or business” for tax purposes, some businesses may exclude up to 60 consecutive days of conducting business activities within the U.S.

You may only claim these exemptions for days on which your personal or business activities took place in an unplanned location, as a result of travel disruptions caused by the COVID-19 pandemic. A tax advisor can help you determine whether your travel or business activities qualify for an exemption, and how the exemption rules affect your U.S. tax status.

2020 IRA Required Minimum Distributions Waived – Did You Know?The CARES Act that was signed into law on March 27, 2020 i...
05/11/2020

2020 IRA Required Minimum Distributions Waived – Did You Know?

The CARES Act that was signed into law on March 27, 2020 includes an important provision for taxpayers with various retirement accounts, including 401(k), 403(b), 457(b), traditional Individual Retirement Accounts (IRAs), and designated Roth accounts. For many taxpayers, the law waives their obligation to withdraw a certain amount from such accounts (called a required minimum distribution, or RMD) during tax year 2020.

Under standard IRS rules for the above retirement account types, you would need to accept a 2020 RMD if you turn 72 years of age in 2020, turned 70 1/2 in 2019 or before, or are any age and inherited the account as a beneficiary. RMDs are usually taxed as ordinary income. However, the CARES act allows you to skip your 2020 RMD without penalty. Note that Roth IRAs are not affected by this waiver, since they do not have RMDs under normal circumstances.

IRS Suspends Many Installment Payments Until July – Did You Know?To help people undergoing hardships as a result of the ...
05/04/2020

IRS Suspends Many Installment Payments Until July – Did You Know?

To help people undergoing hardships as a result of the COVID-19 crisis, the IRS has launched a set of new policies called the People First Initiative (PFI). The initiative provides temporary relief from certain payment obligations for many taxpayers, including those who either have an existing IRS installment payment plan, or are considering entering into such a plan.

For existing installment agreements, payments due between April 1 and July 15, 2020 are suspended at the taxpayer's discretion. In other words, if you are currently unable to make the payments required under your installment agreement (including Direct Debit payments), you may discontinue your payments until July 15. However, if you can make any payments during this period you should do so, since interest will continue to accumulate on unpaid balances.

The IRS strongly encourages taxpayers who cannot afford to pay their federal taxes to enter into a new installment agreement as soon as possible. The April 1-July 15 payment suspension period will apply to new agreements as well as existing ones.

A tax professional can help you determine your eligibility to suspend your installment tax payments, and whether it is best to do so. The IRS will not default any installment agreements during the suspension period. In addition, many collection activities, such as liens, levies, and referrals to third-party collection agencies, have been suspended until July 15. However, field collection officers may continue to pursue compliance from some high-income taxpayers.

VA and SSI Recipients: Register Dependents by May 5th to Receive Full EIPRecipients of Veterans Affairs (VA) and/or Supp...
04/30/2020

VA and SSI Recipients: Register Dependents by May 5th to Receive Full EIP

Recipients of Veterans Affairs (VA) and/or Supplemental Security Income (SSI) benefits will automatically receive an Economic Impact Payment (EIP) from the IRS, even if they are not required to file federal income tax returns. While the standard EIP amount for non-filers is $1,200, those with children under the age of 17 may be eligible to receive an additional $500 per qualifying child.

If you are a non-filer who receives VA and/or SSI benefits and have dependent children, you must act by May 5 in order to receive your full EIP amount quickly. You can provide the required information on your dependent children to the IRS by using a special form on the IRS website. In most cases, if you register your children by May 5, your additional payment amount will simply be added to your $1,200 basic EIP. If you have already received your $1,200 payment but still register your children by May 5, your additional payment will come soon after you register.

If you do not provide the IRS with information on your children by May 5, your additional stimulus payment may be substantially delayed. In many cases, those who do not register their children by the deadline will not receive their additional EIPs until they file a return for tax year 2020.

Online form to provide information on children to IRS: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

Coronavirus-related Tax Scams – Did You know?The IRS warns everyone to watch out for scam phone calls, emails and text m...
04/21/2020

Coronavirus-related Tax Scams – Did You know?

The IRS warns everyone to watch out for scam phone calls, emails and text messages related to COVID-19 (coronavirus) tax relief programs during the spring of 2020. This new wave of phishing attempts and other criminal activity centers on the Economic Impact Payments (EIPs) that the IRS is currently distributing to many U.S. taxpayers. The scammers might incorrectly refer to these payments as “Stimulus Checks” or “Stimulus Payments.”

As a reminder, most taxpayers do not need to take any action in order to receive their EIPs. The IRS will NOT call, email or text you to request private information such as your address or bank account number. If anyone claiming to represent the IRS requests such information from you, asks you to sign over your EIP check, or suggests that they can get your EIP to you faster, you should immediately hang up or delete the message. You can also help the IRS to identify, track down and prosecute perpetrators by forwarding any suspicious emails you receive to [email protected].

If you are unsure whether a call or message you receive is legitimate, treat it as a scam and then contact the IRS for more information. You will not be punished for hanging up on an IRS agent because you believed that the call was fraudulent. Note that although most IRS taxpayer assistance phone services are temporarily suspended due to COVID-19, call centers will reopen as soon as possible. In the meantime, you can still email the IRS and/or find regular updates on coronavirus tax relief programs at https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments.

If you wish to provide the IRS with information such as an updated mailing address to ensure that you receive your EIP as quickly as possible, you should ONLY do so through the official IRS Economic Impact Payments portal, https://www.irs.gov/coronavirus/economic-impact-payments.

New IRS Tools for Faster Delivery of Economic Impact Payments – Did You Know?The IRS has launched two new web portals to...
04/15/2020

New IRS Tools for Faster Delivery of Economic Impact Payments – Did You Know?

The IRS has launched two new web portals to help some taxpayers receive their COVID-19 Economic Impact Payments (EIPs) more quickly. Remember that the vast majority of Americans who filed a 2018 or 2019 federal income tax return, or receive Social Security or Railroad Retirement benefits, do not need to take any action in order to receive their EIPs. If you provided the IRS with bank account information on your most recent tax return or receive benefits by direct deposit, your EIP will be automatically deposited to your account. Otherwise, the IRS will mail an EIP check to the most recent mailing address you provided.

You can use the new “Get My Payment” portal to:

- Learn the amount of your EIP
- Check the status of your payment
- Provide direct deposit banking information to the IRS if you have not previously done so
- Update your mailing address if you have moved and prefer to receive your EIP by check

In order to check the status of your payment, you will need your social security number (SSN), date of birth, and the mailing address shown on your most recent federal tax return. To provide bank account information for direct deposit, you will also need your adjusted gross income (AGI) from your most recent federal tax return (2018 or 2019), the refund amount or amount you owed on that return, and your bank routing number, account type, and account number.

NOTE: If the IRS has already scheduled the delivery of your EIP, you will not be able to use Get My Payment to update your bank account information.

If you are not required to file federal income tax returns (for example, because of an individual gross income below $12,200) and do not receive Social Security or Railroad Retirement benefits, you may need to complete a simple online form in order to receive your EIP. The necessary form is called “Non-Filers: Enter Payment Info Here.”

IRS portals for EIPs:

Economic Impact Payments: https://www.irs.gov/coronavirus/economic-impact-payments

Get My Payment & Status (for those who file federal returns and other automatic EIP recipients): https://www.irs.gov/coronavirus/get-my-payment

Non-Filers: Enter Payment Information Here (for those who do not file federal returns and may not automatically receive their EIPs) https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

Additional 2020 IRS Tax Deadlines Extended – Did You Know?Last month, the IRS announced that the April 15, 2020 federal ...
04/13/2020

Additional 2020 IRS Tax Deadlines Extended – Did You Know?

Last month, the IRS announced that the April 15, 2020 federal income tax filing and payment deadline had been extended to July 15, 2020 for most taxpayers. The IRS has now broadened this extension to cover nearly all federal income tax filing and payment due dates that fall between April 1 and July 15, 2020. In particular, individuals, couples, estates, corporations, other businesses, and Americans living abroad now all have until July 15, 2020 to file their 2019 federal income tax returns, without fear of penalties or interest charges.

Two other specific deadline changes will benefit payers of estimated tax and those who have fallen behind on filing returns or claiming refunds for past years:

- The deadline for second quarter 2020 federal estimated tax payments has changed from June 15 to July 15. Since the first quarter payment due date was previously moved from April 15 to July 15, taxpayers can now make their first two 2020 quarterly estimated tax payments at any time on or before the July deadline. For example, you can make both payments on July 15 without penalty.

- The deadline to file a 2016 federal income tax return (either new or amended) and claim a 2016 tax refund has also moved from April 15 to July 15, 2020. If you are unsure how to obtain a refund from a past year, a tax professional can help you file the necessary return.

If you have a complicated tax situation, such as filing on a fiscal-year schedule, a tax professional can help you determine how this broad deadline extension applies to you.

April 2020 Estimated Tax Payments Extension – Did You Know?The IRS has granted an automatic deadline extension to all ta...
04/08/2020

April 2020 Estimated Tax Payments Extension – Did You Know?

The IRS has granted an automatic deadline extension to all taxpayers who make federal estimated income tax payments. As part of the U.S. Treasury's COVID-19 tax relief program, the due date for estimated tax payments for the first quarter of 2020 has been moved from April 15 to July 15. You can make your first-quarter payment anytime up until the new deadline without penalty.

At this time, the deadline for estimated tax payments for the second quarter of 2020 remains June 15. Therefore, your second estimated tax payment for 2020 will technically be due a month before your first payment. While this circumstance has created some confusion, the important thing to know is just that you should make one payment by June 15, and another by July 15.

Remember that in most cases, your 2020 quarterly estimated tax payments must add up to either 100% of your 2019 federal tax or 90% of your 2020 federal tax to avoid penalties. A tax advisor can help you determine the appropriate amount to pay by the June and July deadlines. Many state tax authorities have also changed their 2020 estimated tax payment due dates. To learn more, you can find a link to your state tax agency's website at https://www.taxadmin.org/state-tax-agencies.

IRS Economic Impact Payments – Did You Know?As part of its COVID-19 (coronavirus) tax relief program, the IRS will begin...
04/06/2020

IRS Economic Impact Payments – Did You Know?

As part of its COVID-19 (coronavirus) tax relief program, the IRS will begin mailing Economic Impact Payments to many US taxpayers by the end of April. If you filed a 2018 or 2019 tax return, your payment will be sent automatically – no action is required on your part.

Senior citizens, recipients of social security disability benefits, and railroad retirees who are not required to file tax returns will also receive their payments automatically. The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to those recipients who are not required to file a tax return and did not file a return for 2018 or 2019.

Individuals with an adjusted gross income (AGI) of up to $75,000 will receive payments of $1,200, while joint filers with a combined AGI of up to $150,000 will receive $2,400. Many taxpayers will also receive a payment of $500 for each qualifying dependent child. Payment amounts decrease for taxpayers with higher incomes; taxpayers without children who have AGIs above $99,000 ($198,000 for joint filers) are not eligible to receive Economic Impact Payments.

If you included bank account information for direct deposit on your most recent tax return, you will receive your payment by direct deposit. Otherwise, a check will be mailed to the address shown on your 2019 return, or your 2018 return if you have not yet filed for tax year 2019. The US Treasury also plans to open an online portal to allow taxpayers who have not previously provided direct deposit information to the IRS to do so if they wish.

If you are required to file tax returns and have not yet filed for 2018 or 2019, you must file at least one of these returns in order to receive your payment. If you are concerned about exposure to COVID-19, these Economic Impact Payments will be available throughout the rest of 2020. A tax advisor may also be able to provide remote assistance so you can file your return from home.

Deadline for 2019 IRA and HSA Contributions Extended – Did You Know?The IRS has extended the deadline for making contrib...
04/03/2020

Deadline for 2019 IRA and HSA Contributions Extended – Did You Know?

The IRS has extended the deadline for making contributions to traditional and Roth IRAs, Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (MSAs) that are credited to tax year 2019. Contributions must usually be made by the April 15 tax filing deadline in order to count toward the previous year. However, since the IRS extended the 2019 tax filing due date to July 15, 2020, the deadline for these contributions has changed to July 15 as well.

If you have not yet reached your 2019 IRA contribution limit ($6,000 for most taxpayers under age 50, up to $7,000 for taxpayers over 50 making "make-up" contributions), you may continue adding 2019 contributions until July 15. While the same is true for HSAs and MSAs, it is important to remember that your employer's carry-over limit or grace period deadline might not have changed. Check with your company's benefits department to make sure additional 2019 HSA or MSA contributions can actually be used to cover medical expenses before contributing.

If you made withdrawals from an IRA or other retirement account in 2019 that are subject to the 10% additional tax (such as early IRA withdrawals not covered by an exemption), the deadline for paying this tax has also been extended to July 15, 2020. A tax professional can help you determine whether any of your 2019 withdrawals require payment of the 10% additional tax.

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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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