Important announcement: Due to the number of COVID-19 cases in our area, our office will not be holding in-person appointments for clients during this tax season. Click here or read the COVID-19 Precautions section of this newsletter for more info.
Tax Tip of the Month: PPP Funding up to $100,000 is now non-taxable income in Virginia
Thanks to legislation recently passed by the Virginia General Assembly, businesses in the state who received a loan through the Paycheck Protection Program or Rebuild Virginia initiative will be eligible to deduct up to $100,000 of business expenses related to those loans on their state tax returns. This brings Virginia closer to being in conformity with the IRS guidelines, which do not have a dollar limit on the deductions related to those loans.

This is great news for business owners in Virginia who are struggling to recover from the pandemic. Here are the main points of the recent legislation:

  • Excludes PPP loan forgiveness amount from income
  • Provides up to $100,000 in deductions for business expenses paid with PPP money
  • Provides same tax treatment for Rebuild Virginia grants
  • Provides over 80% of loan recipients FULL deductibility   

To read more about the details, click here.

Reminder: Early withdrawals from retirement accounts made in 2019 could be both penalty-free and tax free.

In last month's newsletter, we mentioned that thanks to a provision of the CARES act, people who were impacted negatively by the pandemic could make an early withdrawal from a retirement account without paying the usual penalty for doing so. If you did so, you can elect to either pay the taxes on that income this year or spread it out over three years. However, depending on the type of account the money was withdrawn from and the length of time the account has been open, you may actually not have to pay any taxes on that money.

In any case, be sure to let us know if you made an early withdrawal from a retirement account last year when you send in your tax organizer, and specify what type of account it was (i.e., Roth IRA, Traditional IRA, etc.) so we can be sure that you don't pay any unnecessary taxes.
COVID-19 Precautions for Tax Season
Due to the number of COVID-19 cases in our area, our office will not be holding in-person appointments for clients during this tax season.

An online portal will be set up for all clients for the purposes of sending and receiving documents. Clients can use this online portal, the dropbox outside our office, or mail to send us their completed tax organizers and any other documents they need to send us. 

If clients want to have a meeting to discuss their tax situation, phone meetings or online meetings via Zoom will be available. Clients must submit their completed tax organizers and/or other relevant documents at least one day in advance of the meeting.

Finally, we will be setting up a system to allow clients to sign e-file forms and other forms electronically as another way to minimize physical contact.

Thank you in advance for your understanding and cooperation as we work to keep everyone as safe as possible during these difficult times.
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Picture of the Month
As we say goodbye to winter and get ready to welcome spring, here's one last "snow picture" of a winter wonderland on Ben's farm.
Latest Firm News
As we continue to make our way through a tax season like no other, we are pleased to report that our clients have not had any difficulty using Zoom appointments instead of in-person appointments. In fact, many of them appreciate that option and would prefer to do it that way themselves.

One thing that has been taking up a lot of our time is tracking down what stimulus payments people have received so that those can be accurately reported to the IRS. Adding to the confusion is the fact that the second economic stimulus payment went out very close to the end of 2020, and some people may have even received it in 2021, but it nonetheless needs to be reported on the 2020 tax return. Please make sure to report any economic stimulus payments you have received when sending in your tax organizer.
Featured Video: Interest on Tax Refunds
In yet another bizarre twist to the overall tax situation due to the pandemic, because of last year's delayed tax filing deadline, the IRS had to pay interest on tax refunds issued to people who filed tax returns after the original April 15th deadline but before the extended deadline. Guess what? Those interest payments are considered taxable income. So, this year, if you received a 1099-INT form from the IRS, you need to report that on your 2020 tax return so that you can send some of the money the government sent you last year back to the government this year. Watch the video below for more information.
Featured Resource: IRS Refund Status Tool
As people start to file their tax returns this time of year, the one refrain on the mind of many folks is "where is my tax refund." The IRS has a tool to allow you to check the status of your refund after filing your return. Click here to access the tool.
Featured Customer: Caryn's Bridals
Among the many industries that have been heavily impacted by the pandemic is the wedding industry, and one of Farmville's flagship businesses has been right in the middle of that. For decades, brides from all over the region have bought their gowns at Caryn's Bridals, Formals, and Tuxedos, and that hasn't changed because of the pandemic. Caryn’s still provides the perfect blend of selection and personal service to help ensure your bridal or formalwear shopping is an enjoyable experience. Caryn’s large showroom contains a vast array of formalwear, as well as a separate bridal gallery and bridal suite for private appointments. Click here to visit their website for more information.