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Services of Venner & Associates

Important reminders before filing 2020 tax returns

Following an unpredictable year with many changes and challenges, the Internal Revenue Service today shared important reminders for taxpayers who are about to file their 2020 federal tax returns.

Choose direct deposit

The safest, most accurate and fastest way to get a refund is to electronically file and choose direct deposit. Direct deposit means any tax refund is electronically deposited for free into a taxpayer’s financial account.

Eight out of 10 taxpayers get their refunds by using direct deposit. It is simple, safe and secure. This is the same electronic transfer system used to deposit nearly 98% of all Social Security and Veterans Affairs benefits into millions of accounts.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) can give qualifying workers with low-to-moderate income a substantial financial boost. EITC not only reduces the amount of tax someone owes but may give them a refund even if they don’t owe any taxes or aren’t required to file a return.

People must meet certain requirements and file a federal tax return in order to receive this credit. The EITC assistant on can help people determine if they qualify.

The IRS reminds taxpayers that they may elect to use their 2019 earned income to figure the EITC if their 2019 earned income is more than their 2020 earned income. For details, see Publication 596, Earned Income Credit. Taxpayers also have the option of using their 2019 income to figure the Additional Child Tax Credit for 2020.

Taxable unemployment compensation

Millions of Americans received unemployment compensation in 2020, many of them for the first time. This compensation is taxable and must be included as gross income on their tax return.

Taxpayers can elect to have federal taxes withheld from their unemployment benefits or make estimated tax payments, but many do not take these options. In that case, taxes on those benefits will be paid when the 2020 tax return is filed. Taxes can be paid throughout the year. For safe and secure ways to pay taxes electronically go to

Taxpayers can find more details on taxable unemployment compensation in Tax Topic 418, Unemployment Compensation, or in Publication 525, Taxable and Nontaxable Income, on

Interest is taxable income

Many individual taxpayers who received a refund on their 2019 tax returns also received interest from the IRS. The interest payments were largely the result of the postponed filing deadline of July 15 due to the COVID-19 pandemic.

The 2019 refund interest payments are taxable, and taxpayers must report the interest on their 2020 federal income tax return.

The IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10. The average refund interest amount is $18, but the amount for each taxpayer varies based on the tax refund that the taxpayer received. Form 1099-INT will be issued no later than February 1, 2021.

Home office deduction

The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy.

However, the Tax Cuts and Jobs Act suspended the business-use-of-home deduction from 2018 through 2025 for employees. Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home. IRS Publication 587, Business Use of Your Home, provides more on the home office deduction.

Workers moving into the gig economy

Many people found different employment in 2020, including jobs in the gig economy. Taxpayers must report income earned in the gig economy on their tax return. However, gig-economy workers generally do not have taxes withheld from their pay as salaried workers normally do. The IRS encourages people earning income in the gig economy to consider making quarterly estimated tax payments to stay current with their federal tax obligations.

Charitable donation deduction for people who don’t itemize

Individuals who take the standard deduction generally cannot claim a deduction for their charitable contributions. However, the CARES Act permits these individuals to claim a limited deduction on their 2020 federal income tax returns for cash contributions made to certain qualifying charitable organizations and still claim the standard deduction. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify.

Before making a donation, the IRS reminds people they can check the special Tax Exempt Organization Search (TEOS) tool on to make sure the organization is eligible for tax-deductible donations.

Under this change, individuals can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2020. This deduction does not apply to donated property. The maximum deduction is $150 for married individuals filing separate returns. More information is available in Publication 526, Charitable Contributions, on

Disasters such as wildfires, flooding or hurricanes

Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Some 2020 tax deadlines in certain counties have been extended into 2021 due to recent wildfires, hurricanes or flooding.

Tips for taxpayers to make filing easier

To speed refunds and help with their tax filing, the IRS urges people to follow these simple steps:

  • File electronically and use direct deposit for the quickest refunds.
  • Check for the latest tax information, including the latest on Economic Impact Payments. There is no need to call.
  • For those who may be eligible for stimulus payments, they should carefully review the guidelines for the Recovery Rebate Credit. Most people received Economic Impact Payments automatically, and anyone who received the maximum amount does not need to include any information about their payments when they file. However, those who didn’t receive a payment or only received a partial payment may be eligible to claim the Recovery Rebate Credit when they file their 2020 tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.
  • Remember, advance stimulus payments received separately are not taxable, and they do not reduce the taxpayer’s refund when they file in 2021.

Tax filing season to start Feb. 12, IRS announces

IR-2021-16, January 15, 2021

The Internal Revenue Service announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

2018 Tax planning considerations.

Changes in tax law are here and we want to help you navigate the landscape. Contact us soon for an appointment to identify tax planning strategies to capitalize on opportunities within the new law.

Did you know?

  • Due to the increase in the standard deduction and changes in itemized deductions, it is more important than ever to consider the timing of deductible expenses.
  • The child tax credit increased to $2,000 per qualifying child. Plus, more people will qualify for this credit since the threshold at which the credit is phased out is increased to $400,000 for married taxpayers ($200,000 for other taxpayers).
  • There is a new $500 credit for dependents who do not qualify for the child tax credit.
  • For divorces finalized after 2018, alimony payments will no longer be taxable to the recipient and no longer deductible to the payer.
  • There are now limitations on the ability to unwind Roth IRA contributions.
  • With an increased estate exemption, a discussion about the appropriateness of your current estate plan would be valuable.
  • There is a new deduction for business income. The calculation and limitations are complex, but we can help you.
  • With the decrease in tax rate for corporations, now may be the time to consider a change in the structure of your business.
  • Expenses for entertainment are no longer deductible.
  • Bonus depreciation and Sec. 179 expensing have been expanded for purchases of equipment and improvement property.
  • More businesses will qualify to use the cash method of accounting; businesses with $25 million or less in gross receipts are eligible.

Internal Control Assessment

There is a direct relationship between strong internal controls and the health and success of your business.  Simply, the weaker the internal controls the more vulnerable your business is subject to theft and fraud.  Strong internal controls help safeguard your business assets, ensure reliable financial reporting, maintain regulatory compliance, and accomplish operational efficiency.  Strong internal control requires careful examination of your business’ organizational structure and operations.

To learn more about implementing, strengthening, or assessing your business’s internal controls please contact us for a Free Consultation.

Accounting Software Selection

There is an abundance of accounting software options available to small businesses and individuals today.  However, knowing which program will best accommodate your business needs and inherent uniqueness require lots of research. The reality is some packages are better equipped to service some industries better than others, thus selecting a software program to successfully and seamlessly run your business is a large undertaking that requires expertise.

As accounting professionals with experience in a variety of industries we are exposed to various accounting solutions, so we can help you choose and implement the system that best fits your unique situation.

To learn more about selecting the right accounting software package for your business please contact us for a Free Consultation.

Business Entity Selection

Choosing the type of entity of your business, for example, sole proprietor, LLC, S or C corporation, etc.) is a crucial decision that can have longstanding tax implications, positive or negative. We can assist you in evaluating the pros and cons of each entity type to help you determine the most advantageous form of business for your company.

To learn more about selecting the right entity form for your business please contact us for a Free Consultation.

Business Valuations

Business valuation is process of evaluating a business’s past, present, and potential existence with the goal of assigning an estimated economic value.  A business valuation is very subjective and far from being an exact science.  It requires an objective professional who can gather and measure relevant financial and non-financial information to properly defend and support a valuation conclusion.

If you are planning to sell your business, seek debt financing, sell your interest in a business, add a shareholder or partner, marital disolution, estate planning, etc. you will need a business valuation.  At, Venner & Associates we have a variety of experienced professionals who are well positioned to assist you with a sound valuation of your business.

To learn more about our business valuation approach please contact us for a Free Consultation.


Tax Problems – IRS Representation

We’re here to help you resolve your tax problems and put an end to the misery that the IRS can put you through. We pride ourselves on being very efficient, affordable, and of course, extremely discrete. The IRS problems will not just go away by themselves; they just keep getting worse with penalties and interest being added each day.

If you owe the IRS, you have a very serious problem. It may take the IRS several years to catch up to you, but they’re relentless and have no mercy in collecting all the money that is owed.  We will work with you to first assess your situation and provide you with expert advice in resolving it both timely and thoroughly.

To learn more about tax reresentation or resolving IRS problems please contact us for a Free Consultation.


Tax Planning

Mitigating your tax burden is always a core goal. This is best achieved through comprehensive tax planning.  We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income.  We are committed to enhancing our knowledge of the current tax law, complex tax code, and new tax regulations by attending frequent tax seminars.  

To learn more about our tax planning strategies please contact us for a Free Consultation.