Varley Law Office PLC

Varley Law Office PLC
201 NE 2nd ST, Stuart, Iowa 50250; (515) 523-2456

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Wednesday, December 09, 2020

Year-End Tax Planning for 2020

  As we approach the end of a year that most of us are anxious to put behind us, We wish you and your loved ones a happy holiday season and a healthy & prosperous new year. We are writing earlier than usual because the Coronavirus Aid, Relief & Economic Security [CARES] Act, contained provisions that might affect your year-end tax planning.

1. You can deduct up to $300 in charitable contributions from your taxable income, even if you take the standard deduction. It is $300 per tax return, so married, filing jointly taxpayers are limited to a single $300 deduction. You still need a written receipt for any donation of $250 or more.

2. There is no required minimum distribution from traditional IRAs this year. You may still want to take out some funds to reduce tax on the back end. However, taxation of inherited IRAs is much more favorable under the new rules. Remember that you can contribute funds directly from your traditional IRA directly to a charity as a way to get funds out of your IRA without paying tax on it or having it increase the amount of social security subject to tax. Donating grain to a charity is another way to reduce income tax liability.

3. The Economic Impact Payments ($1200/adult taxpayer $500/dependent minor) are not subject to income tax & if you did not receive yours, you can apply for it on your 2020 tax return. If you received a $500 dependent minor payment to which you were not entitled, you may keep it. If you received a $1200 payment for a spouse who died prior to 2020, you must return it.

4. All taxpayers must answer the question about whether they did any virtual currency (BitCoin, Ethereum, etc.) transactions in 2020.

5. There is now a tax credit for sick leave and family leave taken by certain self-employed taxpayers.

Please continue to be alert to tax scams. Do not respond to any phone calls or e-mails purporting to be from the IRS, Social Security, or the Iowa Dept. of Revenue – those agencies will make initial contact by mail. You are welcome to bring any such letter to our office for verification. Never include social security or bank account numbers in an unencrypted e-mail or in a phone call you did not initiate.

If you choose to have our office prepare and file your federal and state tax returns, you will need to sign and return the engagement agreement on the reverse side of this letter. All professionally prepared tax returns must be filed electronically (“e-file”). If you want to file your own tax return for free, here is the link: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

IRS requires mileage logs for vehicles with business use.  Here is the latest information for mileage deduction rates.

You are required to send a Form 1099 to any individual, partnership or LLC that you paid $600.00 or more for services, rent or interest in the course of your trade or business. Payments to cooperatives, banks and other corporate entities are excluded. Wages in excess of $150 in any quarter require the filing of Forms W-2 and W-3 (for household employees you may file Schedule H with your tax return instead). If you would like us to prepare these forms, you will need to provide us with the information before January 27, 2021.

If you have questions on any of the above or other tax matters feel free to call, e-mail, or stop in. When you have your records ready, you may let us know and we will set up an appointment that is convenient for you. Evening or Saturday appointments can be arranged. If you would like worksheets or want to e-mail us information securely, send us an e-mail and we will open a Trustifi® portal for encrypted transmissions.

Privacy Policy

Your privacy is important to us. Please read the following privacy policy.

We collect nonpublic personal information about you from various sources, including:

* Interviews regarding your tax situation

* Applications, worksheets, or other documents that supply such information as your name, address, date of birth, phone number, Social Security Number, income, dependents' information, and other tax-related data

* Tax-related documents you provide that are required for processing tax returns, such as Forms W-2, 1099B, 1099R, 1099INT, 1099DIV, 1099MISC, 1099S, 1098, 1098E, 1098T, 1099SSA, 1099RBR, etc.

We do not disclose any nonpublic personal information about our clients or former clients to anyone, except as requested by our clients or as required by law.

We restrict access to personal information concerning you, except to our employees who need such information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your personal information.

Pursuant to U.S. Treasury Regulations, you are advised that any federal tax advice included in this communication is not intended or written to be used, and cannot be used, to avoid any U.S. federal tax penalties, or to promote, market, or recommend to another party any transaction or matter.

Thursday, November 12, 2020

Privacy Policy - Varley Law Office PLC

 

Your privacy is important to us. Please read the following privacy policy.

We collect nonpublic personal information about you from various sources, including:

* Interviews regarding your legal situation

* Applications, worksheets, or other documents that supply such information as your name, address, date of birth, phone number, Social Security Number, income, dependents' information, and other tax-related data

* Tax-related documents you provide that are required for processing tax returns, such as Forms W-2, 1099B, 1099R, 1099INT, 1099DIV, 1099MISC, 1099S, 1098, 1098E, 1098T, 1099SSA, 1099RBR, etc.

We do not disclose any nonpublic personal information about our clients or former clients to anyone, except as requested by our clients or as required by law.

We restrict access to personal information concerning you, except to our employees who need such information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your personal information.

Friday, August 14, 2020

2021 Iowa Farm Leases

Varley Law Office, PLC

Now is the time dictated by Iowa law to begin negotiating crop land leases for 2020 or at least notify your tenant/landlord, as the case may be, if you wish to change any of the terms in your current lease. (Remember that mutual consent is required if you want to make changes in the middle of a multi-year lease.)

If you wish to terminate a cropland or pasture lease ending March 1, 2020, and have not already done so, you must serve notice in the manner set out in Iowa Code §562.7 on or before September 1, 2020. This statute does not apply to custom farming arrangements, but by tradition, many farm operators have come to expect notice by September 1.

Basing cropland rent on the current CSR2 (updated “corn suitability rating” assessment) of the soil in question is the most accurate and fair way to arrive at a comparable rent [See Computing a Cropland Cash Rental Rate]. In addition, you can calculate a CSR2 for your farm. Below is a table of farmland values and cash rents in counties for which we prepare farmland leases:



The table above is based upon averages from sometimes limited survey results, but it does give a general idea of what the market for Iowa farmland looks like. The predicted annual rental is based on a 3.25% ROI.  Land prices have risen this year, driven by low interest rates and favorable commodity programs. To a lesser extent, rental rates followed land prices as they rose. Currently, there is a strong demand for land, but a limited supply. In addition, there has been an increase in the number of landowners engaging in custom farming. Ag commodity programs such as subsidized crop insurance and the market facilitation program have reduced risk, encouraging land owners to engage farm management companies such as Hertz Farm Management and Peoples Company, rather than opt for cash rentals, so they can take advantage of tax incentives available to operators. Things to keep an eye on include whether interest rates will remain low, the global response to the pandemic, and our trade policy with China.

Finally, with its growing popularity, it is important to know a little information regarding Hemp production in the State of Iowa. In May 2019, the Iowa Hemp Act was signed and this year the Iowa Department of Agriculture & Land Stewardship began issuing licenses to grow hemp. However, it is important that landowners know who they are leasing their land to if they plan on growing hemp on their land. If the hemp licensee grows hemp that fails the THC test, the entire crop will have to be destroyed. If the licensee fails to destroy the crop, the State of Iowa will come onto the land to do it. Moreover, if the operator cannot be found, the landowner will be assessed the costs of destroying the crop grown on their land.

Please contact our office if you have questions. Good luck with your negotiations!

Sincerely,                                  

VARLEY LAW OFFICE, PLC     

Warren A. Varley • Attorneys-at-Law • Karen K. Varley

201 NE Second Street

P. O. Box 235 

Stuart, Iowa 50250-0235

(515) 523-2456

FAX 866-297-7985

varleylaw@iabar.org

©2020

Monday, March 30, 2020

Effective March 30, 2020,
the lobby at Varley Law Office, PLC, will be closed
to help reduce the spread of the coronavirus Covid-19.
If you require legal services, please contact us
by phone at 515-523-2456
or by e-mail at varleylaw@iabar.org
We apologize for any inconvenience, but believe this is a necessary step to protect public health.

Monday, July 01, 2019

Adapted from IRS Tax Tip 2019-79:

Members of the armed forces are entitled to certain tax benefits


Members of the military and their families often qualify for special tax benefits. Here are some examples:
  • Combat pay exclusion. If someone serves in a combat zone, part or all of their combat pay is tax-free. 
  • Deadline extensions. Some members of the military – such as those who serve overseas – can postpone most tax deadlines. 
  • Joint return signatures. Both spouses must normally sign a joint income tax return. However, if military service prevents that from happening, one spouse may be able to sign for the other or get a power of attorney.
  • Reserve and National Guard travel. Members of a reserve component of the Armed Forces may be able to deduct their unreimbursed travel expenses on their return. In order to do so, they must travel more than 100 miles away from home in connection with their reserve duty.
  • ROTC allowances. Some amounts paid to ROTC students in advanced training are not taxable. This includes things like allowances for education and subsistence. On the other hand, active duty ROTC pay is taxable. This includes things like pay for summer advanced camp.
For more information, see Publication 3, Armed Forces’ Tax Guide.


Wednesday, March 27, 2019

People's Law School Event - FREE!

The Iowa State Bar Association is hosting a free public information session focused on older Iowan issues, including:
  • power of attorney and living wills
  • healthcare directives
  • disposition of remains
The meeting is open to the public and will be held at the Iowa Bar Association headquarters at 625 E. Court in Des Moines on Thursday, April 18, from 5:30 to 7:00 p.m. Free parking is available on site.

The speakers are Greg Kenyon, elder law attorney with the Bradshaw Law Firm, and Deanna Clingan-Fischer, Ombuds Officer at Iowa State University.
This seminar is part of the Iowa State Bar Association’s ongoing effort to help Iowans navigate life’s legal questions through its “People’s Law School” series.

Register for the event here  or call 515-243-3179 
or email peopleslawschool@iowabar.org 


Thursday, February 28, 2019

IRS extends farmers' deadline for 2018 estimated tax payment


Source:  IRS QuickAlerts February 28, 2019

The IRS is granting an extension of the March 1st deadline for farmers and fishermen to make their estimated tax payment before being subject to estimated tax penalties – as long as they file and pay the full amount of tax reported on their 2018 return by April 15, 2019.

• To claim the waiver of the estimated tax penalty, farmers and fishermen must attach Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to their 2018 tax return. The taxpayer’s name and identifying number should be entered at the top of the form, and the waiver box (Part I, Box A) should be checked.  The rest of the form should be left blank.

• This relief will expand the number of taxpayers eligible for filing the Form 2210-F using checkbox A and will not require calculations or an attachment.

• Farmers or fishermen who qualify for the relief include: Those who did not make the required estimated tax installment payment by January 15, 2019 AND who file and pay the full amount of tax reported on their 2018 return by April 15, 2019.