As part of our ongoing effort to help Virginia wineries stay informed and prepared in a fast-changing regulatory landscape, the Virginia Wine Coalition is sharing key takeaways from the recent VWA Regulation & Rules Round-Up – Tax Implications of the Federal Omnibus Bill webinar. This session—hosted by the Virginia Wineries Association in partnership with Williams Compliance—provided an in-depth overview of major tax changes affecting winery operations, payroll, capital investments, and federal reporting requirements. You can review the full meeting notes here: [Link to Meeting Notes].

To help you translate these updates into practical next steps, we’ve compiled a curated list of questions to bring to your CPA or tax advisor as you plan for the 2025 tax year and beyond.

Legal Disclaimer: The information summarized here is provided for general educational purposes only and does not constitute legal, accounting, financial, or tax advice. Tax laws and regulations are subject to change, and their application can vary based on individual business circumstances. Wineries should always consult a qualified CPA, attorney, or compliance professional before making decisions that may affect tax obligations or regulatory compliance.

Questions to Ask Your CPA About the New Federal Tax Changes

1. Overtime & Tips Deductions

  • How should we adjust our payroll tracking so that overtime premium and tip income are properly separated for 2025 and required W-2 reporting in 2026?
  • Which of our employees are legally eligible for the new overtime deduction (given agricultural and exempt-status rules)?
  • How should we train staff to differentiate tips vs. service charges so that reporting remains compliant?

2. Depreciation, Expensing & Capital Projects

  • Given our current investment plans, should we prioritize 100% bonus depreciation or Section 179 expensing?
  • Can any portions of our upcoming construction projects (e.g., barrel room, bottling line, tank expansion) qualify as Qualified Production Property for full expensing?
  • Should we elect the optional 40% bonus depreciation in any situations for income smoothing?

3. R&D / Experimental Expenses

  • Do any of our activities (yeast/fermentation trials, canopy management studies, packaging experiments) qualify as R&E expenditures that can now be fully deducted?
  • Should we adjust our chart of accounts to track R&D more clearly for tax purposes?

4. 1099 Reporting & Contractor Management

  • How will the new $2,000 1099 threshold (effective for 2026 filings) change our vendor management process?
  • Should we revise how we collect and store W-9s, particularly for seasonal workers, vineyard consultants, and small contractors?

5. Qualified Business Income (QBI) – Section 199A

  • Will the permanent QBI deduction change our optimal business structure (e.g., LLC vs S-Corp)?
  • Should our vineyard and tasting room operations remain aggregated or separate for the purpose of maximizing QBI?
  • Do we meet the W-2 wage and property basis tests under the updated rules?

6. Employee Retention Credit (ERC)

  • Do we have any ERC claims for Q3/Q4 2021 that were filed after January 31, 2024?
    • If so, how will the July 4, 2025 disallowance date affect us?
  • Are we exposed to the six-year audit window, and how should we prepare documentation?

7. Opportunity Zones (OZ) & Rural OZ Enhancements

  • Is our winery, tasting room, or vineyard located within an existing or newly designated Opportunity Zone, and is it considered rural under the new rules?
  • If so, can we structure any upcoming investments through a Qualified Opportunity Fund (QOF) to take advantage of the new 30% step-up and 50% improvement rules?
  • What is the compliance burden of forming or participating in a QOF?

8. TTB-Related Accounting & Compliance Integration

  • Should we revise our inventory practices to ensure the annual physical matches TTB’s required perjury statement and tax classes?
  • Should we shift all excise tax filings and payments to Pay.gov/EFT now to avoid risk during the transition period?
  • Are our cost accounting and inventory systems properly aligned with TTB expectations for contract winemaking and alternating proprietorships?

9. Strategic Tax Planning for 2025–2029

  • Are there opportunities to time capital investments to maximize new expensing rules before they sunset in 2029?
  • With the overtime and tips deductions tied to MAGI limits, should high-earning owners adjust W-2 wages, distributions, or bonuses to preserve eligibility?
  • Should we model multi-year tax scenarios to understand the best mix of:
    • QBI deduction
    • Bonus depreciation
    • Section 179 expensing
    • R&E deduction
    • Opportunity Zone incentives