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I hear that many of our dads had a great father’s day celebrating with family and friends: fishing trips with laughter but no fish on the line, special meals in local restaurants, special meals prepared by our dads for the family, zoom and facetime meetings with smiles all around and of course many backyard bar-b-ques.

Despite continued high gas prices and continued covid-19 cases most with much lighter symptoms it seems we are getting back to our usual spring/summer rituals including graduation parties, engagement parties and weddings.

I guess it’s also time to get back to those healthy lunches just yesterday I added an all-time favorite bok choy salad (of course I use the recipe as a jumping off point and alter it to limit the sugar to a heaping tablespoon, use only 1 bag of ramen noodles and substitute sesame oil for the seeds) to a helping of roasted cauliflower with tahini and dill…

I was happy to be out walking on the beach this weekend even with those ominous clouds…

Hoping you are getting out more and enjoying friends and family again.

WEEKLY TAKE-AWAY

I have been getting better at taking cues from body language, tone of voice and facial expressions – if it’s already done then no need to offer suggestions or advice, keep the peace by saying “congratulations I hope you will be very happy with … “.  This works well for new relationships, jobs, almost everything.

TAX ISSUES/TAX PLANNING

Is it Time to Reposition Your Investments

It’s on everyone’s lips; the stock market, which just this Monday showed hints of improvement. Emerging after last week’s freefall, investors questioned if last week’s selloff had gone far enough to price in concerns about rising rates and slowing growth.

I am looking at this time as an opportunity:

• it may be time to harvest losses in your regular investment account which may help with your 2022 taxes
• or maybe convert a portion of your regular IRA to a Roth and repurchase those investments in an account which will continue to grow tax free but have no tax consequences when you sell

Employee Retention Tax Credit (ERC)

We are thrilled to see the amended payroll tax return notices and copies of the checks for the ERC’s coming through our client portals, emails and faxes.  A reminder to snap a photo of the check and then deposit it as a separate deposit and notify us immediately.  This refund has already been accounted for and the taxes paid.

It Bears Repeating: NYS Resident Owners of Pass Through Entities with Non-New York State Sourced Income Have a New Opportunity to Elect Meaningful PTET

We know that tax legislation is used to influence behavior, so what better way to keep our NYS residents here, help with those high tax rates…

Under new legislation S8948, effective for tax years beginning on or after January 1,2022 an “electing S corporation” is amended to include either an electing resident S corporation of an electing standard S corporation.  In plain English under the new law even non-NYS sourced income is eligible for the PTET.

We already know that the deadline for the extension has been extended, now those NYS residents with pass through entity income generated outside of NYS but includable on their NYS personal tax returns have access to the State and Local Tax (SALT) workaround.

For 2023 this will be expanded to NYC corporations as well!

Next Batch of IRS Dirty Dozen of Tax Scams for 2022

Every year the IRS warns of phishing attacks and other fraudulent tax schemes…

• Offshore Accounts and Digital Assets used by individuals to evade U.S. tax by hiding income in offshore banks, brokerage accounts, or nominee entities. The funds are accessed using debit and credit cards; wire transfers; or other arrangements, including foreign trusts, employee leasing schemes, private annuities, and structured transactions that conceal the owner of accounts or insurance policies.
• Phishing emails use the IRS logo and subject lines like “Action Required: Your account has now been put on hold.” Similar bogus emails claim to be from a tax return preparation application. One variation offers an unusual activity report and a solution link for recipients to restore their accounts.
• Suspicious texts, emails, or phone calls are designed to trick, surprise, or scare individuals into responding. Victims provide personal information and money.
• We work with well-versed tax controversy attorneys who can help our clients with overwhelming tax debt, but of course there are also “Offer in Compromise Mills” who claim in local advertising that they can settle a tax debt for pennies on the dollar. Taxpayers pay a fee to the mill and receive the same compromise they could have gotten by working directly with the IRS or a reputable attorney. The mills charge excessive fees and mislead people who have no chance of meeting the compromise requirements.
• While there are legitimate conservation easements, unscrupulous promoters sell ownership interests in land to investors through partnerships and then grant conservation easements on the land to qualified charitable or government organizations (see code section 170). By using inflated appraisals of real estate assets like undeveloped land or historic building facades, the arrangements inflate tax deductions and generate fees for promoters.
• Micro-captive Insurance Arrangements. Similar to foreign captive insurance, micro-captive insurance structures involve owners of closely held entities conducting activities that lack sufficient insurance attributes. For example, coverage may insure implausible risks, fail to match genuine business needs, or duplicate the taxpayer’s commercial coverage. The premiums are often excessive.
• Full list here or check out last week for more…

IRS Still Has Backlog of 21.3 Million Tax Returns

On June 22, National Taxpayer Advocate Erin M. Collins released her statutorily mandated midyear report to Congress. The report expresses concern about continuing delays in the processing of paper-filed tax returns and the consequent impact on taxpayer refunds. At the end of May, the agency had a backlog of 21.3 million unprocessed paper tax returns, an increase of 1.3 million over the same time last year.

The report pointed out that the significant majority of individual taxpayers receive refunds. “At the end of the day, a typical taxpayer cares most about receiving his or her refund timely. Thus, these processing delays are creating unprecedented financial difficulties for millions of taxpayers and outright hardships for many.”

Wayfair Hearing May Lead to Remedial Sales Tax Legislation

A Senate Finance Committee hearing on June 14, 2022, may lead to legislation affecting states’ treatment of sales tax.   The Supreme Court decision in Wayfair, which removed the physical presence test as a requirement for states to impose sales tax nexus, has altered the sales tax landscape of virtually every state since it was decided four years ago.

Four years ago, on June 21, 2018, the court overturned the Quill decision, a 1992 case that imposed the physical presence test on states seeking to collect sales tax from remote retailers shipping to residents in the state.  As this article highlights this change has caused unintended consequences for many small businesses.   In the eyes of state departments of revenue, there is no difference between a business that collects sales tax from consumers and keeps it for itself (a crime) and a business that never collects the sales tax from consumers in the first place as it is unaware it needed to. This means that owners of businesses out of compliance with state economic nexus rules are at risk of losing not only their businesses, but also their personal assets as well as rapacious state revenue officials seek the sales tax revenues they believe they are owed.

FOR OUR GRADUATES  

Whether you are starting your first job, your dream career or yet another part time of seasonal job please remember:

• Proper tax withholding elections will prepare you for tax reporting, so that you cover your tax liability and do not end up with a balance due
• Take a look at your weekly paycheck and ask for help understanding the deductions
• Ask for advice about deferred income options, its never too early to start tax advantaged saving
• Speak with the HR department about employee benefits which could help with commuting and other necessary costs.

Best of luck and enjoy your summer and your job 

ECONOMY

Gas Prices Ease a Little Over the Weekend and Maybe Congress Will Help With a “Gas Tax Holiday”

According to AAA the national average price for a gallon was $4.981 on Monday, after weeks of steady increases.  We are now learning about a potential fix via a “gas tax holiday” .  The gas tax adds 18.4 cents total per gallon of gasoline – 18.3 cents in excise tax plus 0.1 cent in a storage fee. For diesel, it is 24.3 cents plus the 0.1 cent fee.   President Biden said that he hopes to have a decision by the end of this week as to whether there will be a gas tax holiday this year.

Hacks to Get Through the Predicted Mild But Lengthy Recession

Investment bank Nomura predicts that the Fed’s interest-rate hikes will push the US into a mild but lengthy recession this year that will cause the economy to shrink in 2023.  It is time or beyond time to put a few safety measures in place:

• Reduce expenses where you can, in your business and/or personal life
• Develop a risk management plan – you can alter your 90 day action plan and/or business plan 
• Look for sales on items you can use, but don’t overbuy as inventory carry can cause financial stress
• Cross-train employees in case you have to down size your staff

Air Travel Woes Continue Nationwide

Airlines canceled 2,237 flights and delayed over 10,000, according to tracking service FlightAware, over the Father’s Day and Juneteenth double holiday weekend. The airlines say that widespread staff shortages are to blame.

Bitcoin and Other Crypto Currency Continue to Wobble

Bitcoin hovered just above the $20,000 threshold on Monday. The cryptocurrency industry was on edge as investors feared that problems at major crypto players could unleash a wider market shakeout.

Oil Slides After Earlier Gains

Oil prices dipped on Monday, reversing earlier gains. Investors worried about slowing global economic growth, fuel demand, and tightening supply.

Michigan Becomes the 14th State to Mandate Personal Finance Education Before High School Graduation

The new legislation requires that all high school students take a course in personal finance before they graduate. It will go into effect for students starting eighth grade in the 2023-24 school year.

Housing Market Cools, But Still Hot

Higher mortgage rates and still-rising home prices continue to keep the housing market hot, though it has eased a bit from the intensity we saw at the peak of the pandemic.

GENERAL RESOURCES

• IRS resources for stimulus payments:
  • Use the Get My Payment tool to check on EIP payment status
  • Eligibility and general information about Economic Impact Payments
  • A list of frequently asked questions for stimulus payments
• IRS information about the Advance Child Tax Credit Payments
  • Portal to update information
  • A list of frequently asked questions on the advance Child Tax Credit Payments
• The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
• Our Covid-19 Resource Center with relevant blog posts, videos and prior weekly newsletters
• Payroll, HR and benefits company Gusto has put together An Employer’s Guide to Navigating the Coronavirus
• Accounting Today has a special page for articles on COVID-19
• Intuit QuickBooks has a dedicated page to help small businesses
• Entrepreneur put together a listing of free tech resources for remote work
• The Consumer Financial Protection Bureau has warnings about COVID-related scams
• Fast Company has a listing of the best productivity apps for 2020
• The New York Times has an online newsletter on K-12 and higher education
• The Wall Street Journal has a collection of articles on education
• The Louvre has digitized 482,000 artworks from its collection
• PC Magazine explains how to carry your vaccination card on your phone
• How to create a strong password

We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!

If you need help with your accounting, want to create a tax minimization plan, want to discuss your business growth plan or your finances, are concerned about retirement goals or need to be held accountable for your 90 day action plan, contact us for a complimentary discovery session or an appointment to just get started.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.