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Weekly Digests

Weekly Digest – October 28, 2022

I have been hearing “10 year Hurricane Sandy Survivor Stories” on the radio these last few days.  As one myself I have many memories of the how hard  it was to literally dig out from the sand deposited by the ocean while emptying  rooms of furniture, clothing, sheetrock, etc., destroyed by salt water. I know people love hearing the stories of how communities came together to work with neighbors, friends, family and strangers.  I look back and smile as I picture major friendships forged and strengthened so “silver linings” and we move on.  I hope that the recent victims of Ian and Fiona will be able to look back to  great memories and stories as the memories of the hard times fade.

Our block 10 years ago…

9 Financial Options

Ten years later and no storms on the horizon for my area and I once again can enjoy the beach and the ocean most days…

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Rock jetty at Riis Park

We don’t see the changing fall colors in my neighborhood, so I am glad to receive and share some great shots from others…

24478And what would fall be without a trip to the pumpkin patch…

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The forecast is for a weekend of great weather, hoping you can get out and enjoy the weather and maybe the fall foliage…

WEEKLY TAKE AWAY

Paying attention to facial expressions, tone of voice and other body language are so important to good communication and connection.  So many of my appointments these days are conducted via video chat  With a good camera and headset we can start our meeting catching up about family and work then dive right in; when limited to just the telephone I miss seeing the smile and wave.  Either way the feedback during discussion is critical; the verbal or nonverbal body language can be powerful indicators of feelings.  Listening carefully I can hear the emotion in a person’s voice: acceptance, anger, frustration etc. For me staying very focused is critical as I listen and observe to “hear” the full message.

TAX ISSUES/TAX PLANNING

401(k) Limit Increase for 2023

The Internal Revenue Service announced that the amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022.  Deferring current income can be one of the most powerful tax saving options to many and certainly to those of you who receive earned income via W-2.  Those of you who are over 50 can opt to defer additional funds via the “catch up” election. More information can be found in IR-2022-188.

Bonus Depreciation for the Business Use of Heavy Luxury Cars is Ending Soon

Reminding you that tax codes work to influence behavior and while many of us are looking forward to purchasing more energy efficient, hybrid or electric cars to help with the environment and receive tax credits via the Inflation Reduction Act of 2022 (see more in my blog post from August 19th), there are some benefits left over from the Tax Cuts and Jobs act.  Luxury cars with unloaded gross weigh in excess of 6,000 pounds and used in your trade or business are eligible for bonus depreciation allowing for 100% depreciation to be taken for the vehicle in the first year.

The following current caps for luxury passenger car placed in service in 2022 are for those business use automobiles with a gross weight of less than 6,000 pounds:

  • $11,200 for the first year without bonus depreciation
  • $19,200 for the first year with bonus depreciation
  • $18,000 for the second year
  • $10,800 for the third year
  • $6,460 for the fourth through the sixth year

Something to think about?

IRS Notices, IRS Help Hotlines and Customer Service

For months (and years) we have been frustrated by the number of incorrect IRS notices our clients have been receiving and our inability to contact the IRS through our special tax practitioners hot line.  This just reported from Accounting Today:

“The Internal Revenue Service is making progress on its plans to recruit an additional 10,000 employees, signing up 4,000 customer service representatives to help the overloaded agency next tax season. The 4,000 new customer service reps would help answer the phones and provide other services. After coming under fire last tax season for long delays in answering calls and dealing with a backlog of millions of unprocessed tax returns left over from 2021, the IRS announced plans in March to hire 10,000 employees to help out (see story). Since that time, the IRS has been granted direct hire authority, which allows the agency to hire new employees on the spot, and it received an additional $80 billion over the next 10 years with the passage of the Inflation Reduction Act in August.

IRS Per-Diem Standard Rates for Business Travel Raised

IRS Notice 2022-44 provides the 2022-2023 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home, specifically

  • the special transportation industry meal and incidental expenses (M&IE) rates; $69 for travel in the continental United States and $74 for any locality of travel outside the continental United States.
  • the rate for the incidental expenses only deduction; now $5 per day and
  • the rates and list of high-cost localities for purposes of the high-low substantiation method; $297 for travel to any high-cost locality and $204 for travel to any other locality within the continental United States.

ADVICE FOR OUR STUDENTS WHO STILL HAVE OUTSTANDING LOANS

You can still apply for student loan forgiveness. Discussions and debates continue and the program is on hold as of last Friday as the 8th Circuit Court of Appeals issued a temporary stay in response to an emergency motion brought by attorneys for several Republican-led states.

“It’s such a rollercoaster for borrowers emotionally,” noted Laurel Taylor, CEO of Candidly, a student debt and savings service.  Even so, she said, “The best thing borrowers can do for themselves now is apply” for the debt forgiveness program.

The program is expected to provide debt relief to as many as 43 million borrowers for those who are eligible.  This may apply to you if you are making less than $125,000 a year; eligible students would receive up to $10,000 of forgiveness ($20,000 for eligible borrowers who were also Pell Grant recipients).  Apply on line at  Debt Relief | Application | Federal Student Aid

ECONOMY

Rishi Sunak Calls for Stability and Unity

It’s official – Rishi Sunak will be the next Prime Minister of the United Kingdom. Liz Truss’ replacement is asking for the people of the UK to pull together as they face a time of “profound economic challenge”.

Housing Prices Predicted to Drop in 2023

In some potentially good news for those in the market for a home, housing prices are predicted to drop by as much as 20% next year. The bad news, however, is that mortgage rates are still at an all-time high, so buying power could be reduced.

How to Maximize your Social Security Increase

The Motley Fool outlines three ways retirees can make the most of their upcoming 8.7% Social Security increase. Although these tax savings ideas are not new they are a good reminder that depending on your income, social security benefits (and this increase) may be partly taxable:

  • Stock loss harvesting
  • Use your IRA Required Minimum Distribution to fund your favorite charities,
  • Purchase a  qualified longevity annuity contract (QLAC)

Read their tips here.

Micron is Building a Microchip Plant in Upstate New York

Micron, one of the world’s largest microchip manufacturers, will open a semiconductor plant in New York, promising an investment of up to $100 billion and a plant that could bring 50,000 jobs to the state.

GENERAL RESOURCES

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 here for you.

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.

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