Weekly Digest – August 11th, 2023

We have been busy in our office working on extended tax returns and working on tax minimization plans so although we had a week of rainy weather we did not feel too bad being “stuck” inside. This morning I was glad to see the sun come out and we are expecting a weekend of good weather.

Sunrise Today Over Our New Rock Jetty Between Beach 130/131
Sunrise Today Over Our New Rock Jetty Between Beach 130/131

The berm construction is going well and the concreate is up to my beach, next comes the sand dunes and walkways…

Berm Construction Continues
Berm Construction Continues

My garden really benefitted from the recent rain we received and we are harvesting tomatoes and cukes for amazing garden to table lunches…

Heirloom and Cherry Tomatoes, Cukes and Foot Long String Beans, Lunch Anyone, Anyone
Heirloom and Cherry Tomatoes, Cukes and Foot Long String Beans, Lunch Anyone, Anyone
From Garden to Lunch With Friends
From Garden to Lunch With Friends

We have a compost pile in our backyard and every year we get “volunteer” plants from the seeds…

"Volunteer" Cantaloupe From Seeds in Our Compost
“Volunteer” Cantaloupe From Seeds in Our Compost

I am looking forward to a weekend of sun, walking on the beach and bar-b-ques with friends, I hope you have some great plans too. Enjoy!


As a tax nerd I get excited talking about tax minimization strategies.  Just last week Elizabeth and I were on a tax minimization planning appointment, she works remotely, so I was spared any inadvertent kicks under the table. She consistently reminds me to maintain a high-level approach, as delving too deep into the accounting intricacies tends to come across as “bla bla bla” to our clients. I have an in-person accounting cocktail party this coming week so I will be able get excited and nerdy.

I asked ChatGPT to edit my thoughts and make it funny, here is what they came up with so I thought I would share their version with you too (let me know what you think):

Tax Savings Magic: From Bla Bla Bla to Exciting Nerdy Wins!”

Hey there, savvy savers! 🎩✨ It’s time for our weekly tax-saving wizardry, where I sprinkle a little magic on those numbers and make your taxes disappear faster than a magician’s rabbit! 🐇🪄

When I’m “talking accounting” with my clients, all they hear is “bla bla bla” – it’s like I’m reciting a secret incantation! But guess what? Behind those mysterious spells, we’re conjuring up some serious savings potions! 💰✨

Imagine this: You’re strolling through the tax forest, and suddenly, bam! A wild deduction appears! 💼✨ We’ve mastered the art of turning everyday expenses into enchanted deductions, leaving you with more gold in your pocket. Cha-ching! 💸🪙

But hold onto your enchanted hats, because that’s not all! 🧙‍♂️✨ We’ve unlocked the hidden portals to credits and exemptions that can rival even the most complex riddles. 🌟🔐 It’s like finding the golden key to the tax treasure chest!

And remember, when I chat with fellow sorcerer-like accountants, we dive into the exciting world of numbers and strategies that’s enough to make anyone’s pocket protector quiver with joy! 🤓📊✨

So, my dear clients, fear not the “bla bla bla” – for beneath the surface lies a realm of tax-saving enchantments that would make any financial wizard proud. Stay tuned for more magical insights, and remember, it’s not just about the numbers – it’s about the treasure they can become! 🌈🔮📚


Millions of Older Workers Are Nearing Retirement with Insufficient Savings, Instituting a Plan for Your Business May Save You Money

A growing number of Americans face the prospect of retiring without a penny in savings.  Only 1 in 10 low-income workers between the ages of 51 and 64 had any funds put away for retirement in 2019, compared with 1 in 5 in 2007 prior to the Great Recession, according to a recent analysis by the U.S. Government Accountability Office.

During our tax minimization planning engagements, we usually recommend and include a discussion on establishing or revising the company retirement plan as the tax benefits provide significant advantages for business owners, helping them reduce their current tax burden while securing their financial future through effective retirement planning.

Benefits of Establishing a Retirement Plan:

Worker Satisfaction and Loyalty:

  • Enhances employee satisfaction and loyalty by providing a valuable long-term benefit.
  • Demonstrates a commitment to employees’ financial well-being, fostering a positive work environment.
  • Matching Contributions: Employer matching contributions (if applicable) can be tax-deductible while also incentivizing employee participation.
  • Attractiveness to Employees: Offering a retirement plan can make the business more attractive to potential employees, aiding in recruitment and retention efforts.

Tax Benefits for the Business/Business Owner:

  • Deductible Contributions: Employer contributions to retirement plans are generally tax-deductible, reducing the company’s taxable income. These may flow through to the owners depending on entity selection.
  • Generous Contribution Limits: Business owners, especially those with sole proprietorships or closely held companies, can often contribute larger amounts to their retirement plans compared to traditional employees.
  • Tax Deductions: Contributions made by the business owner to the retirement plan are generally tax-deductible, reducing the owner’s taxable income.
  • Deferred Taxes: Investment gains within the retirement plan grow tax-deferred, allowing the owner to postpone paying taxes on those earnings.
  • Catch-Up Contributions: Owners over the age of 50 can make additional catch-up contributions, allowing for even larger retirement savings.
  • Asset Protection: Retirement plans can offer asset protection benefits in certain cases, shielding retirement funds from creditors and legal claims.

 Tax Benefits for the Employee:

  • Pre-Tax Contributions: Employee contributions to retirement plans are made on a pre-tax basis, reducing their current taxable income.
  • Tax-Deferred Growth: Investment earnings within the retirement plan are not taxed until withdrawn, potentially leading to higher accumulations over time.
  • Saver’s Credit: Eligible lower-income employees may claim a tax credit for contributing to retirement plans, further reducing their tax liability.
  • Roth Options: Some plans offer Roth contributions, allowing employees to contribute after-tax income for tax-free withdrawals in retirement.

Establishing a retirement plan for your business can yield a range of advantages, from bolstering employee satisfaction to maximizing tax benefits. The type of plan and entity selection should be carefully tailored to meet your financial goals and your retirement needs as well as your employees’ retirement needs.

  • Rev. Proc. 2023-27 Tax Credits for Investment in Solar and Wind in Low-Income Communities

On Thursday The Internal Revenue Service and the Treasury Department released final regulations and a new revenue procedure to encourage development of new solar and wind energy facilities in low-income communities which can qualify for tax credits under the Inflation Reduction Act.  The following summary is from accountingToday:

“The final regs outline the four project categories under which developers can apply for an allocation, and the increase of either 10% or 20% associated with a particular project category. They also define the financial benefits for two project categories, along with the energy storage technology installed in connection with a solar or wind facility.  The Low-Income Communities Bonus Credit program will allocate 1.8 gigawatts of capacity for the 2023 program across four categories of solar or wind facilities, with maximum output of less than five megawatts. The IRS plans to allocate up to 700 megawatts to facilities located in low-income communities; 200 megawatts to facilities on Native American land; 200 megawatts to facilities that are part of federally-subsidized residential buildings, including housing supported by the Low-Income Housing Tax Credit and Section 8 of the Housing Act; and 700 megawatts to facilities where at least 50% of the financial benefits of the electricity go to households with incomes below 200% of the poverty line or below 80% of area median gross income.

The application process for all four categories in the Low-Income Communities Bonus Credit program will open in the fall, and awards will start going out by the end of the year. Depending on availability, applications for the 2023 program are expected to be accepted through early next year. The Treasury previously planned to open the application process in two phases — an initial window and a rolling application process. The IRS can opt to reallocate capacity between categories in the case any category gets oversubscribed, and the unclaimed allocations will roll over into next year, when another 1.8 or more of gigawatts of capacity will be available to applicants.”


The AI rules that US policymakers Are Considering

The White House announced a suite of artificial intelligence policies in May. More recently, in July, they brokered a number of voluntary safety commitments from leading AI companies. That included commitments to both internal and third-party testing of AI products to ensure they’re secure against cyberattack and guard against misuse by bad actors.

Ensuring Products are Safe Before Introducing Them to the Public

The companies commit to:

  • Internal and external security testing of their AI systems before their release.
  • Sharing information across the industry and with governments, civil society, and academia on managing AI risks.

Building Systems that Put Security First

  • The companies commit to:
  • Investing in cybersecurity and insider threat safeguards to protect proprietary and unreleased model weights.
  • Facilitating third-party discovery and reporting of vulnerabilities in their AI systems.

Earning the Public’s Trust

The companies commit to:

  • Developing robust technical mechanisms to ensure that users know when content is AI generated, such as a watermarking system.
  • Publicly reporting their AI systems’ capabilities, limitations, and areas of appropriate and inappropriate use.
  • Prioritizing research on the societal risks that AI systems can pose, including on avoiding harmful bias and discrimination, and protecting privacy.
  • Develop and deploy advanced AI systems to help address society’s greatest challenges.

Federal Reserve Board Released Results From a Survey of Senior Financial Bank Officers

On Tuesday The Federal Reserve Board released results from a survey of senior bank financial officers about their strategies and practices for managing reserve balances. “The Senior Financial Officer Survey is used by the Board to obtain information about banks’ reserve balance management strategies and practices, their deposit pricing strategies, their expectations for potential changes in both the size and composition of their balance sheets, and their views regarding Federal Reserve facilities.” Click through a read the report.

US Postage Rate Hike May Come This Week

Speculation that the USPS will announce the third postal rate hike of 2023 this week in the form of its temporary holiday surcharge that it first instituted during the pandemic.  The last hike affected shipping costs.  This increase in postal rates may ultimately trickle down to impact consumers through adjusted pricing, reduced promotional activities, higher e-commerce shipping charges, and altered consumer behavior. Time to purchase more “Forever” Stamps, they actually come in several nice designs.

US Economy Adds 187,000 July Jobs; A Sign The Labor Market is Cooling

US employers added 187,000 jobs in July, less than expected and a sign that the labor market is cooling after a series of interest rate hikes by the Federal Reserve have driven rates to their highest level in 22 years.

Why Did the US Credit Rating Just Get Dinged?

On August 1, the Fitch Ratings agency downgraded the United States’ long-term credit rating from AAA to AA+ for only the second time in the nation’s history, in what’s generally seen as a signal of concern about the US’s creditworthiness.


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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