Weekly Digest – August 25th, 2023
Another crazy week which started out nice with a vist from Elizabeth last Friday as we worked together before she headed upstate Saturday morning for a wedding then returned Sunday evening to spend time in the office with Monica on a special project as well (notice how her trip may qualify partly as a business expense- see my August 4th blog post). Too bad Myriam, Ramona and Raquel were not with us or I would have included a current group photo on the beach. ⛱️🩴🏖️ But here’s one from July 2021
All this rain has been so good for my garden …
and those busy bee’s are always welcome…
Here’s what it looks like when the veggies hit the pan…
Hoping you have great plans for the weekend OR those of you who are still on extension are working on getting us those last few bits of info that will help reduce your tax liability. ..
WEEKLY TAKE AWAY
This week I was sad to say goodbye to a dear close friend and send condolences to his family and friends. Steve had been battling Parkinson’s disease for over 25 years, but my memories and funny stories always revert back to our time gardening, cycling or running together, family holiday celebrations and several fights and eventual reconciliations. His passing is a reminder to me yet again to be present and enjoy your family and friends while you are able. This week I spent time with his family who are the friends I consider family and it was wonderful to see everyone.
TAX ISSUES/TAX PLANNING
Tax Planning Starts In Your Driveway
Thank you @AccountingToday for calling attention yet again to the 2023 Clean Vehicle Tax Credits under the Inflation Reduction Act of 2022. “President Joe Biden’s signature economic legislation promised to create a wave of demand for made-in-America electric vehicles by offering lucrative tax credits. A year later, EV uptake is more of a wavelet as U.S. car buyers and automakers grapple with qualifications that have limited eligibility for many current electrified models. Currently, 18 of the 97 electrified vehicles on sale in the U.S. qualify for some or all of the tax credit under the Inflation Reduction Act. That number has decreased as the U.S. began imposing the new restrictions.”
Still shopping for your next car (even used vehicles may qualify)…
New Electric Vehicle (EV) or Fuel Cell Vehicle (FCV)
For purposes of the new clean vehicle credit, a new clean vehicle is a clean vehicle placed in service on or after January 1, 2023,
that is acquired by a taxpayer for original use. In addition, to qualify for the credit, the vehicle:
• Cannot be acquired for resale;
• Must be manufactured by a qualified manufacturer;
• Must meet the definition of a motor vehicle under Title II of the Clean Air Act (that is, any vehicle manufactured primarily
for use on public streets, roads, and highways. It must also have at least four wheels);
• Must have a gross vehicle weight rating of less than 14,000 pounds;
• Must be powered to a significant extent by an electric motor with a battery capacity of 7 kilowatt hours or more and must
be capable of being recharged from an external source of electricity; and
• Must have final assembly in North America
Before you sign that contract: click through for the qualifyer tool
Click through to IRS FAQ’s for more: Topic B Income and Price Limitations for the New Clean Vehicle Credit
There are also strict adjusted gross income qualification guidelines; your modified adjusted gross income (AGI) may not exceed:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.
The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.
In the market for a previously owned car: beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit (also referred to as a previously owned clean vehicle credit). The credit equals 30% of the sale price up to a maximum credit of $4,000. Again it is critical to check the rules to be sure you and the car qualify before you buy and remember:
- the credit is nonrefundable
- you can’t get back more on the credit than you owe in taxes
- you can’t apply any excess credit to future tax years
- purchases made before 2023 don’t qualify.
In addition, your modified adjusted gross income (AGI) may not exceed:
- $150,000 for married filing jointly or a surviving spouse
- $112,500 for heads of households
- $75,000 for all other filers
You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your income is below the threshold for 1 of the two years, you can claim the credit.
Before you sign that contract: click through for the qualifyer tool
Hawaii Wildfire Victims Qualify for Tax Relief
Our hearts go out to the victims, family and friends of those affected by the wildfires in Hawaii. I am glad to share information and links to the IRS tax relief:
“The tax relief postpones various tax filing and payment deadlines that occurred from Aug. 8, 2023, through Feb. 15, 2024 (postponement period). As a result, affected individuals and businesses will have until Feb. 15, 2024, to file returns and pay any taxes that were originally due during this period.
This means, for example, that the Feb. 15, 2024, deadline will now apply to:
- Individuals who had a valid extension to file their 2022 return due to run out on Oct. 16, 2023. The IRS noted, however, that because tax payments related to these 2022 returns were due on April 18, 2023, those payments are not eligible for this relief. (remember the extensions are for additional time to file, not additional time to pay).
- Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
- Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, 2024.
- Calendar-year partnerships and S corporations whose 2022 extensions run out on Sept. 15, 2023.
- Calendar-year corporations whose 2022 extensions run out on Oct. 16, 2023.
- Calendar-year tax-exempt organizations whose extensions run out on Nov. 15, 2023.
In addition, penalties for the failure to make payroll and excise tax deposits due on or after August 8, 2023, and before September 7, 2023, will be abated as long as the deposits are made by Sept. 7, 2023.”
Click through to the IRS news release of August 18th for more details and links and best of luck.
Mortgage Rates Are At A 21-Year High; Now What
Mortgage rates hit a 21-year high this week, a milestone that makes home buying a much more expensive prospect for those who are interested in doing so. According to Freddie Mac, the rate for a 30-year fixed-rate mortgage has climbed to 7.09 percent, an uptick from the 5.13 percent it was at a year prior.
New York and California Each Lost One Trillion In Assets As Financial Firms Fled South
The steady exodus of Wall Street banks and big tech firms from California and New York over the past several years has cost the states nearly $1 trillion apiece in managed assets, according to a new analysis by Bloomberg News.
Whan and Will the U.S. Enter the Recession Experts Have Been Warning Us About?
A recession may be far from top of mind as stocks erase much of this year’s losses and many of the more visible indicators of such an extended slowdown remain far from troublesome, but several key warning signs are still flashing red.
Apprentice Trailblazers: Share Your Story, Build the Future You Dream About
The U.S. Department of Labor is launching the Apprentice Trailblazer Initiative to create a national network of apprentices and apprenticeship graduates from all walks of life and give them a platform to feature their stories, share their experiences on Registered Apprenticeship, and show how apprenticeships increase opportunities for all communities, particularly underserved populations. The application deadline for the first cohort is Sept. 30, and the first cohort of youth Apprentice Trailblazers will be announced during National Apprenticeship Week, Nov. 13-19.
Analysis Shows Retirees Could See $17,400 Reduction in Benefits By 2033
The average retired couple could see their Social Security benefits reduced by $17,400 in 2033 as funding for the program diminishes over the coming decade, according to a recent analysis.
The FTC Accused Two Companies of Scamming Student-Loan Borrowers Out of $8.8 Million
A federal watchdog just cracked down on companies it accused of scamming student-loan borrowers out of millions of dollars.
- IRS resources for stimulus payments:
- IRS information about 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 prior blog posts, videos and prior weekly newsletters
- Entrepreneur put together a listing of free tech resources for remote work
- The Consumer Financial Protection Bureau has warnings about COVID-related scams
- 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
- 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 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
Get in touch
Contact us if you have any questions or want to discuss the next steps for your business.