Weekly Digest – December 16, 2022
It’s so great to receive those holiday photo cards as we watch the kids get bigger and go from cute to beautiful or handsome, while we still look so great too. We also know we are doing something right when our clients show us extra appreciation with thoughtful and yummy gifts/gift baskets. Thanks for thinking of us.
Notice the new photo size; after a few quires to my website people and then a bit of fiddling I finally got it. Now I just need some great weather again…
This Sunday evening starts Hanukkah, “The Festival of Lights”; the holiday that commemorates the rededication of the Jewish temple in Jerusalem in the 2nd century BCE. We know it as the time for Hanukkah traditions like: lighting the menorah (adding one candle each night), giving and receiving gifts including chocolate gelt (chocolate coins), playing spinning the dreidel (colorful top) and those delicious latkes (potato pancakes) and apple sauce.
Wishing you all a great weekend and a happy and healthy holiday season and happy new year.
WEEKLY TAKE AWAY
Spending time helping someone can really make a difference and always makes my day. Yesterday, December 15th was our last major deadline of 2022 and we successfu3ly navigated this year in many ways. Most importantly, by being proactive and sticking to our 90 day action plan goals we were able to take extra time working with our clients either directly or behind the scenes. This time of year we re-review plans put in place months ago to ensure they are still working or need to be tweaked again. This may be the most interesting part of our work, it is certainly the most rewarding for us and our clients. I know this, as the feedback we have been receiving has been really great. Even during a telephone meeting, I can “hear and feel” the smiles and appreciation and I come away with a huge smile and the feeling that I really made a difference, and I am grateful for that.
TAX ISSUES/TAX PLANNING
Grateful and Looking to Share with a Possible Tax Benefit
During this holiday season, remember those less fortunate and consider beefing up your charitable donations. With state decoupling from IRS rules you may be able to itemize deductions at the state level even if your situation does not enable you to itemize deductions at the federal level. Consider non-monetary donations by participating in food, toy and clothing drives. Remember the rules about donations and documentation. I wrote about charity fraud in a prior post, so beware and be aware.
Give Your 401K a Boost Before Your Last Pay Check
For 2022 the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $20,500, with a catch-up provision of $6,500 for those over 50. As there may be a few more 2022 paychecks coming your way, this may be a great time to increase or max out your deferred contribution withholding. In many cases your employer may match a portion of your contribution increasing your retirement savings even more.
New York State and City Pass-Through Entity Tax for 2022
If you opted into the New York State and New York City pass-through entity tax (PTET) for 2022 estimate #4 was due yesterday and we are thrilled that the NYC portal has started accepting payments as well. Even if you did not make yesterday’s deadline you can still make payments through the end of December 2022. Those payments will help decrease your federal tax liability by reducing your federal taxable income. In addition the payments will be counted as New York State and New York City tax payments on the shareholder or partners personal tax returns. Please feel free to click through to my blog post of July 22nd for more details and links.
IRS Rev Proc 2022-42 Documentation for Vehicle Credits
This credit, which is worth up to $7,500 for buyers of new all-electric cars and hybrid plug-ins, has been extended through 2032. Under the new rules, taxpayers get a $3,750 credit for meeting the critical minerals requirement and a $3,750 credit for meeting the battery component requirement. Obviously, the burden for meeting these more technical requirements fall on the manufacturers of batteries and electric vehicles.
Additionally, the seller of a new clean vehicle is required to furnish a report to the buyer and the IRS containing the name and taxpayer identification number of the buyer; the vehicle identification number (VIN) of the vehicle; the battery capacity of the vehicle; and other verification related to providing the credit to the taxpayer.
In Revenue Procedure 2022-42 the IRS provides the procedures for persons selling vehicles to report specified information to the IRS for a vehicle to be eligible for the credit for new or previously owned clean vehicles.
Small Businesses Hold the Key to Supply Chain Resilience
Small and midsize businesses play an important role in supply chains, representing 44% of US private employment and most of the country’s STEM jobs. They also represent an enormous opportunity to improve supply chain resilience while increasing overall competitiveness. I love how this article sites the Beer Game, a business simulation exercise developed at MIT where students looked to meet current and future demands, ordering more and more beer kegs at increasing prices and eventually ended up bankrupt.
A “Near-Limitless, Safe, Clean” Source of Energy
Researchers at the Department of Energy have reportedly ignited 2.5 MJ of fuel, releasing a massive burst of energy. It’s considered a breakthrough in nuclear fusion technology and could lead to revolutionary developments in the clean energy space.
Dr Robbie Scott, of the Science and Technology Facilities Council’s (STFC) Central Laser Facility (CLF) Plasma Physics Group, who contributed to this research, described the results as a “momentous achievement”.
“Fusion has the potential to provide a near-limitless, safe, clean, source of carbon-free baseload energy,” he said. “This seminal result from the National Ignition Facility is the first laboratory demonstration of fusion ‘energy-gain’ – where more fusion energy is output than input by the laser beams. The scale of the breakthrough for laser fusion research cannot be overstated.
Dogecoin Plunges as Crypto Continues its Fall
The crypto industry’s largest meme coin, Dogecoin, fell over 9% at the beginning of the week, DOGE is trading at around $0.088. Its plunge was the largest of several cryptocurrencies, which all started the week with a tumble.
US Worker Productivity is at its Lowest in Decades
According to the Bureau of Labor Statics, the productivity of American workers has fallen for three consecutive quarters, the most significant decline since 1947. It is believed the decline was inevitable, but COVID sped it up.
New Procedures for Manufacturers and Sellers of Clean Vehicles
The Treasury Department and Internal Revenue Service issued Revenue Procedure 2022-42 setting out key processes for manufacturers and sellers of clean vehicles. This revenue procedure also provides the procedures for persons selling vehicles to report specified information to the IRS for a vehicle to be eligible for the credit for new or previously owned clean vehicles.
From the Kiplinger Newsletter: 10 Key Ideas for Your 2023 Financial Planning
The economic landscape will remain unpredictable for the foreseeable future. Still, there are plenty of ways to ensure our finances are robust enough to deal with whatever the next 12 months bring:
- Max out your 401K – hint, hint, there’s still time to adjust for 2022 as well
- Set aside money in your HSA
- Plan and budget in general, this should be ongoing
- For those on social security note that your benefits will increase beginning January, this might be a great time to elect withholding so you don’t get a big tax bill in April 2021
- Make direct charitable payments via your RMD
- Invest in self-care
- Help elderly parents and relatives with their own budgeting and financial planning
- Start your children on their own financial planning, and if appropriate involve them in yours
- Work on building up a surplus of savings for emergency needs
- Audit your beneficiaries as family situations may have changed since you made those elections
- 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 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 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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Contact us if you have any questions or want to discuss the next steps for your business.