Weekly Digests

It’s been another jam-packed week as we head for the new year. Our office is continuing to work on tax minimization plans, help determine bonus payments, and calculate estimated tax payments as we navigate the ever-changing Beneficial Ownership Information (BOI) landscape.  Although I love walking on the beach in the morning I was really glad it was raining Monday enabling me to sleep in.  I am happy to share some beautiful sunrises from this week though…

I am hoping you enjoy your weekend and have great plans for the upcoming holidays.  FYI we are preparing to host and contribute to several holiday dinners with family & friends, so please feel free to share some of your favorite holiday dish recipes and photos in comments and texts AND enjoy the holiday spirit.

WEEKLY TAKE AWAY

Plan but be prepared to pivot (make sure you have your running shoes laced tightly and your computer on).  I was scheduled to join my friends Scott Ahroni, esq and Craig Wild, CPA yet again for another Beneficial Ownership Information (BOI) seminar presentation “10 Things and More I Need to Know About BOI But Didn’t Know to Ask ” maybe it should have been “10 Things I Hate About BOI” instead. Our webinar was scheduled for Wednesday at 2 PM.  Luckily my morning routine calls for an early wake-up time so I get my regular workout in before I take my morning beach walk, then check my emails as I drink my first cup of coffee 🍵.  Wednesday morning, I found emails from several of the online accounting journals I subscribe to and received a “heads up” call from an accountant friend about wording in section 122 of the Bipartisan Bill released Tuesday evening which could affect the filing deadline requirements for entities formed or registered before January 1st 2024 (see details below under Tax Issues/Tax Planning).  I spent several hours reading, fact checking, and updating our slide deck and was so grateful that our presentation was planned for 2 pm,  I also ” time stamped” the PowerPoint, just in case but as of 9 AM this morning there are no updates…

TAX ISSUES/TAX PLANNING

Charitable Giving Comes in Many Different Forms

Charitable giving comes in  many different forms as I was so aptly reminded by this recent article from Kiplinger.com, for tax purposes just remember to Document Document Document AND follow the rules (I have edited her article where appropriate).  Thank you @Gabriella Cruz-Martínez for also reminding us that:  “food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.”

Tis’ the season for giving, and your donations can actually give back to you by lowering your tax bill.  With a charitable donation, you can gift money (remember to ask for a receipt) or goods (again that receipt) to a tax-exempt organization which could reduce your taxable income on your federal and/or state tax return  (if you itemize deductions). Generally, you can deduct from 20% to 60% of your adjusted gross income through donations. However, there are some limitations.  For instance, cash donations to your company-sponsored fundraiser or department store may not be eligible. You can only deduct qualifying donations from an IRS-recognized tax-exempt organization or 501(c)3.

Animal Shelters: If you’re interested in donating to an animal shelter or sanctuary, you can do local research and look up registered 501(c)3 organizations in your area. You can also verify if they are a registered tax-exempt organization by calling them, or by using the IRS tax-exempt organization search tool online.  Some shelters serve as life-long homes for disabled or senior animals, while others focus on rehabilitation and rehoming for adoption; they welcome old sheets, towels and blankets.

Thrift Stores:  If you’re doing some spring cleaning this winter, your clothes, furniture, books, or appliances can be donated to 501(c)3 thrift stores. While Goodwill and the Salvation Army may come to mind, you can do some research and donate to a smaller local thrift.  For example, in New York City, Housing Works has several stores across the city and all proceeds go towards funding and legislation to ensure all persons living with HIV/AIDS have access to housing, healthcare, treatment, and prevention.  Housing Works accepts cash donations online, thrift and book donations at your local shop, and can even arrange furniture pickup.  REMEMBER to list out the items donated at there ‘depreciated value”.  We provide a check list for itemizing donated items and recommend asking for a contemporaneous receipt which you should keep with your other “tax papers”.

Toy Drives:  If you’d like to donate toys this holiday season, you can get in touch with local toy drives in your state or city. Don’t know where to start your search? Well, your local children’s hospital, church, public library, or neighborhood group may give you a lead.  Some fire departments, like FDNY Firezone, are registered 501(c)3 organizations with a funding bank specifically for toys. If you’d like to donate, it’s often asked that gifted toys aren’t wrapped for security reasons.  If you’re looking to donate to a bigger organization, the Marine Toys for Tots Foundation accepts online cash donations or you can drop off a toy at a local chapter. Local campaigns are celebrated each year in over 800 communities across all 50 states, including the District of Columbia, Puerto Rico, and the Virgin Islands. REMEMBER to save those store receipts for these purchases which we recommend you keep with your other “tax papers”.

Food Drives:  As it gets colder outside, many families like to participate in food drives to give those in need a warm meal. If you’d like to participate or donate to a 501(c)3 organization, you can research your state food bank or pantry.  For instance, Feeding Florida has 9 chapters across the state that help serve 2,400 community-based partner agencies.  The organization helps feed 2.9 million Floridians facing hunger, including over 800,000 children.  Another organization that accepts donations is No Kid Hungry, you can contribute by giving a one-time or monthly donation online.  All proceeds go to help feed children at school, at home, or during the summer months — when some kids are often the hungriest due to lack of school meals.  REMEMBER to save those store receipts for these purchases which we recommend you keep with your other “tax papers”.

Charitable foundations:   If you have a specific cause you’d like to donate to, like awareness of climate change, medical research, or a local school district, you can do so.  For example, St. Jude Children’s Research Hospital is a 501(c)3 that accepts monthly or one-time donations to help families front bills for treatment, housing, or food, while their children get medical attention.  The American Civil Liberties Union (ACLU) Foundation is another non-profit organization you can donate to. All proceeds go toward defending and advancing civil liberties via litigation, education, and lobbying.  Building Homes for Heroes is an IRS-recognized 501(c)3 that builds and modifies mortgage-free homes for first responders, injured veterans, and their families.  As mentioned, your local public schools, libraries, and hundreds of other deserving organizations may have a registered 501(c)3 fund where you can donate cash or non-monetary gifts to support their initiatives for those in need.  Again, remember document your donations as appropriate.

Beneficial Ownership Information (BOI) Reporting Deadlines Extension? or Not

Beneficial Ownership Information (BOI) reporting requirements, constitutionality, and deadlines are still in flux and accounting newsletters and social media posts are buzzing about what, when, why, who, and if entities should file AND whether we as their tax and accounting advisers should get involved.  The latest posts relate to a potential extended due date as included in the “funding bill” still being hashed out in congress (my blog posts by 9:30 AM, the vote is scheduled for today at 10 AM).    This Here’s the gist as copied and pasted from our slide deck page 34 …..

Included in Section 122 of the Bipartisan Bill Released December 17th 2024 Proposed Amendment to 5336(b)(1)(B) of title 31 US Code:

Sec. 122. Extension of filing deadline for certain pre-existing reporting companies:  “Section 5336 (b)(1)(B) of title 31, United States Code, is amended by striking “before the effective date of the regulations prescribed under this subsection shall, in a timely manner, and not later than 2 years after the effective date of the regulations prescribed under this sub-section” and inserting “before January 1, 2024, shall not later than January 1, 2026”.”

The revised statutory provision would read as follows:

In accordance with regulations prescribed by the Secretary of the Treasury, any reporting company that has been formed or registered ‘before January 1, 2024, shall, not later than January 1, 2026, submit to FinCEN a report that contains the information described in paragraph (2).

https://docs.house.gov/billsthisweek/20241216/CR.pdf (page 223/1547)

As you can imagine I sent several texts and emails with “I’m done” emojis and gifs…

IRS Increases the Standard Mileage Rate for Business Use in 2025

Per IR-2024-312:  On Thursday the Internal Revenue Service announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.

“Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical purposes, the same as in 2024.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
• 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.

The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, is based on only the variable costs from the annual study. ”

ECONOMY

US Small Business Sentiment Nears 3.5 Year High in November

Wells Fargo Investment Institute Signals the U.S. is Positioned to Power the Global Economy in 2025

Wells Fargo Investment Institute (WFII) released its “2025 Outlook: Charting the Economy’s Next Chapter.”  As reported in this recent article from BusinessWire.com:   “WFII’s global economic outlook is that the U.S. economy’s continued expansion will lead the world economy. As well, the U.S. stock market rally will broaden, with earnings being the primary driver of prices across equity asset classes.

WFII expects equity market leadership breadth to continue to widen, including extended participation by more cyclically oriented areas of the market, such as small-cap equities and the Financials, Communication Services, Industrials, and Energy sectors of the S&P 500 Index.

“We continue to believe that equity markets look attractive for 2025, with broader sector leadership and participation, thanks to improving fundamentals and a policy tailwind,” said Darrell Cronk, chief investment officer for Wells Fargo Wealth & Investment Management. “The incoming administration and congressional leaders want a fast start, with likely policy priorities including extending tax benefits, deregulation, tariffs, and tighter border control. We expect that these policies will support our guidance.”

Outlook on global economy and asset groups:

• Global economy: We believe the U.S. economy will lead the global economy, as economic recoveries in Europe, China, and emerging markets face significant headwinds.
• Global equities: We expect returns to be driven mainly by earnings growth, but valuations should remain supportive.
• Global fixed income: Short-term U.S. Treasury rates likely will fall with the Federal Reserve policy rate, but longer-term rates should rise with economic growth, tariffs, and immigration restrictions.
• Global real assets: We believe commodities are well-positioned to benefit from slow supply growth and a global demand rebound that is driven by a modest international economic recovery and lower global interest rates.
• Global alternative investments: Global alternative investments are likely to benefit from a pickup in merger and acquisition activity, lower cost of borrowing, and increasing confidence that economic growth is sustainable.”

Business Leaders Express Greater Optimism About Economy After US Election

As reported in this recent article from HRDrive.com:  “Executive business leaders reported major shifts in positive sentiment about the economy and their companies’ prospects after the presidential election, according to a fourth-quarter survey by AICPA & CIMA. Compared to the third quarter, hiring plans increased, and 20% of leaders said they’re planning to hire in the near future.”

Business Roundtable Q4 Rconomic Index Shifts Higher on CEO Expectations and Plans for 2025

As reported in this recent article in BusinessRoundtable.org:  “Business Roundtable released its Q4 2024 CEO Economic Outlook Survey, a composite index of CEO plans for capital spending and employment and expectations for sales over the next six months. The overall Index rose 12 points from last quarter to 91, the highest level in over two years and well above its historic average of 83. The increase is the result of CEOs reporting higher numbers across all three subindices.

“As we head into the new year, the Survey results reflect CEOs’ optimism about the U.S. economy in the coming months,” said Business Roundtable Chair Chuck Robbins, Chair and Chief Executive Officer of Cisco. “With Washington poised to consider measures that can protect and strengthen tax reform, enable a sensible regulatory environment, and drive investment and job creation, business leaders are energized by the opportunity to engage the incoming Administration and Congress on policies that can further fuel our economy.”

The Survey’s three subindices were as follows:

• Plans for hiring increased 12 points to a value of 67.
• Plans for capital investment increased 10 points to a value of 83.
• Expectations for sales increased 13 points to a value of 123.”

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
  • A list of frequently asked questions on the advance Child Tax Credit Payments
• IRS links for disaster relief
• SBA link for Disaster assistance
• FinCEN link for BOI reporting
• 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