Weekly Digests

Welcome to summer 2024!  You know it’s officially summer when you mix up your second gallon of “bug juice” in my case organic spray mix for combating those invasive Spotted Lanternflies. Yes, they are back again this year, but I am ready for them,  prepared to do battle and winning. They seem to love my fig tree; I check every morning after my beach walk and find them lined up on the top branches.  My method of trapping, spraying and squishing is working as there are less and less showing up each day AND more and more fig buds each day.

This has been a busy week as I took my morning walks even on Monday and Tuesday before I headed out to Long Island to attend the annual Meltzer-Lippe Private Wealth & Taxation Institute…

I am glad to say I was able to get out on the beach every day for my new version of strength work as I walk barefoot in the soft, flat sand …

My garden is a source of stress relief and I am enjoying this year’s crop of lettuce in my salads.  It looks like it’s time to start picking the basil for a mozzarella, tomato, basil salad or for a small batch of pesto; the more you pick the more it produces!

Here’s hoping for short rain showers and long stretches of sunshine for the weekend.  I hope you have great plans.

WEEKLY TAKE-AWAY

I was thrilled to attend a great conference this week, and to speak on one of the panels.   It was bifurcated (in-person and live streamed) but I attended in person and had a great time speaking and learning and meeting with other tax and legal professionals.  I taught one of the venders the Yiddish word for the eye glass cleaning cloth he was giving out (Shmata) as this conference was held on Long Island; I also showed him how the container was actually a flexible business card holder – great alternate use of packaging materials – we love to recycle! Even though the trip was over an hour each way it was well worth it, I remembered to take my business cards (last year’s take-away) and have already  connected with some of the venders and other professions I met there.

TAX ISSUES/TAX PLANNING

IRS Options for Late Filers: Payment Plans, Penalty Relief, Good Excuses

While the IRS has several options to assist taxpayers who missed the April filing deadline for their 2023 federal income tax returns, and in some cases all you have to pay is the interest, we see that many individuals and businesses try the DIY approach. However, we tax professionals have a toolbox that, in most cases, more than covers the associated fees with tax and penalty savings.

Our best advice to avoid this situation and/or mitigate it:

• Be Proactive with tax planning to assure you are paying the minimum tax based upon your situation by planning ahead and taking advantage of deductions, credits, and other tax-saving strategies.
• Follow Estimated and Withholding Tax Guidelines so you don’t get “hit from left field” unprepared on April 15th
• Work with a Knowledgeable Tax Professional who can guide you through the laws, help you understand what documentation you need, and advise you on how to keep and organize your records properly.

When all else fails there are remedies which can employed in addition to paying the balance due as soon as possible to minimize the penalties and interest, remember an extension to file extends the deadline to file until October 15 but does not extend the time to pay:

• Penalty Relief for First-Time Offenders
• Reasonable Cause for Health Issues or Unforeseen Circumstances
• Installment Agreements
• Offer in Compromise (OIC)
• Automatic Failure-to-Pay Penalties on Unpaid Taxes

By working with a knowledgeable tax professional and understanding IRS procedures and best practices, taxpayers can effectively mitigate penalties and interest and avoid the stress of missed deadlines.

Connelly v. Internal Revenue Service

This ruling may affect current and future estate planning for small business owners. On June 24^th  I am scheduled to attend what I am sure will be the first of many seminars as we pick apart this case.  On June 6th the U.S. Supreme Court handed down its decision in the Connelly case (Connelly v. United States, U.S., NO 23-146, opinion 6/6/2024), which affirmed a decision of the US Court of Appeals for the Eighth Circuit.  The case addressed the valuation of stock in a closely held business and held that the obligation of an entity to buy a deceased owner’s shares does not reduce the value of the insurance proceeds received by the entity which are used to fund a corporate redemption obligation under a buy-sell agreement. In short, no offset for the redemption obligation is recognized for estate tax purposes.  

ECONOMY

 New Era of Supply Chain Disruption

As reported in this article by Finance.Yahoo:  “After a series of COVID-19 pandemic disruptions, ongoing geopolitical conflicts, and now a historic year in which more than 60 countries are holding elections, supply chain managers face a growing number of challenges.”  “I would actually say that we’re in a new era,” HSBC Americas head of global trade solutions Marissa Adams told Yahoo Finance in a video interview. “I don’t think that there is a normalization anymore. I think that what companies are now facing is that supply chain disruption is the new norm.”

The ‘Good’ and ‘Bad’ News Inside the US Jobs Report

As reported in this article by Reuters.com:  “The latest U.S. payrolls report did little to settle the debate about where the job market is headed, with ample fodder for both “soft-landing” believers and doubters over whether the Federal Reserve can tame inflation without sending millions of workers onto the jobless rolls.  True, the “blowout” gain of 272,000 jobs in May exceeded every single estimate among 77 economists polled by Reuters ahead of the release of the report on Friday, and the breadth of hiring was the widest in 16 months.”

Gas Prices Could Push Overall Inflation Lower

As reported in this article by Investopedia.com:  “Falling gas prices made May one of the tamest months for inflation since late last year, if forecasters are correct.   That would mean prices rose 3.4% over the year, the same year-over-year rate as April.  Much of the relief for consumers came at the gas pump. Average nationwide prices for unleaded gas fell around 18 cents per gallon to $3.61 during May, according to Gasbuddy data, driving a large portion of the expected decrease, several economists said.”

The Economy Hits a Midyear Holding Pattern

As reported in this article by Axios.com:   “From the C-suites of big companies to the halls of the Federal Reserve, economic decision-makers are waiting to see whether the next shift is toward recession, reacceleration or something in between.  The economy has hit a midyear holding pattern in which policy is static, growth and inflation have leveled out and CEOs aren’t making major adjustments to hiring plans as they await the results of the U.S. presidential election and a Fed policy pivot.”

GENERAL RESOURCES

• News about the Child Tax Credit
• 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