Weekly Digests

It’s Friday and the start of Memorial Day Weekend – Reminder that although this weekend may be the unofficial start of the summer for many of us, however, it‘s significance is actually in remembrance and thanks to our brave soldiers and war heroes: Thank You for Your Service!

 You are very much appreciated and not forgotten.  Thanks to those who defend our country we are able to go about our lives, starting our day on the beach, in the gym, with a stop at the local deli or bagel shop or on our way to work or school knowing we are safe.

This week I was grateful to be able to start my day with a walk on the beach, then do a strength workout before heading to my office with fresh brewed coffee.  Thank you for sharing some great morning and evening shots as well.

Evidently Tuesday was a good day for photos:

Memorial Day 2024; a beautiful morning on the beach and a great way to start the 3-day weekend. I hope you have a great day with only positive thoughts and memories…

Many of us are planning a long weekend starting with a half day and spending time outside gardening, relaxing or tending the bar-b-que, Wishing you all a great weekend.

WEEKLY TAKE AWAY

This has been another crazy week and maybe the most important “projects” we helped with were not tax related, but rather the good work we did as matchmakers.  We received several requests for help from clients and friends for advice with non-tax related issues.   I was so glad to be able to take time to listen to their concerns and to connect them with one of the many legal, financial, medical and/or tax professionals I know trust and depend on in these cases. Several calls concluded with some great pointers and strategies that could be really helpful.  These conversations left both me and my clients/friends more relaxed and feeling that there could be an actual positive outcome.  I firmly believe that with proper communication we can understand the real problem and begin to help solve it just by listening and then of course we call or text our contact for professional assistance👂🏼📲📳📞.

TAX ISSUES/TAX PLANNING

IRS Warns About More Tax Scams

This just reported in this week’s Tax Advisor:  This week the IRS issued a consumer alert regarding scams involving the fuel tax credit, the sick and family leave credit, and household employment taxes.  The alert: these scams led thousands of taxpayers to file inflated refund claims. Instead of receiving refunds, taxpayers are finding that their checks are delayed as the IRS seeks documentation supporting claims for these credits and household employment taxes paid.

The refund amount is frozen on returns with these bad claims, the IRS said; even if a portion of the refund is based on legitimate claims, taxpayers will not receive any refund amount.

For filing an improper claim, some taxpayers could face penalties of up to $5,000 per return, follow-up audits, or, if an improper claim is filed knowingly, criminal prosecution. The IRS is encouraging taxpayers to review the guidelines and seek advice from a trusted tax practitioner. To avoid penalties, taxpayers may want to file an amended return to remove ineligible claims.

2024 Tax Estimate #2 are Due Soon: June 17th 2024

Yes, it’s that time again; it’s time to review your year-to-date income and profitability results. Let’s also put a positive spin on this exercise. You can take the time to determine what your 2024 tax liability is, as well as look to schedule an appointment with your tax professional to create or update your tax plan, hold a cash flow review and/or business operations assessment. Proactive planning may help you achieve your desired outcome.

• First steps, review your financial statements and compare activities with your prior year, annualize and project for a full year so that you are prepared to meet your current and full year business and personal tax liability.
• Next, consider making some changes in operations to positively affect your cash flow, life-work balance, return on investment.  Certainly look at equipment needs and use, professional services effectiveness, employee focus allocation, profit centers, etc.
• Finally, update or create a 90 day action plan to incorporate tax plans, business goals, personal goals and exit plans

IRS Interest Rates

The Internal Revenue Service  announced that interest rates will remain the same for the calendar quarter beginning July 1, 2024.  For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily.

Here is a complete list of the new rates:

• 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
• 5.5% for the portion of a corporate overpayment exceeding $10,000.
• 8% for underpayments (taxes owed but not fully paid).
• 10% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

Tax Planning Starts at Home With Solar Pannels and Other Home Improvements

I was glad to see that with these longer days of sunlight my solar panels were hard at work producing many kwh and hopefully the system will bank enough extra hours to cover our fall/winter usage.  Considering adding some energy efficiencies to your home?  Take some time to read through the rules and consider an installation.

If you make energy improvements to your home, tax credits are available for a portion of your qualifying expenses. You can claim either the Energy Efficient Home Improvement Credit or the Residential Clean Energy Property Credit for the year when you make qualifying improvements.  Improvements to your primary residence offer opportunities to claim a credit. If you own a second home and use it as a residence, you may also be able to claim these credits. You cannot take credits for property you rent to others.  Feel free to contact us to help you determine if the benefits offered by installing solar panels, new windows and exterior doors, insulating your attic, etc will be good for your tax returns as well as the environment.

Who Can Claim the Credits:

• You can claim either the Energy Efficient Home Improvement Credit or the Residential Energy Clean Property Credit for the year when you make qualifying improvements.
• Homeowners who improve their primary residence will find the most opportunities to claim a credit for qualifying expenses. Renters may also be able to claim credits, as well as owners of second homes used as residences.
• The credits are never available for improvements made to homes that you don’t use as a residence.

Energy Efficient Home Improvement Credit

These expenses may qualify if they meet requirements detailed on energy.gov:

• Exterior doors, windows, skylights and insulation materials
• Central air conditioners, water heaters, furnaces, boilers and heat pumps
• Biomass stoves and boilers
• Home energy audits

The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:

• 2022: 30%, up to a lifetime maximum of $500
• 2023 through 2032: 30%, up to a maximum of $1,200 (biomass stoves and boilers have a separate annual credit limit of $2,000), no lifetime limit

Get details on the Energy Efficient Home Improvement Credit.

Residential Clean Energy Credit

These expenses may qualify if they meet requirements detailed on energy.gov:

• Solar, wind and geothermal power generation
• Solar water heaters
• Fuel cells
• Battery storage (beginning in 2023)

The amount of the credit you can take is a percentage of the total improvement expenses in the year of installation:

• 2022 to 2032: 30%, no annual maximum or lifetime limit
• 2033: 26%, no annual maximum or lifetime limit
• 2034: 22%, no annual maximum or lifetime limit

Get details on the Residential Clean Energy Credit.

You can visit IRS.gov/homeenergy for full details including a comparison chart. This chart can help you decide if the credits apply to expenses you’ve already paid or will apply to improvements you’re planning.

ECONOMY

US Small Business Sentiment Rebounds in April

According to a recent article in Reuters.com:  “U.S. small-business confidence increased in April and the share of owners planning to raise prices was the smallest in a year, but persistent labor shortages continued to exert cost pressures for owners, a survey showed on Tuesday.”

Are We Getting a ‘Hard Landing’ After All?

According to a recent article in TheWeek.com:   “Is 2024 the year America gets the recession economists expected in 2023? It’s a growing concern. A “worse-than-expected” jobs report this month could signal an economic slowdown that “threatens to downshift the nation’s brisk economic growth,” said The Associated Press.

Core Inflation Hit 3-Year Low in April, But Remains Well Above Historic Target

According to a recent article in Forbes.com: Inflation was less painful than expected in April, bolstering the case for the Federal Reserve to soon bring down interest rates as the U.S. economy tiptoes the path to a soft landing.

Small Business Optimism

According to a recent article in Investopedia.com: “Small business optimism grew for the first time this year but inflation continues to be a top concern for business owners, data from the National Federation of Independent Business (NFIB) showed.”

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