Blog

This is the last time (for a while) that I will refer to tax season 2024 in my weekly blog.  We all know that tax season never really ends until the IRS and most states shut down their e-file portals in October, but we can dream.  Every year we say “this has been the worst tax season ever”, and it has been yet again.  Friends and family roll their eyes and tell us that they know we will get through this tough time as we always do, and they have been right and will be this year too, but it still feels like the worst tax season ever.  It certainly helps to have a full supply of dark chocolate in the top right and drawer of my desk, to be able to workout regularly (this year my favorite has been my 32 miniute interval row on my concept II erg) and take daily walks on the beach at sunrise.  This morning my phone’s weather app did not tell the full story, it did say 54 degrees and overcast which is barefoot beach walking weather, BUT sooooo windy and stormy…

We were thrilled to be able to see and receive so many photos of the eclipse, so you don’t need mine too…

Everyday on the beach is different and it certainly is a great way to start my day…

I am hoping those of you who have crazy deadlines can make some time for yourself this weekend AND please if you haven’t done so submit your paperwork or signature documents to your tax professional BEFORE Monday!!!!

WEEKLY TAKE AWAY

You never know what is in store for you, hence the expression “stop and smell the roses”  This week as the roses are not in bloom here yet, we say take time to “stop and:

• feel the earthquake
• do the NYT crossword puzzle (at least Monday-Wednesday)
• have breakfast/lunch/dinner (sometimes they are an all-one-affair) with those people in your life who you love and care about
• watch the eclipse
• take a walk on the beach at sunrise/sunset/mid-day
• take your 32 minute interval workout
• call your mom/dad/spouse/partner/kids/other…”

even during tax season or your busy time. It’s definitely been a marathon this year. As we approach the finish line I am just grateful for my brilliant dedicated staff. We are a team!

TAX ISSUES/TAX PLANNING

TAX SEASON 2024: IRS STATISTICS

The IRS tracks their processing times, submissions, payments out, funds received.  For tax season 2024 the IRS is reporting the average direct deposit refund amount has reached $3,152 as of March 22, 2024 up 5.4% on the same period in 2023.  They have  processed more than 79 million returns through March 22, down slightly on last year by -1.4%, due in large part to the lower number of actual filing days this tax season (61 versus 54).

• Do we care?
• Do they even know or track how many extensions and tax returns are “sitting” in our office ready to be submitted once we get the e-file signature documents back?  OR
• Do they even know or track how many tax returns are “sitting” in MY office ready to be printed digitally and uploaded to our client portals by Ramona?  OR
• Do they even know that we only care about our own tax return statistic, our own refund, how much is being withdrawn from our bank account in the next few days?
• Do they even know that we only care about our time in the Boston Marathon being held for the 128th year on April 15th? (My brother-in-Law Rob is scheduled to run) Good Luck Rob🏃🏻
• Do they even know that we only care about our plans for the weekend 😎🌻🥳🧺

It Bears Repeating:  It’s Better to Extend than Amend or Miss Tax Minimization Opportunities

It’s April 12^th several major tax deadlines have passed and one more on Monday; S Corporation and Partnership business owners may have followed these rules: “it’s better to extend than amend”; “it’s better to extend than rush to file and miss out on some little-known tax advantages”; “it’s better to extend than rush to file and miss out on some little known hitches in the tax law”.  Individuals know their personal tax returns are due on April 15;  people may also need to file gift tax returns and foreign asset reports.  C Corporation tax returns with a December 31st year end are also due on Monday.

• New York State Small Business Subtraction Modification: as of January 1, 2022, eligible shareholders, partners, members and sole proprietors whose entity is also eligible can apply the expanded subtraction modification to their 2023 tax return for a reduced tax bill at the state level.
• Annual deferred compensation plan contributions for company pension plans are due by the filing deadline (March 15th or extended filing deadline (September 15th), by filing an extension you can make the payment by September 15^th and still reduce your business and/or individual tax liability.   For sole proprietorships the due dates are April 15^th and October 15^th.
• Forms K-2/K-3 Reporting Responsibility for Pass-Through Entities- see my blog post from February 24th, 2023 for more detail about protection under statute of limitations rules
• You can make Traditional and ROTH IRA contributions to your accounts by Monday and have them count for 2023 as well (make sure to let your banker/broker know the year/type of contribution intended)
• You can check in with your tax professional to confirm they know about the life or financial changes that occurred this year

It Bears Repeating:  There’s Still Time for Effective Tax Savings

Take your time, amass some more documents, schedule a consult with your tax advisor over the next few weeks and you may be effective at reducing your current year tax liability, it could be just a matter of pulling funds from one pocket and putting them in another.  Eligible individual taxpayers should consider making a contribution to their traditional IRA by the April 15^th deadline. Under the right circumstances your IRA contribution could save you money on 2023 tax bill. Remember to consult your tax professional to see if this makes sense for you.

ECONOMY

U.S. REMAINS the World’s TOP DESTINATION for FOREIGN DIRECT INVESTMENT

According to the US Department of Commerce: “The United States has been ranked as the top destination for foreign direct investment for the 12th consecutive year according to Kearney’s Global Business Policy Council’s 2024 Foreign Direct Investment (FDI) Confidence Index.  The annual survey of global senior executives and investors found that the United States maintains its lead ranking for over a decade due to the growing strength of the U.S. economy and rebounding consumer sentiment.

Foreign investors were encouraged by higher-than-anticipated GDP growth in 2023, which was attributed to strong consumer and government expenditure, and robust export levels. The ranking is also testament to the United States’ lead in technological innovation, a top priority for investors and the Biden-Harris Administration’s economic agenda.

“SMALL BUSINESS OWNERS’ CONFIDENCE in the ECONOMY INCREASES

According to the US Department of Commerce: “The Q1 MetLife and U.S. Chamber of Commerce Small Business Index, which measures small business owner confidence, is 62.3—similar to last quarter’s score of 61.3—reflecting a stable business climate. More small businesses see an improving economy, helping to drive the headline score up one point.  One in three (32%) small business owners now say the U.S. economy is in good health, up seven percentage points from last quarter. Roughly two in five (38%) say their local economy is in good health, up eight percentage points from the end of 2023.  ”

STRONG US  LABOR MARKET UNDERPINS the ECONOMY in the FIRST QUARTER of 2024

According to this article in Reuters:  “U.S. job growth blew past expectations in March and wages increased at a steady clip, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated Federal Reserve interest rate cuts this year.”

The US ECONOMY is FLASHING a RECESSION WARNING SIGN

According to this article in BusinessInsider.com:  “The US economy is flashing a classic recession warning that has only shown a false positive once in the last century, according to top economist Lakshman Achuthan. The business-cycle expert and cofounder of the Economic Cycle Research Institute pointed to troubling signs of weakness in the US, with warning signs of a downturn cropping up in multiple areas of the economy

• The economy is flashing a recession warning that has only been wrong once in the last 120 years.
• The ECRI’s Leading Economic Index has started to decline in the past year, top economist Lakshman Achuthan said.
• GDP growth and the job market are also weakening in certain areas, which could lead to trouble for the US, he added.”

WHEN WILL the FEDERAL RESERVE CUT RATE or WILL THEY?

According to this article in the SeattleTimes.com:   “Ever since the Federal Reserve signaled last fall that it was likely done raising interest rates, Wall Street traders, economists, car buyers, would-be homeowners — pretty much everyone — began obsessing over a single question: When will the Fed start cutting rates?

But now, with the U.S. economy showing surprising vigor, a different question has arisen: Will the central bank really cut rates three times this year, as the Fed itself has predicted — or even cut at all? The Fed typically cuts only when the economy appears to be weakening and needs help.

Lower interest rates would reduce borrowing costs for homes, cars and other major purchases and probably fuel higher stock prices, all of which could help accelerate growth. An even more robust economy might also benefit President Joe Biden’s re-election campaign.

Friday’s blockbuster jobs report for March reinforced the notion that the economy is managing quite nicely on its own. The government said employers added a huge burst of jobs last month — more than 300,000 — and the unemployment rate dipped to a low 3.8% from 3.9%.

Some analysts responded by arguing that it’s clear the last thing the economy needs now is more stimulus from lower rates.”

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