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What a difference a day or an hour can make, especially here at the beach. This morning I “slept in”, yes at 7 AM I missed that classic shot of the sun rising out of the ocean on the horizon, but with no wind, no rain, it really did feel like a spring day….

The votes are in; Saturday Morning Sunrise – Favorite of the 4 I took and shared via text…

Easter Sunday and for once I was not alone on the beach; I can’t believe someone (less klutzy than me at least) would venture out on those slippery jetty rocks…

Days with an overcast sun the best you can hope for is deep blue…

It was stormy here most of this week but the beach is still inviting …..

The piping plovers are back. It’s spring…

TGIF and I’m hoping for a bit of a break.  I hope you have great plans for the weekend, or maybe can just relax a bit.

WEEKLY TAKE AWAY

Tax time can sometimes be an impetus for change; we in the accounting industry see clients take the opportunity to close out a tax year with one professional and start working with another.  Sometimes they are just not a great fit anymore, or one party or the other becomes disillusioned.  Sometimes I have been disappointed to see certain behavior by “professionals” during this change over; I wonder why someone with a long history would jeopardize all those years of good feelings and “burn” those relationship bridges as they disengage. My firm has been in business for over 20 years and during that time we have taken on new clients and disengaged with others.  We try to be courteous to our predecessors and successors as we know how difficult it is to “onboard” a new client.  No matter how strong a relationship is, it needs attention and care to remain strong and healthy.

TAX ISSUES/TAX PLANNING

UNINTENDED CONSEQUENCES of RUSHING TO FILE YOUR TAX RETURN

or

IT’S BETTER & CHEAPER TO EXTEND THAN AMEND

The myths and truths about income tax extensions:

• Myth: a tax extension enables you to file AND pay the balance due later.(with no consequences)
• Truth: While a tax extension gives you more time to file your taxes, it does not extend the deadline for paying any tax due. When you submit your request for extension of time to file, make sure you submit your best estimate of your balance due as well.
• Myth: filing a tax extension puts you on the radar of the IRS for an audit
• Truth:  the IRS is too busy running their operation to “red flag” your extended tax return
• Myth: My tax professional prefers that I send them my last missing document even at the “last minute”, so we don’t have to file an extension.
• Truth:  Your accountant counts to 10 and then says “thanks so much for getting me this last piece of information.  We did a great job estimating when we prepared your extension and once we finalize you may get a refund”.

Bottom line, please take you time preparing your paperwork and send your documents into your tax professional as soon as your “package” is complete.  In addition although we are aware that most people prefer to file by April 15th we will not jeopardize the accuracy or the tax results if that means rushing it out.  Please be reminded that filing an extension does NOT open you to audit and actually is the best way we know of assuring your returns are correct and complete.  Preparing an extension allows us all to make sure are clients are paying in the least tax possible in their situation.  It also gives certain taxpayers more time to make the SEP/IRA payments that will reduce their overall tax liability AND to check with venders for potential “straggler tax documents”.

TAXPAYERS are REQUIRED to REPORT DIGITAL ASSET TRANSACTIONS, GIG ECONOMY INCOME, FOREIGN SOURCE INCOME & ASSETS

People sometimes forget that we have a voluntary tax system, well not totally voluntary… if you choose to not file you may end up… (in jail, with a huge penalty, a big legal fee).  When we file our tax returns we should be including all sources of income, NOT JUST those items that show up on a third party document (i.e. W-2, 1099-NEC, 1099-Misc, 1099-R, etc). We also have the opportunity to volunteer other information, such as charitable donations, business related expenses, business asset purchases, and the cost basis of stocks we sell.  Around this time every year the Internal Revenue Service reminds taxpayers they’re generally required to report all earned income on their tax return, including income earned from digital asset transactions (crypto currency transactions, FanDuel winnings, NFT’s), the gig economy and service industry as well as income from foreign sources.  Again, “it’s better to extend than amend”, so if you have not taken the time to accumulate all possible deductions or confirmed and quantified all sources of income, file an extension and use that extra time to make sure your return is accurate.  Remember these are extensions of time to file, NOT an extension of time to pay, so be prepared to include your best estimate of your balance due (if any) when you file your extension.

ECONOMY

US ECONOMIC GROWTH for LAST QUARTER is REVISED UP SLIGHTLY to a HEALTHY  3.4% ANNUAL RATE

The U.S. economy grew at a solid 3.4% annual pace from October through December, the government said Thursday in an upgrade from its previous estimate. The government had previously estimated that the economy expanded at a 3.2% rate last quarter.

FEDERAL RESERVE ISSUES FOMC STATEMENT

The Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.

SMALL BUSINESS HIRING WOES SHOW SIGNS of EASING as ECONOMY STAYS STRONG

Hiring woes may be easing for small businesses. The CBIZ Small Business Employment Index reported a seasonally adjusted increase of 0.17% in February as the U.S. economy stays strong despite high interest rates. The CBIZ index tracks hiring among thousands of companies with 300 or fewer employees across the U.S.

WHAT the BALTIMORE BRIDGE COLLAPSE MEANS for the US ECONOMY

The collapse of the Francis Scott Key Bridge on Tuesday is a reminder that the economy remains vulnerable to sudden supply-chain shocks, experts say. While the disaster is unlikely to have a tangible effect on headline GDP growth or inflation, it could affect specific sectors, drive up shipping and trucking costs, and affect employment in Baltimore, they say.

FEDERAL RESERVE EXPECTED to CUT RATES

The U.S. Federal Reserve looks on track to cut interest rates as the presidential campaign season heats up, potentially delivering President Joe Biden a boost as polls show Americans dislike his handling of the economy.

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