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How fortunate I feel to have been able to spend an extended Thanksgiving holiday with my family and friends.  It was great to get away and clear my head.  The morning sunrises over Gourdneck Lake, MI were spectacular

As great as our vacation was, I celebrated when our plane flew over Rockaway beach, “there’s no place like home”

We have a rainy weekend forecast for the NY metropolitan area, but I think it may be a sign that it’s time to defrost that turkey carcass and make some soup, then curl up with a good book or movie and just relax…

WEEKLY TAKE AWAY

After taking time off from work and responsibilities the week of the thanksgiving holiday, having a clear head helped me as I worked up notes for our office 90 day action plan and meeting.  My staff and had a great and super productive meeting as we reviewed and discussed the line items and tweaked our goals for reasonableness.  We are all set for tax season 2023 and well on our way to continuing our proactive approach to year-end planning, worksheet updates, and document retrieval methods.  For me having a clear head made all the difference in the world, so we also scheduled a “holiday party” for mid-January when Elizabeth and Myriam will be in NY and an after tax season get away (probably at Monica’s beach house – she was not in the meeting at the time we picked the location).  Please feel free to create your own 90 action plan using SMART goals as discussed in a prior post.

TAX ISSUES/TAX PLANNING

Employee Retention Tax Credit (ERC)

Clients are still receiving emails from predatory “ERC Mills” in response, the IRS  has issued IR-2022-183 warning employers about those companies who are targeting businesses and preparing what may be erroneous amended tax returns looking for these credits.

On the other hand we are thrilled to see the amended payroll tax return notices and copies of the checks for our clients ERC’s coming through our client portals, or via emails and faxes.  A reminder to snap a photo of the check and then deposit it as a separate deposit and notify us immediately.  This refund has already been accounted for and the taxes paid.

Here are some guidelines to use to evaluate your situation for those of you who may be eligible, but have not applied for these refundable credits: 

The ERC is a refundable tax credit designed for businesses who continued paying employees while shutdown due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020 to December 31, 2021. Eligible taxpayers can now claim the ERC on an amended federal employment tax return (form 941) for a period within those dates.

To be eligible for the ERC, employers must have:

• sustained a full or partial suspension of operations due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19 during 2020 or the first three quarters of 2021,
• experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
• qualified as a recovery startup business for the third or fourth quarters of 2021.

 Grateful and Looking to Share with a Possible Tax Benefit

During this holiday season, remember those less fortunate and consider beefing up your charitable donations.  With state decoupling from IRS rules  you may be able to itemize deductions at the state level even if your situation does not enable you to itemize deductions at the federal level.    Consider non-monetary donations by participating in food, toy and clothing drives.  Remember the rules about donations and documentation.  I wrote about charity fraud in a prior post, so beware and be aware.

Save with the New Climate Tax Breaks

The Inflation Reduction Act of 2022 provides some relief by giving energy tax credits to people who buy certain eco-friendly products:

Save Up to $1,250 on Energy-Efficient Appliances

• Energy Star air source heat pumps: $300 tax credit
• Energy Star central air conditioning units: $300 tax credit
• Energy Star gas-powered boilers: $150 tax credit
• Energy Star gas, propane and oil furnaces and fans: $150 tax credit
• Energy Star non-solar water heaters (gas or electric): $300 tax credit
• Advanced main circulating fan: $50 tax credit for fans that don’t use more than 2% of your furnace’s total energy.

Save Up to $1,500 on Energy-Efficient Home Improvements

• Insulation: Get a tax credit for 10% of your qualifying insulation purchases, up to $500. Qualifying purchases include batts, rolls, rigid boards, expanding spray, blow-in fibers, weather stripping, spray foam in a can, house wrap and caulk.
• Windows, doors and skylights: Get a tax credit for 10% of the amount you spend on Energy Star-certified windows, doors and skylights, up to $500.
• Roofs: Get a tax credit for 10% of the amount you spend on an energy-efficient roof, up to $500. Roofing must be Energy Star-certified metal or asphalt with the appropriate pigment coatings or cooling granules.

National Tax Security Awareness Week Began on Cyber Monday

The Internal Revenue Service and the Security Summit partners kicked off the 7th National Tax Security Awareness Week this past Monday with IR-2022-204, providing information on how to avoid scams and protect sensitive personal information over the holiday shopping season. Click through for the full report.

ECONOMY

Some Retailers Benefited from Black Friday, Some Did Not

The crucial holiday shopping season started last week and results were mixed at best, with some distinct early and winners and losers. The winning retailers had a few key trends including “product assortments” driving the sales within their market segments during the long weekend. While analyst said the losing retailers had weak store traffic even with increased discounting; this may ultimately lay the foundation for poor fourth-quarter profits.

Protests in China Agitate the Global Economy

Protests erupted in the Chinese city of Urumqi after a fire killed at least 10 people this week. The protests, spurred on by China’s strict Covid-19 policies, sent global oil prices lower and the US dollar higher.  Our hearts go out to their family and friends especially during the holiday season.

BlockFi Files for Bankruptcy as the Crypto Crash Continues

Troubled cryptocurrency firm BlockFi is the latest domino to fall after the spectacular crash of FTX earlier this month. They currently owe money to more than 100,000 creditors.

Greener Flying is Possible with Hydrogen-Fueled Aircraft

Rolls-Royce and easyJet are currently testing an aircraft that runs on hydrogen and say that it’s a “major step” towards proving that zero-carbon aviation fuel is possible.

Purchase the Things You Love with Conscious Spending

“Conscious spending” is all about admitting that you like nice things, and then looking forward in your budget planning so that you can buy them. The only catch is that you have to be patient and mercilessly cut spending in areas that don’t bring you joy.

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
  • Portal to update information
  • A list of frequently asked questions on the advance Child Tax Credit Payments
• The best source for up-to-date and accurate health information is the Center for Disease Control (CDC)
• Our Covid-19 Resource Center with relevant blog posts, videos and prior weekly newsletters
• Payroll, HR and benefits company Gusto has put together An Employer’s Guide to Navigating the Coronavirus
• Accounting Today has a special page for articles on COVID-19
• Intuit QuickBooks has a dedicated page to help small businesses
• Entrepreneur put together a listing of free tech resources for remote work
• The Consumer Financial Protection Bureau has warnings about COVID-related scams
• Fast Company has a listing of the best productivity apps for 2020
• 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
• PC Magazine explains how to carry your vaccination card on your phone
• How to create a strong password

We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are here for you.

If you need help with your accounting, want to create a tax minimization plan, want to discuss your business growth plan or your finances, are concerned about retirement goals or need to be held accountable for your 90 day action plan, contact us for a complimentary discovery session or an appointment to just get started.