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Hanukkah, “The Festival of Lights”; the holiday that commemorates the rededication of the Jewish temple in Jerusalem in the 2^nd century BCE started last night: Thursday December 7th.  We know it as the time for Hanukkah traditions like:  lighting the menorah 🕎(adding one candle each night), giving and receiving gifts 🎁including chocolate gelt (chocolate coins) 🪙, playing spinning the dreidel (colorful top) and those delicious latkes (potato pancakes)  and apple sauce.

You just know it will be a good day when there’s no wind at low tide at sunrise.  On Wednesday we walked towards the east and as the sun rose above the clouds we saw the spout of water, then ……

Dolphins follow the whales who follow the fish…

Certainly incentive to get up with the sun…

I checked with my Rockaway friends and received this photo from a friend of a friend who obviously used a real camera for this shot…

It was also quite beautiful …

Gotta go, no telling what I’ll run into this morning …

Low tide and temperate today, we saw a beautiful at sunrise🌅, seaguls🕊️ and some cute dogs🐕‍🦺🐕🐶 AND it was low tide and 35 degrees, all good.

For those of you who are celebrating Hannukah, enjoy, for those of you who have other plans, best wishes for a great weekend.

WEEKLY TAKE AWAY

Diplomacy is always appreciated.  There’s a way of saying things and not hurting someone’s feelings.  Just yesterday I was with my sister at a medical appointment.  We were concerned about timing as we were registered for our annual NYS mandated sexual harassment training webinar set to start at 9:30 and needed to get back to her house in time to log in. We asked the person who was settling us in our examination room how long the process would be.  He explained that the appointments for most people took approximately 40-45 minutes but those with older patents were usually an hour or more.  He smiled and said “so you should be done within 40 minutes”.  We were thrilled to be classified with the younger patients, and he was right we were done and out within 40 minutes!  P.S. he was also diplomatic when indicating the standard and “roomier” size exam gowns🏥…

TAX ISSUES/TAX PLANNING

Deadline for your Fourth Estimate Tax Payments; a Wake-Up Call for Tax Minimization Planning

Corporations who make estimated tax payments should be reminded that the payment for the fourth quarter of 2023 is due next Friday, December 15th. While the fourth quarter estimate for Self-employed individuals, retirees, investors and non-corporate businesses is January 15, 2024.

We love to say it’s not a problem, it’s an opportunity and you might want to use this reminder as a wake-up call that you still may be eligable for some tax minimization planning opportunities; you may be able to shift your dollars from your IRS and State tax payment pocket to a different pocket using tax minimization strategies.

Beneficial Ownership Information (BOI) Reporting Requirements

In the tax and reporting world many of us procrastinate and wait to act when the deadline is almost here.  That has been the case for the Beneficial Ownership Information (BOI) reporting requirements.  The effective due date as mandated is January 1st 2024.  This mandate has been pushed back from the initial due date, but the laws take effect as of January 1st 2024.  For existing companies the reporting deadline is January 1st 2025, but 2024 start-ups are required to report within 90 days of inception.

This was mandated under the Corporate Transparency Act (CTA) enacted in 2021 the purpose of which was to “enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities.” Financial Crimes Enforcement Network (FinCen) – here is the link to the FinCen – BOI reporting rule fact sheet and is a legal requirement for those companies who meet the criteria – here is the link to the FinCen   FAQ landing page.

This sounds like a “tax thing” that your accounting professional should be able to handle, BUT it is not.  We recommend yourobligations to report be discussed with legal counsel to ensure you are complying with the law.  We will be vetting firms who we feel can properly advise our clients and will furnish that information to them via direct email and telephone calls.  Please don’t wait for the last minute on this one.  The following is an excerpt from the FinCen – BOI reporting rule fact sheet :

Timing

• The effective date for the rule is January 1, 2024.
• Reporting companies created or registered before January 1, 2024 will have one year (until January 1, 2025) to file their initial reports, while reporting companies created or registered after January 1, 2024, will have 90 days after receiving notice of their creation or registration to file their initial reports.  The original 30 day deadline has been pushed to 90 calendar days due to a recently passed extension (RIN 1506-AB62)
• Reporting companies have 30 days to report changes to the information in their previously filed reports and must correct inaccurate information in previously filed reports within 30 days of when the reporting company becomes aware or has reason to know of the inaccuracy of information in earlier reports.
• Reporting companies created or registered on or after Jan. 1, 2025, will continue to have 30 days to file initial BOI reports.

Reporting Companies

• The rule identifies two types of reporting companies: domestic and foreign. A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe. A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office. Under the rule, and in keeping with the CTA, twenty-three types of entities are exempt from the definition of “reporting company.”
• FinCEN expects that these definitions mean that reporting companies will include (subject to the applicability of specific exemptions) limited liability partnerships, limited liability limited partnerships, business trusts, and most limited partnerships, in addition to corporations and LLCs, because such entities are generally created by a filing with a secretary of state or similar office.
• Other types of legal entities, including certain trusts, are excluded from the definitions to the extent that they are not created by the filing of a document with a secretary of state or similar office. FinCEN recognizes that in many states the creation of most trusts typically does not involve the filing of such a formation document.

Beneficial Owners

• Under the rule, a beneficial owner includes any individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company. The rule defines the terms “substantial control” and “ownership interest.” In keeping with the CTA, the rule exempts five types of individuals from the definition of “beneficial owner.”
• In defining the contours of who has substantial control, the rule sets forth a range of activities that could constitute substantial control of a reporting company. This list captures anyone who is able to make important decisions on behalf of the entity. FinCEN’s approach is designed to close loopholes that allow corporate structuring that obscures owners or decision-makers. This is crucial to unmasking anonymous shell companies.
• The rule provides standards and mechanisms for determining whether an individual owns or controls 25 percent of the ownership interests of a reporting company. Among other things, these standards and mechanisms address how a reporting company should handle a situation in which ownership interests are held in trust.
• These definitions have been drafted to account for the various ownership or control structures reporting companies may adopt. However, for reporting companies that have simple organizational structures it should be a straightforward process to identify and report their beneficial owners. FinCEN expects the majority of reporting companies will have simple ownership structures.

Moore v. United States is Challenging Certain Tax Provisions

This link from a recent article in Tax Practice News details the highlights of the case:

Tax provisions included in the Tax Cuts and Jobs Act (TCJA) sought to bring cash from foreign earned income from US corporations back into the United States.  The provision allowed for beneficial tax rates as an incentive.  The plaintiffs in this case are challenging that provision:

“Moore v. United States is challenging certain tax provisions that were originally put into place by Congress in 2017. The 2017 tax law changes sought to prevent tax avoidance from foreign earnings by changing the permanent deferral of tax on foreign income. When the changes were made, Congress provided deemed repatriation to avoid a windfall for foreign corporations who had accumulated significant deferred income under the old policy that would have resulted in a higher tax liability.

The Moore case is challenging the Constitutionality of the repatriation. The majority of the claim by the Moore shareholders is that the 2017 change establishes a tax on unrealized earnings as well as taxing accumulated earnings. The Moore v. US case is citing the 16th amendment to challenge the constitutionality of the tax.”

ECONOMY

US Economy Grows 5.2% in Third Quarter; Higher Interest Rates Eroding Momentum

The U.S. economy grew faster than initially thought in the third quarter as businesses built more warehouses and accumulated machinery equipment, but momentum appears to have since waned as higher borrowing costs curb hiring and spending.

Jerome Powell Says Fed Could Raise Interest Rates Further if Inflation Doesn’t Continue to Ease

Federal Reserve Chair Jerome Powell on Friday kept the possibility of another interest rate hike in play this year, despite cooling inflation. “With its aggressive interest rate hikes, the Federal Reserve has made significant progress toward bringing down inflation to its 2% goal but is prepared to raise rates further if appropriate, Fed Chair Jerome Powell said Friday. He also did not say when the Fed might start cutting rates, though he could provide more details in a conversation that is expected to follow his speech.  “Having come so far so quickly, the (Fed’s policymaking committee) is moving forward carefully, as the risks of under- and over-tightening are becoming more balanced,” Powell said in a speech at Spelman College in Atlanta.”

The 20 Best States to be a Property Owner

Sadly ☹️, NYS🗽 is NOT on this list, but surprisingly 😮California 🏄🏿‍♂️is…  Becoming a property owner continues to be an attractive prospect for many, despite the current high interest rates, so it makes sense to know where your property tax burden is going to be the least. The article lists the 20 U.S. states with the lowest effective real estate tax rates.

Black Friday Shoppers Spent a Record $9.8 Billion in U.S. Online Sales, Up 7.5% from Last Year

Black Friday e-commerce spending popped 7.5% from a year earlier, reaching a record $9.8 billion in the U.S., according to an Adobe Analytics report, a further indication that price-conscious consumers want to spend on the best deals and are hunting for those deals online.

• Black Friday generated $9.8 billion in U.S. online sales, according to Adobe Analytics, up 7.5% from a year ago.
• The spending bump reflects consumers looking to advantage of big deal days and finding it easier to compare discounts online.
• After Cyber Monday, sales will likely taper off through the rest of the holiday season as retailers trim discounts.

Biden Administration Plans to Buy 2.7M Oil Barrels to Refill Emergency Stockpile

The Biden administration plans to buy 2.7 million barrels of oil to help replenish the nation’s much-depleted emergency stockpile. The planned purchase for the oil is at an average price of $79 per barrel, the Department of Energy said in a statement on Friday.  Biden sold off more than 40% of the Strategic Petroleum Reserve last year to help lower gas prices following the Russian invasion of Ukraine. In total, the White House tapped the reserve four times last year, including when Biden ordered a record-setting 180 million barrels of oil released from the reserve.  The repeated withdrawals left the stockpile at the lowest level since the 1980s, prompting accusations from Republicans that Biden had left the U.S. vulnerable to potential energy threats.

The Federal Reserve Beige Book

The current Federal Reserve Beige Book has been published, giving an overview of economic conditions around the country:

• Overall Economic Activity
• Labor Markets
• Prices
• Highlights by Federal Reserve District
  • Federal Reserve Bank of Boston
  • Federal Reserve Bank of New York
  • Federal Reserve Bank of Philadelphia
  • Federal Reserve Bank of Cleveland
  • Federal Reserve Bank of Richmond
  • Federal Reserve Bank of Atlanta
  • Federal Reserve Bank of Chicago
  • Federal Reserve Bank of St. Louis
  • Federal Reserve Bank of Minneapolis
  • Federal Reserve Bank of Kansas City
  • Federal Reserve Bank of Dallas
  • Federal Reserve Bank of San Francisco

E-commerce Stocks Rally After Black Friday Shoppers Spend Record Online

Shoppers turned out in full force on Thanksgiving and over the Black Friday weekend, largely shunning physical stores for the comfort of clicking “buy online” from their couches. Black Friday online spending reached a record $9.8 billion in the U.S:

• Shares of e-commerce stocks such as Shopify, Etsy and Wayfair all surged Monday on strong Black Friday online sales and rosy projections for Cyber Monday.
• Budget-conscious shoppers sought deals and used buy-now-pay-later services to stretch their wallets.
• Newer e-commerce entrants TikTok and Temu also dangled heavy promotions.

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 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

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

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Contact us if you have tax concerns, tax minimization questions or want to discuss the next steps for your business success and financial goals.