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All the talk of Groundhog Day reminded me about the 1993 movie starring Bill Murray, probably a good choice for streaming tonight with a bowl of popcorn.  As I googled the Old Farmer’s Almanac also popped up on my feeds with comments about how people swear by it.  For me I am happy to check the daily and weekly weather forecast and the Rockaway Beach tide charts on my cell phone.  At least my phone is showing it will be clear and sunny here this weekend; no predictions about the rest of winter.

Here in rockaway it was overcast all week, but I was glad to go out on the beach for early morning walks

Clounds make some beautiful colors on Gordneck Lake, MI this week too…

At least it was sunny somewhere this week; southern California.  My daughter Jessie took my granddog Sampson out on a local lagoon, he’s water safe but doesn’t look so happy in his personal floatation device (PFD)

I hope you have great plans for the weekend, we are looking forward to a clear and sunny one.

WEEKLY TAKE AWAY

Now that tax season is here I am vowing to “stick to my guns/stick to our process” for best results… no short cuts!

TAX ISSUES/TAX PLANNING

2024 IRS Standard Milage Rates

Beginning oBeginning on Jan. 1, 2024, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 67 cents per mile driven for business use, up 1.5 cents from 2023.
• 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, a decrease of 1 cent from 2023.
• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2023.

These rates apply to electric and hybrid-electric automobiles as well as gasoline and diesel-powered vehicles.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.    As always Document, Document, Document.

2023 Child Tax Credit (CTC): Who Qualifies and What it’s Worth

The child tax credit (CTC) allows eligible parents and caregivers to reduce their tax liability and might even result in a tax refund. However, not everyone can claim the credit, and credit amounts can differ for those who can.   Right now, unless Congress makes last-minute changes, the 2023 child tax credit is worth up to $2,000 per qualifying child. However, the credit is not fully refundable, which means that you cannot receive the entire $2,000 back as a tax refund, even if you have a $0 tax liability and qualify for the full credit amount. In general and in plain English most of the credit can only reduce the amount of federal tax you owe which is great, but $1,600 of the CTC is refundable (an increase of $100 over last year).

Keep in mind $2,000/$1,600 are maximum amounts and your credit(s) can vary based upon your specific situation (adjusted gross income, filing status, etc).

Tax Season 2024 Has Begun, Here Are 8 Things to Do Before You File; CORRECTION, 9 Things

As of Monday, January 29th the IRS has started accepting and processing 2023 federal income tax returns. CNN’s recent article suggests there are eight things which can make the experience of preparing and filing your taxes as stress free as possible. I would change that to 9 and start off with…

• Work with an experienced and trustworthy tax advisor
• Know the deadlines: Unless you file for an automatic six-month extension, the filing deadline for most people is April 15.
• Review your 2022 tax return for a guide to deductions you may have again this year
• Assess big life changes, if any, which occurred during 2023: Although it helps with planning to contact your tax advisor before these occur: you got married or divorced, had a baby, became widowed, sold a home or other big investment, started receiving Social Security, moved to a new state.  These or other major life transition last year, may change your tax liability (or refund) from what it was on prior years tax returns.
• Those of you with a small business should check for 1099-K from a payment app in addition to regular 1099-NEC which should be arriving in the mail this week and next
• If you qualify for premium tax credits for your health insurance you will need to fill out form 8962 with information from the form 1095-A
• Keep an eye on Congress and our weekly blogs for news about potential tax law changes: Lawmakers are still working on  the specifics of a bipartisan tax package that contains two provisions that could save money for some filers claiming the child tax credit and for small business owners.
• Speed your refund: If you are owed a refund submit your return early via the IRS e-file portal. The IRS typically issues refunds within 21 days of accepting your return. But note that if you are claiming an Earned Income Tax Credit, the IRS cannot by law issue the EITC-related refund before mid-February
• You may be able to file for free: If your income is low enough and you have a simple enough return, you may be able to prepare and electronically file your federal tax return for free with select tax software providers.

ECONOMY

By the Numbers: U.S. Economy Grows Faster than Expected for Year and Final Quarter of 2023

The U.S. Commerce Department’s Bureau of Economic Analysis (BEA) reported fourth quarter real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the fourth quarter of 2023 exceeding expectations.

US Manufacturers to Temper Investment Pace After Vibrant 2023

U.S. manufacturers are expected to slow down their capital spending in 2024 following a robust 2023 as still-elevated borrowing costs and demand concerns temper a lingering desire to upgrade operations.

Fed’s Inflation Battle Hinges on Convincing Americans Price Hikes are Done

The way inflation has fallen toward the Federal Reserve’s goal with little cost to jobs has many convinced the central bank has won the battle. Victory, however, requires persuading people that price increases are a thing of the past.

US Economy Brushes Aside Recession Fearmongering with Strong Q4 Performance

The U.S. economy grew faster than expected in the fourth quarter amid strong consumer spending, and shrugged off dire predictions of a recession after the Federal Reserve aggressively raised interest rates, with growth for the full year coming in at 2.5%.

Reuters Poll Shows Global Economy Outlook At Odds with Aggressive Rate Cut Bets

Global growth is set to stay resilient this year and only pick up pace a bit in 2025, according to a Reuters poll of economists, a stable outlook at odds with still-relatively aggressive interest rate cut bets in financial markets.

20 Ways Business Drives Innovation and Improves Lives

Improvements in transportation, the internet, e-commerce, and many other aspects of our everyday lives result from people in business driving innovations. The US Chamber of Commerce takes a closer look at 20 examples of how these business teams are making a difference every day.

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.