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 |  Bizink  |  H.R. 25,  REPYE,  Student Loan Forgiveness,  Sunrise,  tax season 2023,  Tesla,  The Fair Tax Act,  Weekly Take-Away

Weekly Update – January 13th – Lucky Friday

Why not “Lucky Friday the 13th?” I googled and found the association with the belief that there were 13 guests at the last supper.  I also found a reference to the Thirteen Club a supper club which was founded by William Fowler who had many successes and positive associations with the number 13. One of the favorite sayings in our office is “any day I learn something new is a good day” and since that happens most days and I already listened to a great podcast this morning, so it’s a good day for me already, and I hope it is for you too.

Just this week I was able to attend a live CPA seminar “Tax Season Tools, Tips and Templates Roundtable” and shared a booth with some of my favorite professional friends…

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Ladies’ table at our Tuesday MAP meeting

Approximately 40 of us attended and we learned so much from each other

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Great to share ideas with my peers

We had some mixed weather this week, but even when it’s stormy I can take some cool shots…

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Best wishes for a great Friday 13th and weekend.

NEW YEAR’S RESOLUTIONS

I love the “Here to Help” column appearing daily on page 3 of the New York Times.  Last Saturday the article by Elissa Sanci and Rose Maura Lorre was titled “Practical Life Hacks to Replace Your New Year’s Resolutions“. They included great tips that are easily added to our daily routine but can realy make a difference in your everyday life, even if you try encorporating even one or two:

  • Clear your space of tripping hazards
  • Stick trackers on the stuff you loose (or fear losing) most
  • Light your hallwy at night
  • Automate your home’s lighting
  • Hack your hydration
  • Organize your most annoying cabinet
  • Store duplicate cleaning supplies where you use them most

WEEKLY TAKE AWAY

I certainly enjoy the ease and efficiency of virtual meetings and webinars.  My trip to Long Island Tuesday morning took over an hour, but was well worth it.  Even through vitrual roundtable events enable the free flow of ideas and debate, when in person you can share your thoughts with friends across the room with eye rolls and facial expressions too.

FOR OUR STUDENTS

This Tuesday the Education Department released details of President Biden’s proposed student loan repayment plan; the Revised Pay As You Earn REPAYE.  “We’re fixing a broken student loan system,” Education Secretary Miguel Cardona said on a call with reporters Monday. “We’re making a new promise to today’s borrowers and to generations to come. Student loan payments will be affordable. You won’t be buried under an avalanche of interest, and you won’t be saddled with a lifetime of debt.” Read more in this article by Danielle Douglas-Gabriel.

TAX ISSUES/TAX PLANNING

Tax Season Filing Starts January 23rd

The Internal Revenue Service scheduled the official date for the opening of tax season, with Monday, Jan. 23, 2023, the day when the agency will begin accepting and processing 2022 tax year returns.  “This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act,” said acting IRS Commissioner Doug O’Donnell in a statement. “With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year. We’ve trained thousands of new employees to answer phones and help people. While much work remains after several difficult years, we expect people to experience improvements this tax season. That’s just the start as we work to add new long-term transformation efforts that will make things even smoother in future years.”

Meanwhile on Monday, House Republicans passed a bill to strip the IRS of much of the extra $80 billion in funding for enforcement enacted last year by Democrats’ Inflation Reduction Act, although the bill is not expected to advance in the Senate, which is still controlled by Democrats. On Wednesday, Rep. Earl L. “Buddy” Carter, R-Georgia, introduced H.R. 25, The Fair Tax Act, to replace the current Tax Code with a national consumption tax known as the Fair Tax.

Time to Update Your Tax Deferral Elections Plus

I include this suggestion in my year end planning meetings and tax exit appointments as it’s great to start early but it’s never too late.  I also included this suggestion in last week’s blog, but I feel it bears repeating as we tend to hear suggestins and say that sounds great, but then let the opportunity slip by. Contact your payroll department and take advantage of the New Rates/Limits for 2023:

  • The annual limit for 401K contribution limit is now $22,500 with a $7,500 catch-up for those of us over 50
  • The annual limit for SIMPLE IRA or SIMPLE 401K is $15,500 with a $3,500 catch-up for those of us over 50
  • The monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $300
  • The dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,050.
  • For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $610, an increase of $40 from taxable years beginning in 2022.

Worst Tax Season Ever Predicted (Yet Again)

I looked back to my blog post from a year ago and found that we are in pretty much the same boat, plus we can add 2021 tax return processing to the backlog:

“The IRS is drastically understaffed, it’s even hit or miss most days if we can get through to the IRS through our tax practitioners hot line – set up specifically so that we accountants can resolve issues more quickly via a phone call.  The IRS is still behind in processing prior year amended paper returns as well as 2019 and 2020 original paper returns.  Yet another reason to prepare your documents early and make sure all necessary information is available and provided to your accountant prior to your appointment.”

ECONOMY

Layoffs ahead for Goldman Sachs

According to a person familiar with the matter, Goldman Sachs will lay off as many as 3,200 employees this week. “More than a third of the job cuts are expected to be from the firm’s trading and banking units”.  This is a result of the slump in global dealmaking activity as fewer companies merge or seek to raise capital.

Investors Weigh Their Chances Against Further Rate Hikes

Money market bets are showing 77% odds of a 25-basis point hike in the Fed’s February policy meeting, but investors may be profit-taking ahead of the CPI report due Thursday.

Mortgage Rates Approach 4-Month Lows and May Continue

Mortgage rates improved this week with the bond market making serious gains. As a result, the average lender is slightly better versus last Friday, coming almost perfectly in line with the lows seen on December 15th.  We may also see  the rates fall to 5.25% much lower than the 2022 high of 7.12%.

My blog last week included “Is it Time to Buy  Your First Home”.  Thank you to the Queens Chamber of Commerce for this link to the webinar Steps to Buying Your First Home presented by TD Bank.  February 1 at 2 PM EST.

Telling Indicator Points to a Recession

The Treasury yield curve is a notorious predictor of recession, and on the 2 and 10-year notes, it’s at its deepest inversion in over 40 years. The indicator preceded the downturns of 1990, 2001, and 2008.

Tech Layoffs Continue into 2023

Silicon Valley marked the second half of last year with hiring freezes, layoffs, and other cost-cutting measures. Unfortunately, tech layoffs may go from bad to worse this year.

Disney CEO Bob Iger Calls Employees Back to the Office

In a memo to employees, Iger emphasized the value of working together in person and will require that they come in 4 days a week. He feels that being together in person allows employees to connect, observe, and create with peers and grow professionally by learning from leaders and mentors.

Is it Time to Buy Tesla Stock, the Car or Both?

After a nosedive over the past few months, economists say that the stock is oversold. As a result, many wonder if Tesla has bottomed out – and if it could fall further.  Buying a used Tesla may be a better investment though as this article shares that used tesla prices are falling faster than other cars.

Would You Like to Drive Around in a Giant Hot Dog?

Kraft Heinz is looking for “creative souls” to drive one of its Oscar Mayer Wienermobiles full-time, touring America to attend high-profile events and coordinate press on its behalf.

GENERAL RESOURCES

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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