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WEEKLY TAKE AWAY

This week I attended several webinars.  It can be hard to focus when it’s a busy time of year and I hear the phone constantly ringing.  As I sat in on “Managing and Controlling a Calm Tax Season” I kept reminding myself to focus and jot down some key take aways.  The speaker was a well know partner in a regional accounting firm with over 50 years of professional experience.  He shared how he trained and mentored his staff over the years.  His tips and anecdotes hit home for me but can be expanded to encompass most relationships.  I firmly believe that most if not all relationships take time and care, people want to be heard, they want a connection and if we take the time to connect and focus we can identify early warning signs before the relationship is no longer working: stop🛑, look👓, listen👂🏿, correct✏️, repeat🔂

TAX ISSUES/TAX PLANNING

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 year’s January 13th blog, but I feel it bears repeating as we tend to hear suggestions 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 2024:

• The annual limit for 401K contribution limit is now $23,000 with a $7,500 catch-up for those of us over 50
• The annual limit for SIMPLE IRA or SIMPLE 401K is $16,000 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 $315
• The dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200.
• For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
• The annual limit for IRA contribution limit is now $7,000 with a $1,000 catch-up for those of us over 50
• Feel free to read through IRS publication 15-B Employer’s Tax Guide to Fringe Benefits for more ideas
• IRS tax inflation adjustment for tax year 2024:  IR-2023-208

Income Tax Brackets for 2024

The IRS reviews all income tax brackets annually, making adjustments as necessary to balance for inflation. For the 2024 tax year, tax rates range from 10% at the low end to a top rate of 37%.

Highlights of changes in Revenue Procedure 2023-34:

The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
• Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).The other rates are:35% for incomes over $243,725 ($487,450 for married couples filing jointly)
  32% for incomes over $191,950 ($383,900 for married couples filing jointly)
  24% for incomes over $100,525 ($201,050 for married couples filing jointly)
  22% for incomes over $47,150 ($94,300 for married couples filing jointly)
  12% for incomes over $11,600 ($23,200 for married couples filing jointly)The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
• The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).

For 2024 the IRS Added a Digital Question to More Tax Forms AND…

The IRS has tweaked the wording on various forms this year. Depending on the entity and tax return filed, the IRS is including a digital assets question which asks this basic question, (with different variations, for corporate, partnership or estate and trust taxpayers):

“At any time during 2023, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”

AND they are now addressing digital assets of all types rather than referring to Crypto Currency as in the past.  Of course we have updated our annual engagement letters to include the updated version of the question as well.

Tax Relief for American Families and Workers Act of 2024

It’s in the news almost daily, and covered in my prior blog posts, but I wanted to share the summary from Kaplan Financial Education on the House Ways and Means Committee extender bill.

ECONOMY

Top 8 Global Business Trends for 2024

The U.S. Chamber of Commerce’s International team carefully tracks the top geopolitical, economic, and policy trends affecting global business. Here are eight to watch in 2024.

How Copyright Lawsuits Could Kill OpenAI

Late last year, the New York Times sued OpenAI and Microsoft, alleging that the companies are stealing its copyrighted content to train their large language models and then profiting off of it. Depending on who you ask, what’s at stake is either the future of the news business, the future of copyright law, the future of innovation, or, specifically, the future of OpenAI and other generative AI companies. Or all of the above.

US Congress Passes Bill to Avert Government Shutdown, Sends it to Biden

The U.S. House of Representatives approved a stopgap bill to fund the federal government through early March and avert a partial government shutdown, sending it to President Joe Biden for final approval.  The measure passed 314-108, with 106 Republicans and two Democrats in opposition.

Federal Reserve’s Beige Book

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

According to a Recent Report from the IMF, 60% of Jobs in the US will be Impacted by AI.

About 30% of jobs will be impacted in a largely positive way, through increases in productivity and improved skills. While the other 30% of jobs will be impacted in a more negative way, up to and including the loss of those jobs altogether. So what can you do?

Investors Face Sticky Inflation, Widespread Turmoil, and a Clouded Economic Outlook

In a recent interview, private equity billionaire Henry Kravis  KKR’s billionaire cofounder and co-executive chairman advised being prepared to capitalize on the opportunities that emerge during periods of turmoil:

• warned of sticky inflation and interest rates during an interview aired this month.
• flagged economic and geopolitical uncertainty.
• touted downturns as opportunities and said failure isn’t shameful.

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

Get in touch

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