+1 718-318-2677
+1 718-318-2677

Blog

 |  Andrea Parness  |  2023,  401K Limits,  Employee Benefits,  new year's resolution,  SIMPLE IRA Limits,  tax planning,  Weekly Take-Away

Weekly Update – January 6th 2023 Welcome to a New Year

“WELCOME TO 2023” and yet another opportunity to start fresh with a New Year’s resolution, or not.

I was curious, and googled “what is the average time a new year’s resolution lasts”, no fear, all will be revealed.  I didn’t really want to make a resolution even though I have been thinking about this and planning my reveal for weeks. Nothing easy like exercise at least 5-6 times a week or so hard that I wouldn’t want or couldn’t obtain it like no more drinking red wine at dinner (or after dinner). I was going to be conscious about my treatment of others, try to be a nicer person. Let’s face it if your sibling is nice it lets you off the hook no matter what “Monica’s the nice sister” and she is, so I made her my accountability person.  I did do research at the end of day 4 (Wednesday).  I post every Friday morning so the verdict… I beat the odds… so far.  What was your resolution and how have you done? Before you answer I must direct you to this New York Times article that I loved reading and agree with Realistic Expectations for the Year Ahead, basically our 2023 resolution should be ‘ let’s just get through the year unscathed”.  Of course that is huge and I wish that for everyone.

Turns out the average length of time to stick to your resolution is…. “One week and most are abandoned by the end of February”. Do we even have a chance, should we even bother?  Let’s see, I have added a new section to my blog and weekly newsletter, NEW YEAR’S RESOLUTIONS. Feel free to send me yours, if not I will ask for them.

NEW YEAR’S RESOLUTIONS

Here’s one we can all try for “Let’s treat others as well as we treat our pets”.  I came up with that one this morning after receiving a text from my daughter Jessie. She, her boyfriend and dog are traveling from Atlanta to their new home in California making stops along the way at hotels and friend’s homes.  My husband and I fell in love with her dog Sampson during their visit this summer…

31361 2
Sampson get’s his own bed at the hotel along the way
I am happy to say that I am keeping to my non-resolution of working out most days and was up with the sun on New Year’s day and rewarded with a beautiful red sky…
Img 20230102 072331181 Hdr
Red Sky at dawn on Rockaway Beach NY
and like fresh powder on the slopes after a snow fall, I made first tracks…
First tracks on New Year’s day 2023

Img 20230102 072547388 2
First tracks on New Year’s day 2023

Best wishes for a happy and healthy new year to you, your family and friends.

WEEKLY TAKE AWAY

Even thinking about choosing my new year’s resolution helped me to focus on being concious of my choices and actions.  As I chose to use “The Power of Conscious Choice” my decisions were not only more deliberate, but better.  This blog post by JV Crum III and Joe Sanok really sums it up nicely “Over the course of a typical day, you make numerous choices in your business and in your everyday life. At the conscious level, you make hundreds, if not thousands of choices every day. At the unconscious level, you make an incalculable number of choices daily. By focusing your energy to make as many of your decisions as consciously as possible, you will maximize your ability to pursue your passions and purpose and create positive change.”

TAX ISSUES/TAX PLANNING

Time to Update Your Tax Deferral Elections Plus

It’s time to contact your HR 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.

IRS Tax Inflation Adjustments for 2023

The tax year 2023 adjustments described below generally apply to tax returns filed in 2024:

  • The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.
  • Marginal Rates: For tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).

The other rates are:

  • 35% for incomes over $231,250 ($462,500 for married couples filing jointly);
  • 32% for incomes over $182,100 ($364,200 for married couples filing jointly);
  • 24% for incomes over $95,375 ($190,750 for married couples filing jointly);
  • 22% for incomes over $44,725 ($89,450 for married couples filing jointly);
  • 12% for incomes over $11,000 ($22,000 for married couples filing jointly).

The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).

Adoption Tax Credit Provides a Valuable Benefit

The adoption credit is indexed annually by the IRS. Due to the rising inflation of late, the figures have increased to $14,890 per child for 2022.  New adoptive parents may be able to benefit from this credit on their 2022 return depending on their income level and any credit in excess of their 2022 tax liability may be carried forward for up to five years.  Qualified adoption expenses:

For both the credit and the exclusion, qualified adoption expenses, defined in section 23(d)(1) of the Code, include:

  • Reasonable and necessary adoption fees,
  • Court costs and attorney fees,
  • Traveling expenses (including amounts spent for meals and lodging while away from home), and
  • Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.

2023 IRS Standard Milage Rates

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
  • 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

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

ECONOMY

Wall Street, Stocks and the S&P Index

2022 is being touted as one of the worst years for Wall Street and the worst since 2008 with the S & P down almost 20%.

Salesforce is Laying off 10% of it’s Workforce

Business software maker Salesforce is laying off about 8,000 employees, or 10% of its workforce, as major technology companies continue to prune payrolls that expanded during the pandemic lockdown.

Is it Time to Buy Your First Home?

It could well be time to buy your first home or at least start shopping.  Interest rates are higher than the past few years but prices are expected to come down to make the monthly payments affordable.  You can also work on inproving your  credit, focus on saving up a good sized down payment and make use of your deferred income account (you may be eligable for first time buyer  early withdrawal penalty releif).  Please do your research and consult with your financial advisors to make sure you understand the potential strain on your budget as well as taking potential tax benefits into account.

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.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

Complementary Discovery Session

This is our way for each of us to get to know each other a little bit better so we can map out a strategy that will help you meet your goals

 

Want to grow your business?

Categories

Want to grow your business? Our Complimentary Resources will Help