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Get well wishes and lovely flowers have really boosted my rehab efforts.

I am 3 1/2 weeks into recovery from my right hip replacement.  Up until yesterday morning I was feeling better and stronger every day, and then…

Weekly Take Away

…after weeks of following the prescribed and ever increasing physical therapy exercise outline I woke up  feeling exhausted, with a 4/5 level of  pain.  I was really disheartened, feeling sorry for myself, just plan miserable.  We have all heard  “listen to your body“.  My body was screaming; I listened, and took a day off spending the day resting, icing, on phone visits with my family.   This morning I woke feeling refreshed and ready to get back to work, first, finishing this blog, then completing my full PT routine and finally working in  my office starting with my Thursday “to do” list and moving onto those postposed Thursday projects.  I listened to my body and again feel back on track and stronger than ever!

TAX ISSUES/TAX PLANNING

Apple Leads the Stock Market Down; Time to Shuffle Your Portfolio?

U.S. stocks fell sharply into the final hour of trading Monday . News that Apple plans to curb spending next year to prepare for a possible recession seemingly had a major effect on other stocks.  Just a few weeks ago I suggested it could be the right time to reposition your holdings from taxable deferred investments like traditional IRAs to ROTH IRAs so you catch the rebound growth in a non-taxable investment account. We are told that you can never time the market, but maybe it’s time to contact your investment adviser.

The IRS Dirty Dozen of Tax Scams for 2022

Every year the IRS warns of phishing attacks and other fraudulent tax schemes…

• Appreciated property is transferred to a charitable remainder annuity trust and taxpayers claim a step up in basis to fair-market value, then sell for -0- capital gain.
• U.S. citizens or residents try to dodge taxes with contributions to foreign individual retirement arrangements in Malta (or other countries).
• American owners of closely held entities enter a purported insurance arrangement with a Puerto Rican or other foreign corporation with cell arrangements or segregated asset plans.
• Inappropriate use of the installment sale rules under Sec. 453 by a seller who, in the year of a sale of property, effectively receives the sales proceeds through purported loans.
• COVID stimulus funds applied for using identity theft with bogus emails, social media posts and phone calls. Including filing for tax credits, PPP funds, or making false unemployment claims.
• Offshore Accounts and Digital Assets used by individuals to evade U.S. tax by hiding income in offshore banks, brokerage accounts, or nominee entities. The funds are accessed using debit and credit cards; wire transfers; or other arrangements, including foreign trusts, employee leasing schemes, private annuities, and structured transactions that conceal the owner of accounts or insurance policies.
• Phishing emails use the IRS logo and subject lines like “Action Required: Your account has now been put on hold.” Similar bogus emails claim to be from a tax return preparation application. One variation offers an unusual activity report and a solution link for recipients to restore their accounts.
• Suspicious texts, emails, or phone calls are designed to trick, surprise, or scare individuals into responding. Victims provide personal information and money.
• We work with well-versed tax controversy attorneys who can help our clients with overwhelming tax debt, but of course there are also “Offer in Compromise Mills” who claim in local advertising that they can settle a tax debt for pennies on the dollar. Taxpayers pay a fee to the mill and receive the same compromise they could have gotten by working directly with the IRS or a reputable attorney. The mills charge excessive fees and mislead people who have no chance of meeting the compromise requirements.
• While there are legitimate conservation easements, unscrupulous promoters sell ownership interests in land to investors through partnerships and then grant conservation easements on the land to qualified charitable or government organizations (see code section 170). By using inflated appraisals of real estate assets like undeveloped land or historic building facades, the arrangements inflate tax deductions and generate fees for promoters.
• Micro-captive Insurance Arrangements. Similar to foreign captive insurance, micro-captive insurance structures involve owners of closely held entities conducting activities that lack sufficient insurance attributes. For example, coverage may insure implausible risks, fail to match genuine business needs, or duplicate the taxpayer’s commercial coverage. The premiums are often excessive.

It Bears Repeating: NYS Resident Owners of Pass Through Entities with Non-New York State Sourced Income Have a New Opportunity to Elect Meaningful PTET

We know that tax legislation is used to influence behavior, so what better way to keep our NYS residents here, help with those high tax rates…

Under new legislation S8948, effective for tax years beginning on or after January 1,2022 an “electing S corporation” is amended to include either an electing resident S corporation of an electing standard S corporation.  In plain English under the new law even non-NYS sourced income is eligible for the PTET.

We already know that the deadline for the extension has been extended, now those NYS residents with pass through entity income generated outside of NYS but includable on their NYS personal tax returns have access to the State and Local Tax (SALT) workaround.

For 2023 this will be expanded to NYC corporations as well!

IRS Urges DYI Taxpayers with 2021 Extension to Make Use of Website Tools

With millions of people still waiting to file their tax returns, the IRS reminds them to file as soon as possible and take advantage of special tools available on IRS.gov that can help them file.

ECONOMY

Delta Buys One Hundred Boeing 737 Max 10’s

For the first time in 11 years, Delta Air Lines contracted to purchase a large number of Boeing planes. The deal is for one hundred Boeing 737 Max 10’s with options for 30 more. Deliveries are to begin in 2025.  A sign of the times as Delta looks to modernize its narrow-body fleet as they seek to capitalize on a rebound in travel following the record slump caused by the Covid-19 pandemic.

Netflix is Bracing for a Storm

The streaming company says it expects to lose 2 million subscribers this period. As one of the most expensive of the big streaming services, many people may look to cancel Netflix as they try to cut costs.  I for one am grateful to have a distraction as I count my reps and use my elliptical (at level 1 “walk in the park” post surgery for now).

Big Banks Anticipate Less Demand for Loans as Economy Slows

U.S. bank executives said they’re optimistic on loan growth, but warned demand could weaken later this year if the worsening economic outlook starts to hurt consumer confidence.

The U.S. dollar eased on Monday, retreating from the two-decade high hit last week. Traders are hedging their bets on how aggressively the Federal Reserve will raise rates at its meeting later this month.

Home Builders are Feeling the Pinch of Inflation and High Interest Rates

The National Association of Home Builders/Wells Fargo Housing Market Index fell for a seventh straight month to 55, the lowest level since May 2020, from 67 in June, NAHB said in a statement on Monday. Readings above 50 mean more builders view market conditions as favorable than poor.  High inflation and steep borrowing costs brought customer traffic to a near standstill in July. U,S. home builder sentiment hasn’t been this low since the beginning of the coronavirus pandemic.

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 Covid-19 Resource Center with relevant blog posts, videos and prior weekly newsletters
• Payroll, HR and benefits company Gusto has put together An Employer’s Guide to Navigating the Coronavirus
• Accounting Today has a special page for articles on COVID-19
• Intuit QuickBooks has a dedicated page to help small businesses
• Entrepreneur put together a listing of free tech resources for remote work
• The Consumer Financial Protection Bureau has warnings about COVID-related scams
• Fast Company has a listing of the best productivity apps for 2020
• 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
• PC Magazine explains how to carry your vaccination card on your phone
• 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 all in this together!

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.

Twitter set to sue Elon Musk

Twitter and Elon Musk are set to go to court, after the social media giant vowed to sue Musk over backing out of the $44 billion buyout deal.

Stock markets open low

U.S. stocks fell at the beginning of the week as investors prepared for fresh inflation data and corporate earnings that could influence the Federal Reserve’s path for interest-rate increases.

Canceled home sales in June at highest rate since before the pandemic

About 60,000 home-sale agreements fell through nationwide in June, according to Seattle-based Redfin. In some cases, interest rates rose as purchases were in progress, causing deals to fall through.

World’s largest asset manager cuts its stock market outlook

On Monday, strategists at BlackRock’s Investment Institute said they were cutting their exposure to developed market equities. They cite aggressive intervention by the Fed to tame rising prices across the global economy as the reason.

The dollar and the euro are almost at par

For the first time in 20 years, the exchange rate between the euro and the US dollar was nearly the same on Monday, less than one cent away from parity.

Electric car maker rumored to be scaling back

American electric automaker Rivian is considering laying off around 5 percent of its 14,000 employees, or around 700 people. The jobs were added as it scaled up and aren’t involved in manufacturing. No official announcement has been made.

Texans asked to cut back on power use to avoid rolling blackouts

In what was labeled as a “conservation appeal,” the Electric Reliability Council of Texas announced on Sunday that it would be asking Texans to voluntarily conserve energy during peak usage hours, between 2 and 8 p.m.

Americans feel that inflation will surge higher than ever

On Monday, a survey from the Federal Reserve Bank of New York showed that consumer expectations for where inflation will be one year from now climbed to another record high in June.

Where should you invest in times of inflation?

US News & World Report has rounded up 7 stocks that are good inflation investments. It can be found here.

Register for the IRS Nationwide Tax Forum by July 14

The 2022 virtual event is being held over a five-week period from July 19 through August 18 and features 32 webinars — including a keynote address by IRS Commissioner Chuck Rettig, updates on tax law, cybersecurity, practitioner ethics and more.

Get in touch

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