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Sometimes all I need is a mini vacation, a long weekend, or visit with good friends. Living by the beach is great; many people (including me) take advantage of opportunities like:  week-night kayaking, morning walks/runs, surf fishing , whale/dolphin spotting, beach volleyball, surfing, ocean swims, etc.   Time away from home rather than a “staycation” can be more than a change of location and might afford us time to reflect as well as relax.  My mini “staycation” is often time spent in my garden, even when it is “not doing great” or I am simply picking a few berries or squashing those awful spotted lantern flies.  I love seeing how my friend’s gardens are doing so this week’s collection of garden bounty come from friends in NY and NC, thanks for sharing…

I am so happy to share these great “staycation” photos from friends and family…

I started my weekend yesterday as my husband David and I drove up to Maine to visit with friends who are family (our daughters met the first day of kindergarden).  The weather is expected to be good and it’s so beautiful and relaxing here.  I hope you have great plans for your weekend as well.  After breakfast we will head for the marina and one of the islands in the bay…

WEEKLY TAKE-AWAY

When I gossip with my family and close friends I need to remind myself:  “this is a no judgement zone”.  It’s often hard  to stay focused on using someone else’s “faux pas” as fodder; it should be a learning moment or take-away.  I should NOT be thinking “who raised you”.  This summer I have attended several conferences, seminars, and networking events and learned so much, re-connected with several professional friends, and started to form new connections.  I can see that it could be tempting to connect others in my network with some of the really knowledgeable professionals in my sphere, but there is PROTOCOL that must be followed.  I know I’m not supposed to say “must” (accountants and attorneys say may/should).  Sticking with business protocol means checking first before connecting.  Then once given acceptable parameters, a call or introduction email should follow.

As I try to follow good business protocol I do have to give a shout out to my wonderful hosts at Wednesday night’s  “Power Professionals of Long Island Networking Event”:  Nicole Maldonado, VP – Senior Business Relationship Manager at JP Morgan Chase and Sharyn O’Mara, Marketing Director at Futterman, Lanza & Pasculli, LLP.  I reconnected with several professional associates, met many new and interesting people including someone who literally lives down my block.  How did we come to realize this; someone at the event told her to go over and introduce herself to me (his mother raised him right).

TAX ISSUES/TAX PLANNING

IRS Finalises 10 Year Rule for Retirement Withdrawals

The Internal Revenue Service and Treasury Department have released final regulations updating required minimum distribution (RMD) rules for beneficiaries under the 10-year rule:

The final regulations reflect changes made by the SECURE Act and the SECURE 2.0 Act impacting retirement plan participants, IRA owners and their beneficiaries. At the same time, Treasury and IRS issued proposed regulations, addressing additional RMD issues under the SECURE 2.0 Act.

While certain changes were made in response to comments received on the proposed regulations issued in 2022, the final regulations generally follow those proposed regulations:  Specifically, Treasury and IRS reviewed comments suggesting that a beneficiary of an individual who has started required annual distributions should not be required to continue those annual distributions if the remaining account balance is fully distributed within 10 years of the individual’s death as required by the SECURE Act. However, Treasury and IRS determined that the final regulations should retain the provision in the proposed regulations requiring such a beneficiary to continue receiving annual payments.

The new proposed regulations include provisions for which Treasury and IRS are soliciting public comments, including provisions addressing other changes relating to RMDs made by the SECURE 2.0 Act.

How Kamala Harris May Shift the Crucial Tax Debate in this Year’s Election

This week the following article showed up in my on-line accounting newsletter from AccountingToday I follow tax law changes and proposed tax bills and thought you might find this excerpt interesting:

“The new presumptive presidential nominee for the Democratic Party carries a long paper trail in tax policy. That history may alter the debate in a pivotal election ahead of a looming deadline next year.

President Joe Biden’s decision to leave the race and endorse Vice President Kamala Harris sets her up to be the party’s nominee. This will lead to greater examination of Harris’ record in her current role, as well as her 2019 candidacy, her time as a senator from California between 2017 and 2021 and her tenure as the state’s attorney general for a half dozen years. It’s not clear whether any Democrats will challenge Harris, who said in a statement that her “intention is to earn and win this nomination.”

“It’s not about a handout. It’s about giving people the opportunity to compete,” she said in a discussion about the long-term impact of the Biden administration’s investments, the Atlanta Journal-Constitution reported. “Give hardworking people the opportunity to get ahead — and not just get by.”

Harris has called for significant changes in tax policy — in some cases more far-reaching than Biden’s plans — and promoted infrastructural projects that received funding through the Inflation Reduction Act. In recent months, she traveled to several states as part of an “economic opportunity tour,” with stops like one in Atlanta for the 100 Black Men of America conference in June.”

New Final Overtime Rules as Introduced via the Fair Labor Standards Act (FLSA)

Thank you to Teresa Garzon, Payroll HCM Consultant with Isolved  for your recent blog post on the Fair Labor Standards Act (FLSA) which recently introduced a new, final overtime (OT) rule, bringing significant changes for employers and employees of businesses who gross at least $500,000 per year and employ at least two employees engaged in interstate commerce:

“The new rule mandates that exempt executive, administrative and professional employees must be paid at least:

• $844 per week ($43,888 per year) beginning July 1, 2024
• $1,128 per week ($58,656 per year) beginning January 1, 2025

Additionally, highly compensated employees (HCE) must be paid on a salary basis and receive at least:

• $132,964 beginning July 1, 2024
• $151,164 beginning January 1, 2025

The FLSA applies to employers with:

• At least two employees engaged in interstate commerce with at least $500,000 in gross annual business
• Hospitals, residential care facilities or schools
• Public agencies

Covered employees include those involved in:

• interstate commerce
• domestic service workers like housekeepers, full-time babysitters, and cooks, even if the employer isn’t a covered enterprise.

Employers will need to decide on a course of action and plan for how those changes will be implemented. There are three main steps employers need to take when deciding their course of action:

• Identify which exempt employees might be affected.
• Calculate the hours worked by these employees.
• Evaluate the options and decide how, and how much, these employees will be paid.

Employees classified as exempt and earning less than $43,888 need to be identified.  It’s important to include total incentive pay (e.g., bonuses, commissions, or any other incentive pay).

Employers must either:

• Increase their pay to $43,888 by July 1, 2024.
• Reclassify them as hourly nonexempt and determine a new hourly rate on their current salary. They will be entitled to overtime pay.
• Calculate a cost-neutral rate of pay for nonexempt employees. They will be entitled to overtime pay.
• Reclassify them as salaried nonexempt, paying them the same weekly rate for 40 hours or fewer and overtime for any additional hours over 40 in a workweek.”

Teresa Garzon is a Payroll HCM Consultant at isolved HCM. Teresa currently works with business owners of small to mid-market companies nationwide, helping them navigate through the complexity of Payroll, Human Resources, Recruiting and Compliance.  Contact Teresa at: TGarzon@isolvedhcm.com

ECONOMY

Economy Slowing but Not in Recession Territory

As per this recent article in U.S.News.com:  “The U.S. economy is likely to slow in the coming months but is not flashing recession signals as it enters the critical 100-day period to the November presidential election.”

What Does it Mean for the Economy When Businesses Grow their Inventories?

As per this recent article in Marketplace.org:  “U.S. businesses added more stock to their inventory in May than most economists had been expecting. The U.S. Census Bureau reported Tuesday business inventories were up 0.5% month-over-month in May.  In the short-term, the May increase is good news — it means that despite higher interest rates, businesses feel confident enough about this economy to invest more in the stuff they sell — or the stuff that goes into whatever they sell. However, in the long term, things are a little more complicated.  An increase in inventory can be a good thing. But Christina DePasquale, who teaches economics at Johns Hopkins University, said sometimes the increase is unplanned, meaning businesses didn’t sell everything they wanted to sell, and their inventory grew unintentionally.”

The Federal Reserve Faces a Wave of Data Before Deciding On End-Of-Summer Rate Cut

As per this recent article in Reuters.com:  “Investors have locked onto the U.S. central bank’s Sept. 17-18 meeting for the start of interest rate cuts that Federal Reserve Chair Jerome Powell has said will represent a “consequential” change in policy from the pandemic-era battle against inflation to a phase of easing monetary policy.”

Economist Who Called the 2008 Recession Shares 5 Signs the US is on the Brink of a Downturn

This article from BusinessInsider.com points to signs as seem in prior years:   “June’s nonfarm payrolls report may have beaten economists’ expectations with a robust 206,000 jobs added. But don’t bet on a soft landing outcome for the US economy as the Fed gets set to cut rates, says famed economist David Rosenberg.  In notes to clients this week, Rosenberg — the founder of Rosenberg Research who called the 2008 recession while working as Merrill Lynch’s chief economist — argued that the labor market is much weaker than headline numbers show, and shared several indications that the economy is on the brink of a downturn.

The Board of Govenors of the Federal Reserve Issued the July 2024 Beige Book

The July 2024 Beige Book has been published by the Federal Reserve, giving an overview of economic conditions around the country:

“Overall Economic Activity:  Economic activity maintained a slight to modest pace of growth in a majority of Districts this reporting cycle. However, while seven Districts reported some level of increase in activity, five noted flat or declining activity—three more than in the prior reporting period. Wages continued to grow at a modest to moderate pace in most Districts, while prices were generally reported to have risen modestly. Household spending was little changed this period according to most District banks. Auto sales varied across Districts this cycle, but some Districts noted that sales were lower due in part to a cyberattack on dealerships and high interest rates. Most Districts saw soft demand for consumer and business loans. Reports on residential and commercial real estate markets varied, but most banks reported only slight changes, if any, in recent weeks. Travel and tourism grew steadily and was on par with seasonal expectations. Agricultural conditions varied in tandem with sporadic droughts across the nation. Districts also reported widely disparate trends in manufacturing activity ranging from brisk downturn to moderate growth. Retail restocking spurred slight growth in transportation activity. Meanwhile, tight capacity in ocean shipping led to a surge in spot rates. Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation.

Labor Markets:  On balance, employment rose at a slight pace in the most recent reporting period. Most Districts reported employment was flat or up slightly, while a few Districts reported modest employment growth. Several Districts reported declines in employment in the manufacturing sector due to slowdowns in new orders. Skilled-worker availability remained a challenge across all Districts; however, several Districts reported some improvement in labor supply conditions. Additionally, labor turnover was lower, which reduced demand to find new workers. Looking ahead, contacts in several Districts expect to be more selective on who they hire and not backfill all open positions. Wages grew at a modest to moderate pace in most Districts. However, several Districts reported some slowing of wage growth due to increased worker availability and less competition for workers.

Prices:  Prices increased at a modest pace overall, with a couple Districts noting only slight increases. While consumer spending was generally reported as showing little to no change almost every District mentioned retailers discounting items or price-sensitive consumers only purchasing essentials, trading down in quality, buying fewer items, or shopping around for the best deals. Most Districts noted that input costs were beginning to stabilize; however, Atlanta specifically noted products like copper and electrical supplies have seen a notable increase over this period.”

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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