Weekly Update–March 15th, 2024: A Perfect Tax Deadline Storm Day ⛈️ or Opportunity to Plan ☔🌈🍀
Today is a major deadline day, it’s like a perfect storm for me with a sunny afternoon and mild temperature expected later. I really wanted to stay out on the beach and continue my walk even though it was overcast at 7AM. Not gonna happen as today is March 15th, the perfect tax season deadline storm of beautiful weather and several major business, fiduciary/trust and partnership tax return, election, estimated payment and/or first estimate deadlines for our clients I am happy to review my week of sunrise photos, each so different but beautiful. A walk at sunrise; a great way to start my day ESPESICALLY at this busy busy time and I am happy share them …
Saturday morning at the beach 🏖️ no sun no rain but a beautiful day for a walk at sunrise…
Monday’s Rockaway Beach Sunrise at 7 AM daylight savings time…
Here comes the sun, Tuesday Morning Sunrise on the beach…
I’m not sure what a purple sky at dawn means…
Thursday morning the sun looked huge as it rose into a bank of clouds…
Overcast here at sunrise today, my cellphone camera added it’s own blue tint…
I am hoping those of you who had deadlines made them with little or no stress and have great plans for the weekend.
WEEKLY TAKE AWAY
Promises, promises, I have learned to say “we will finalize and upload your tax return by the end of next week”. It’s hard for me to hold back on my promises with my “good intentions” of completing the returns shortly after my tax return review/exit appointment as that process can easily take from 30 minutes to several hours of work, depending on the complexity. I see it’s a matter of being realistic about my time constraints in the busy time of year and managing the expectations of my clients and myself. So promises promises, best to make sure to bite your tongue before you promise something you can’t deliver and disappoint yourself and those you are looking to help.
TAX ISSUES/TAX PLANNING
It’s Better to Extend than Amend or Miss Tax Minimization Opportunities
It’s March 15th with several major tax deadlines today; S Corporation and Partnership business owners may want to follow these rules: “it’s better to extend than amend”; “it’s better to extend than rush to file and miss out on some little-known tax advantages”; “it’s better to extend than rush to file and miss out on some little known hitches in the tax law”.
- New York State Small Business Subtraction Modification: as of January 1, 2022, eligible shareholders, partners, members and sole proprietors whose entity is also eligible can apply the expanded subtraction modification to their 2023 tax return for a reduced tax bill at the state level.
- Annual deferred compensation plan contributions for company pension plans are due by the filing deadline (March 15th or extended filing deadline (September 15th), by filing an extension you can make the payment by September 15th and still reduce your business and/or individual tax liability. For sole proprietorships the due dates are April 15th and October 15th.
- Forms K-2/K-3 Reporting Responsibility for Pass-Through Entities- see my blog post from February 24th, 2023 for more detail about protection under statute of limitations rules
There’s Still Time for Effective Tax Savings
Take your time, amass some savings in the next few weeks and you may be effective at reducing your current year tax liability, it could be just a matter of pulling funds from one pocket and putting them in another. Eligible individual taxpayers should consider making a contribution to their traditional IRA by the April 15th deadline. Under the right circumstances your IRA contribution could save you money on 2023 tax bill. Remember to consult your tax professional to see if this makes sense for you.
The IRS Faces a Major Problem: Nonfilers
It’s tax season and spring so people’s thought turn to… tax return refunds and balances due. The IRS is focusing on non-filers as this recent article in AccountingToday spells out: “Taxpayers who exit the tax system by not filing a required return have emerged as a growing and under-the-radar problem for the IRS. A Feb. 29, 2024 IRS non-filer enforcement announcement comes not a moment too soon as the service tries to reel back in the growing number of taxpayers who are not filing a required return. For the past few decades, tax gap studies have been measuring the amount of revenue lost each year due to non-filing. In the most recent study, the IRS estimated that the non-filing tax gap almost doubled in five years: from $39 billion in 2016 to $77 billion in 2021.
ECONOMY
Biden Signs $460 Billion Spending Package, Averting Government Shutdown
On Saturday, President Joe Biden signed a package of six government funding bills (H.R. 4366 with an amendment), narrowly averting a partial government shutdown, though a second tranche of bills has yet to be finalized ahead of a looming March 22 deadline. Click through to read the full NY Times article.
Slower, But Strong US Job Growth Expected in February
As reported in this recent article from Reuters: “U.S. job growth likely slowed in February after two straight months of robust gains, but the labor market probably remains too strong for the Federal Reserve to consider cutting interest rates by June as currently anticipated by financial markets.
The Labor Department’s closely watched employment report on Friday is also expected to show the unemployment rate unchanged at 3.7% for the fourth consecutive month and the annual increase in wages only slowing marginally. The labor market is supporting the economy, which is outperforming its global peers.
In summary:
- Nonfarm payrolls forecast increasing 200,000 in February
- Unemployment rate seen unchanged at 3.7%
- Average hourly earnings expected to rise 4.4% year-on-year”
Welcome to the Housing Market’s ‘New Normal’: 7% Mortgage Rates
Per this article from NBC News: “Mortgage rates are high and housing inventory is tight, but some experts see the market’s deep freeze starting to thaw this spring. Homebuying started to pick up during and after the holidays. Existing home sales increased 3.1% from December to January, according to the National Association of Realtors. Meanwhile, the inventory of unsold existing homes rose 2% from December to January, totaling around 1 million at the end of last month, slightly expanding buyers’ options.”
GENERAL RESOURCES
- News about the Child Tax Credit
- 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