Blog

Welcome to March and the count down to spring, hard to believe when we were building snowmen ⛄ just last week.  We at A. Parness Company CPA are deep into tax season 2024, with several tax deadlines happening March 15, which when necessary, may be extended until September.  During our exit appointments we get many similar questions, today I am focusing on “working dogs”.  I am picturing farm dogs herding sheep or guarding the hen house, maybe those canine companions, like Mitchie who assist with medical related issues, or service animals who sniff for drugs and explosives at the airport.  But what about my granddog Sampson who accompanies my daughter to the office most days and now has several friends he meets in the lobby so they can visit other offices in the building together?  Of course, as accountants we say “it depends” on the facts and circumstances and the lawyers in the group may say “there may be deductions”; the rest of us start searching the internet for answers (which may NOT be correct).  So read my take on this below in my TAX ISSUES/TAX PLANNING section, check Treas. Reg. §1.262-1(b)(3). and enjoy this week’s photos of the office dogs in my life.  Please feel free to share your photos in the comments below or text me your favorites and I may include them nest week..

I don’t think these cute photos are what we had in mind when you hear about “working dogs”

My weekly blog would not be complete without a few sunrise and sunset photos, thanks to family and friends who have contributed this week as well…

I am hoping you have some wonderful plans for this weekend, with or without your pet, working dog, or canine companion.

WEEKLY TAKE AWAY

It’s tax season so let’s keep it short and sweet research, research, research and document, document document and when in doubt go right to the main source IRS pub #XYZ!

TAX ISSUES/TAX PLANNING

Can I Take My Pet as a Deduction on My Tax Return

Sampson, is an unpaid intern who accompanies my daughter to her job at RCE Technologies, Inc., a medical device start-up in Southern California; someone at work recently asked Jessie, if she could take him as a deduction on her tax return, so she turned to me for guidance.  Under certain circumstances some of his care and feeding expenses may be deductible, but we rely on facts and circumstances and document, document, document.  Spoiler alert, Sampson appears in my blogs, has a home video “Sampson Goes to Work” and does act as company mascot, BUT his primary function is non-deductible pet and family best friend so his upkeep is NOT deductible under the present circumstances.  Please note he has an Instagram account and is available to star in a movie and under different circumstances his care and maintenance could be deductible.

Remember the IRS Code Section 162 which spells out ordinary and necessary business expenses as you consider police or airport dogs, specially trained and certified to perform specific duties. In Rodriguez v Comm., T.C, Memo 2009-99 the tax court ruled the purported guard dog expenses were nondeductible personal expenses.

Sampson was a foster failure (he was adopted after 1 day), however under certain circumstances the costs of fostering an animal may be considered non-cash charitable deductions, see Van Dusen v. Comm. 136 T.C. 515 (2011).

Before taking expenses related to your specially trained service animal as an unreimbursed medical deduction (see page 7 of IRS publication 502) remember those service animals are specially trained, certified and perform medical related services to directly assist a visually impaired or hearing disabled person, or an individual with other physical disabilities.  In general, those out-of-pocket costs include: food, grooming, and veterinary care incurred in connection with maintaining the health of the service animal so it may continue to perform its duties.

More Guidance on Beneficial Ownership Information Reporting (BOI)

I have been discussing this “new” reporting requirement with other tax professionals and with my business clients during our recent exit appointments and have been posting about the related rules and regulations (see my blog post from January 5th and December 8th 2023 and November 10th 2023) while also preparing a co-presentation with one ofmy friends/legal advisors.  This just out: FinCEN Issues Small Entity Compliance Guide for Beneficial Ownership Information which provides an overview of the requirements regarding access to beneficial ownership information (BOI) by small entities; in particular, small financial institutions authorized to access BOI.  Under the Access Rule, issued in December 2023, BOI reported to FinCEN is confidential, must be protected, and may be disclosed only to certain authorized Federal agencies; state, local, tribal, and foreign governments; and financial institutions.  The guide includes sections summarizing the Access Rule’s requirements that pertain to small financial institutions’ access to BOI.  Who exactly is FinCEN… The Financial Crimes Enforcement Network (FinCEN) and they mean business, remember ignorance of the law is no excuse and the penalties are stiff!

Time to Start Working With a Tax Professional and How to Vet Yours

Tax time; as we start receiving annual tax documents our focus turns to hopes for meaningful write-off’s and tax credits.  Around this time last year I was interviewed by Marielle Segarra of NPR for a pod cast (here is the link to the print version) we focused on why someone would be best served by working with a tax professional and how to find the right professional for you and your situation.

I feel that once a person starts working they should at least have a consultation with a tax professional, this could lead to immediate tax saving incentives offered by their employer.

In general I recommend that you seek out a professional tax consultant when you experience or anticipate a major life change:

• new job
• moving to another location (especially a new state)
• make a career change
• get married, divorced or starting a family
• start a business or “side” business
• look to borrow money or take funds from a retirement account
• you were the victim of a casualty (Hurricane Sandy)
• you won money via gambling or the lottery
• you were granted relief from bankruptcy or credit card debt
• you are looking for assistance living within your income and paying off debt
• receive an inheritance (in that case the attorney may be a great referral source)
• purchasing (selling):
  • a home or new home
  • stocks
  • trading in digital assets
  • have foreign investments
  • have publicly traded investments in pass through entities

You can generalize these suggestions when looking for a professional to work with; for a CPA or licensed tax professional I recommend that you:

• If you are working with a financial advisor I would ask them for a referral.  If you are not working with another professional you can ask your parents, friends or work colleagues for a referral.  Ask them what they like and dislike about that professional.
• Look at their website, see what they specialize in, read some blog posts and testimonials
• Call their office and ask for an appointment to find out about their process (we call this a discovery meeting and ask for prior year’s tax return copies first before we book that appointment).
• Ask important questions:
  • will they give you tax advice or just assist you with the filing requirements
  • will they help you make decisions about electing into a company retirement plan/deferred income account
  • will they have an appointment with you to discuss your tax return (will the appointment be via video chat, in person or by telephone or not at all).
  • how will you exchange documents- secure portal, mail, email, hand deliver
  • confirm that they will represent/support your return if your tax return is pulled for audit

Now, time to start or continue gathering and organizing your tax documents and make that appointment!

IT WARNING

 You Get An Urgent Request From Your Company Superior  to Purchase Gift Cards For the Office…

How Can You Avoid Falling for this Type of Trap

Consider this scenario:  You the controller or executive assistant gets an email from one of the top executives at your company.  He or she is in a meeting and can’t talk, but desperately needs your help.  He/She needs to obtain gift cards for:  a special key employee, important client, event swag, etc.  You are asked to go and get gift cards Apple or the like and email back the numbers.  But who is really sending this?  BEWARE:  THIS IS A  SCAM currently circulating and catching many unsuspecting well-meaning individuals.  Anyone can create a fake email address within seconds.

Let’s walk through a few key steps to keep you and your company’s finances safe.

Verify, verify, verify. Always verify any unusual requests, especially those involving money or sensitive information. A quick phone call or a face-to-face conversation with the person making the request can save you from a costly mistake. Confirming who the executives at your fim are is easily researched via the internet (including senior staff you may not know personally).

Look for red flags:

• Does the phone number match?
• Does their email address look off by a character or two if you received the request via your inbox?
• Are there typos or oddly phrased sentences?

These are red flags. Scammers often use spoofed emails that resemble a legitimate address, hoping you won’t notice the difference.   Just remember this:  don’t share the numbers on the back side of the gift card with anyone you are not familiar with. Scammers can use those numbers to empty the card’s balance before you can report it to Apple or the authorities.

Guest Post by Jim Dipelesi, president of JRD Technical Associates, Inc.  Thank you Jim for this information and for taking such good care of us!

ECONOMY

New Study Unveils the Major Companies Behind the Great US Employment Boom

A new study reveals that tech giants like Google, Amazon, and Microsoft are among the top companies where employees are seeking new jobs. Despite high salaries, workers are leaving due to job dissatisfaction, seeking better work-life balance, career growth, and company culture at smaller firms or startups.

Small Business Grants are Now Available to Help Fill Vacant Storefronts

Various grants are being offered to help businesses looking to occupy empty storefronts.These grants aim to revitalize communities and boost local economies. They encourage investment by supporting renovations, rent, working capital and operating costs.  The grants are available through local governments, economic development entities, and private organizations, with eligibility criteria and application processes varying by program.

• Maryland Project Restore 2.0 and Business Boost Grant Programs
• New Jersey Main Street Acquisition Support Grant
• GM Moving Flint Forward
• SpringBoard Small Business Grants
• Lowell Community Teamwork Grant
• Michigan Small Business Support Hubs program

The New Go-Go Economy, Characterized by Rapid Change & Growth

Josh Bersin discusses the ‘go-go economy’, characterized by rapid change and growth. Companies must adapt by investing in people, technology, and well-being. Businesses should focus on sustainable practices, employee development, and agile operations to thrive in this dynamic environment. Those who don’t risk falling behind.

Slower US Inflation is Set to Fuel Fed Rate-Cut Optimism

The latest U.S. inflation data suggests a slowdown, bolstering expectations that the Federal Reserve may cut interest rates. This development is anticipated to provide a positive stimulus for the global economy, as investors and policymakers look for signs of easing inflationary pressures to support economic growth.

Why the 1960s Can Help Us Understand Our Confusing Economic Mood

The article draws parallels between the current economic sentiment and the 1960s, highlighting similarities in inflation, low unemployment, and technological optimism. It suggests that studying the 1960s can offer insights into today’s confusing economic landscape, with potential lessons on managing inflation without triggering a recession.

m, leading to savings and a quicker path to ownership. However, it’s crucial to ensure there are no prepayment penalties and to consider personal financial stability before opting for this strategy.

GENERAL RESOURCES