Weekly Update – May 26th 2022
Just a few more weeks until summer, I have been counting the days/weeks as the weather warms up and we have “real” beach days. I was away this past weekend so I missed the first “real” beach day of the season, although I prefer to walk the beach rather than sit and bake. I’m happy to share this morning’s sunrise, I wore long pants and a thick fleece …
Post tax season I start my garden prep and planning, then over mother’s day weekend I head to the Brooklyn terminal market with my friend to choose seedings…
Slight delay, but my plot has been aerated, the compost spread and weed prevention fabric laid; I’m ready for the weekend.
As I worked through several projects this week I was once again reminded that “it takes a village”. I am so grateful to have a support system of associates, staff, family and friends who barely have to be asked to jump in and offer their skills to help create a positive outcome. It’s important to ask for the right help at the right time!
Where’s My Refund
With the IRS reporting at least 10 million pieces of correspondence in flux we are seeing that there are still many 2019, 2020 and now 2021 still bogged down in the review process. We get minimal comfort from knowing that refunds related to e-filed returns will be issued with interest. The “Where’s My Refund” tool is helpful in tracking the status, but it was limited by tax year which has just been expanded to show 3 years. We do note that the most common post is “your tax return has been received and is being processed”.
IRS and States Sending Duplicate Notices
We have been seeing that although we reply to IRS and state tax authority notices as they are received our clients are getting second and third requests for payment or information. Our system allows for tracking of correspondence on our end. We “log in” copies of notices with our reply and PDF of position support along with a “date stamped” note about the situation. I would love to see what stage the issue is with a tracking system by the IRS and state portals. Please be patient!
Taxpayers Who Missed the Filing Deadline Should File Now
The IRS encourages taxpayers who missed the tax filing deadline on April 18 to file as soon as possible. While taxpayers due a refund receive no penalty for filing late, those who owe and missed the deadline without requesting an extension should file quickly to limit penalties and interest. Families who don’t owe taxes can still file their 2021 tax return and claim the Child Tax Credit for the 2021 tax year at any point until April 15, 2025.
SALT Relief May Not Make it Through Congress and the Senate
Despite roadblocks, five House Democrats are still fighting for relief on the $10,000 limit on the federal deduction for state and local taxes (SALT). Pass through entitles in several state have a workaround, but this is not available or realistic for most taxpayers.
PPP and EIDL Fraud Bills
The Small Business committee of the House Ways and Means committee is proposing 2 bills to address PPP and EIDL loan fraud. The bills are looking to establish a 10-year statute of limitations for bank fraud related to these stimulus programs.
Employee Retention Tax Credit Mills
We have seen aggressive marketing to the general business community by “ERC Mills”, who are creating boiler plate support for extremely aggressive stances. The IRS and congress is aware of these firms and practices, as such audits of the amended tax returns requesting those credits are being scheduled.
IRS Interest Rates Will Increase Beginning July 1, 2022
Last Friday the Internal Revenue Service announced that interest rates will increase for the calendar quarter beginning July 1, 2022. The rates will be:
- 5% for overpayments (4% in the case of a corporation).
- 2.5% for the portion of a corporate overpayment exceeding $10,000.
- 5% for underpayments.
- 7% for large corporate underpayments.
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points.
Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points, and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.
The interest rates announced today are computed from the federal short-term rate determined during April 2022 to take effect May 1, 2022, based on daily compounding.
Economic Well-Being Report of U.S. Households
On Monday, the Federal Reserve Board issued its Economic Well-Being of U.S. Households for 2021. A summary of the report, which examines the financial lives of U.S. adults and their families, can be found here.
Subtle Signs of Slowdown in the Housing Market
It seems that after years of seeing bidding wars for homes, it seems the American housing market may have finally peaked. History shows that housing prices drop with the increase in interest rates, but some “hot” areas are still showing high demand. Rising interest rates and more inventory in some areas have led to this slight slowdown in the general housing market.
Oil Prices Staves off Recession Fears
The price of oil steadied on Monday, alleviating some concerns of recession as we head into the summer driving season and China’s economy opens back up after lockdown.
Low inventory and Chip Shortage Affecting the Used Car Market
The average age of cars on our roads has crept up to 12.2 years, according to a report from S&P Global Mobility.
Starbucks follows McDonald’s out of Russia for good
The coffee chain announced this week that it would pull all of its stores and brand presence out of Russia, after pausing operations in March.
Hyundai Developing Mobility Technologies
Hyundai announced on Sunday that it plans to spend $5 billion in the U.S. on developing mobility solutions such as autonomous driving and robotics
Apple Looks to Move More Production Out of China
After the pandemic led to supply-chain jams and amid growing tension between the U.S. and Chinese governments, Apple is rumored to be seeking alternatives. Currently 90% of Apple’s production is in China.
- 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.