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It’s officially bar-b-q season; time to get together with family and friends. My husband and I started a new routine this season, we invite friends over mid-afternoon so they can miss beach traffic and we can start our visit with a walk on the beach. Most importantly our bar-b-q starts with dessert, and when we return home from the beach we pick our salad greens, then relax over appetizers. We might also end with a lite dessert of fruit and ice cream after our main dish. This works out really well , you can never have too much dessert!

This week with such varied weather the morning cloud cover has created some opportunities for some cool shots…

The weather forecast for this weekend looks promising; I am hoping you can spend some time outdoors and maybe we’ll get a beach day too.

Weekly Take-Away

This week on Wednesday evening, I attended the 69^th annual New York State Society of CPA’s (NYSSCPA) Installation dinner.   As our Nassau/Suffolk Chapter of NCCPAP executive board discussed purchasing a table and supporting the NYSSCPA and their incoming board for this event, my vote was yes, let’s attend.  My reason: “my mom always said do the right thing and you will never regret it”.  Even as I checked my travel app and saw I would have a 2 hour and 20-minute ride out to the south shore of Long Island I held fast in my recommendation to support the incoming board and attend the event.  It was a beautiful evening; the event was held at a waterfront venue and yes, I had a great time (even with a heavy downpour for the trip home).  Of course, when I was growing up and didn’t listen to her advice my mom would be right and I would regret being stubborn.  So when I am in doubt, I play her voice over in my head several times and then listen and “do the right thing and I will not regret it”.  NO Photos- I was too busy mingling and enjoying being with my friends to focus on photos.

TAX ISSUES/TAX PLANNING

 IRS Penalty Relief Available for First Time Requests

Hopefully you will never need this tip, but nice to know it’s available.  In general, taxpayers may qualify for administrative relief from penalties for failing to pay on time under the IRS’s first-time penalty abatement program if the taxpayer:

• Did not previously have to file a return, or had no penalties for the three prior tax years;
• Filed all currently required returns or filed an extension of time to file; and,
• Paid, or arranged to pay, any tax due.

 Tax Free and Taxable Fringe Benefits Can be a Valuable Tool for Employee Retention and Appreciation

Proper identification and reporting of fringe benefits enable employers to take applicable tax deductions and employees to receive tax free “income”.  Not all benefits are alike and depending on the circumstances may be taxable or partly taxable (includable or excludable for tax purposes) to the employer and/or employee. The following is a general list and a link to the IRS Fringe Benefit Guide  – IRS Code Section 132:

Transportation Fringe Benefits

• Personal use of a company car
• Parking spots
• Transit cards
• Use of a company aircraft even if there is a business trip involved somewhere

Working Condition Fringe Benefits

• Health Insurance
• Life Insurance
• De Minimis Fringe Benefits
• Employee Discounts
• No additional cost services
• Employee Achievement Awards for Length of Service and Safety-the changes under the new tax bill
• Prizes and Awards—Cash and Noncash
• Cell phones
• Gift certificates and gift cards
• Holiday gifts

Meals, Clothing, Housing and Education Fringe Benefits

• The changes to employer provided relocation under the Tax Cuts and Jobs Act of 2017
• On-site lodging
• Lodging for executives such as vacation condos
• Providing meals for employees, what are the circumstances surrounding the meal
• Educational assistance programs

Here is a link to the IRS Publication 15b for tax year 2024 and some of the 2024 updates and links:

• Cents-per-mile rule. The business mileage rate for 2024 is 67 cents per mile. You may use this rate to reimburse an employee for business use of a personal vehicle, and under certain conditions, you may use the rate under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee. See Cents-Per-Mile Rule (see section 3)
• Qualified parking exclusion and commuter transportation benefit. For 2024, the monthly exclusion for qualified parking is $315 and the monthly exclusion for commuter highway vehicle transportation and transit passes is $315. See Qualified Transportation Benefits (section 2)
• Contribution limit on a health flexible spending arrangement (FSA). For plan years beginning in 2024, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $3,200.
• Additional permitted election changes for health coverage under a cafeteria plan. Notice 2014-55, 2014-41 I.R.B. 672, available at IRS.gov/irb/2014-41_IRB#NOT-2014-55, expands the application of the permitted change rules for health coverage under a cafeteria plan and discusses two specific situations in which a cafeteria plan participant is permitted to revoke their election under a cafeteria plan during a period of coverage.
• Moving expense reimbursements. Public Law (P.L.)  115-97, Tax Cuts and Jobs Act, suspends the exclusion for qualified moving expense reimbursements from your employee’s income for tax years beginning after 2017 and before 2026. However, the exclusion is still available in the case of a member of the U.S. Armed Forces on active duty who moves because of a permanent change of station due to a military order. The exclusion applies only to reimbursement of moving expenses that the member could deduct if they had paid or incurred them without reimbursement. See Moving Expenses in Pub. 3, Armed Forces’ Tax Guide, for the definition of what constitutes a permanent change of station and to learn which moving expenses are deductible.
• Bicycle commuting reimbursements. P.L. 115-97 suspends the exclusion of qualified bicycle commuting reimbursements from your employee’s income for tax years beginning after 2017 and before 2026. See Transportation (Commuting) Benefits  (see section 2).

IRS’s Posts the 2024 Dirty Dozen: Be Wary of These Scams and Schemes

The IRS once again kicked off their list of the annual Dirty Dozen with a warning about phishing and smishing scams.  The warnings and scams on the list are similar to those cited in 2023 and I counted 11, hmmm… .  Stay tuned for my blog post next week as I start counting down, or check them out here via the IRS link and be wary, if it sounds too good to be true…

ECONOMY

Federal Reserve Board Issues Economic Well-Being of U.S. Households Report

The Federal Reserve Board on Tuesday issued its Economic Well-Being of U.S. Households in 2023 report, which examines the financial circumstances of U.S. adults and their families.  From the Executive Summary:

“Results from the 2023 Survey of Household Economics and Decision making (SHED) indicate that people’s overall financial well-being was nearly unchanged from the previous year but below the high reached in 2021. Despite the moderating pace of inflation, many adults continued to indicate that higher prices were a challenge in managing their finances.

Overall Financial Well-Being:

The 72 percent of adults doing at least okay financially was similar to the 73 percent in 2022 One notable exception was parents living with their children under age 18, where the share doing at least okay financially fell 5 percentage points from 2022. Inflation continued to be the top financial concern, despite the inflation rate falling over the prior year.

Income:

Many people experienced a change in their family’s monthly income and spending from a year earlier. Thirty-four percent of adults said their family’s monthly income increased in 2023 compared with the prior year.

Employment:

The rates at which workers started new jobs, applied for new jobs, and received pay raises were similar to 2022. About 4 in 10 single working parents of a younger child (under age 13) used paid childcare, as did a similar share of parents living with a spouse/partner where both parents worked. •

Housing:

Challenges paying rent increased in 2023. The median monthly rent payment was $1,100 in 2023, up 10 percent from 2022. In addition, 19 percent of renters reported being behind on their rent at some point in the past year, up 2 percentage points from 2022.

Retirement and Investments:

Progress toward retirement savings goals improved slightly in 2023. Thirty-four percent of non-retirees thought their retirement savings plan was on track, up from 31 percent in 2022, but down from 40 percent in 2021.

US Households Still Feel Pinched by Inflation

According to this article in Reuters.com:  “U.S. households continued to feel pinched by inflation in late 2023 even as price pressures ebbed, the Federal Reserve reported, with most Americans saying their financial situation had changed little in the last year, while parents reported times had gotten harder.”

US Economic Output Hits 2-Year High

As reported in this article in Finance.Yahoo.com:  “The US economy is defying expectations amid concerns of a slowdown. S&P Global’s flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 54.4 in May, up from 51.3 in April. Economists had expected the index to remain largely unchanged in May. Instead, it hit a 25-month high.”

Improved Business Activity Casts Doubt Over Rate cuts

According to this article in Reuters.com:  “Businesses across the globe broadly enjoyed an improved performance this month with activity picking up in the United States and across parts of Asia and Europe, surveys showed on Thursday, giving central banks room to potentially defer cutting interest rates.”

Crypto-Friendly Bill Passes House

As reported in this article in Forbes.com:  “The House passed legislation that would give oversight authority over most forms of cryptocurrency to a more industry-friendly agency. The legislation would put most forms of cryptocurrency, including bitcoin, under the regulatory purview of the Commodity Futures Trading Commission by classifying them as commodities, rather than securities that would fall under the authority of the Securities and Exchange Commission.”

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