Blog

Sending best wishes and our thanks to our veterans and their families this Veteran’s day 2023.  We salute you and appreciate your courage and service to our country.

I am loving the beautiful photos that I have been receiving and am happy to share.  This is an actual photo from my friend Renee’s back porch (she is a show off)…

Added benefit when visiting “the kids” to have a great trail to walk and I know Ilene and Len had a great vist…

We walked this bog trail when we visited Emily, Jeff and Rory this summer…

We enjoyed the sunset by the Oceanside CA pier when we visited this summer; this one was taken by my daughter Jessie this week…

I actually left Rockaway this week and was able to enjoy NYC foliage too…

The beach this week was amazing, and what a difference a day makes…

Nice to have a friend who is also a weekend gardener, I am all set for blackberry season 2024.  Yes, I made her a delicious healthy dinner after we finished…

I am wishing everyone a great weekend and for those of you who are off today as well, enjoy.

Weekly Take Away

Early detection saves lives, I know that October is breast cancer awareness month and many people took the opportunity to have their annual screenings. For us even though we have some stragglers, October is our official deadline end to our annual tax season.  What better reminders could we all have than to be proactive with our health checkups (focus on us as much as we focus on taxes).  Many of us have friends and family members who have a potential problem which when detected at an early more treatable stage can be successfully treated. So be annoying and check in with someone you love to make sure they are up to date with their screenings and maybe save a life; then go out for a brisk walk 🚶🚶‍♂️🚶‍♀️and enjoy the fall weather 🍁🍂 and a healthy break💟.

TAX ISSUES/TAX PLANNING/BUSINESS ADVISORY

Beneficial Ownership Information (BOI) Reporting Requirements Due Date is …Almost Here

In the tax and reporting world many of us procrastinate and wait to act when the deadline is almost here.  That has been the case for the Beneficial Ownership Information (BOI) reporting requirements initial due date as mandated for January 1st 2024.  This mandate has been pushed back from the initial due date, but January 1st is coming and the due date requirement will most probably January 1st, 2024.

This was mandated under the Corporate Transparency Act (CTA) enacted in 2021 the purpose of which was to “enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities.” Financial Crimes Enforcement Network (FinCen) – here is the link to the FinCen – BOI reporting rule fact sheet and is a legal requirement for those companies who meet the criteria – here is the link to the FinCen   FAQ landing page.

This sounds like a “tax thing” that your accounting professional should be able to handle, BUT it is not, your obligations to report should be discussed with legal counsel to ensure you are complying with the law.  We will be vetting firms who we feel can properly advise our clients and will furnish that information to them via direct email and telephone calls.  Please don’t wait for the last minute on this one.  The following is an excerpt from the FinCen – BOI reporting rule fact sheet :

Reporting Companies

• The rule identifies two types of reporting companies: domestic and foreign. A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe. A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that is registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office. Under the rule, and in keeping with the CTA, twenty-three types of entities are exempt from the definition of “reporting company.”
• FinCEN expects that these definitions mean that reporting companies will include (subject to the applicability of specific exemptions) limited liability partnerships, limited liability limited partnerships, business trusts, and most limited partnerships, in addition to corporations and LLCs, because such entities are generally created by a filing with a secretary of state or similar office.
• Other types of legal entities, including certain trusts, are excluded from the definitions to the extent that they are not created by the filing of a document with a secretary of state or similar office. FinCEN recognizes that in many states the creation of most trusts typically does not involve the filing of such a formation document.

Beneficial Owners

• Under the rule, a beneficial owner includes any individual who, directly or indirectly, either (1) exercises substantial control over a reporting company, or (2) owns or controls at least 25 percent of the ownership interests of a reporting company. The rule defines the terms “substantial control” and “ownership interest.” In keeping with the CTA, the rule exempts five types of individuals from the definition of “beneficial owner.”
• In defining the contours of who has substantial control, the rule sets forth a range of activities that could constitute substantial control of a reporting company. This list captures anyone who is able to make important decisions on behalf of the entity. FinCEN’s approach is designed to close loopholes that allow corporate structuring that obscures owners or decision-makers. This is crucial to unmasking anonymous shell companies.
• The rule provides standards and mechanisms for determining whether an individual owns or controls 25 percent of the ownership interests of a reporting company. Among other things, these standards and mechanisms address how a reporting company should handle a situation in which ownership interests are held in trust.
• These definitions have been drafted to account for the various ownership or control structures reporting companies may adopt. However, for reporting companies that have simple organizational structures it should be a straightforward process to identify and report their beneficial owners. FinCEN expects the majority of reporting companies will have simple ownership structures.

IRS Provides Tax Inflation Adjustments for Tax Year 2024 (Rev Proc 2023-34)

The IRS issued Rev Proc 2023-34 yesterday November 9, 2023 which sets forth the annual inflation adjustments that will affect more than 60 tax provisions for 2024 tax returns (generally filed in 2025).   Time to start tax planning…

With the inflation adjustment, Rev. Proc. 2023-34 provides that for tax year 2024:

• The top income tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).
• The other income tax rates for single taxpayers will be:
  • 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
  • 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
  • 24% for incomes over $100,525 ($201,050 for married couples filing jointly
  • 22% for incomes over $47,150 ($94,300 for married couples filing jointly
  • 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
• The lowest rate is 10% of incomes for single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).
• The standard deduction amounts for 2024 will be increased, as follows:
  • For married couples filing jointly—$29,200 [an increase of $1,500 from the prior year]
  • For single taxpayers and married individuals filing separately—$14,600 [an increase of $750]
  • For heads of households—$21,900 [an increase of $1,100]

The personal exemption for tax year 2024 remains at $0 (the personal exemption was suspended for tax years 2018 through 2025 by the U.S. tax law enacted in 2017 (Pub. L. No. 115-97, or the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA)).

For 2024, as in 2023, 2022, 2021, 2020, 2019 and 2018, there is no limitation on itemized deductions (referred to as the “Pease” limitation under prior law), because that limitation was also suspended by the TCJA for years 2018-2025.

Looking to Manage Business Debt

Managing finances needs and business debt can be a daunting task for many small business owners. Dealing with business loan payments in this climate of high interest rates can add to the regular stress of managing your cash flow and can be overwhelming. A business loan, line of credit, or a business credit card can help your company hire new employees, purchase inventory, acquire equipment, and fuel growth. However, it’s crucial to strike a balance, as excessive debt can spiral into an unsustainable expense. Debt management is vital to the success and sustainability of any business. Here are some tips on effective debt management for you to consider:

• Rank your debts: The first step in debt management is understanding which debts are immediate and which can wait. Ranking your debts enables you to prioritize the most pressing ones, helping you avoid defaulting on payments. Defaulting on loans and credit can lead to a decrease in your business credit score, adversely affecting your financial standing in the long run.
• Consolidate debt: Consider consolidating your debts into a single monthly payment. This approach streamlines debt management by making it easier to track and manage all your debts, reducing the chances of missed payments and late fees. Debt consolidation also slashes the interest rate of high-interest loans, saving you money on interest payments.
• Increase revenue: One of the most effective ways to manage debt is by boosting your business’s revenue. Fine-tune your existing offerings, explore new markets, or invest in products/services that align with your brand’s vision. Higher revenue translates to more funds available for debt repayment, minimizing additional interest costs.
• Reduce spending: Prudent cost-cutting and expense management play a pivotal role in debt management. This entails negotiating with suppliers for favorable prices, adopting energy-efficient equipment, and even renegotiating loan terms to lower monthly payments. By curbing unnecessary expenses, your business can allocate more funds toward debt payoff while building reserves for other operational needs.

AND remember we are here to help by pinpointing areas for improvement, offering suggestions for debt consolidation strategies, and helping create a budget aligned with your business objectives.  Feel free to check out these resources from our website and call for a discovery session.

ECONOMY

Biden’s New Plan for Student Loan Relief

On Monday, the Department of Education announced new plans to forgive billions of dollars in loans held by struggling borrowers. If it works, people who have spent decades under the yoke of monthly payments will finally be free of their obligations. The question is whether the Supreme Court will once again blow up Biden’s loan forgiveness ambitions before they leave the ground.

Federal Reserve Held Interest Rates Steady; Powell hedges on possible end of tightening campaign

The Federal Reserve held interest rates steady on Wednesday as policymakers struggled to determine whether financial conditions may be tight enough already to control inflation, or whether an economy that continues to outperform expectations may need still more restraint. Fed Chair Jerome Powell said the situation remained something of a riddle:

• Central bank’s policy rate remains in 5.25%-5.50% range
• Fed says economy grew at ‘strong’ pace in third quarter
• Traders add to bets that Fed is done raising rates

Yellen Sounds Unfazed Over US Budget Deficit Concerns

Treasury Secretary Janet Yellen waved away angst about the budget deficit in remarks at a Bloomberg event in Washington. She said the surge in longer-term bond yields in recent months is a reflection of a strong US economy, not the jump in government borrowing driven by a widening fiscal deficit. Exerpt from market insider:

• Treasury Secretary Janet Yellen doesn’t see a clear line tying the recent surge in long-term bond yields to the US government’s growing fiscal deficit.
• In Thursday comments at a Bloomberg event in Washington, DC, Yellen said the historic sell-off in the Treasury market — which sent benchmark bond yields to their highest levels since pre-2008 financial crisis — aren’t happening in a vacuum.
• “We’re seeing yields go up in most advanced countries,” Yellen said, noting that the jump instead is “largely a reflection of the resilience people are seeing in the economy.”
• Her comments followed the release of real gross domestic product data that showed the American economy grew at a 4.9% annualized rate in the third quarter. That beat the roughly 2% seen in the prior two quarters, and marked the fastest growth since 2021.

US Consumer Confidence Hits a Five-Month Low

Consumer confidence in the United States fell for a third straight month in October as gloomier economic forecasts and rising prices dampened optimism.  Data released on Tuesday showed that The Conference Board’s index dropped from 104.3 in September to 102.6 last month, which is a five-month low.

Biden Issues Executive Order on AI for U.S. Government Departments and Application Developers

U.S. president Joe Biden today issued an Executive Order establishing new standards for the use of artificial intelligence applications in the U.S. federal government, government-funded programs and critical infrastructure sectors.

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

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.