Blog

In last week’s blog I mentioned we were updating our website using the “slash and burn” method as we like to refer to edits or  our “less is more” approach to simplification… the review and edits have begun.  You can still find this week’s blog at the bottom of our home page; prior blogs are now in the “Latest News” Tab (we have eliminated the newsletters, Covid-19 sections and trimmed down our videos to leave the most relevant information).  I am excited to see the subject search bar ______🔍 our website developers are creating – many times I need an easier access to prior blogs and articles.   Our web site developers will be enhancing the “Client Area ⬇️” with more links (find it along the top bar next to our telephone number).

I love to share photos and stories, and this week I have a whale of a tale 🐳🐋with many dolphins🐬and sharks🦈too.  I went fishing off of Rockaway Beach.  After my walk I bundled up in fleece and a windbreaker and headed to the boatyard with a long-time family friend.  I assured him I was a good fisherperson 🎣, but warned that I hooked sharks on my last fishing expedition.  It was a beautiful day, we passed many dolphin pods as we headed around the breezy point jetty and then motored down the Rockaway, Queens coast, dropping our lines and whale watching.  Yes, I hooked 2 sharks  (my friend released them back into the ocean) and -0- striped bass, but it was a beautiful day and so exciting to see several whales feasting on the fish we had set out to catch.  Truth is I had a great time and was happier to watch the whales than to actually catch dinner…

I shared the video my friend took and was able to extract this “screen shot” as a photo (I know it’s blurry), it was so cool to be out on the water seeing the whales, dolphins and even the sharks …

Of course it would not be fall or Halloween without photos of pups on parade…

I did get in several barefoot walking days and bundled up those below 50-degree days.  What a great way to start the day…

Hoping you can enjoy an extra hour of sleep on Sunday morning, I have this feeling I will wake at my usual time and start my walk in the dark…

Weekly Take Away

For my Sunday morning barefoot beach walk I wore my usual layers of windproof fleece and was able to remove some layers once I “warmed up”;  for the boat ride later that morning I bundled up in an actual windproof ski jacket and fleece and packed a few extra layers.  Dress for success 🕴🏽, dress appropriately for the occasion 🩱🧥👒 and enjoy🎣🚤!

TAX ISSUES/TAX PLANNING

Post Election: Tax Law Changes

We know the Tax Cuts & Jobs Act (TJA) (which went into effect as of 101/01/2018) has provisions set to expire as of 12/31/2025, BUT… every year that I can remember an “extender bill” is passed.  This extender bill allows for adjustments and extends the “sunset” for provisions that congress, the senate and president all sign on for.  There are some favorites which are included year after year, and also some adjustments to existing laws and some new initiatives.  We do recognize that some tax laws look to influence business owner and individuals’ behavior (think: employee benefits, business meals deductions, electric vehicle credits, charitable contributions and solar power credits).  We expect to see some tug-of-wars and hard negotiations as the lawmakers strike a balance between revenue raisers and tax incentives.  In face of this uncertainty, we try to be proactive and focus on what’s important to us.  We focus on tax minimization planning that can be flexible and effective.  Tax nerd time, that’s the fun stuff.   I tuned in to a webinar this week which my professional organization hosted.  No real answers just speculation.  As usual, we will keep you posted as the laws are finalized and we are here to help you navigate.

As per a recent article in AccountingToday.Com:   “The 2024 elections are nearly upon us, with the fate of the tax world hanging in the balance. Of course, other important issues loom as well, including open borders, crime, inflation, and conflicts in Europe and the Middle East, as well as the style and personality of the candidates themselves. But for tax nerds, these are eclipsed by the positions offered by the candidates on taxation.

The tax landscape is highly dependent on the fate of the election, according to Marc Gerson, a member at Miller & Chevalier and former majority counsel at the House Ways and Means Committee:

“Obviously the fate of the 2017 tax cuts is at stake,” he explained. “But also what happens during the lame duck session is critical. The focal point will be to extend the 2017 provisions which were enacted on a temporary basis. Some have expired, while others will expire at the end of 2025, so it’s safe to say that regardless of the election results, we will see some tax legislation next year. Neither party wants to see higher taxes on all Americans. What is to be determined is the length and scope of any extension and how it will be paid for.”

They also have to pass a budget, he observed: “And regardless of formal requirements, there will be incredible pressure on Congress and the White House to pay for legislation so there will be no increase in the deficit. Some Republicans assert that the tax cuts ‘paid for themselves,’ since revenue increased after enactment of the Tax Cuts and Jobs Act.”

“There are Republicans that take the position that the extension of the TCJA should not have to be paid for because under dynamic scoring they will lead to greater revenue,” Gerson observed. “But some Republicans prefer deficit reduction to tax relief, and some Democrats believe that tax cuts will add to an already overburdened deficit.”

Dynamic scoring assesses the effect of tax legislation not only in terms of its direct effect on the budget, but also the indirect effects of tax on economic growth. It projects a positive or negative effect on jobs, wages, investment, gross domestic product and revenue.

The reconciliation process allows the passage of the budget without the impediment of a filibuster by the minority party. The post-election “lame duck” Congress will return to Washington November 12.

“So much depends on the election. If either party has a sweep, they will try to do tax through reconciliation. Then the extreme policies of either party will get tempered down,” said Gerson. “The other thing to keep in mind is that Congress and the White House next year will have immediate ‘must pass’ legislation so they will have to deal with the deficit, government funding and tax law. They really have a full agenda of ‘must pass’ legislation from the beginning of the year. It will be very challenging right from the start.”

Perhaps foremost among that must-pass legislation will be some kind of solution for funding the government (the current arrangement ends December. 20).

“The productivity of the new Congress is dependent on the election results, which may result in a change in control of both the House and the Senate,” said Gerson. “This may result in the delay of any real consideration in the lame duck session. The new Congress will have to deal with the debt limit, government funding, a farm bill and the TCJA tax cuts. Meanwhile, the current continuing resolution expires December 20. There could be disaster-related legislation in the lame duck session, which could involve targeted disaster tax relief and may start the discussion of a 2024 tax bill. And they may pass either an omnibus appropriations bill if they can agree on it, or another continuing resolution bill into the new year.”

ECONOMY

What America’s Small Businesses Have to Say About 2024 & What They Expect in 2025

As reported in this recent article from TheHill.com:  Small businesses employ about half of the workers in this country and generate nearly half of the nation’s gross domestic product. These owners — and their employees — are a massive voting bloc. So with the election only a couple of weeks away, what’s their state of mind?  A number of surveys have been released in the past few weeks that cover tens of thousands of business owners, of every color and gender from across the country, representing the smallest to mid-sized organizations (that is, a few hundred persons). Here is a sample of what they had to say:

• First, real monthly income decreased in September in eight of the 12 industry sectors tracked by the Intuit QuickBooks Small Business Index. Likewise, small-business revenue last month dipped in five of the eight regions monitored as part of the index, with zero or near zero growth in the remaining three.
• However, a Small Business Index from payments and financial technology firm Fiserv, which tracked retail and restaurant point-of-sale transactions, revealed three straight months of “steady consumer spending” and — although retail trade declined in September — small-business sales increasing about 1.8 percent over the last year. So not a lot. But positive.
• A Bank of America survey found that 78 percent of the American small-businesses responding to their recent survey “grew” (though the growth was unspecified) in the past year, with even higher percentages for businesses with Black and Hispanic owners. U.S. Bank’s Small Business Perspective survey found that 73 percent of small businesses have also “grown” in the last year — again, with no amount specified.
• But the National Federation of Independent Businesses, which has surveyed its membership monthly for the last 50 years, said that a “net negative” (seasonally adjusted) number of business owners reported higher nominal sales in the past three months, down 1 point from August and the “lowest reading of this year.” The survey also said that the net frequency of reports of positive profit trends was minus-34 percent (seasonally adjusted), with owners blaming weaker sales, inflation and labor costs as the culprits.

The October Beige Book National Summary

The October 2024 Beige Book has been published by the Federal Reserve, it gives an overview of economic conditions around the country the following is their summary of overall economic activity:

“On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth. Most Districts reported declining manufacturing activity. Activity in the banking sector was generally steady to up slightly, and loan demand was mixed, with some Districts noting an improvement in the outlook due to the decline in interest rates. Reports on consumer spending were mixed, with some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives. Housing market activity has generally held up: inventory continued to expand in much of the nation, and home values largely held steady or rose slightly. Still, uncertainty about the path of mortgage rates kept some buyers on the sidelines, and the lack of affordable housing remained a persistent problem in many communities. Commercial real estate markets were generally flat, although data center and infrastructure projects boosted activity in a few Districts. The short-lived dockworkers strike caused only minor temporary disruptions. Hurricane damage impacted crops and prompted pauses in business activity and tourism in the Southeast. Agricultural activity was flat to down modestly, with some crop prices remaining unprofitably low. Energy activity was also unchanged or down modestly, and lower energy prices reportedly compressed producers’ margins. Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook.”

US Firms Point to Steady Economy but See Lower Profit Margins, Fed says

As reported in this recent article from Reuters.com: “U.S. economic activity was little changed from September through early October and firms saw a slight uptick in hiring, continuing recent trends that have reinforced expectations the Federal Reserve will opt for a smaller 25-basis-point reduction in borrowing costs in two weeks.

• Fed’s ‘Beige Book’ shows inflation pressures moderating
• Job market kept steady pace from September to early October
• Businesses cautious due to uncertainty about US election

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
  • A list of frequently asked questions on the advance Child Tax Credit Payments
• IRS links for disaster relief
• SBA link for Disaster assistance
• FinCEN link for BOI reporting
• 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

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