Weekly Update–November 3rd, 2023: Tax Minimization & Retirement Planning

It’s official, LIPA has accepted our application and paperwork, we are now banking our exported KWH.  That means that not only can we “withdraw” KWH when our panels are not producing, we can now report our solar panel project on our 2023 personal income tax return and receive tax credits from the IRS and NYS.  As NYC residents we also qualify for a real estate tax reduction over 4 years.  Saving money, saving the planet.  For more tax planning with energy credits see my blog post from: August 18th 2023

Thursday 26.1 KWH Exported Power & Banked
Thursday 26.1 KWH Exported Power & Banked

Happy Halloween 2023 πŸŽƒπŸ’€πŸ§™πŸ‘»; hoping you enjoyed your visitors and finishing off the leftover candy. I had a lot of help with the photo’s this week, no, not from the dog owners, from their pets who dressed up and then patiently posed for these cute pix…

Xena Bee
Xena Bee
Sampson is a Spooky California Surfer Dude
Sampson is a Spooky California Surfer Dude
Mitchie is Hugh Heffner Wearing His Smoking Jacket While Smoking His Pipe
Mitchie is Hugh Heffner Wearing His Smoking Jacket While Smoking His Pipe
Ruby the Rockaway Beach Beach Bum
Ruby the Rockaway Beach Beach Bum
Rory is an Angry Acorn
Rory is an Angry Acorn

Those showoffs in New Hampshire, beautiful fall colors and $-0- state taxes… (beautiful and good tax planning!)

Fall Mountains, Sunapee N.H.
Fall Mountains, Sunapee N.H.

Of course it wouldn’t be a weekly post from me if I didn’t share photos from my walk on the beach.  Yesterday morning I bundled up with a fleece sweater and vest but then like a crazy person walked barefoot along the water’s edge…

Roackaway Beach Sunrise November 2nd
Rockaway Beach Sunrise November 2nd

Yes the water was warmer than the sand and the air!

Wishing everyone a great weekend, and if you’re in NYC cheer on the runners in the 52nd NYC Marathon this Sunday November 5th. Here’s a link to the course.  Good luck to the 50,000 runnersπŸƒπŸƒ‍β™€οΈπŸƒ‍♂️

Weekly Take Away

Communication and shared responsibility is our key take-away this week.  Just the other day a client forwarded an email from their investment advisor who was confirming that his accountant properly recorded his Back Door ROTH IRA for 2020-2022.  Well, it was us and we didn’t, so our bad πŸ‘Ž, but the investment advisor had never emailed the client about their plan, nor had the client given us any prior documentation.  SO Shared Responsibility for this one.  Typically, we check IRS transcripts prior to filing returns for some of our clients, but those transcripts may not be complete prior to September and most probably not before the April 15th individual tax filing deadline.  We were happy to amend the years in question, but thought, let’s recheck the transcripts for those years.  Punch line: the 2022 IRS transcript revealed more income items that were not previously provided by the client nor on the prior 2022 transcript. Again, shared responsibility.  The good news is that the 2020 and 2021 amended tax returns will yield a refund and we are “voluntarily reporting” additional income and remitting taxes, which may enable us to mitigate the penalty situation.

Communication & Shared Responsibility
Communication & Shared Responsibility


Tax Planning with Qualified Retirement Funds

IRS notice 2023-75 was released on November 1st and is a great year-end reminder to review your 2023 tax situation and possibly do some year-end tax minimization planning AND to check in with your human resources department to confirm that you are maximizing your 2023 contribution and are all set for 2024.   Remember once you reach 50 years old you can also make additional catch-up contributions.  In my August 11th 2023 blog post I discussed the advantages of incorporating retirement plans into your strategic minimization tax plan – take another look and feel free to contact our office to set up an appointment for your year-end tax minimization plan review and/or to discuss your 2024 tax minimization planning strategies.

IRS Notice 2023-75:  Qualified Retirement Plans: IRAs, 401(K)s 403(b)s Contribution Limit Increase for 2024

Every year (or most years) the IRS increases the limits/caps for retirement contributions.  In most cases when the taxpayer or employee makes the contribution to a qualified retirement plan, the contributed funds reduce their current year’s taxable income and the funds grow tax free until withdrawn (the premise is that you will be in a lower tax bracket when you retire AND probably need/want the money).   For Roth IRAs and ROTH 401Ks the funds grow tax free until they are withdrawn, and when properly planned the withdrawal will be tax free as well.

IRA Plan Limits for 2024:

  • The limit on annual contributions to an IRA increased to $7,000, up from $6,500.
  • The IRA catch‑up contribution limit for individuals aged 50 remains $1,000 for 2024.

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions so check in with your accounting professional before making your contribution.  Additionally taxpayers may be eligible for the Savers credit (when your income falls within the following ranges: $76,500 for married couples filing jointly, up from $73,000; $57,375 for heads of household, up from $54,750; and $38,250 for singles and married individuals filing separately.)

401(k)/403(b)/457 Plan Limits for 2024:

  • The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan is increased to $23,000, up from $22,500.
  • Catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan remains $7,500 for 2024.  It is possible for those over 50 years old to defer up to $30,500, starting in 2024.

SIMPLE IRA Plan Limits for 2024:

  • The amount individuals can contribute to their SIMPLE retirement accounts is increased to $16,000, up from $15,500.
  • The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024.  It is possible for those over 50 years old to defer up to $19,500, starting in 2024.

ROTH IRA Plan Limits for 2024:

Eligitablity for contributions is based upon the following income levels:

  • The income phase-out range for taxpayers making contributions to a Roth IRA is increased:
    • For single taxpayers and heads of household the phase out range is between $146,000 and $161,000 up from between $138,000 and $153,000.
    • For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
    • The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

Maximum Defined Contribution Plan Rules for 2024:

  • Maximum Defined Contribution Plan Limit$ 69,000
  • Annual Compensation Limit: $345,000
  • Defined Benefit Plan Annual Benefit: $275,000
  • Definition of Highly Compensated Employees for 2024:  5% Owner or any lineal ascendant or descendent of a 5% Owner (no compensated limit allowed) other employees $155,000

Additional changes made under SECURE 2.0 are as follows:

  • The limitation on premiums paid with respect to a qualifying longevity annuity contract remain at $200,000 for 2024.
  • Added an adjustment to the deductible limit on charitable distributions. For 2024, this limitation is increased to $105,000, up from $100,000.
  • Added a deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity. For 2024, this limitation is increased to $53,000, up from $50,000.

Details on these and other retirement-related cost-of-living adjustments for 2024 are in Notice 2023-75PDF, available on IRS.gov.

Charitable Tax Scams

The Internal Revenue Service (IRS) has warned American taxpayers to be on the lookout for criminals soliciting donations and falsely posing as legitimate charities in the wake of a string of natural disasters and conflicts happening across the globe IR2023-196.  Be on the lookout for scammers who set up fake organizations to take advantage of the public’s generosity as scammers take advantage of tragedies and disasters.  When fake charities scam unsuspecting donors, the proceeds don’t go to those who need the help and those contributing to these fake charities can’t deduct their donations on their tax return.  To receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool. It’s also important for taxpayers to remember that they can’t deduct gifts to individuals or to political organizations and candidates.

Here are some tips to help individuals avoid fake charity scams:

  • Individuals should never let any caller pressure them. A legitimate charity will be happy to get a donation at any time, so there’s no rush. Donors are encouraged to take time to do their own research.
  • Confirm the charity is real. Potential donors should ask the fundraiser for the charity’s exact name, website and mailing address, so they can confirm it later. Some dishonest telemarketers use names that sound like well-known charities to confuse people.
  • Be careful about how a donation is made. Taxpayers shouldn’t work with charities that ask for donations by giving numbers from a gift card or by wiring money. That’s a scam. It’s safest to pay by credit card or check — and only after researching the charity.

For more information about fake charities see the Federal Trade Commission website.

10 Ways to Spot IRS Scams and Impersonators

It is true that in rare circumstances the IRS will come to a home or business. But the agency’s new policy of scaling back on unannounced visits makes the likelihood of this extremely low.

Unless you’re being subpoenaed, served a summons, or your assets are in danger of being seized, the IRS generally won’t show up on your doorstep.

In accordance with the new policy, if a face-to-face meeting is necessary, taxpayers will receive mailed letters or notices from the agency to schedule the meet-up first. Some other major red flags that can help tip you off to an IRS scam include:

  • They’re calling you first. The IRS contacts taxpayers by mail first; it doesn’t initiate contact via a random phone call.

  • They’re leaving a prerecorded voicemail. The IRS doesn’t leave prerecorded, urgent or threatening voicemails.

  • They’re emailing you. The IRS doesn’t initiate contact with taxpayers by email to request personal or financial information. Do not reply to the message, open any attachments or click on any links. And note that the IRS’s website is IRS.gov — not IRS.com, IRS.net, IRS.org or some other bit after the period.

  • They’re texting you. The IRS doesn’t initiate contact with taxpayers by text message to request personal or financial information.

  • They’re contacting you via social media. The IRS doesn’t initiate contact with taxpayers on social media channels to request personal or financial information.

  • The form they’re sending or referencing doesn’t appear on the IRS website. You can look up the names of IRS notices and letters on the IRS website. If the type of notice you received doesn’t show up on the list, it’s probably not legit.

  • They don’t know what an HSPD-12 card is. Real IRS agents have two forms of identification: a pocket commission and an HSPD-12 card. You have the right to see these credentials, and you can verify information on the HSPD-12 card by calling the IRS (go here for a list of IRS customer service phone numbers).

  • They’re asking for a credit card or debit card number over the phone. The IRS doesn’t do that.

  • They want you to pay only with gift cards or prepaid debit cards. The IRS doesn’t use these methods for tax payments. The IRS mails paper bills to taxpayers who owe taxes, and payment should only ever be made out to the U.S. Treasury — not a collections agency or other entity. (See some real ways to make an IRS payment.)

  • They’re saying you’ll be arrested, deported, have your driver’s license revoked, etc. The IRS can’t revoke your driver’s license, business licenses or immigration status. They also cannot threaten to immediately bring in local law enforcement. In addition, the IRS and the Taxpayer Bill of Rights give you the opportunity to question or appeal what the IRS says you owe.


U.S Mortgage Rates Soar to Highest in More Than 23 Years

The interest rate on the most popular U.S. home loan last week jumped to the highest since September 2000, marking its seventh straight weekly increase and driving mortgage applications to a 28-year low, a survey showed.

United Autoworkers Strike is Over After 46 Days

Good news for the autoworkers, many of whom will be making $46 per hour.  “After 46 days on strike, the United Auto Workers said it had reached tentative agreements with all of the Big Three Detroit automakers, bringing an end to the union’s first-ever work stoppage at all three car companies.

The UAW announced Monday evening it had reached a tentative agreement with GM, the last of the Detroit car companies to complete negotiations. Local UAW leaders over the weekend approved a tentative agreement at Ford, which will now be voted on by members, and the union nabbed another agreement Saturday at Stellantis, ending the strike there.”

Read the full article here.

As The Market Enters Correction Territory, Don’t Blame the American Consumer

Read the full article here, synopsis follows: “Pershing Square’s Bill Ackman on Monday sounded alarms on the economy, which he believes has begun to decelerate on the back of aggressive rate hikes. ″[T]he Fed is probably done. I think the economy is starting to slow,” Ackman said on CNBC’s “Squawk Box.” “The level of real interest rates is high enough to slow things down.”

In a bid to fight stubbornly high inflation, the Federal Reserve has taken interest rates to the highest level since early 2001, while signaling borrowing costs will stay elevated for longer. The central bank last month forecast it will raise rates one more time this year. Many on Wall Street have grown worried about a recession as the economy feels the lag effects from massive tightening measures undertaken since March of last year.

“High mortgage rates … high credit card rates, they’re starting to really have an impact on the economy,” Ackman said. “The economy is still solid, but it’s definitely weakening. Seeing lots of evidence of weakening in the economy.”

The billionaire hedge fund manager said he believes long-term Treasury yields could shoot even higher in the current environment. He sees the 30-year rate testing the mid-5% and the benchmark 10-year approaching 5%. Ackman said he’s still shorting 30-year Treasury bills as a hedge.”

Winter Holiday Spending, Shopping, Consumer Behavior FAQs

Winter holidays are a time of celebration and gift-giving. The National Retail Federation provides data and trends on winter holidays, including spending, shopping, and consumer behavior. The 2023 holiday sales forecast is due for release this week.


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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