Weekly Update – November 4th, 2022
Halloween in NYC this year was overcast and a bit rainy so we only had a few “trick or treaters”; a wonderful treat for me was hearing a lovely childhood memory from my husband (see this week’s Take Away). I am hoping you had many cute visitors, wore your own creative costume, or accompanied your own “trick or treaters” through the neighborhood, maybe you still have some candy to share. Or maybe you have a sweet childhood memory to share.
I am glad to see a great weather report as we approach this weekend with an extra hour of sleep this Sunday morning “Spring Ahead, Fall Back” and looking to get out on the beach for more barefoot walks…
Thank you Elayne for sharing this beautiful photo right outside your front door…
Thank you Emily for another sunrise on the lake photo…
Whishing you all an extra hour of sleep and a great weekend.
WEEKLY TAKE AWAY
Consider the reason behind the decision; ask and listen, you may be surprised at what you learn. What does the Halloween candy you hand out say about you, is there a story behind that bowl that sits by your door. I never really thought about it, I usually buy the mini chocolate candy bars I love, just in case there are leftovers. If you don’t ask you’ll never know, if you don’t listen you’ll never hear. Just like Felix and Oscar “when you assume, you…”. My husband bought the Halloween candy this year, I figured he would buy bags of mini chocolate bars, so when I saw the bowl of candy I was a bit surprised. Right by our front door sat a bowl of mints like my mom used to carry around in her pocket book. So I asked and listened as he shared a childhood memory of a neighbor who used to carry around those mints and share them with him and his brothers and how to him this was “real candy”. Who knew….
TAX ISSUES/TAX PLANNING
New York City Pass-Through Entity Tax for 2022
New York City partnerships and city resident New York S corporations that opted in to the New York State pass-through entity tax (PTET) for 2022 can now opt in to the New York City pass-through entity tax (NYC PTET) for 2022 using the online Pass-Through Entity Tax (PTET) 2022 New York City Annual Election application.
Eligible entities may make the election for the 2022 NYC PTET online now through March 15, 2023. Estimated tax payments for the 2022 NYC PTET are optional but making them before the end of the year will reduce taxes at the federal level. The NYC PTET estimated payment portal is expected to be available soon, we will keep you posted so that the payments will be beneficial for the 2022 tax year.
Employee Retention Tax Credit (ERC) Predatory Mills
A reminder/warning to those who are receiving emails from predatory “ERC Mills”, the IRS has issued IR-2022-183 warning employers about those companies who are targeting businesses and preparing what may be erroneous amended tax returns looking for these credits.
On the other hand we are thrilled to see the amended payroll tax return notices and copies of the checks for the ERC’s coming through our client portals, or via emails and faxes. A reminder to snap a photo of the check and then deposit it as a separate deposit and notify us immediately. This refund has already been accounted for and the taxes paid.
Employee Retention Tax Credit (ERC)
On the other hand we are thrilled to see the amended payroll tax return notices and copies of the checks for our clients ERC’s coming through our client portals, or via emails and faxes. A reminder to snap a photo of the check and then deposit it as a separate deposit and notify us immediately. This refund has already been accounted for and the taxes paid.
Here are some guidelines to use to evaluate your situation for those of you who may be eligible, but have not applied for these refundable credits:
The ERC is a refundable tax credit designed for businesses who continued paying employees while shutdown due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020 to December 31, 2021. Eligible taxpayers can now claim the ERC on an amended federal employment tax return (form 941) for a period within those dates.
To be eligible for the ERC, employers must have:
- sustained a full or partial suspension of operations due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19 during 2020 or the first three quarters of 2021,
- experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
- qualified as a recovery startup business for the third or fourth quarters of 2021.
Douglas O’Donnell Just Named as Acting IRS Commissioner
Acting Commissioner O’Donnell has spent more than 36 years at the IRS in a variety of roles. Before becoming deputy commissioner for services and enforcement last year, he served as commissioner of the Large Business and International Division for nearly six years.
Treasury Secretary Janet Yellen who picked Douglas O’Donnell to succeed Commissioner Rettig said in a statement, “Deputy Commissioner O’Donnell has dedicated his career to serving American taxpayers through every level of the agency.” “His commitment to improving the experience of the American taxpayer will guide his and the agency’s work as they continue their efforts to propel the IRS forward during a critical period of modernization. Now more than ever, the IRS has the momentum to transform with service, technology and workforce improvements that will make it a world-class agency to meet the needs of the American people.”
4,000 New Employees Were Hired by the IRS
As of last week the IRS has hired 4,000 new customer service employees to help with the backlog of unanswered notices and unprocessed tax returns. The IRS established a special Tax Practitioners Hot line for licensed tax practitioners to be able to resolve client issues and notices in a timely manner. Our office calls the IRS several time a day every day; amazingly this morning we were able to connect with the IRS though our tax practitioner’s hot line for the first time in months.
the IRS announced plans in March to hire 10,000 employees to help with their backlogs. In addition the IRS was granted direct hire authority, which allows the agency to hire new employees on the spot, and received an additional $80 billion over the next 10 years as part of the Inflation Reduction Act in August.
Please Continue Making Retirement Plan Contributions
A new report from Allianz Life shows that 54% of respondents have stopped making contributions to their retirement accounts due to the increased cost of living. Additionally, 43% of those respondents said they have dipped into their existing savings to make ends meet. Not my clients I hope, as 401Ks, IRAs, and other deferred income options are one of the easiest and best tax savings strategies for W-2 employees. One of my favorite screen shares during a tax return exit appointment is to show the tax savings for the year via side by side view of the tax liability and refund with and without the contribution. Before taking money from these accounts, it makes sense to check with your HR department to see if the plan allows you to borrow from your retirement account.
ADVICE FOR OUR STUDENTS WHO STILL HAVE OUTSTANDING LOANS
You can still apply for student loan forgiveness. Discussions and debates continue and the program is on hold as of last Friday as the 8th Circuit Court of Appeals issued a temporary stay in response to an emergency motion brought by attorneys for several Republican-led states.
“It’s such a rollercoaster for borrowers emotionally,” noted Laurel Taylor, CEO of Candidly, a student debt and savings service. Even so, she said, “The best thing borrowers can do for themselves now is apply” for the debt forgiveness program.
The program is expected to provide debt relief to as many as 43 million borrowers for those who are eligible. This may apply to you if you are making less than $125,000 a year; eligible students would receive up to $10,000 of forgiveness ($20,000 for eligible borrowers who were also Pell Grant recipients). Apply on line at Debt Relief | Application | Federal Student Aid
The Dow Jones Had a Great October
The Dow tumbled a bit on October 31, but despite that was still up 14% for the month. That means it had its best monthly gain since January 1976.
It Now Takes More Money Than Ever to Be Able to Retire
A recent survey by Northwestern Mutual showed that adults who expect to retire at 64 now need to save $1.25 million to retire comfortably.
Salary Transparency Law Takes Effect in New York City
New York City’s Salary Transparency in Job Advertisements came into effect this week. It requires employers to post salary information on job listings. The law received plenty of pushback from corporations but was passed last spring.
Eurozone Inflation Hit a Record 10.7%
Similar to what we’re seeing, record energy and food bills are driving the cost of living up and slowing economic activity in continental Europe.
- IRS resources for stimulus payments:
- IRS information about 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 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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