Blog

TGIF and TGTSO – thank God it’s Friday and thank God tax season 2024 is over.  I stayed in the office late Tuesday evening to submit extended 2023 individual tax returns and C Corporation tax returns and then literally crashed.  Of course, as a habitual early riser I woke at 5:30 and headed down to the beach for a walk and to catch the sun rising.

Sunrise yesterday was amazing I couldn’t choose just one…

It’s time to harvest fall root veggies (and the last of the ripening figs of course) and enjoy the fall colors.  I know I left the carrots in too long and they are narley, but my daughter (who was an art major in middle school and high school and an art history major in college) complemented me on the composition, textures and colors, and you mom’s know it’s rare we get complements, so sharing with you too…

No fall colors from my daughter who lives in southern CA, but nice to see my granddog Sampson making friends with a goat when he vistied a farm…

My niece is up in Maine visitng friends and interviewing for teaching jobs (her choices are ME and NJ)…

We know it will be very cold in Michigan soon, but the colors on the lake this week were really nice…

After our IRS and State tax filing deadline, I felt it was time for my staff and I to take a bit of a break; we took a break on Wednesday then started up again and are now working on:  completing some 2023 stragglers, and starting on/continuing with special projects like:

• tax controversy/advocacy support
•  2024 tax projections and tax reduction/tax minimization plans
• Beneficial Ownership Reporting (BOI) under the Corporate Transparency Act (CTA) client support
• and sharing best ideas to implement within our office processes.

AND of course taking time for the important stuff, like a morning walk…

Never a dull moment but we learn so much from our clients, our legal and financial resources and each other.  I am hoping for some “real” down time this weekend and hope you have some great plans too.

Weekly Take Away

Reading the news about the recent wildfires, hurricanes and storms brings back memories from October 2012 and Hurricane Sandy – like the tale of 2 cities it was the best of times and the worst of times.  Our neighbors came together to support each other and great friendships were forged.  My daughter Emily had great content for her medical school essay on overcoming great challenges and I was able to use our harrowing time as an ice breaker with my fellow Goldman Sachs 10K Small Business cohort. As  victims/survivors I know we were not properly prepared so I googled best ways to prepare and found this article from the NY Time wirecutter: The Best Emergency Preparedness Supplies.  It’s probably good to keep some of these on hand and I hope you never need them…

The items they highlight are organized into six key categories to make sure you have your bases covered. For more information on tools and preparedness for specific disaster scenarios, read their guides to hurricane, wildfire, and earthquake preparedness. They also have a guide to building a go bag.  My not so funny memory about the “to go bags” my kids packed when we saw fires springing up around us and down our block … their favorite sweat pants, a hammer, scissors and Nature Valley Granola Bars.

TAX ISSUES/TAX PLANNING

The Top 10 Taxpayer Disputes with the IRS

I read a recent article in AccountingToday.com:  “The Top 10 Taxpayer Disputes with the IRS”, they noted:   “Tax season can be difficult enough for professional tax preparers to navigate, but for the average taxpayer, who lacks the practitioner’s technical knowledge, it can be an absolute minefield — and it gets even worse when the Internal Revenue Service comes back with a question or a problem with a self-prepared return. Discrepancies and disagreements with the IRS, while business as usual for CPAs, can be terrifying to the taxpayer.”  The following items were included in their list and we often see this in our practice when working with new clients or reviewing supplied documents.  We are able to avoid most discrepancies with a proactive approach, annoying practice of questioning what appear to be inaccurate or missing information, requesting information from the IRS or various State portals and finally our exit appointments:

• Tax return preparation errors – we see this with self-prepared as well as professionally prepared tax returns when we review prior year’s tax returns
• Retirement account contributions and distributions – ineligible/incorrect contribution limits, eligible deductions and required minimum distributions, unintended disregard of control groups
• Tax withholding and payments -incorrect/insufficient employer withholding may lead to a large balance due or refund, we see this when individuals change jobs or move to a new state/city
• Foreign income reporting – so glad we have several great resources to call on for assistance with proper reporting
• Worker classification – misclassification as a non-employee (1099) vs employee (W-2)
• Estimated tax payments – underpaid or late payments may result in penalties (which is why we support our clients with tax controversy/advocacy work when they receive notices)
• Taxpayer ID theft – may require the use of an I.D.PIN or hand delivery of paper tax return to the local IRS office.
• Filing status – there may be some alternative choices when marital status or residence changes – this must be documented and calculated to determine the appropriate choice which is accurate and results with the smallest tax liability for the “family unit”
• Deductions and credits – must be based upon facts and circumstances and properly documented
• Accuracy of income reporting – many times we confirm income from various sources via IRS wage & income transcripts (so glad we have them as a resource).  Proactive research avoids notices from the IRS when income matching reveals additional income

IRS provides Hurricane Milton Relief; May 1st Deadline Now Applies to Individuals & Businesses in all of Florida; Many Businesses Qualify for Deposit Penalty Relief

As per IR-2024-264, Oct. 11, 2024:  Due to Hurricane Milton, the Internal Revenue Service today announced relief for individuals and businesses in 51 counties in Florida.

Individuals and businesses in six counties that previously did not qualify for relief under either Hurricane Debby or Hurricane Helene will receive disaster tax relief beginning Oct. 5, 2024, and concluding on May 1, 2025. They are Broward, Indian River, Martin, Miami-Dade, Palm Beach and St. Lucie.

In addition, individuals and businesses in 20 counties previously receiving relief under Debby, but not Helene will receive disaster tax relief under Hurricane Milton, from Aug. 1, 2024, thru May 1, 2025. They are Baker, Brevard, Clay, DeSoto, Duval, Flagler, Glades, Hardee, Hendry, Highlands, Lake, Nassau, Okeechobee, Orange, Osceola, Polk, Putnam, Seminole, St. Johns and Volusia counties.

As a result, affected taxpayers in all of Florida now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments, including 2024 individual and business returns normally due during March and April 2025 and {those} 2023 individual and corporate returns with valid extensions and quarterly estimated tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Individuals and households that reside or have a business in any one of the localities listed above qualify for tax relief. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

ECONOMY

AAA Reports Gas Prices Rise Slightly as Hurricane Milton Causes Regional Disruptions

As reported in this recent article from SmallBizTrends.com:   “The national average for a gallon of gasoline has risen by two cents over the past week to $3.21, according to the latest data from AAA. This small increase is attributed to the effects of back-to-back storms, with large areas of the country experiencing infrastructure damage, road flooding, and power outages due to Hurricane Helene and now Storm Milton.”

US in Recession Since 2022 After Inflation Adjustments

As reported in this recent article from TheEpochTimes.com:  “New research by a pair of prominent economists suggests that the U.S. economy has been in a recession for the past two years, after inflation adjustments are taken into account. According to Bureau of Labor Statistics data, cumulative inflation since 2019 has totaled nearly 25 percent. But inflation figures have been understated by nearly half, resulting in cumulative growth to be “overstated by roughly 15 percent,” economists EJ Antoni and Peter St. Onge said.”

Mortgage Demand Drops as Rates Jump to Highest Since August

As reported in this recent article from TheEpochTimes.com:  “The overall mortgage application volume fell 5.1 percent last week as the average interest rate for 30-year fixed-rate mortgages rose to 6.36 percent. Mortgage application volume saw a significant drop last week as interest rates jumped to their highest level since August, according to the Mortgage Bankers Association’s (MBA) latest weekly survey, which showed a cooling in both refinance and purchase activity.  The MBA announced in an Oct. 9 press release that overall mortgage application volume fell 5.1 percent for the week ending Oct. 4, with mortgage refinance activity experiencing a sharper 9 percent decline. Purchase activity saw a slight 0.1 percent dip.  The mortgage originations dropped as the average interest rate for 30-year fixed-rate mortgages rose to 6.36 percent, up from 6.14 percent the previous week, marking the highest level in two months.”

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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