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 |  Bizink  |  2021 Child Tax Credit,  2023 IRS Inflation Adjustments,  Crypto Currency Reporting,  fall foliage,  On-Line Betting,  On-line Gaming,  Rev. Proc 2022-38,  Social Security COLA Increase,  Student Loa,  Student Loan Forgiveness,  Weekly Take-Away

Weekly Update – October 21, 2022

Tax season is finally over and I love having more free time again.   I am back to taking walks on the beach where the sunrise is great, even on a foggy day,

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but nothing beats the amazing colors of fall foliage…

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Thank you Jeff and Emily for sharing this amazing shot from Telluride, Colorado, safe travels home.

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Thank you Ilene for sending me some great photo’s from your walk on the grounds of  The Mount Edith Wharton’s Home, I love this one with the sculpture in the foreground.

I am hoping everyone is able to get out this weekend for a walk, hike, bike ride or just to relax and enjoy the change of seasons.

WEEKLY TAKE AWAY

I may have rushed through conversations and emails to my staff and clients during the last few days and weeks in an effort to get much needed information and sometimes just a signature document, in fact I’m sure I did. The results were frustration for all parties involved. I realized that no matter what the urgency, I needed to step back, take a deep breath, and in this age of modern technology, create a brand new email with one strong message or request. Something that would hit straight at the matter or request and get the necessary attention from our client and action or information that was so critical to get us to our end goal.  We love this one: “CRITICAL, PLEASE READ AND REPLY ALL: WE NEED YOUR E-FILE SIGNATURE DOC IN ORDER TO SUBMIT YOUR RETURN – YOU HAVE A $7,000 REFUND”.   That one was pretty successful!

TAX ISSUES/TAX PLANNING

On-Line Gaming, My New Passion, the IRS Wants to Know Too

Not mine of course, I am too busy “working in my garden” or walking on the beach, but it’s nearing the end of baseball season, with football season close behind.  So many of the “kids” teens and their parents are turning to on-line gaming/sports betting and some are winning big!  Sites like Draft Kings, BetMGM Sportsbook, FanDuel Sportsbook & Casino, and others are collecting the data that may be taxable, but not all send you the annual W-2G or 1099 to remind you of all the “fun” you had during the season.  When you sign up check to see if you will receive the annual information, or will have to access the site and download the data that the IRS is receiving too.  Don’t know what I’m  talking about, ask your kid, then make sure they keep a record of their bets, wins, and losses, we will need those detail come tax time.

Relatives May Be Eligible for 2021 Child Tax Credit

The Internal Revenue Service reminds families that some taxpayers who claim at least one child as their dependent on their tax return could be eligible to benefit from the Child Tax Credit (CTC).

Charitable Giving is Always in Style, but Beware

It’s Charity Fraud Awareness Week, and the IRS is joining the international fight. Learn more about charity fraud and what the IRS is doing to help here.

Higher Standard Deductions and Other 2023 Inflation Driven Adjustments

The Internal Revenue Service just released  Rev. Proc 2022-38: listing several inflation related adjustments affecting individual income tax brackets, deductions and credits for 2023 :

  • Standard deduction. For married couples filing jointly — $27,700, up $1,800 from the prior year; for single and married filing single — $13,850, up $900; for head of household — $20,800, up $1,400.
  • Marginal rates. The top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for MFJ). The other rates are:
  • 35% for incomes exceeding $231,250 ($462,500 for MFJ); 32% for incomes exceeding $182,100 ($364,200 for MFJ); 24% for incomes exceeding $95,375 ($190,750 for MFJ); 22% for incomes exceeding $44,725 ($89,450 for MFJ); and 12% for incomes exceeding $11,000 ($22,000 for MFJ). The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for MFJ).
  • AMT. The Alternative Minimum Tax exemption amount rises to $81,300 and begins to phase out at $578,150 ($126,500 for MFJ, with phaseout beginning at $1,156,300).
  • The Earned Income Tax Credit. The tax year 2023 maximum amount is $7,430 for qualifying taxpayers who have three or more qualifying children, up from $6,935 for tax year 2022. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phaseouts.

Crypto Investors Get Some Answers in US Tax Form Instructions

The IRS has given US cryptocurrency holders a bit more clarity about how to report digital assets on their 1040 income tax forms, a likely precursor to regulatory guidance.  In 2022 tax form draft instructions released late  Monday, the Internal Revenue Service expanded how taxpayers should list
their crypto transactions, including switching the verbiage from “virtual currency” to “digital assets,”  in response to the definition in Section 6045 as amended in the 2021 infrastructure bill that expanded cryptocurrency reporting requirements.  That change addresses ambiguity about whether a nonfungible token, or NFT, is considered virtual currency. In the updated form, the agency explicitly says, digital assets includes NFTs and virtual currencies.”

Thank you Greg B for sharing this article from BloomBergTradebook.com

The IRS is Reaching Out to Those Taxpayers Who are Still Eligible for Stimulus Payments, EITC, and Child Tax Credits

This week the IRS started sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits but did not claim them by filing a Individual taxpayers, and families.  Including the Child Tax Credit (CTC), Recovery Rebate Credit (RRC) or Earned Income Tax Credit (EITC).  These and other tax benefits were expanded under last year’s American Rescue Plan Act and other recent legislation. Please note that the only way to get the valuable benefits is by filing your 2021 tax return and the e-file portal is closing soon.

ADVICE FOR OUR STUDENTS WHO STILL HAVE OUTSTANDING LOANS

It’s time to apply for student loan forgiveness. On Monday President Joe Biden announced  that the federal application for Americans seeking student loan forgiveness is now open. It’s expected to provide debt relief to as many as 43 million borrowers.  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

Good news: Justice Barrett rejected the Wisconsin taxpayers group effort to block the student debt relief program form taking effect.

ECONOMY

Social Security COLA Increase Announced Check In for Your 2023 Benefit

Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 8.7 percent in 2023.  The 8.7 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 65 million Social Security beneficiaries in January 2023. Increased payments to more than 7 million SSI beneficiaries will begin on December 30, 2022.

Your new higher 2023 benefit amount will be available in December through the mailed COLA notice and “my Social Security’s Message Center“. You can opt to receive a text or email alert when there is a new message from Social Security–such as their COLA notice–waiting for you, rather than receiving a letter in the mail. You can create or access your “my Social Security account” online at www.ssa.gov/myaccount.

Recession Likely, But Not Yet Certain

Economists have been warning of a “perfect storm” of conditions pointing to a serious recession for most of the year, but some economists are still saying that it’s not a certainty yet.

The Stock Market Started the Week Strong

Wall Street kicked off a busy week of corporate earnings with a broad rally Monday. The market has been volatile, switching between gains and losses, in recent weeks.

Hearing Aids Available Over The Counter

Starting this week, Walmart, Walgreens, and CVS customers will be able to buy over-the-counter hearing aids. It’s the result of an historic ruling, expected to dramatically improve access to hearing aids for millions of Americans without requiring an exam or prescription.

Mastercard Enters the Crypto Trading Industry

Mastercard is launching a program to let financial institutions offer cryptocurrency trading to their clients. The program will handle regulatory compliance and security — two core reasons banks typically avoid dealing with cryptocurrency.

GENERAL RESOURCES

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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