As reported in this recent article from Reuters.com: “The number of Americans filing new applications for unemployment benefits dropped to a four-month low last week, suggesting that the labor market remained fairly healthy. The upbeat outlook on the economy was underscored by other data on Thursday showing corporate profits increased at a more robust pace than initially thought in the second quarter.”
Weekly Update–October 4th 2024-Enjoying the Holidays 🍎🍯🏛️📚 as Tax Season 2024 Winds Down AND…
I love my family and love to spend time with them, but most of them are scattered across the country with only a few within driving distance. When the holidays arrive, as they have this week, I am so grateful for the friends who are my chosen family, we plan holiday meals and always have a great time with plenty of laughter and a delicious meal…
The Tashlich Tradition: On Rosh Hashanah, many families participate in tashlich, a tradition of throwing bread crumbs into water to wash away the mistakes of the past year. Yesterday afternoon my husband David and I “tossed our sins into the ocean” with pita bread and the seagulls ate some…
Now that it’s officially fall and the sun is rising close to 8 AM, my husband David (aka our barista) can make our morning coffee – a pot of “decaf” for me and a pot of “cafe” for him and join me on a beach walk. Now we walk a bit farther and faster, this is a no nonsense walk and I am only able to take one or two photos or else I have to run to catch up. Did I mention it’s been high tide and windy for the past week? Luckily my shots have been worth sharing so here they are ..
I am hoping you all have great plans for the weekend, my weather app is predicting clear skies and warm weather, enjoy!
Weekly Take Away
I try to make sure to take time to celebrate holidays and special occasions with family and friends, even during the height of my busy season; I know I can never get that time back! Rosh Hashanah marks the Jewish New Year; we wish neighbors, friends and strangers “Shanah Tova” which means “good year” in Hebrew. We also say “best wishes for a sweet new year”, hence the tradition of serving “apples dipped in honey”. This year I made a puree with some of my freshly picked figs, water, balsamic vinegar and thyme. I used the mixture for a baked brie with my concoction in the center. It was delicious, sweet and savory. This year it was baked brie with figs as well as apples dipped in honey for a sweet new year, AND we had a great time!!!
TAX ISSUES/TAX PLANNING
IRS Announced Tax Relief for Victims of Tropical Storm Debby in North Carolina; Various Deadlines are Postponed to February 3rd 2025
As per NC-2024-07, announced August 9th, 2024: “Tax relief is now granted for individuals and businesses in North Carolina that were affected by severe storms and flooding that began on Aug. 5, 2024. These taxpayers now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments.
The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area should call the IRS disaster hotline at 866-562-5227 to request this tax relief.
The Feb. 3, 2025, filing deadline applies to:
- Individuals who had a valid extension to file their 2023 return due to run out on Oct. 15, 2024. The IRS noted, however, that because tax payments related to these 2023 returns were due on April 15, 2024, those payments are not eligible for this relief.
- Businesses with an original or extended due date including, among others, calendar-year partnerships and S corporations whose 2023 extensions run out on Sept. 16, 2024, and calendar-year corporations whose 2023 extensions run out on Oct. 15, 2024.
The Feb. 3, 2025, deadline also applies to any payment normally due during this period, including the quarterly estimated tax payments due on Sept. 16, 2024, and Jan. 15, 2025, and the quarterly payroll and excise tax returns normally due on Oct. 31, 2024, and Jan. 31, 2025. In addition, penalties on payroll and excise tax deposits due on or after Aug. 5, 2024, and before Aug. 19, 2024, will be abated as long as the tax deposits are made by Aug. 19, 2024.”
New Process/New Options for Resolving Incorrect Claims for the Employee Retention Credit (ERC)
As per IR-2024-246, announced September 26, 2024, there is additional help available for resolving incorrect claims taken for the Employee Retention Credit (ERC). In my July 12th blog I mentioned the IRS’ larger budget for high income audits and their continued focus on questionable employee retention tax credits (ERTC). The IRS has created several voluntary disclosure programs one which ended in March of 2024 and another that was recently instituted and is on-going through November 22, 2024:
The second ERC-VDP is open through Nov. 22, 2024, for 2021 tax periods. The ERC-VDP for 2020 tax periods is no longer available, the current program is for 2021 claims. The second ERC-VDP program requires you to:
- Complete and send an application package for the second ERC Voluntary Disclosure Program,
- Voluntarily pay back the ERC, minus 15%
- Cooperate with any requests from the IRS for more information, and
- Sign a closing agreement.
New assistance through the recently announced supplemental claim process and what it means:
“A supplemental claim is an adjusted employment tax return that allows a third-party payer to correct and/or consolidate previous claims that they filed on or before Jan. 31, 2024, if those claims have not yet been processed by the IRS.
By filing a supplemental claim, the third-party payer is asking the IRS not to process outstanding adjusted employment tax returns for the tax period. The IRS will treat claims filed before the supplemental claim as if they were never filed.
The supplemental claim process is for third-party payers to which all of the following apply:
- The third-party payer has filed one or more claims aggregating Employee Retention Credits for itself and/or clients using the TPP’s Employer Identification Number.
- The third-party payer made the claim on an adjusted employment tax return (Forms 941-X, 943-X, 944-X or CT-1X).
- The IRS has not processed any of the claims the third-party payer is including in the supplemental claim.
As in the past we are happy to assist you with this process; we recommend that those of you who are concerned that your credit was not supportable or not legitimate may be best served by working with a specialist who can review your situation (we have several law firms we are comfortable referring you to).
The Automatic 6-Month Extension Deadline is Approaching
If you were unable to file your tax return by the April 15th/16th deadline, you should have filed your 2023 extension with any balance due and possibly the first estimate for 2024. We are coming up to the filing deadline of October 15th, which if not met may cause additional penalties and interest.
Still Time to Make Annual SEP/IRA Plan Contribution
The upcoming individual tax return filing deadline of October 15th is also a deadline for funding your company’s SEP/IRA for sole proprietorships. This is a great tax minimization planning technique, take the funds from the tax liability pocket and put them into the pension plan pocket where they can grow tax free until retirement or required distribution dates.
ECONOMY
Low Weekly US Jobless Claims, Robust Corporate Profits Highlight Economy’s Resilience
Economic Outlook Q4 2024
As reported in this recent article from SPGlobal.com: “S&P Global Ratings expects the U.S. economy to expand 2.7% in 2024 and 1.8% in 2025 (on an annual average basis). The growth forecasts are 0.2 and 0.1 percentage point higher, respectively, compared with June forecasts, partly reflecting the impulse from financial conditions that turned more positive and partly on stronger core goods consumption than previously expected.”
U.S. Crude Oil Falls Nearly 3%, Closes Below $68 on Report Saudi Committed to Production Increase
As reported in this recent article from CNBC.com: “U.S. crude oil prices fell nearly 3% on Thursday on a report that Saudi Arabia is committed to pressing ahead with production increases later this year. Saudi is ready to increase production in December even if the move results in low oil prices for a prolonged period, people told The Financial Times.”
Federal Reserve Rate Cuts Will Put Money in Pockets, but a Mood Shift May Take Time
As reported in this recent article from Reuters.com: “Even before the Federal Reserve approved its outsized half-percentage-point interest rate cut last week, financial markets had begun making credit cheaper for households and businesses as they bid down mortgage rates, cut corporate bond yields, and chipped away at what consumers pay for personal, auto and other loans. How fast that process will continue now that the U.S. central bank’s first rate cut is in the books is unclear, in particular whether easing credit conditions will become tangible to consumers in ways that shift attitudes about the economy.”
Key Federal Reserve Inflation Gauge at 2.2% in August; Lower than Expected
As reported in this recent article from NBCNews.com: “Inflation moved closer to the Federal Reserve’s target in August, easing the way for future interest rate cuts, the Commerce Department reported Friday. Though the inflation numbers indicated continued progress, the personal spending and income numbers both came in light.”
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
- Portal to update information
- A list of frequently asked questions on 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 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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