Blog

Today is a perfect tax storm day with many 2022 extended tax returns and estimate #3 for 2023  due.  As we brace for this major deadline many of us are also watching the weather reports as Hurricane Lee moves up the atlantic coast; it looks like a perfect storm is heading our way too.  Remember that safety should always be the top priority, so take precautions to protect yourself and your loved ones in the face of the hurricane. With careful planning and organization, you can navigate both the tax storm and the weather storm successfully.

The army corps of engineers has done an amazing job on our jetties and berm.  When I checked this morning our surf was a bit rough bit there does not seem to be much erosion, fingers crossed…

Even though we are super busy working on our tax deadline, I was glad to be able to attend an out-of-town wedding of close friends we consider family.  It was a beautiful affair …

Then on Sunday afternoon we tried to return to JFK…

You know it’s a bad sign when you are checked into the airport lounge and they tell you your flight is cancelled (my app was still showing the flight was on time).  We finally made it home Tuesday morning.

Tonight is the first night of Rosh Hashanah the Jewish New Year and we wish those of you who celebrate L’ Shana Tova, Happy New Year.   It’s also a time for harvesting and I am glad to say my garden is still going strong…

Stay safe, enjoy the holiday and your weekend.

Weekly Take Away

It seems that flying these days is a challenge, lately either my flight out or my flight home is delayed, cancelled and rescheduled.  I can usually be flexable and work remotely, but after this last trip I realized that when you are stranded in another city your best bet is to choose a hotel right by the airport.  The hotel staff understand your woes and are very accomidating.  Many hotels even provide a free shuttle to and from the airport.  They also tend to be a bit larger with a nice pool, business center and well equipped gym. 💪🏊🏊‍♂️💻📱

TAX ISSUES/TAX PLANNING

Failure to File Penalty May be the Right Tactic

Today is the deadline for extended Partnership, S-Corporation, and Trust tax returns, and while it’s tempting to procrastinate, then rush through the process, it’s crucial to resist that urge. At our firm, we provide “open lists” and “checklists” to help you gather missing information and supporting documents for your tax deductions.  📃📃 You groan when the reminder emails come through and you think to yourself “I’ll do it later”. However, waiting until the last minute often leads to costly errors and missed opportunities AKA deductions.

While some accounting firms may accommodate rushed returns by charging a premium, we believe that the risk of errors far outweighs the cost of filing an accurate tax return slightly late.  Remember that penalties for late returns, which are based on a monthly fee per partner or shareholder (in the case of S-Corporations), are not deductible. Additionally, state and local penalties may also be assessed.

IRS Moratorium on Employee Retention Tax Credits

Per AccountingToday article: “The Internal Revenue Service said Thursday it’s putting an immediate stop to processing of new claims for the Employee Retention Credit after receiving a surge of questionable claims.

The immediate moratorium will be in effect until the end of the year. It comes as tax professionals have been inundated by requests by clients for help with claiming the ERC or dealing with the impact of the IRS disallowing claims and conducting audits after businesses responded to the heavily advertised promotion on TV, the internet and social media (see story).

The IRS believes a substantial portion of the new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing. The Employee Retention Credit program was initiated in 2020 in response to the COVID-19 pandemic as a way of encouraging employers to keep employees on their payrolls despite widespread shutdowns across the country, but it only applies to business interruptions through the third quarter of 2021. This year, thanks to aggressive promotions by so-called ERC mills, the IRS is receiving more claims for the credit this year than ever before.

The IRS said it will continue to work on previously filed ERC claims that it received before the moratorium but issued a reminder that the increased fraud concerns will mean processing times will take longer. In July, the IRS announced it was shifting more of its focus to review ERC claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS said Thursday that hundreds of criminal cases are now being worked on by its agents, and thousands of ERC claims have been referred for audit.”

ECONOMY

Lithium Deposit Found Along the Nevada-Oregon Border May Be Among World’s Largest

A deposit of lithium recently discovered along the Nevada-Oregon border may be among the world’s largest, having potentially huge implications for the transition to electric vehicles.

Deutsche Bank Warns the US recession Remains ‘More Likely Than Not’

The U.S. economy has a better chance than not of tumbling into a recession within the next year as inflation remains uncomfortably high, according to Deutsche Bank strategists.

Consumer Financial Protection Bureau Report Highlights Role of Big Tech Firms in Mobile Payments Arena

The Consumer Financial Protection Bureau (CFPB) published a new issue spotlight highlighting the impacts of Big Tech companies’ policies and practices that govern tap-to-pay on mobile devices like smartphones and watches.

The Beige Book Published

It’s not always about the numbers when the Federal Reserve makes its interest rate decisions. On top of looking at key economic figures that track employment, inflation, financial stability and the like, officials also pay attention to stories and anecdotes from people on the ground, living and working in each of the Fed’s 12 regional reserve bank districts. The latest data has been released.

Quality Jobs Survey

A new survey from Jobs for the Future and Morning Consult highlights worker sentiment on quality jobs.

What Do Rising Corporate Bankruptcies Say About the Economy?

There was a big spike in corporate bankruptcies in August, data company Epiq Bankruptcy reported this week, up 17% from July. That puts corporate bankruptcy on the rise for more than a year now.

US Federal Budget Deficit Projected to Double This Year

The U.S. federal deficit is projected to nearly double this year as a result of higher interest rates and lower tax revenue. The gap between what the government spends and what it collects is expected to grow from about $1 trillion last year to $2 trillion for the 2023 fiscal year that ends Sept. 30, according to the latest projections from the Committee for a Responsible Federal Budget (CRFB).

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

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.