As the year 2023 draws to a close, we at the Brico Group want to take a moment to express our sincere gratitude for your continued trust and partnership. Your business has been instrumental in our success, and we are truly grateful for the opportunity to serve you.
We are proud of the work we did to save your hard earned tax dollars this year, and we look forward to continuing to support you in the year ahead. We are committed to providing you with the highest quality accounting and financial services, and we are confident that we can help you achieve your financial goals in the future.
As we celebrate the holidays and welcome the New Year, we wish you all the best for a joyous season and a prosperous year ahead.
For those who qualify, (see below) the Employee Retention Credit (ERC, or ERTC) is still active. The IRS is simply pausing the processing of those claims. Here is a brief overview of the ERC for those who may need a refresher.
The Employee Retention Credit (ERC or ERTC) is a complex tax credit provided by the IRS for businesses and tax-exempt organizations that continued to pay employees during the COVID-19 pandemic, especially when facing shutdowns or experiencing a required decline in gross receipts in 2020 and 2021. However, the IRS has identified issues with aggressive marketing and misinformation, leading to ineligible claims for the ERC. To assist taxpayers in determining their eligibility accurately, the IRS has created a detailed question-and-answer chart.
Part A: Checking Your Eligibility
If the eligibility questions lead to this part, the organization may qualify for the ERC. Thorough record-keeping, including wages paid, gross receipts, government orders, and other required documents, is crucial. Assistance from a trusted tax professional is recommended, and additional information is available at IRS.gov/erc.
Part C: Resolving an Incorrect ERC Claim
If an incorrect ERC claim has been made, the IRS provides a withdrawal process outlined at IRS.gov/withdrawmyerc. This process is applicable if certain conditions are met, including making the claim on an adjusted employment tax return, filing the adjusted return only for the ERC claim, and not cashing or depositing the refund check. The IRS is also working on guidance for employers who were misled into incorrectly claiming the ERC and received the credit. Regular updates on IRS.gov/erc are advised for the latest information.
In conclusion, the ERC is a valuable credit for businesses and tax-exempt organizations, but it is crucial to navigate the complex eligibility criteria accurately to avoid potential repercussions for incorrect claims. The IRS emphasizes its commitment to helping taxpayers while preventing incorrect ERC claims and fraud.
Ironically, the 2023 tax season starts today on January 23rd. Another year of putting the correct numbers in the correct boxes and filing by the correct due date. Those numbers however, have a greater emotional meaning to you the taxpayer. Numbers such as total income can drag your ego and pride into the mix when you have a banner year. It makes for an exciting yet stressful situation when you have a great year but did not plan accordingly. Will I owe taxes on the income or will I be able to minimize my tax burden are the questions revolving around in your head.
Did I make a tax plan ahead of time to address the increase in income?
When you are only putting the correct numbers in the correct boxes by the correct due date, you are selling yourself short and possibly leaving your hard earned dollars to the IRS. The goal is to bring those numbers to life, recognize them and celebrate them. What better way to accomplish this than by building a tax plan during the year so there are no surprises at tax time.
Feel free to contact us if you would like to partner with more than a tax professional that puts the right numbers in the right boxes by the right due date to build a lasting relationship to save your hard earned dollars and bring meaning to your numbers.
Here's to a less "taxing" filing season.
According to a recent study by Allianz Life Insurance, 54% of American workers have cut or stopped their retirement contributions to combat the rising prices of inflation. With inflation being at a 40-year high, many taxpayers are also taking early withdrawals from those same accounts to make ends meet.
Inflation can affect a great deal of decisions for taxpayers including when to make tax payments. If the IRS underpayment rate is lower than the US inflation rate, it may pay to wait until a later date with dollars that are worth considerably less. Those same tax dollars could be used for many other things including charity, real estate strategies or other retirement planning.
If you need any assistance with tax planning for inflation, feel free to give us a call.
#inflation #taxes #taxplanning #intheblack
By now many of you have heard about the GameStop/Robinhood stock market news floating around social media sites like Reddit and TV lately. If not, instead of going on and on about short positions and mark-to-market. Here's a quick video that explains it all:
If that video is as clear as mud, or has you thinking you need to go trim your hedges outside, then let's add another wrinkle. What happens when the taxman comes knocking after you have sold your GameStop stock for a gain?
Stocks sold for a gain (buy low, sell high) are called capital gains income and is taxable. Stocks held for less than a year have short-term capital gains and stocks held for a year or long have long-term capital gains. Short-term capital gains are taxed at the ordinary rate which is typically higher than the long term rate. Short-term gains will be included with your other ordinary income (W-2, 1099, etc) and you will pay tax based on your marginal tax rate and income.
The key to lowering your tax with stock sales is to create a strategy that will enable you to pay lower taxes on capital gains. Some strategies include:
It it also important to note that with the change in the Presidential Administration, your stock tax plans will need to be devised in concert with your other personal and business tax situation(s).
Feel free to contact us if you need assistance with your stock tax strategies, small business tax, or tax planning. If you need new hedges, I may know a good landscaper.
In March of 2020 the CARES Act was signed into law allowing a tax credit of $1200 ($2400 MFJ) plus $500 for each qualifying child based on the taxpayer's income. The thresholds for the stimulus payments are:
We have compiled a list of the top questions (and answers) we have received regarding the stimulus payments. If you have any additional questions feel free to contact us.
1) Is The Stimulus Taxable?
2) Will I Have to Pay the Stimulus Back?
3) I Got My Full Stimulus and I’m Not Required to File a Return, Do I Need to File?
4) Will the Government Send Taxpayers 1099 Like Forms Showing Amounts Received?
▪ IRS Notice 1444 for the first Economic Impact Payment
▪ Notice 1444-B for the second Economic Impact Payment
5) My 1444 and or 1444-B show that I Received the Stimulus Check But I Never Received It, What Do I Do?
▪ If your payment was issued by direct deposit, your first step is to check with your bank and make sure they didn’t receive a deposit.
▪ You should only request a payment trace to track your Payment if you received Notice 1444 or if Get My Payment shows your payment was issued and you have not received it.
▪ Call the IRS at 800-919-9835
▪ Mail or fax a completed Form 3911, Taxpayer Statement Regarding Refund
6) I Didn’t Receive My Second Stimulus Yet, Should I Wait to File or Claim the Credit?
▪ It depends
▪ All payments were required to be sent out by 1/15.
▪ Check “Get My Payment” tool on the IRS website to see if you received a direct deposit or if a check was mailed out
▪ You will not be able to add new routing or account information, or request to receive your payment by EIP Card
▪ Claim credit for amounts you were eligible for but did not receive.
Will will update this post with additional questions/answers as they come in.
Itemized deductions versus the standard deduction
The TCJA doubles the standard deduction, but suspends the personal exemptions and virtually eliminates many of the itemized deductions. The law temporarily eliminates miscellaneous itemized deductions subject to the 2 percent floor and limits the home mortgage interest deduction to home acquisition debt of up to $750,000.
With these changes, some taxpayers may see a lower taxes. Some taxpayers that itemized in the past may not for 2018. Contact us is you need to run the numbers for your tax situation. If the results are grim, you may need to adjust your employer withholding (Form W-4) and/or quarterly estimated tax payments.
Bunch charitable contributions
The TCJA temporarily increases the limit of cash contributions to public charities from 50 to 60 percent of adjusted gross income (AGI). The only problem (as mentioned above) is that the double standard deduction and itemized changes will leave many taxpayers left out. One solution is to bunch or increase charitable contributions in alternating years, or set up donor-advised funds.
Watch out for home equity debt interest
The TCJA allows for home equity debt interest if the funds were used to buy or substantially improve the home that secures the loan. Taxpayers must keep good records to ensure that the proceeds were used in this manner, payment to credit card or other personal debt is not allowed (even if prior to 2018).
Revisit 529 qualified tuition plans
The TCJA revises earnings in a 529 college savings plan and allows for paying tuition at an elementary or secondary public, private or religious school, up to $10,000 per year. If you fall in this boat, it may be time to revisit their 529 plans.
Maximize the qualified business income deduction
And of course last but not least the QBI deduction (from our last post) for small business owners. Be sure to contact us for steps how this deduction can save your hard earned dollars