ETC Consulting, Inc.

12/28/2023

New IRS quick poster !

Home Energy Tax Credits …

12/28/2023

IRS standard mileage rates for 2024 increases to 67 cents a mile

IR-2023-239, Dec. 14, 2023 — The Internal Revenue Service today issued the 2024 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

08/10/2023

5 Things Rich People Do To Keep Their Wealth

You can develop many of the similar habits that millionaires have that keep them wealthy.

1. Have a financial plan and stick to it

a. the financial plan doesn't just refer to how to spend and save
b. know all the nuts and bolts about budgeting and expenses
- types of insurance in place
- estate planning:
- legal documents
- goals for leaving a legacy for family/charity
- look at taxes, employer benefits and investments

2. Do not worry about investments nor manage them often

a. investing isn't an active process, but, is about patience,
knowing it is the highest probability of success over time
b. do not have stock trading constantly on your mind
- not thinking about timing the market
- not about making lots of cash on the next hot stock
- take a long view of investing

3. Over-plan for retirement

By over-planning, you will be able to maintain the same standard
of living in retirement for a longer time.

Use the life expectancy of age 95, because there is roughly 25%
chance for a healthy 65-year-old couple, at least one of them
will live into their 90s.

4. Find ways to reduce taxes

Paying less in taxes means keeping more money in the long run.

As your wealth grows and moves you into higher tax brackets,
reducing total taxes is critical to maintaining wealth.

Though taxes can be complicated to understand, reducing taxes
must be part of the overall financial plan and considered at every
step
- from where they invest
- how they give gifts
- how to take advantage of certain tax breaks/incentives
- how to decrease the amount of taxes owed now and
later in retirement

5. Incorporate charitable giving into financial planning

There are a number of tax advantages to giving
a. charitable contributions can be in a number of forms:
- monetary donations
- shares of stock,
- distributions from an IRA after a certain age

b. charitable contributions can help lower total taxable income
- reducing income taxes
- reducing Medicare premiums in retirement

06/15/2023

California cracking down on Loophole

The administration of Gov. Gavin Newsom, in its 2023 budget, proposed banning incomplete non-grantor trust (ING) that lets the very wealthy avoid state income and federal gift taxes.

Under Newsom’s proposal, it would stop using the IRS definition of incomplete gifts and would instead set its own definitions for when a {California resident} taxpayer has made a complete transfer of assets.

California would like to crack down on a type of trust that lets the very wealthy avoid state income and federal gift taxes. And the Golden State is not alone: A number of state officials have taken aim at the … Continue reading → The post California Takes Aim at Tax Loophole for State’s Riche...

06/10/2023

From CA FTB:

IRS Statement on the Mailing of Balance Due Notices to California Taxpayers

The [IRS reassures California taxpayers that they continue to have an automatic extension until later this year to file and pay their taxes for those covered by in the state.

The current mailings being received by some taxpayers, the IRS Notice CP-14, are for taxpayers who have a balance due, and they are sent out as a legal requirement. While the notice received by taxpayers says they need to pay in 21 days, most California taxpayers have until later this year to pay under the disaster declaration. These letters include a special insert that notes the payment date listed in the letter does not apply to those covered by a disaster declaration, and the disaster dates remain in effect.

The IRS apologizes to taxpayers and tax professionals for any confusion as we continue to review the situation. Taxpayers receiving these letters do not need to call the IRS or their tax professional.

Around the Nation - California

06/10/2023

* Specialist small business consulting firms have sprung up to help business owners claim the Employee Retention Credit, a governmental tax incentive intended for companies stressed by the pandemic.

* The Internal Revenue Service has become skeptical of ERC claims, especially given how easy it has become to file for the credit.

* Fraudulent claims involving the ERC were added by the IRS to its annual 'Dirty Dozen' list of tax scams, and the risks of a costly audit are now elevated for firms that improperly claim the credit.

The Employee Retention Credit has soared in popularity among pandemic-related tax incentives for business owners, but the IRS has become skeptical of claims.

05/26/2023

Taxable ... Yes, Who Knew !

1. Unemployment Benefits
2. Union Strike & Lockout Benefits
3. Kickbacks
4. Jury Duty Pay
5. Free Tours
6. Stolen Or Found Property
7. Bartering
8. Gambling Winnings {Offset By Losses}
9. Income From Illegal Activities
10. Canceled Debts
11. Bribes
12. Dividends From Alaska Permanent Fund
13. Alimony
14. Social Security Benefits {If Have Other Substantial Income}

05/26/2023

Tax Audit Red Flags

1. All Income Not Reported
2. Took Home Office Deduction
3. Business Losses Reported
4. Unusually Large Business Expenses
5. Claiming Car 100% for Business
6. All Your Stock Trades Not Reported
7. Digital Assets Question Not Answered
8. Large Charitable Contributions Made or Didn’t Document Them
9. Earned < $25,000 Or > $500,000
10. Income Volatile Year To Year
11. Made Basic Or Math Errors
12. Reported Rounded Expense Numbers Instead of Specific Amounts

04/05/2023

President Biden’s proposed budget includes notable tax provisions

President Biden has released his proposed budget for the federal government for the 2024 fiscal year. The budget, which aims to cut the deficit by nearly $3 trillion over 10 years, includes numerous provisions that would affect the tax bills of both individuals and businesses. While most of these proposals stand little chance of enactment with a Republican majority in the U.S. House of Representatives, they shed light on the Democrats’ priorities as they prepare for the 2024 election season.

** Link in 1st comment has complete article

03/15/2023

Look out ... in the latest IRS Small Business Issue 2023-04:

1. Beware of Employee Retention Credit schemes

The IRS recently reissued a warning urging taxpayers to review the Employee Retention Credit guidelines before trying to claim the credit. Businesses should be cautious of advertised schemes and direct solicitations promising tax savings that are too good to be true.

“While this is a legitimate credit that has provided a financial lifeline to millions of businesses, there continue to be promoters who aggressively mislead people and businesses into thinking they can claim these credits,” said Acting IRS Commissioner Doug O’Donnell.

“Anyone who is considering claiming this credit needs to carefully review the guidelines. If the tax professional they’re using raises questions about the accuracy of the Employee Retention Credit claim, people should listen to their advice. The IRS is actively auditing and conducting criminal investigations related to these false claims. People need to think twice before claiming this.”

02/09/2023

2023: Tax Breaks for Filers over 50

* Higher contribution limits for retirement accounts
- contribution limits for employees rose to $22,500
in 2023 from $20,500 in 2022
- employees 50 and older can add an additional $7,500,
up from $6,500 in 2022

* Higher contribution limits for Health Savings Accounts
- if you reach 55 during the year, catch-up is an additional $1,000

* Bigger standard deduction at age 65
- if you file as single taxpayer, you get an extra $1,850
standard deduction
- if you file as married filing jointly, extra standard deduction
is $1,500
- for taxpayers who are both 65 (or older) and blind,
the extra deduction is doubled

02/08/2023

3 IRS Deductions You Can't Take This Year

Tax season is here, but, before you file, you'll want to be aware of some changes for the 2023 tax season.

1. Out-of-pocket charitable donations

Now, you need to itemize deductions in order to deduct your charitable donations.

2. Moving expenses

Moving expenses for job-related reasons can't be claimed. Only active members of the Armed Forces moving due to military order are permitted to take this deduction.

3. Alimony

Alimony payments for divorce or separation agreements dated after Dec. 31, 2018, cannot be deducted.

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Not as many changes were made to deductions for tax year 2022, but there are a few updates to tax credits worth mentioning.

This year, the IRS reduced the child and dependent care tax credit from $8,000 to $2,100 - in line with the maximum amount before the pandemic.

The child tax credit (CTC) is also smaller - now at a maximum of $2,000 for each child - down from the credit amount for those under age six was $3,600, and for those under 18, it was $3,000.

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