It feels a little silly to return in a blog post about something that quite likely will not come to pass, but it feels needed. I am referring to the Tax Relief for American Families and Workers At that passed the House of Representatives on January 31 but is currently stalled in the Senate.
The bill is not being ignored, though. Last week, IRS Commissioner Danny Werfel was part of a hearing when he was asked about the potential for the bill’s passage, and his answers echo much of what I wrote on this a couple of weeks ago. So, I figured it was worth addressing some highlights. First, Werfel estimated that it would take the IRS six to 12 weeks to implement the changes if the bill was passed. Even if this were passed immediately, that short window already pushes things into April. So, you would have to be betting on both the Senate (which is not) and the IRS (which traditionally doesn’t) working very quickly to make it worth holding off on filing your taxes because of this. Second, Werfel stated that only 10% of households would see adjustments to their tax returns due to changes in the Child Tax Credit. This means that if you are unsure if this would even affect you at all, it likely won’t. Furthermore, if you file early, it is not as if you will miss out on getting the extra credit. It will still be applied to your existing return. The advice after this is still to not wait on moving forward with your taxes. So many people start to think about tax season when the calendar turns to the new year and at that point April 15 sounds far away. On January 1, though, you are still about a month away from receiving all the forms you will need for even most basic returns. And now we are rapidly approaching the end of February, so we are only looking about having seven weeks to go before the deadline. This time goes by fast and it is easy to hear about possibilities about why you may want to wait, but there is rarely anything concrete to be gained by doing so. And many times, even those potential reasons fade away. So keep on top of things while you still have the chance to be proactive and not feel the weight of a tough deadline push. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter
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Recently, I saw a headline about ransomware attacks and thought that I had not heard about them in a while. Then I got into the article, discovered that 2023 had the highest amount of ransomware payments ever (over $1 billion) and then started to wonder why I hadn’t heard about them in a while. And the only answer I can come up with is that it has become so commonplace that it isn’t newsworthy anymore for it no longer captures eyes and attention.
From there, it only stands to reason that online security as a whole is probably suffering the same point. At this point, security software is probably ubiquitous enough that everyone has installed something at some time, but if news of scammers and criminals barely register anymore, are we giving it enough thought? Do we even know things such as:
Another interesting point is that ransomware saw a big dip in 2022, with the total amount received by attackers dropping to $567 million after being at $983 million in 2021. The jump last year, though, says that drop looks to be more an aberration than a trend. And really, even if only half a billion dollars is out there to be had, that’s enough for bad actors to keep working on getting it. We can see some of the same type of conversations surrounding gift card scams now, they’re everywhere, people are growing ever more aware of them, but they’re not stopping. So let this just be a warning to keep on top of your security and don’t let it just fade to the back of your mind. It does not need to be front of the mind all the time, but it cannot be forgotten. Even as scammers are becoming ever more ubiquitous, our security systems need to match that. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter No matter how big tax filing time really is for us here, we understand that it’s not everyone’s favorite. And it becomes a little less fun for everyone (ourselves included) when there is news that says the season could still be thrown for a loop.
That occurred last week when the House of Representatives passed a tax bill with various credits (the biggest one probably being beefing up the Child Tax Credit) that would be in effect for tax years 2023 through 2025. So yes, that’s tax year 2023, the one that we are currently in the midst of filing season for. There are also some business tax benefits involved, but exactly what is in the bill is not what I want to discuss here. First, although this bill passed with bipartisan support in the House, it is already running into significant pushback in the Senate. So the best-case scenario here is that even if it is eventually signed into law, it is not going to happen that quickly. There is no reason then to push off your tax-filing plans. This would only add deadline weight for something that could possibly not even come to pass. Second, if you file early, it is not as if you are going to miss out on any new credits. When legislation has been passed on this sort of timeline in the past, it is applied retroactively, so you will still be able to receive the full value. And finally, what is in this bill are things that can only possibly benefit taxpayers. Nothing is set up so that you would pay now and then still just owe more taxes in the future. So for planning purposes, whatever you do now would be a worst-case scenario. And those are always better to plan for than hoping for some eventual relief. So overall, we are now in February, the filing season’s full picture may not yet be completely in focus, but the best plan now is still to move forward with filing as fast as possible. For after all, tax filing time is big for us here, it only gets bigger as we go along, so the sooner we can act together, the sooner we can get things wrapped up. Even if there are later adjustments. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter It is not new that it’s a pretty universal rule that if you receive money, the IRS wants to know about it. So, it is not surprising that in recent years the agency has asked about cryptocurrency on the 1040 for individual taxpayers. It is a little newer, however, that cryptocurrency has really taken off, so now the IRS is asking about it on forms for estates, trusts, partnerships, and C and S corporations.
With this expanded range of questions, it is probably worth bringing a little more attention to what the IRS really wants to know when asking this question. As this issue has come up, many taxpayers have thought that they had nothing to report. Sure, they did dabble some in this realm, but some just made a purchase once (possibly even many years ago) and traded it through an exchange into a new form of cryptocurrency. And in this type of transaction, it’s easy to think there is nothing to report for they never actually saw any money come back to them because of it. This is something that still needs to be shown, however. Overall, if a taxpayer did any of the following activities, they will need to report it to the IRS:
If this is something you are only doing in a small way, it is easy to overlook it when it comes to tax planning. In fact, it is possible that the outcome on your tax return will be very minimal. At the same time, however, you do not want to give the IRS any reason to have your tax return stand out to them. So, make gathering any information about your crypto holdings part of your standard tax preparation. And do it soon while there is enough time to do it before the weight of deadlines starts to feel heavy. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter Subscription services certainly are not new. The business plan for gyms has long involved a number of people paying a monthly fee for a service they never use. With the proliferation of online services in recent history, though, the comfort people have in signing up for an ongoing relationship has increased. Heck, you may have signed up for a streaming service for the first time during the pandemic lockdown that you are still paying for every month. And now, this pricing mindset is becoming a hot thing to think about across different types of businesses.
And it doesn’t even really have to be a subscription in the strictest terms for companies to embrace it. This week, Applebee’s offered a pass for $200 that would cover a year of weekly date nights (52 uses). The pass includes up to $30 of food and non-alcoholic beverages per use. And really, any way you break down the numbers, it is a very good deal for those who purchased it. And many agreed, as the passes sold out in a minute. What does Applebee’s stand to gain from this, though? Well first, I am clearly talking about them, so it gets them some immediate word-of-mouth advertising. Also, since the deal does not include alcohol, if a couple goes out and gets a couple drinks each, the company’s profit starts to rise again. And what if this couple brings along their children or another couple? What this also does is establish a habit. If you can get people to visit your establishment weekly for a year, chances are they will do so more frequently than they had before even after the deal runs its course. Beyond that, though, from a psychological point of view, it strikes me that the company is tapping into something that people are just now more comfortable with, the concept of having a subscription. After all, in many stories this was described as a subscription, but it really isn’t. Anything that you pay for once does not fit that model of repeated payments at regular intervals. I also recently have written multiple times about the idea of not being afraid to try something new. This can be scary in one’s business because you can never know the outcome, but you can always pull back if things don’t work. Sometimes they do, though, passes sell out in a minute, and then a company gets to see how it plays out. Seems worth a shot anyway. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter |
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