Every year the IRS releases its Dirty Dozen list of tax scams. It was not much of a surprise that the agency began this year’s list with talking about Employee Retention Credit schemes.

If you are a business owner, you deserve a medal if you have avoided getting phone calls and/or emails from people claiming that they can help you receive some of this credit. The trickiest thing about these offers is that it can all feel pretty legitimate – the Credit itself is a real thing after all. Without getting into the details, it is based on giving back to companies that struggled some during the pandemic while still keeping people employed. It is not a new thing that was just passed, but companies aggressively seeking to help with obtaining the credit have recently proliferated.

And if someone comes by and can help you claim this credit- then your business gets paid the credit, the ERC facilitators take a percentage, everyone is getting free money they didn’t have before, this is a win-win all around, right?

Well sure, if things are done correctly.

There are companies popping up who are only doing these type of claims, though. They are militantly marketing themselves to all businesses, and it is all a setup for quickly handling some of these, then disappearing.

So here are some things to keep in mind –

If you have already received this credit, you can’t get it again.  These companies are sending out messages to EVERYONE, and despite their claims that you could be eligible, this is not something new you can explore after already getting this credit.

This is a real credit, though, and if you have not yet received it and want to look into whether or not you qualify, you should.  Just do this with someone you already trust and don’t give in to heavy marketing tactics from someone you have never heard from before. You can then have greater confidence that all was done in the correct manner - and you will probably pay less of a fee, too.

When things sound too good to be true, they often are. This can be a very valuable credit to many, but there are some rules around it that mean everyone doesn’t’ just automatically get the maximum allowed. When someone promises you more than seems reasonable, that’s most likely because they aren’t being reasonable.

Finally, this is such a dangerous scheme because it is tied into so much truth. A potential scammer can give the highlights of this potential credit, you can look it up, and all the basics will line up. Just remember to give yourself that extra bit of time to run this by a trusted professional, and not a fly-by-night operation, to be sure you are getting what you are entitled to in the correct manner.

Warmly,

Josh Bousquet
Connect to Us ~ Facebook ~ Twitter

Multiple times over the pandemic I wrote about how there was only so much that one could do personally while forces way beyond one person or one business are at work in the world. And now it feels like we may be on the verge of a similar situation as the banking system feels less secure even as other banks and governments try to steady things.

So there may not be anything new I am really saying here (I definitely will not be claiming expertise in global banking) but it did feel like a good time to drive home some of the points we held onto during the pandemic times.

For yes, there is only so much one can do in some of these situations. That is why one can easily feel for some of the people deeply involved in this situation. Like, can you imagine if your bank suddenly was failing and you have moments of not knowing if your money even existed anymore? And then after going through that, it is easy to understand why someone would run to the bank and gain the comfort of having actual cash. But of course, that is also the worst thing one can do when it comes to halting the issues on a grand scale.

So just what should one do?

The thing to do is stay on top of your own situation. If you are worried about uninsured funds, you personally have, then look into ways that could spread them into other places that would help you gain the comfort you lack.

This could be even more of a trying time for business owners. Of course it is awful enough to imagine your own money going away, but what if your business loses a significant amount of funds and then you can’t cover payroll? That would be just another moment of the snowball growing as it goes down the hill.

But even then, any bank failure would be at least difficult and most likely impossible to predict, so there is no surefire way to avoid this. But again, you can spread out funds if that helps your comfort level. You should also remain on top of your bookkeeping so that if these outside forces start shifting things in your business, you will be able to make changes to address them before it becomes too late.

And I am not saying that things will get to a point where it is too late. Chances are it will not and there are already indications that things have leveled off.  But at the same time, if you have worries, putting your head in the sand is not the best way to handle it. Be vigilant to the degree that it helps you gain comfort and you will be in the best position to keep that snowball from growing.

Warmly,

Josh Bousquet
Connect to Us ~ Facebook ~ Twitter

At this point, most have heard about ChatGPT. This is not surprising as it is pretty astounding technology. For those who don’t know, however, it is a piece of artificial intelligence that is raising a spectrum of questions from what jobs are about to be defunct to is it going to make plagiarism impossible to detect when it comes to schooling. It then comes to the ultimate question of is there enough information on the internet that personal expertise is no longer that valuable.

But since you are here, let me put any questions you might be having about us to rest – this recent Bloomberg article says that ChatGPT failed to give a complete answer on tax advice 100% of the time. And yes, that is a bit of a nuanced conclusion, but I think it also really captures the value of professionalism and experience.

First, let’s concede what this is not saying. Of course, it’s not impossible to get an overall sense of a correct answer through an AI such as ChatGPT when it comes to a tax question. I mean, tax laws are out there on the internet, they aren’t some secret only passed down in clandestine ceremonies held by candlelight while wearing cloaks. Just like any general tax question that you put into Google, a general sense of a tax situation is not difficult to obtain.

But where ChatGPT is failing is in the follow-up questions. It is understandably not always clear when those should be asked (and from an algorithm’s POV, it has answered the question that was asked, the job is done). A computer can know how to handle the question it was asked, it cannot always know where else this question should lead.

ChatGPT’s power remains fascinating. The potential of AI can be both exciting and frightening. It’s not an expert yet, though, and that leads us back to why you ever consult an expert in the first place.

When you pay an expert, you are paying for the time they have put in to gain the skills and knowledge that it is not worth your time to master. It’s not that with enough time and resources you couldn’t master a subject. You just may not have the time or resources to do so, or you may just not be interested in a subject enough to care enough to do so.

I will not be bold enough to claim an AI will never be able to achieve levels of expertise in some areas where that learning and experience becomes unnecessary. But it is clear that we are not there yet, so still place trust in the experts that you already know.

Warmly,

Josh Bousquet
Connect to Us ~ Facebook ~ Twitter

A few times in this spot I have recently mentioned how being on top of your bookkeeping and/or tax preparation gives you the chance to potentially take more advantage of legitimate tax deductions. I recently was struck by the idea, however, that maybe that ideas starts a step or two ahead of what some people need. So let me take those steps back today.

First, a tax deduction does not mean that it decreases your final tax bill by that amount. Instead, a deduction will decrease the amount of your taxable income, meaning you will be taxed on a lower amount. So let’s say you bought $100 of office supplies for your business, it doesn’t mean you have to pay $100 less in taxes, but if means you will be taxed on $100 less of income.

Next, obviously not everything you buy during a year is tax deductible. If that were the case, you could just spend all your profit and never have to pay taxes. The rules on what is deductible (and possibly how much of it is) are where you can start to get into the weeds of where people feel overwhelmed with tax talk.

If you have specific areas you are interested in, though, you may be able to get some knowledge without getting too stuck. The IRS’s rules for deductions are published in Publication 535, which can be reached via this link.

This publication only discusses deductions but is still 57 pages of information laid out over three columns with a small font. And it is probably no surprise that this is not the most scintillating reading, either. It is grouped together well, though, with clear subject headings, so it may help lead you to an answer of a definite question. At the same time, there could be value in looking it over and maybe thinking about some areas where you could find deductible expenses that you would not have thought of before.

Either way, there is power in having information, even if the answers found aren’t the ones you were hoping for. There is also the potential for information overload, though, and that is where having someone on your side you can interact with and ask questions can be beneficial. So do not shy away from gaining the power of having even more information and know we are happy to help you get it over this next month as we finish up this often confusing season.

Warmly,

Josh Bousquet
Connect to Us ~ Facebook ~ Twitter

And suddenly it is March. We are about a month and a half into tax season and there is about a month and a half to go. Remember when there was so much time left to get all this stuff done? Well, 50% of it is gone.

Of course, we still understand why people procrastinate getting all this tax stuff done. No one WANTS to do it. And then there is this article about a recent study that says 80% of American small business owners feel some stress at tax time.  But if you had the chance to avoid stress for a time, why wouldn’t you?

Well, let’s talk about some reasons why not.

One of the biggest reasons people put off handling their taxes is a worry that they won’t like the final answer. So again, if you are choosing to put off receiving bad news, we can understand why you would do so. At the same time, however, the sooner you get this news, the more time you have to put together a plan to handle it. You can’t make your tax liabilities go away, but you can give yourself more time to explore options about how to handle them.

Also, if you have these worries, that’s a good tip-off that your records and bookkeeping may not be exactly perfect. Then it is as if this also forces you to face a prior negligence. If that is the case, then the sooner you get a move on it, the better it will be by the time you get to filing your tax return, and the better it is, the better that tax return is going to be. You are not likely going to accidentally discover some more income but you may be able to get some receipts and expenses in order that will end up being deductions.

If these are the types of concerns that keep you from wanting to face your taxes, these can also largely be handled both ahead of time and rather constantly throughout the year. Speaking with a tax professional can help you put a plan together to make a good calculation of your expected tax liabilities and make the proper estimated payments to handle them. Getting a little help with that bookkeeping can also help ensure that you are staying on top of those numbers and making them as accurate as possible. Then come next tax season, a lot of the stress one feels now can fade away.

​Remember, you are only paying taxes because you have made money. This is not a bad thing. Sometimes you just need a plan to make sure you are ready to handle it correctly.

​Warmly,

Josh Bousquet
Connect to Us ~ Facebook ~ Twitter