​It’s never that exciting to talk about the IRS when it is not tax filing season (and it’s not even that exciting then) but I did think it was worth nothing that the agency appears set to resume sending collection notices that it suspended more than a year ago as it caught up on a backlog of tax returns. Exactly when this will resume is unclear, but it is another of those return-to-normal moments that we started to really see during this past tax filing season.

So what does this actually mean for you?

Well, it means that if you get a notice from the IRS, it deserves your attention. There was a time during the COVID pandemic when notices were being received but they did not actually mean anything.  If your return was just in the pile of the agency’s backlog waiting to be processed, it was a very real possibility that you did not owe what these notices said you owed. Once your return was actually processed, things would be caught up, and it would be as if the notices never happened.

Now when they happen, they mean something.

But what should you do if one is received?

This largely depends upon what the notice is saying. If it is a notice saying that you did not file a tax return, then the first question is whether or not you did actually file that return. If you did, then you need to take action with the agency or your tax preparer to find out what happened to it. If you did not, well, then you probably knew this was a possibility and the sooner that you get on it the better, for you can start alleviating some of the pain added by penalties and interest.

If you are getting a notice that says you owe a balance to the IRS, your action can again largely depend upon whether you knew you owed this or not. If you do owe and a payment was missed for whatever reason, well, then yes, you still owe this money. If you didn’t know that you owed this, this could again be a time to contact the agency or your tax preparer to figure out where it is coming from.

No matter what, the point is that the answers now are that you should not ignore these notices. The proper response is no longer going to be “just wait.” But if you don’t know what to do from there, remember that as always you can reach out to us and we will do what we can to steer you in the right direction.

Warmly,

Josh Bousquet
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The other day I got sucked in by a headline asking “Is There a Best Day to Buy Gas?” I suspected there had to be an actual answer or this wouldn’t be a story (hint, it’s Monday), but I was shocked at how little the difference was. On the whole, it appears this tip can save you $50-$100 a year – yep, less than $2 a week.

Now I don’t want to fully discount this as a real thing. If you live in a way where you tend to fill up your vehicle once a week and it doesn’t much matter when you do it, then sure, switch to Monday and take a bit of savings. But with the number being what it is and most people just getting gas when It’s needed, this doesn’t seem to be much to worry about.

This did, however, then make me think about some things we hear when discussing finances with business owners. Much like this urge to wonder how you can save money at the pump, one of the first questions they often ask is “how can I save more money?” For of course, it is always beneficial if you can spend less money and receive the same amount of goods and services in return. And there may be some answers in here with tax planning and strategy that can make appreciable differences, but once that is in place, there often aren’t huge answers to this question.

So many of your expenses are just … your expenses. There’s only so much (often meaning none) shopping around you can do for things like utilities. There’s even only so much shopping around you can even do for things like supplies. I mean, the internet is a vast space, but once you find the best price for something, well, that’s it, you found the best price.

So then how can you make more money?

Well, you should probably look less at how much money you are spending and more at how much you are making.

Think about it, if you do have your expenses pared down to just what they are, oftentimes bringing in more clients or making new sales do not come with vast new expenses (and those they do should be included in what you are charging for them). At that point, you are already paying the costs necessary to run your business. So once you are set up, new business can be even more profitable than old business.

Therefore, never give up on potential savings on your expenses, but don’t neglect the areas where you can profit even more, which deserve more of your attention.

​Warmly,

Josh Bousquet
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The difference between a hobby and a business comes up sometimes when discussing taxes. It’s one thing to have a side gig, it’s another to claim a side gig is a business when it’s not really set up to make money. Or at least this is the view given in a recent Forbes article. This isn’t the only negative view I have heard about the situation, either. Another runs along the lines of, “you’re making some money, you better hope the IRS doesn’t find out.”

But why is this never framed as a positive? How about, “wow, you’ve started to make some money doing this thing you love, you can start getting some tax deduction for this.”

It is really easy to have this situation feel bad, so I understand where it comes from. After all, this typically starts from someone enjoying a hobby then selling some goods or services to friends and family. And granted, most endeavors of this type are never going to reach anyone’s notice that you would need to worry about.

But then more and more people start to see what someone does, they want something from them as well, more exchanges start happening, and that allows for more chances that this does get to a point where tax forms may be involved, and it will get noticed. And at that point, yes, you may be expected to pay some taxes on that money.

When that happens, what was really fun and got you money to take the family out for a meal starts to feel less fun when the government wants some of it, too.

Well first, that’s not going to be the government trying to take away the money for that one meal, it will only want something because you earned enough for multiple meals. So to start, it just means you’re already doing pretty well.

And second, it doesn’t have to only be giving up some of what you make, for when done correctly, it could also let you claim some deductions. For example, if you are selling some crafts, what you buy to make those items can become a business expense.

Sure, this line between hobby and expense can be tricky and is not always clear. At the same time, though, when its issues arise because you are making money, it shouldn’t take the biggest work of reframing to make that a good thing. And of course, if this began as something very small, you may not understand its tax implications and instead want to hide from it. But if it is something you want to pursue and continue to make work for you (ideally even more so than it is now) then don’t be afraid to reach out and find out the right ways to do it. For again, this doesn’t have to be a bad thing.

Warmly,

Josh Bousquet
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Granted, there hasn’t a whole lot of time since tax season ended, but it has been almost a month now, which at least provides enough space to have let some of adrenaline/stress wear off and to start to reflect on it a bit deeper. And it seems no matter what view you reflect from, things did go well.

As we have mentioned recently in this space, the IRS is operating better than it has in a few years, having worked through a backlog of returns and now offering better service for those who need it. As Chad Hooper of Professional Managers Association (a national group of IRS managers) succinctly summarized: "Wait times are down, service levels are up, and return processing is only getting faster.”

From the tax preparer side then, a lot of the hurdles that the agency presented in the last couple years with extended wait times and lower service levels disappeared and made things easier on that side, too. As Tom O’Saben, a director for the National Association of Tax Professionals said: “It was almost like business as usual. That's a lot to be said for the IRS, given the mountain they had to climb. The time to process amended returns for 2021 returns was measured in months — this year it was measured in weeks.”

As some of you read this, though, I am sure you are questioning these pie-in-the-sky assessments. When it comes to a tax return, after all, most don’t care about how the industry or government agencies are faring. All that matters is what your own tax return looked like at the end.

This can feel even more incongruous because some of what made the last few tax seasons so difficult on the agency and tax professionals were changing rules and COVID provisions. And some of what made the last few tax seasons so wonderful for taxpayers were changing rules and COVID provisions.

If you find yourself in the group that is upset over your return then, please realize that this largely was a return to normal. If you take your last few tax returns, next year’s is more likely to look like this year’s than the others. And you may not have the power to bring back some payments and credits you took advantage of during the pandemic, but you do have the power to make choices during the year to make the final number on your return look closer to what you want it to be.

And then next year, when you look back on the tax season that was, everyone can be happy.

Warmly,

Josh Bousquet
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We are in the midst of National Small Business Week and as a small business that does a lot of work with other small businesses, this is something quite important to us. And even if you don’t realize it, it is probably even a little important to you, for have you ever bought your favorite thing or received your favorite bit of service from Wal-Mart?

This is not a slight against any large business, they just are what they are. Small businesses, however, also are what they are and that hits in a different way. I believe what sets small businesses apart can be summed up in one word – passion.

When a business gets large enough, so much of it becomes about handling the business of the business. It starts to involve so many people, so many stakeholders, all with so many concerns that the vision the business started with tends to no longer get the same attention it did when it began.

That passion still exists in small businesses, though, and is why the things you purchase from one and the service you receive feel different. At the same time, though, that passion does not carry over to the business of the business. So just as it can be the biggest benefit of dealing with a small business, it can also be the thing that keeps it from thriving and growing.

This is because most small businesses start with someone’s love and their wish to bring it to others. It does not start with someone who is really excited about offering, well, anything, just so they can get really deep in the weeds when it comes to bookkeeping, tracking finances, looking at reports, and filing their taxes in the most advantageous ways. And those things can certainly come back to hurt a business, as can not knowing how to market, not knowing how to contact potential customers, etc.

But there are people out there who can do those things, people who began their own businesses because that stuff is what they love to do. And sure, this is a little self-serving since we are one of them, but it is true. And shared passion is a big part of what makes it so wonderful to work with other small businesses.

We are not trying to sell anything specific here and will even admit to not being the right fit for everyone or every small business. But we did want to take this time to mention that big-picture idea and put out a general wish that small businesses do not hold back from getting the help they need to thrive and continue bringing what is wonderful about them into the world.

Warmly,

Josh Bousquet
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