With the recent flooding in Texas, we are seeing stark reminders of how quickly our lives can be forever affected by things that are completely outside of our control.

​When such things happen, there is some relief offered by the IRS. Granted, this isn’t relief of a sort that you suddenly don’t have to pay as many taxes as you thought, but it does postpone various deadlines, so as some people try to move on with too many worries hanging over them, it at least removes some.

As a little reminder here, too, it is not only the giant disasters that cause the IRS to give some of this relief. Granted, these affect a smaller amount of people over a smaller area, but if you think  you may have be in such an area, it can be worth checking out the agency’s list of disaster relief areas at www.irs.gov/newsroom/tax-relief-in-disaster-situations.

To me, taking advantage of this disaster relief is part of taking care of yourself in the small ways. It clearly is not going to fix a lot of what some people are going through, but if you can embrace enough smaller acts, they start to add up and make a difference.

The same type of dynamic is at work when it comes to personal security and protecting personal information. Another IRS help that is offered in this area is the ability to get an identity protection PIN (IP PIN). This is a rather simple concept of a six-digit number that is provided to you by the IRS that will be necessary to file a tax return. This will keep anyone else from submitting a return using your social security number. You can even do this now ahead of next tax season on the IRS website.

And again, this also isn’t some life-changing concept, but it could be enough to add some extra comfort and help you feel better about what will happen when you do file your return.

A final small thing to keep in mind in this area is to not stop paying attention to the news now that the Big, Beautiful Bill has been signed into law. As I said in this space last week, that passage unfortunately doesn’t mean we know exactly how everything in it is going to play out. But if you keep an ear open to what is happening, you will be best prepared when it is time to do something about it. And this doesn’t have to be a constant thing, just don’t be shut off now that it’s over.

Warmly,

Josh Bousquet
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We have all been waiting for it essentially since Trump was elected in November and then last week it finally happened – a Big, Beautiful Bill has made its way into law. With such a wait, it shouldn’t be surprising that we started getting some questions from clients immediately about what it means.

And on one level, this is great. People should be interested in how big things affect their lives – especially when they are ones that you could potentially turn to your advantage.

On another level, though, we still must advise using some caution because exactly what everything is going to look like is not quite certain. When the Tax Cuts and Jobs Act was passed in the first Trump administration, it represented a large shift but exactly how it would be reflected on a tax return still took some time to be fleshed out. Then during the pandemic, stimulus payments became big quickly but all the answers as to how those would look long-term were also not immediately apparent.

Because of their size, big changes take time to appreciate everything they bring.

My advice for now is to make yourself generally knowledgeable about what was included in the Bill. And this is for everyone, no matter what side of the political spectrum you are on or how much you think you already know about the bill.

To start, it’s huge. The Big moniker is not a lie. There are probably some things in it that you are not aware of. These things may not affect your life, but it is still worth a look.

If you do this, I would even wager that you will find something in the bill that you like that you didn’t know was there. Again, it covers a lot of areas in a lot of different ways, and they don’t all fit in one news story, so some may be surprising. Of course, this also means you are going to find things that you do not agree with. Either way, it’s good to know.

And we will remain with you as we continue this journey – it is just also going to be a big one. As such, we can’t go from beginning to end in one moment, but we have taken a big step on the way. So as guidance from the IRS is released, we will continue to keep you posted.

Warmly,

Josh Bousquet
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This is a week where many celebrate the things that make our country special – and possibly even make our country great. It is therefore no surprise that Donald Trump and the Republicans had a push to try to get their Big, Beautiful Bill passed for the July 4 holiday.

And as of this point, it looks like their wish may even come true if votes fall the way they hope today.

How you feel about what is being passed probably is not much of a surprise. If you were a fan of what the Republican priorities are, you are likely pleased. If you are not a fan of where Republican priorities are, you are likely not.

Either way, don’t let your feelings overcome how you absorb news about what is happening. Take the time to understand what it means for you and your situation. Will you be able to work your way through all the twists and turns and get a 100% answer as to where you’ll land? Probably not, but you can at least avoid any surprises. Wherever your politics stand, you deserve the peace of knowing how the current administration is affecting your personal picture.

And you also deserve to still enjoy a good holiday weekend. No matter how you feel about what this means, do what is good for your mental health, remain mindful of your physical health, and we will see you again here next week.

Warmly,

Josh Bousquet
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There are some things said about taxes that become truths through their repeating and live forever in the societal mindset. One hears jokes about how getting married or having kids are being done just for the tax benefits. And well, it’s not as if there’s no truth there, but little enough of it that it’s probably not worth buying diapers for it. There is also a concept that owning a house brings some great benefit, but that also is not as much as some would believe.

A big shift in this area came when the Tax Cuts and Jobs Act of 2017 was passed in the first Trump administration. This changed the standard deduction for a married couple from $13,000 to $24,000 for a joint return. That kept many homeowners from receiving benefits because taxpayers must itemize their deductions to deduct homeownership expenses and many fewer were itemizing following this change..

For those who do itemize their deductions, though, there can still be benefits to home ownership. Home mortgage interest and state and local real estate taxes can be deducted and depending on the size of your mortgage or location of your home, they can add up quickly.

But remember that all these rules are subject to change. And just as the TCJA affected the standard deduction, it also capped the amount that can be deducted for state and local taxes. As with most things then, the passage of that bill made some people happy, and some people fumed over it.

And also remember there is a current push in Congress for another bill that will affect the tax rules. There is no telling exactly when this bill will be passed and it is impossible to know exactly what it’s going to include, but the fact that something will be passed at some point looks inevitable.

Hearkening back to the first point, don’t accept things as forever gospel even if you have heard them many times. There seems to be a shakeup coming and it could very well affect some things that have been true for a long time. By staying on top of it, though, you can at least keep it from becoming an unwelcome surprise and maybe even be ahead of things enough to use it to your advantage.

Warmly,

Josh Bousquet
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Even as a middle-aged guy, I don’t want to seem full of doom and gloom when looking to the future and speaking to the dangers of new technologies. In fact, I am incredibly impressed by how many things AI can do, do very well, and only see that growing as the technology ages, especially since it is something that can build on itself. I will, however, caution against trusting it too much.

Some people in our industry are touting how bookkeeping is now totally automated because of AI – and that looks very far from the case to me. Again, I think there is space for AI to be very helpful in this type of work. For example, let’s say someone is on a work trip to an area they have not visited before and eats at a local restaurant. It is nice if AI can do a little research in the background first and determine that this was a meal before having to do that Google search ourselves. It’s a small thing, but making little tasks quicker adds up over time.

And the hit rate that AI gets on such moves is good, but not perfect. Even if we say it gets it right 75% of the time, that again may be impressive overall, but would you want a quarter of such transactions entered incorrectly into your bookkeeping? At that point you’re in danger of having books that may be approaching not being useful for meaningful predicting, budgeting, assessment, etc., which is quite a turn from being fully automated.

People trying to sell the fully automated idea makes sense – implement some sort of AI program that does an okay job, get it to people for less money, and you’ve already established your selling proposition. Is there not value, however, in knowing actual eyeballs have gone over your books? If there’s any place in your life where an extra look and a little bonus care can go a long way, your finances must rank high there.

And if you do pay a little extra for that attention, that doesn’t mean they have to eschew Ai completely. I think it’s inevitable that it’s going to find its way into most jobs and make them a little easier. At the same time, too, this opens time for someone to pay more attention to the situation from a different vantage point. Maybe each individual transaction doesn’t need as much attention, so the overall state of your business can receive it instead. I think these type of hybrid relationships are where the real values are going to lie when AI gets firmly established. 

Warmly,

Josh Bousquet
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