Annual client letter – 2023 tax year

Welcome to another tax season!

There are fewer changes to the tax laws compared to the previous two years, but it is nice to finally be past the pandemic “era”!  Like previous years though, we cannot do full hour-long appointments and prepare your tax forms while you wait.  With the number of clients, it is physically impossible to do so.  It is best to drop off your paperwork and we will contact you when everything is ready.  If you have any questions or need to discuss something, we can take some time to discuss when you drop them off.

You can drop them off, mail them in, or send them electronically through my secure portal.  If you wish to use the portal, send me an email request and I will provide you with a link to use.

Some issues to discuss:

Health insurance information – You are no longer required to provide me with proof of health insurance, UNLESS you have the ACA marketplace insurance (Obamacare).  If you have insurance through your employer or pay for your own (1095-B or 1095-C) I no longer need proof.   If you have the Obamacare ACA marketplace insurance you should receive a 1095-A… which I WILL need.

The Corporate Transparency Act of January 2021 includes a new requirement for companies to report their “Beneficial Ownership Information”  (BOI) to the Financial Crimes Enforcement Network (FinCEN).

The purpose of this new reporting requirement is to catch the criminal money laundering, shell companies, and foreign ownership structures.  If your business was formed before January 1st 2024 you will have to file the BOI report before January 1st 2025.  Businesses formed after January 2024 will have 90 days (after formation) to report their BOI.

We can discuss this, but I will not be helping clients file their BOI report during the busy tax season. We can take care of it later on in the year, as there are some unanswered questions and guidance as to whether or not I have the legal ability to assist in filing a BOI.

1099-K changes – If you sell goods or services and accept credit cards (including Venmo, PayPal, and others) your merchant payment provider is required to send you a 1099-K that reports the amount of revenue they processed for you.  The laws were recently changed regarding the threshold the merchant provider used to report the income and it was lowered to $600.  Basically, if you sold something on E-bay for $700 you would receive one! The IRS realized the mountain of paperwork and problems this would cause, and temporarily suspended the new rules… keeping the threshold at $2,000 or 200 transactions.  Until the technical issues are worked out, there will be no reporting issues for the 2023 tax year.  If you do receive a 1099-K we do have a method to work around it if it is not considered taxable income.

Extension filing – If it is necessary to file an extension to the April 15th deadline we will take care of that free of charge.  If you believe you will owe for the 2023 tax year, I highly suggest you make an estimated payment on or before April 15th.  The IRS gives an extension to file but NOT an extension for payment.  They have given notice that they will strictly enforce late payment penalties next year.

 Commonly forgotten paperwork:

– Dependent child in college?  Don’t forget the 1098-T tuition statement from the school to get your tuition tax credits.

– If you have an Identity Theft Pin # used for electronic filing, remember that the IRS issues you a new pin number every December, and will send you a CP01 notice in the mail with your new number.  This is a number used by someone who has experienced identity theft, but as of 2021 anyone can apply for one.

– Purchased an electric vehicle or installed solar panels?  Bring you invoices and receipts to get the big energy credits. This also applies to new furnaces, heat pumps, water heaters, insulation, new roof, windows, and doors.

Some housekeeping issues:

We will not be raising prices this year!

Please do not bring in your tax documents still in their sealed envelopes.  It takes us extra time to open and sort everything before we can start working on them.

If you have regular investment accounts that include dividends, interest, or stock trading activity, please wait until you receive your “consolidated report” from your fund manager.  They usually send these out late in February or even later in March.  If you want to bring in your other documents earlier that is fine, but we won’t be able to work on your file until everything is received.

Thank you!

Tim & Chris Bright