12 Dec 2023

Experts Warn: Financial Decision Considerations And Pitfalls To Avoid

Experts are sounding the alarm — the economic landscape is as unpredictable as ever, and financial choices can either propel us toward prosperity or plunge us into turmoil. With inflation and costs rising, the higher the value of pushing for the right investment for you.

Like Indiana Jones, you can’t find the treasure without taking risks, and neither does it come fast. If you’ve only kept money in the bank, it’s time to brave the financial decision-making lands that have been perilously navigated, and journey on to find the key artifact that can lead you to long-term treasure.

This article will take us into identifying those steps and hidden snags that may trap you, and help you navigate towards sound financial decision-making. Let’s journey on and define your financial future in the next many years.

Key Financial Decision Considerations

Indiana Jones does not go on his quest without knowledge of what he may be up against. Much like in finance, you need to consider these factors before making big decisions:

Understanding Your Financial Goals: Understand your business goals and the specific targets you need for your company in the short and long term. Depending on your target, you can save towards owning a home, funding your child’s education, saving for retirement, or even startup capital. If you identify and prioritize your objectives in the business field, you can make informed decisions based on these objectives.
Assessing Your Risk Tolerance: Risk tolerance can be defined as your capability to bear fluctuations in the financial markets that might lead to your losses on investment. At this stage, it is necessary to assess yourself to understand the amount of risk you can handle while investing; this includes conservative, moderate, and aggressive levels. Knowing your risk tolerance will assist you in choosing suitable investment strategies that best suit your personality and financial goals.
Creating a Budget and Financial Plan: Sound fiscal decision-making is founded on a budget. It is about monitoring your income inflows and outflows and setting aside the target savings. Budgeting lets you see how much money you spend and where you could save or cut down. A financial plan is more than just a budget showing where your money should go. Instead, it is a map of how one’s financial situation will change over time to reach goals.
- Diversifying Your Investments: Diversification is one kind of risk mitigation in which an investor spreads the money among different assets, including stocks, real estate, and bonds, among others. This helps minimize the effect of poor performance of a single investment with other investments that could do better. Diversifying your investments will also shield you from market fluctuations and mitigate risks.
  Read More

Written by Stephen Blake

08 Dec 2023

What Do UK Tax Leaders Think Of Recent Changes To The R&D Tax Landscape? Evolution Or Revolution

At the end of November 2023, we held our second roundtable discussion. Following the success of our first event in April 2023, it is important to bring leaders together again to discuss the many recent changes that have impacted our industry in a short space of time.

Set in the beautifully festive boardroom at Fortnum and Masons we gathered 15 R&D tax leads from the top 50 firms and Tax dispute experts as well as a Shadow Minister, to ensure we had a discussion that represented multiple stakeholders and diverse viewpoints.

What makes a competent professional?

HMRC is increasingly questioning what makes a competent professional within the enquiries they are raising. HMRC seem to be narrowing the scope of what is necessary to define a competent professional. This is a frustrating position. There was collective agreement on how important the role of the competent professional is but also that HMRC’s current stance is now too narrow.

This further led to alarming examples where businesses choosing to protect their Intellectual Property through trade secrets are being penalised, and their claims are being assessed as not compliant.

HMRC’s lack of engagement and training

The frustration over the lack of engagement with HMRC is continuing to be a concern with little improvement since our conversation in April. The inability to speak to a specific individual who is allocated to the case and therefore informed and knowledgeable about the specifics of that case is resulting in incorrect communications leading to a lack of clarity on areas of enquiry. This highlights the need for HMRC to invest in training and education for their staff to ensure consistency in their messaging.

The lack of consistency and apparently minimal training of HMRC staff are leading to genuine claims being challenged and then for commercial reasons, companies are deciding not to fight when they should. If the aim was to address the level of fraudulent claims, then it now seems that HMRC is also acting as a barrier to genuine claims meaning we are seeing genuine businesses walking away from the UK innovation market. This is being made more frustrating as it could be rectified but if it isn’t, we certainly risk the payback of previous R&D subsidies. It was noted that the core payback metrics of spillover and additionality are long term (10 years+) so the actions now will continue to damage the UK’s position on the global stage.

Announcement of the merged R&D tax relief scheme – but what’s the policy?

Written by TaxConnections Admin

08 Dec 2023

Meet The Expert Insurance And Bank Executives Are Searching For Right Now To Lower Taxes – Meet Addison Henry

Benefits of Federal Tax Credits For Insurance Companies: How To Lower Your Effective Rate

Navigating the intricacies of federal tax credits can be daunting due to the sheer volume of information available. This blog post aims to discuss the advantages and potential revenue streams tied to federal tax credits.

Our objective is to boost your cash flow, lower your effective tax rate, empower your team to cultivate new relationships, explore untapped investment avenues in the realm of tax credits that conventional methods might overlook, and guide you on reducing your tax liability by up to 15% and in some cases more, depending on your effective tax rate.

Benefits of Investing in Tax Credits:

Tax Liability Reduction | Offsetting Tax Liabilities: Tax credits directly reduce the amount of tax owed. If an insurance company has a significant tax liability, purchasing tax credits can help reduce this liability up to 15%.
Investing in Specific Industries: Some tax credits are designed to encourage investments in specific industries such as renewable energy, affordable housing, or historic preservation. Insurance companies may buy these credits to invest indirectly in these sectors.
Diversification: Buying tax credits can be a way for insurance companies to diversify their investments and earn a return on their tax liability.
Corporate Social Responsibility | Promoting Sustainable Practices: By investing in tax credits related to renewable energy or environmental initiatives, insurance companies can demonstrate their commitment to sustainable and responsible business practices.
Community Development: Tax credits for renewable energy, affordable housing or community development can help insurance companies contribute to social welfare and improve their public image.
Risk Management | Stable Returns: Investments in certain tax credits can offer stable and predictable returns, which can be attractive for insurance companies that have to manage long-term liabilities.
Financial Planning | Cash Flow Management: Using tax credits can help in managing cash flows by reducing the amount of cash needed to settle tax liabilities
Tax Planning: Incorporating tax credits into their financial planning can help insurance companies optimize their tax position.
Building Partnerships and Network | Strengthening Industry Relationships: Engaging in transactions related to tax credits can help insurance companies build relationships with others in the industries they are supporting.

Written by TaxConnections Admin

08 Dec 2023

IRS Expands Work On Aggressive Employee Retention Credit Claims; 20,000 Disallowance Letters Being Mailed

IRS Expands Work On Aggressive Employee Retention Credit Claims; 20,000 Disallowance Letters Being Mailed, More Action And Voluntary Disclosure Program Coming

As part of continuing efforts to combat dubious Employee Retention Credit (ERC) claims, the Internal Revenue Service is sending an initial round of more than 20,000 letters to taxpayers notifying them of disallowed ERC claims. IRS is disallowing claims to entities that did not exist or did not have paid employees during the period of eligibility to prevent improper ERC payments from being made to ineligible entities.

The letters are being sent as the IRS continues increased scrutiny of ERC claims in response to misleading marketing campaigns that have targeted small businesses and other organizations. The IRS mailing is the latest in an expanded compliance effort that includes a special withdrawal program for those with pending claims who realize they may have filed an inaccurate tax return. Later this month, a separate voluntary disclosure program will be unveiled allowing those who received questionable payments to come in and avoid future IRS action.

After an initial review this fall, the IRS determined that a large block of taxpayers did not meet basic criteria for the credit. Starting this week, taxpayers who are ineligible for the credit will begin receiving copies of Letter 105 C, Claim Disallowed.

This group of letters will cover taxpayers ineligible for the ERC either because their entity did not exist or did not have employees for the time period when the credit was claimed.

Written by TaxConnections Admin

08 Dec 2023

Watch Our Two Videos To See What We Do For You At TaxConnections

Watch Our Two Videos To See What We Do For Your Tax Career

Watch The Videos at https://www.taxconnections.com/taxblog to understand the benefits of TaxConnections Membership. We exist to support the tax professional community and do the heavy lifting required to promote your tax expertise to an audience who wants to find and interact with you. With millions of searches conducted online for tax expertise each year, now is the time to position your professional profile to attract the taxpayers who arrive searching for tax expertise all over the world.

While big tech companies are collecting all your data to create social credit scores on you, we do not do that. Protecting your privacy is a priority for us. Many of our tax professional members are emerging small to medium size tax practices responsible for serving small to medium size growing businesses. We care to build a site that protects our members in ways that ensure your success. Some of our members have connected with the biggest clients of their tax careers. We encourage you to join us to organize all your content assets in a way they work for you. We also care about the companies we associate with and take great care to tour and explore or Sponsors products and services before bringing them to you on the www.taxconnections.com platform.

When they treat us well, we know they will treat you well, too!

Written by Kat Jennings

06 Dec 2023

Make Your R&D Tax Credit Defensible

Claiming the R&D tax credit can potentially help your business offset increased cash flow. However, simply completing IRS Form 6765, Credit For Increasing Research Activities, doesn’t guarantee the IRS will approve your claim.

Learn a few key things you can do to ensure your R&D tax credit is defensible in the case of an IRS or state audit.

1. Understand Which Activities are Considered Qualified Research Activities

One of the most important things you can do to make your R&D tax credit defensible is understand what qualifies as research activities. Qualified research activities are specific efforts to develop new products, fabrication processes, or software, or improve existing ones. This can include activities such as developing firmware and risk management systems, designing tools and fixtures, automating manufacturing processes, and much more.

To determine if your research activities are eligible under the R&D tax credit claim, you’ll need to ensure each passes the Four-Part Test as outlined in IRC §41(d). Any company that wants to claim the R&D tax credit must satisfy each of the criteria of the Four-Part Test, including the Business Component Test, Technological Uncertainty Test, Process-of-Experimentation Test, and Technological-in-Nature Test. Learn more about the Four-Part Test here.

2. Make Sure You Meet the Additional Qualifications

In order for a taxpayer to claim the R&D tax credit, there are a few minimum qualifications that must be met in addition to the above-mentioned qualified research activities. These additional requirements include having 5 years or less in revenue and having less than $5 million in revenue in the current year. It’s important to note that qualifications can vary by state, so you’ll need to understand these specific qualifying factors within your state when claiming the tax credit.

Written by Deborah Roth

06 Dec 2023

Tax Professional Alert: Update TaxConnections Profile To Receive Business Referrals

This is the time of the year TaxConnections receives an increase in requests from taxpayers all over the world searching the site for a tax expert to connect to. There is definitely an uptick this year from taxpayers searching for a wide range of tax expertise. While I was working at my desk this past Sunday the phone was ringing from taxpayers calling and looking for referrals to the tax expert they needed. I referred them to our members. We invite you to subscribe as a TaxConnections Member so we may refer new business to you this year. When you are seen on TaxConnections, and your Membership is up to date, you will receive referrals from us. You can tell if you are up to date simply by Logging In to www.taxconnections.com. If you registered years ago and have not Logged into your online profile in long time, please call us at 858.999.0053 as you may require a special accommodation to access your online profile. We encourage you to look at the features available to you as a TaxConnections Member at this blog and video at this link.

Above all, I want to tell you that as many big tech sites now collect your data and use it to aggregate information for their own purposes, TaxConnections believes in protecting your privacy. We do not share your information with anyone outside our organization. We are the site protecting and respecting your data and information. We highly recommend you make it a priority to protect your online data and privacy more than ever. We are happy to share with members a special report when you ask for it. This Special report discusses what is happening to your Professional Profile information on many big tech sites. I am a big fan of Rob Braxman (The Internet Privacy Guy) on YouTube and highly recommend you learn from him. He provides a lot of information you need to know now. Also, I am happy to send our paid members a copy of the research we have done that will greatly surprise you. The point is you need to protect yourself and the way you do this is by becoming more informed and educated about how you are currently operating online.

We Care About Your Success Online. We Respect Your Privacy.

Kat Jennings, CEO

www.taxconnections.com

TaxConnections is now accepting Sponsors for the 2024 New Year. Become a Preferred Sponsor Today To Increase Introductions. Our Sponsorships And Pricing Can Be Viewed At This Link: https://www.taxconnections.com/marketplace (Additional Marketing Costs). Call 858.999.0053 and request to speak about a Sponsorship or email kat@taxconnections.com

Written by TaxConnections Admin

06 Dec 2023

IRS Announces 2023 Form 1099-K Reporting Threshold Delay For Third Party Platform Payments

IRS Announces 2023 Form 1099-K Reporting Threshold Delay For Third Party Platform Payments; Plans For A $5,000 Threshold In 2024 To Phase In Implementation

Following feedback from taxpayers, tax professionals, and payment processors and to reduce taxpayer confusion, the Internal Revenue Service delayed the new $600 Form 1099-K reporting threshold requirement for third party payment organizations for tax year 2023 and is planning a threshold of $5,000 for 2024 to phase in the new law.

Third party payment organizations include many popular payment apps and online marketplaces.

The agency is making 2023 another transition year to implement the new requirements under the American Rescue Plan that changed the Form 1099-K reporting threshold for payments taxpayers get selling goods or providing a service over $600. The previous reporting thresholds will remain in place for 2023.

What This Means

This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

This phased-in approach will allow the agency to review its operational processes to better address taxpayer and stakeholder concerns.

Taxpayers should be aware that while the reporting threshold remains over $20,000 and 200 transactions for 2023, companies could still issue the form for any amount.

It’s important to note that the higher threshold does not affect the actual tax law to report income on your tax return. All income, no matter the amount, is taxable unless it’s excluded by law whether a Form 1099-K is sent or not.

Who Gets The Form

Written by TaxConnections Admin

01 Dec 2023

We Are The World: Music To Enjoy

Listen to a wonderful song called ” We Are The World” with the voices recorded on the night of January 28th , 1985. There was a sign on the front door of A&M Studios that said ” Check Your Egos At The Front Door”. The song was produced by Quincy Jones. Singers are: Lionel Richie, Stevie Wonder, Kenny Rogers,James Ingram, Tina Turner, Billy Joel, Michael Jackson, Diana Ross, Dionne Warwick, Willie Nelson, Al Jarreau, Bruce Springsteen, Kenny Loggins, Steve Perry, Kenny Loggins, Steve Perry, Daryl Hall, Huey Lewis, Cyndi Lauper, Kim Carnes, Bob Dylan, Ray Charles, Paul Simon and more.

Enjoy the music today.

ttps://music.youtube.com/watch?v=9AjkUyX0rVw

Written by TaxConnections Admin

01 Dec 2023

Avoid Penalties: Essential Bookkeeping Catch-Up Tips For Small Business Owners

As a small business owner, the words “tax penalties” can strike fear into the heart of your finances. The complexity of keeping accurate books can be overwhelming, especially if you’ve fallen behind. But it’s not too late to catch up and sidestep those dreaded fines.

Understanding the importance of up-to-date bookkeeping is crucial for any small business. Not only does it keep you compliant with the IRS, but it also provides a clear picture of your financial health, which is essential for making informed business decisions. Here’s how to tackle your bookkeeping backlog efficiently:

1. Assess Your Current Situation: Take a comprehensive look at where your books stand. How far behind are you? What financial periods are the most urgent?

2. Prioritize Your Catch-Up Process: Start with the most pressing tasks. If tax deadlines are approaching, focus on getting the necessary documents in order for those first.

3. Use Accounting Software: Implement easy-to-use bookkeeping software that can automate some of the processes and help you organize your records better moving forward.

4. Dedicate Time for Bookkeeping: Set aside regular time each week dedicated solely to managing your accounts to prevent future backlogs.

5. Consult with a Professional: When in doubt, seek the help of a professional accountant or bookkeeper. Their expertise can be invaluable, and they can offer strategies tailored to your unique business needs.

The road to bookkeeping recovery may seem long, but with the right tools and guidance, you can navigate it successfully. If you’re overwhelmed by the thought of tackling this alone, we’re here to help.

Have a question?Contact Robin Boyd, Essential Accounting.

Written by Robin Boyd

30 Nov 2023

Tax Professionals: Watch This Video If You Want A Smart Business Back Up Plan In Case You Lose Electricity

Written by TaxConnections Admin

30 Nov 2023

National Taxpayer Advocate Objectives Report To Congress 2024

National Taxpayer Advocate Report To Congress 2024

The Internal Revenue Code requires the National Taxpayer Advocate to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The National Taxpayer Advocate is required to submit these reports directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, or the Office of Management and Budget. The first report, due by June 30 of each year, must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year.

FY 2024 Objectives Report To Congress

PREFACE: The National Taxpayer Advocate’s Introductory Remarks

REVIEW OF THE 2023 FILING SEASON

TAS SYSTEMIC ADVOCACY OBJECTIVES
Introduction