In late August 2023, tax professionals and experts from all corners of the country gathered under the warm Florida sun for the highly anticipated IRS Tax Forum Conference. Among the attendees, Loeffler Financial Group stood out as a shining example of excellence in the world of tax and finance. The event, hosted at the Orlando County Convention Center, provided an invaluable opportunity for Loeffler Financial Group to network, learn, and share insights on the ever-evolving world of taxation.
The Gathering of Tax Minds
The IRS Tax Forum Conference is an annual event that brings together tax practitioners, tax professionals, and representatives from the IRS to discuss important topics, new developments, and best practices in the field of taxation. With the goal of enhancing the expertise of tax professionals and fostering collaboration among attendees, this conference has become a cornerstone in the industry.
Loeffler Financial Group Stays Up-to-Date on Tax Laws and Regulations
Loeffler Financial Group, a respected name in the financial world, was a prominent participant at this year’s conference. As a testament to their commitment to excellence, the group sent a delegation of their top experts to engage in workshops, panel discussions, and networking opportunities. Their active participation in various sessions demonstrated their dedication to staying at the forefront of tax law and regulation changes.
Key Highlights:
- Workshops and Educational Sessions: Loeffler Financial Group’s team immersed themselves in a wide range of workshops and educational sessions that covered topics such as tax planning, compliance, cybersecurity, and emerging tax technologies. This investment in knowledge will undoubtedly benefit their clients in the coming year.
- Networking Opportunities: The conference provided ample opportunities for professionals to connect and share insights. Loeffler Financial Group leveraged these connections to foster collaboration and expand their network of industry peers.
- Panel Participation: Several members of Loeffler Financial Group had the honor of participating in panel discussions. Their expertise and thought leadership were on full display as they shared their insights on complex tax issues and future trends.
- Exhibitor Presence: The Loeffler Financial Group booth in the exhibition hall attracted a steady stream of conference attendees. Visitors had the chance to engage with their experts, learn more about their services, and gain valuable insights into their approach to financial and tax planning.
Key Takeaways:
The IRS Tax Forum Conference in Orlando, Florida, was a tremendous success for Loeffler Financial Group. Their active involvement, dedication to staying current on industry developments, and commitment to excellence solidify their position as a trusted and forward-thinking financial partner for their clients.
As the tax landscape continues to evolve, Loeffler Financial Group’s presence at events like the IRS Tax Forum Conference demonstrates its unwavering commitment to providing top-tier financial and tax services. Their participation in such forums not only benefits their clients but also contributes to the overall advancement of the tax profession.
Loeffler Financial Group’s attendance at the IRS Tax Forum Conference in Orlando, Florida, was a testament to their ongoing commitment to excellence and their dedication to serving their clients with the highest level of expertise. As we move forward into an increasingly complex tax landscape, Loeffler Financial Group’s presence and contributions at events like these will undoubtedly continue to shape the future of taxation and financial planning.
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A MUST READ if using digital payment tools or reselling tickets
A recent tax law change by this edition of Congress now requires transaction reporting to the IRS for anyone receiving more than $600 in payments through digital payment tools like PayPal, Venmo, and CashApp. It also impacts anyone using transaction platforms to buy or sell tickets for sporting events and concerts. Here is what you need to know.
What is happening now
They need your Social Security number. If you use digital payment platforms you will now need to provide your Social Security number and a valid name and address to accept digital payments or to buy and sell tickets online.
The IRS will know. Most of these transactions for those receiving funds will now have this activity reported to the IRS if the total for the year exceeds $600. This is true even if you lose money on the transaction. It will be done using Form 1099-K and will be issued to you in January.
Your taxes may be more complicated. If the IRS considers the transaction a business transaction, you will now need to report the transaction on your 2022 tax return, even for casual transactions that lose money. This is often the case when selling event tickets for a loss or taking digital payments at a garage sale.
You may receive many 1099-Ks. You can expect to receive a separate 1099-K from every platform you use where you exceed the $600 threshold.
The IRS watchdog approach. Prior to 2022, the reporting threshold was $20,000 AND more than 200 transactions. But with the perceived under-reporting of income by those in the gig economy, the transaction threshold was eliminated and the dollar threshold was lowered to $600. Now the IRS will use their computer auditing to compare your 1099-Ks with what you report on your tax return and audit you if they do not match.
What to do now
Coach your friends. Whenever you exchange money with friends in a digital format like Venmo, have them mark the transaction as non-business. Each application will handle this differently, but it is critical you do this to avoid getting a 1099-K in error.
Use cash or check. When receiving payments from friends, if there is potential for error ask for a check or cash. This will avoid the 1099-K reporting mess.
Split payments. When splitting a bill at a restaurant, do not have one person pay and then get reimbursement. Instead, ask the restaurant to split the bill and everyone pay their share. You can make this easy on your server if you are willing to split the bill evenly.
Understand the problem. When receiving a digital payment, you are relying on the person paying you to code the transaction correctly. Unfortunately, you cannot make them do it correctly, so you now need to keep track of digital money received, who it was from, and for what purpose.
True business transactions. For those of you in the gig economy, you have a different problem. Many reporting platforms are inconsistent on reporting. Some will report your income twice, once on a 1099-K and again on another tax form (1099-MISC or 1099-NEC). You must actively monitor this information. Plus, you need to know whether the amount reported is gross proceeds (required) or whether they netted out their fees.
Casual users of seller platforms are now in business. Infrequent users of places like E-Bay, Etsy and Amazon are now in business when payments received are more than $600. Be prepared to create a business tax return on Schedule C of your Form 1040.
This seemingly simple change in the tax code is having a wide-reaching impact. It will further complicate filing taxes AND processing taxes for the IRS. Given the level of public outcry, a roll back of this new rule is possible, but given the nature of Congress, do not plan on it.
With tax season in the rear view mirror, now is the time to take a hard look at your federal and/or state withholdings to ensure next year’s tax bill does not surprise you.
A review is more important than ever!
There are a number of tax code changes that will impact the amount of tax you pay next year. So much so, that if you do not forecast your tax obligation now, you may be in for a very unpleasant surprise. This is true because:
No more advance payments for the Child Tax Credit. The one-year requirement of the IRS to pay out half of the Child Tax Credit in advance is no longer in place. So you will not only need to plan for this change, but it will also impact your tax return.
Child Tax Credits are lower. In addition, the Child Tax Credit amount for each child is rolling back to the 2020 dollar amount of $2,000. This could mean as much as $1,600 in lower credits for each of your children.
Dependent care credits are lower. The dependent care credit is also lower in 2022. So if both you and your spouse work and have daycare expenses, you will need to forecast the impact of this on this year’s tax obligation.
New 1099-K reporting may require estimated tax payments. The IRS will be receiving millions of new informational tax forms reporting activity from those using digital payment platforms. So for those reselling event tickets, using sites like eBay, Esty and Amazon, you will now need to account for all this income. It may now require quarterly estimated tax payments throughout the year.
Be aware of life events. In addition, a change in your situation could create the need to review your withholdings. It could be due to a job change, selling or buying a home, getting married or divorced, or having a birth or death in the family. Whatever the cause, be aware of the potential change and put a sharp pencil to revising your withholdings.
High inflation is impacting everything. Finally, consider the impact of inflation on your situation. This is especially important if you have a small business as higher costs of labor and supplies could dramatically impact your pending tax bill.
Calculating and making adjustments
Using the IRS calculator. The IRS has an online tool to help you calculate how much you will need to withhold. In order to get an accurate reading, you need to have a copy of your latest paycheck or last quarterly estimated tax filing (Form 1040 ES) and a copy of your last tax return.
The IRS tool is here: IRS Withholding Calculator
Simply follow the tool’s instructions and compare the tool’s recommendation to your current withholdings.
Get expert help if necessary. The IRS recently changed the way it calculates recommended withholdings. While the intent is well intended, many are confused by the change. It is always a good idea to call to review your situation if you have any doubts. But do it now, while there is plenty of time in the year to build the proper withholding amount.
File a new withholding form with your employer. Whether you’re paying too much or too little, you can fix it by filling out a new W-4 form and giving it to your employer. If you’re filing quarterly estimated taxes, you can adjust your next quarter’s estimate in a similar way.
In a perfect tax world, you would not owe too much nor get too large of a refund. Think of overpayments as an interest-free loan the government borrowed from you. Conversely, a shortfall means writing a large check when you file your tax return. That’s a surprise few of us want.
Call Loeffler Financial Group today to schedule a quick review at 717-393-7366.
Frequent tax law changes have made the tax code very complicated; only the informed taxpayer can take advantage of tax-cutting opportunities that remain.
Here are some suggestions you should consider if you’re interested in cutting your taxes.
1. Reduce your consumer debt. The interest you pay on consumer debt is not deductible. Consider shifting consumer debt to a home-equity loan (where available and not to exceed $100,000) to maintain deductibility for the interest. Don’t rush into anything, however. Consider loan origination costs and points you may have to pay. Also, realize that if you can’t make the payments on the home-equity loan, you could lose your house.
2. Rehabilitate an old building. One tax break that may be attractive to you is the credit for rehabilitating old buildings – either commercial or certified historic structures. If you don’t want to do the work yourself, consider investing in partnerships that rehabilitate old structures.
3. Watch for AMT liability. The alternative minimum tax (AMT) is the one you pay when too many tax preference items reduce your regular tax below a certain amount. If you use preference items to reduce your taxes – such as accelerated depreciation, private activity bond interest, etc. – you may want to shift income and deductions to keep the alternative minimum tax from applying to you.
4. Time any change in marital status with a view to minimizing taxes. Among the areas that could be affected are deductibility of IRA contributions, lost itemized deductions, and a shift to a different tax bracket. You might be able to cut your tax bill by delaying or accelerating a marriage or divorce.
5. Contribute to a retirement plan. Retirement plans are still an excellent tax shelter. Consider a a retirement account strategy to reduce your self-employed income, even part-time or in a second business. If you’re an employee, find out if your company has a 401(k) or other plan and make contributions to it. If you qualify, you should also consider an IRA.
6. Use your vacation home wisely. If you own a second or vacation home, find out whether you get a better tax break by treating the property as a second residence or as a rental property. The number of days you personally use the home is crucial, so get details immediately.
7. Avoid the “kiddie” tax. Check the income of any children under the age of 19 (24 for full-time students). Unearned income beyond a certain amount will be taxed at your highest rate. Shifting investments or making other adjustments may be appropriate.
8. Make your hobby a business. If you’re making money from a hobby, turn your hobby into a business so that you can write off your expenses. You must be able to demonstrate that you engaged in the activity for a profit. To do that, conduct the activity as a business. Keep records, and get a separate bank account for the activity. The IRS will expect your sideline business to show a profit in three out of five years, or you’ll have to prove your profit motivation in order to deduct losses.
9. Don’t overlook medical deductions. If you help to support an elderly relative who lives in a nursing home for medical reasons, the cost of the nursing home may qualify for the medical deduction. If you make improvements to your home for medical reasons, the cost of such improvements are medical expenses to the extent the improvements do not increase the value of your home. That includes such things as widening doorways for wheelchair use or modifying the home to accommodate an individual with a medical problem.
10. Take the child care credit if you qualify. If you pay for child care services while you work or go to school, you may qualify for the child care credit. The credit is allowed only for children under the age of 13. You must report on your tax return the name, address, and taxpayer identification number of the care provider.
There are other tax-cutting strategies in addition to those mentioned here. If you would like assistance in selecting tax-saving strategies that make the most sense in your situation, please call Loeffler Financial Group at 717-393-7366 and we can assist with any questions or concerns you may have!
