December News To Know
Dear Clients & Friends,
As December draws to a close, the CJBS team is working hard to set you up for success in the 2022 tax season. With only a few weeks left in the year, now is the time to ensure your current tax strategies still meet your needs. It’s also the time to take any last-minute steps to help improve your financial well-being for 2023.
In this month’s newsletter, we highlight year-end reminders as well as specific opportunities that may create substantial benefits for you or your business, including:
- Accelerating expenses (including taking advantage of the 100% bonus depreciation now, before it drops in 2023)
- Planning for unexpected gains
- Making adjustments for high income
- Electing to use the PTE (Pass-Through Entity) tax
- IRA conversion
- The #hireyourkids social media trend
Two of our partners have shared examples from this week on how they have used some of these strategies to benefit their clients. Here’s what they had to say:
“I worked with a retired individual who is not yet getting their pension or IRA (required minimum distributions). This was the perfect scenario to convert their traditional IRA to a Roth IRA. Timing this strategy appropriately can minimize the tax on conversion while allowing future retirement dollars to grow—and be distributed—tax-free.”
– Jeffrey Stuart, CPA
“I had several clients use their accumulated earnings, employee retention credits and available PPP funds to buy a bunch of equipment this year with cash (no debt), and then take the 100% bonus depreciation which is allowed in 2022, which substantially reducing their company’s net income for tax purposes, saving them thousands of dollars.”
– Andrew Lotts, CPA, CGMA
From year-end tax planning to maximizing your deductions, our advisors can help you understand the tax codes that affect you (and/or your business) and create tailored solutions to optimize your financial situation. We offer proven strategies to partner with you on achieving your goals, year after year.
2022 Tax Planning Guide
Our Year-End Tax Planning Guide is now available, and our CJBS team will soon be sending our Tax Organizer to help you gather the information needed for your 2022 tax returns. In order to continue to provide you with the best possible service, we have rolled out our Client-Collaboration Hub. Our goal is to streamline the tax return process, making it more efficient and less stressful for you, our clients. Keep an eye out in the next month for additional details as well as information on how to access the Hub and Organizer.
Reminders for year-end:
- Business owners, including sole proprietors, must file 1099-NEC by January 31, 2023, reporting payments for services over $600 to any given individual, LLC, and/or attorney/law firm. If you don’t have W9s for every contract worker, it’s important to secure those now in order to timely issue and file 1099s by the deadline to avoid a non-filing penalty per contractor.
- If you use an automobile for your business, remember to record the odometer reading on 12/31/22 to log your business mileage for 2022 and to start your 2023 mileage log.
- Be sure to account for your 12/31/22 year-end inventory.
There’s a current trend on social media (specifically on TikTok) that suggests you can “hire” your kids and pay them in order to receive the deduction in the 2022 calendar year—but is this true? While it may seem like a good idea, there are numerous tax implications and requirements to qualify (as well as specific paperwork to file), so it may not be worth it in the end—or realistic.
As always, if you have any questions, please visit our Helpful Resources page on our website or call your CJBS team member today!
Wishing you all the best for a very happy and healthy holiday season,
The CJBS Team