May 2024 Newsletter

Good afternoon everyone –

I hope you all had a good weekend; my apologies for the delay in getting this newsletter out! Ever since we got through the initial deadline for individual income tax preparation, I have finally gotten some time to breathe and really flesh out the newsletter for this month. From the bottom of my heart, I want to thank each and every one of you for contributing to the progression of this company. I cannot begin to describe how much I've learned in the last couple of months as a product of collaborating with each of you. This has been such a good experience, and I look forward to being your trusted financial advisor in the years to come. With that, this newsletter will serve as the retrospective after a bit of reflection over this last season. 

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1. Tax Updates

W4 Refresh

Now that we've gotten through tax season, some of you may have noticed that you may have owed more to the IRS than anticipated or gotten a refund more than expected. There may be an instance where you may need to update your W4. Given that we are almost halfway through the year, this is something that should be investigated as soon as possible! Your W4 can be updated to adjust how much you are taking out in Federal & State withholding on your paystub. When you adjust this and make a retroactive payment, this could put you back in equilibrium, so you do won't have to pay the IRS a significant amount at the end of the year (or receive a larger than expected refund). Please reach out to us if this is something you would like to explore.

Initial Look into New Software

At LAS, one of our main strategies when formally filing individual/business tax returns is eliminating as many pass-through costs incurred on behalf of our clients as much as possible (filing fees, processing fees, etc.). As we've done in the past, we will continue to always be transparent and communicative with you if some outside cost arises during the course of our filing. As a retrospective from the last year, we've gotten those costs to come as low as $15 for any state filing fee as processed by that state's department of revenue. However, our team is continuing to look into new software that can be leveraged where we may be able to lower this cost even further so that the only fee you'll have to pay is the fee for LAS's services of preparing and filing your return. More updates will come at a later date, but I just wanted to share that conversations have begun to investigate new software.

Small Business Owners Retrospective

For small business owners or anyone who had a Schedule C reported with their tax return this year, we will be reaching out to you to inquire if you'd like further tax planning to be arranged for 2024. Be on the lookout for an email from me (Kevin).

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2. Industry Trends

Stay ahead of the curve by keeping abreast of the latest trends in your industry. In this edition, we discuss key financial trends that could impact your business. From technological advancements to regulatory changes, we've got you covered.

FinCen BOI Requirement

For those of you who own a business, please look into this new reporting requirement – the FinCEN Beneficial Ownership Report under the National Defense Authorization Act and Corporate Transparency Act. Though this company, Lipuma Accounting Services, cannot advise thoroughly on the details of how to formally file the report, we advise that you reach out to your attorney to see how this can affect you and your company. Here’s the link to the FinCEN website: https://fincen.gov/

1099-K (Businesses ONLY) - Proposed

For those who handle transactions through intermediaries like Zelle, Venmo, Cashapp, etc., I encourage you to look back and see how you set up those transactions through your financial system. There was an important update through the IRS that was proposed recently that noted that businesses/individuals will be issued a 1099-K for transactions handled through these mediums in excess of $5,000. So, if you transact more than this limit through these payment applications, you will be issued a 1099-K directly from these companies for your tax return. If you'd like to go over this further, I encourage you to reach out to me and see how your tax planning can be affected.

Source/More Information: https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation

IRA Contribution Limit Increases for 2024

Here are some bulleted, summarized information on IRA Contribution Limits from the IRS for 2024:

• For 401(k), 403(b) holders, the contribution limit is now $23,000

• For Traditional/ROTH IRA holders, the contribution limit is $7,000

• Catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan remains $7,500

Source/More Information: https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000

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3. Business Update

LAS Rate Changes for 2024

After getting through this tax season, here are the updated rates for LAS's services effective 5/13/2024 (Base Rates):

• Form 1040: $300 (Single); $450 (Married Filing Jointly)

• Schedule D (Capital Gains/Losses Worksheet): $50 per financial institution

• Schedule C (Business Return): $500 (this is subject to change based on what LAS's involvement would be)

• Schedule E (Rental Income Return): $500 (this is subject to change based on what LAS's involvement would be)

• Any additional schedule will be priced out and itemized to you during your initial consultation with me before each filing

• Tax planning begins at $120/hr. per your engagement letters.

I know these jumps in prices appear steep, but what I'd like for you to consider is the level of care that goes into each return. With your tax filing, you also receive me as a consultant for whenever you have questions or concerns regarding your finances. If you'd like to go over this further with me to see how this affects your return, please reach out. Our main priority is ensuring we are meeting your needs in the best way possible.

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Thank you for choosing Lipuma Accounting Services as your trusted financial partner. We are committed to supporting your success and look forward to serving you in the coming months.

Kevin