Davidson Fox & Company LLP  

October 2023 Newsletter

Summer is here!

As the leaves begin to change and the school year swings back into action, it's a signal for us to delve into some critical tax considerations. This month, we shine a spotlight on numerous important topics, including the future of U.S. tax policy, electric vehicle charging taxes, how rising interest rates impact start-up fundraising, and much more.

September happenings at DFC:

LUMA Projection Arts Festival: As a major sponsor of the event, our team was invited to attend a VIP party which provided an early look at the projections.  We enjoyed good food, good conversation with the other VIP's and even participated in a behind the scenes tour with the LUMA crew.


The AVRE 9 @ Night golf tournament is always a hit with glow balls and a course lit up with glow sticks.  We won the tournament this year (and a couple in the past, too!) and look forward to next years event to support this great cause.  


Rumble Ponies Baseball and rocking out with our Co-Managing Partner:  On Friday, September 15th, we went to the Rumble Ponies game to cheer on the Ponies and listen to music.  Our Co-Managing Partner, Jesse, is in the band Tijuana Danger Dogs and they were playing at the stadium!  He's rocking out in the picture below while we surprised him with our support by gathering our families to dance and unwind after the September 15th deadline (thank you Davidson Fox for buying our tickets).  A couple from our team even did the "Taco-Run" across the field.  We break the mold and are not your typical "stuffy" accountants.  Check out our fearless-leader's band and upcoming schedule here: Tijuana Danger Dogs


OCTOBER:  The October Extension Deadline is rapidly approaching!  If you filed for an extension in April, your time is about up.  Monday, October 16th by 5:00pm (for those who really like to wait until the last minute).

REMEMBER WE DO PAYROLL - and a lot of other financial-related services, too!  For those who like to year-end plan and prepare for next year, give us a call.  There is value in preparing your financial future, and we can help.  (607) 722-5386.  Locations in Binghamton, Ithaca, and Horseheads.

Should you find yourself at a crossroads in your financial journey or have pressing questions about the topics covered, please don't hesitate to reach out. We're here to guide you toward informed decisions that align with your financial goals.

And remember, our services extend to your colleagues, family, and friends. Should they require assistance, we're just a phone call away. We remain committed to identifying every opportunity to ensure our client's prosperity. Your kind reviews and referrals are invaluable to us.

Wishing you a prosperous October, good luck with extension filing, and a Happy Halloween!


Davidson Fox

October Extended Due Date Just Around the Corner

Article Highlights:

  • October 16, 2023 is the extended due date for 2022 federal 1040 returns.
  • Late-filing Penalty
  • Interest on Tax Due
  • Other October 16 deadlines

If you could not complete your 2022 tax return by April 18, 2023 and are now on extension, that extension expires on October 16, 2023. Failure to file before the extension period runs out can subject you to late-filing penalties.

There are no additional extensions (except in designated disaster areas), so if you still do not or will not have all the information needed to complete your return by the extended due date, please call this office so that we can explore your options for meeting your October 16 filing deadline.

Although the October due date is normally October 15th, for 2023, the 15th falls on a weekend, so the due date automatically moves to the next business day which is Monday October 16th.

If you are waiting for a K-1 from a partnership, S-corporation, or fiduciary (trust) return, the extended deadline for those returns is September 15 (October 2 for fiduciary returns). So, you should probably make inquiries if you have not received that information yet.

Late-filed individual federal returns are subject to a penalty of 5% of the tax due for each month, or part of a month, for which a return is not filed, up to a maximum of 25% of the tax due. If you are required to file a state return and do not do so, the state will also charge a late-file penalty. The filing extension deadline for individual returns is also October 16 for most states.

In addition, interest continues to accrue on any balance due, currently at the rate of .5% per month.

If this office is waiting for some missing information to complete your return, we will need that information at least a week before the October 16 due date. Please call this office immediately if you anticipate complications related to providing the needed information, so that a course of action may be determined to avoid the potential penalties.

Additional October 16, 2023, Deadlines – In addition to being the final deadline to timely file 2022 individual returns on extension, October 16 is also the deadline for the following actions:

  • FBAR Filings - Taxpayers with foreign financial accounts, the aggregate value of which exceeded $10,000 at any time during 2022, must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). The original due date for the 2022 report was April 18, 2023, but individuals have been granted an automatic extension to file until October 16, 2023.

  • SEP-IRAs – October 16, 2023, is the deadline for a self-employed individual to set up and contribute to a SEP-IRA for 2022. The deadline for contributions to traditional and Roth IRAs for 2022 was April 18, 2023.

  • Special Note – Disaster Victims – If you reside in a Presidentially declared disaster area, the IRS provides additional time to file various returns, make payments and contribute to IRAs. Check this website for disaster related filing and paying postponements.

Please call this office for extended due dates of other types of filings and payments and for extended filing dates in disaster areas. Please don’t procrastinate until the last week before the due date to file your extended returns.

The Future of U.S. Tax Policy: Key Issues For 2024 Presidential Candidates

The early Presidential debates for the 2024 election cycle have begun, and one topic that's expected to take center stage is the future of the U.S. tax code. Tax policy questions loom large, and the 46th person to serve as United States President – remember, Grover Cleveland was elected twice, non-consecutively – will have to grapple with some major tax issues. 

Foremost among these are the expiring individual and business tax regulations brought about by the Tax Cuts and Jobs Act (TCJA) and the growing deficits and national debt.

Tax Cuts and Jobs Act Details

The tax code changes brought about the TCJA are scheduled to sunset at the end of 2025, leading to potentially major changes for taxpayers. Kiplinger notes that now is the time to begin planning to mitigate the financial impact of these expiring provisions – talk to your tax professional for planning strategies that might help you keep more of your hard-earned money.

It is also imperative for all of the 2024 Presidential candidates to address how they intend to prevent these expirations from negatively affecting Americans in all demographics and at all income levels. TCJA questions surrounding all of the following topics are likely to play a key role in debates moving forward.

Individual Tax Expirations

The TCJA, which was signed into law in December 2017, introduced temporary changes that significantly alter the taxes paid by individual income earners. This means that the majority of Americans have enjoyed increased after-tax income for the last several years. Some notable provisions that are set to expire include:

Lower Tax Rates and Brackets

Before the TCJA changes took effect, the U.S. tax code had seven brackets with rates from 10 percent to 39.6 percent. The TCJA lowered rates for several brackets and widened the brackets to reduce so-called marriage penalties. Furthermore, the TCJA lowered the top tax bracket from 39.6 percent to 37 percent, which has saved high-earners significant amounts of money.

Expanded Family Benefits

The TCJA reformed the Child Tax Credit (CTC), personal and dependent exemptions, and the standard deduction. This gave lower- and middle-income households with children greater benefits. It also simplified the tax filing process. As an example, it doubled the maximum CTC to $2,000 per eligible child and extended overall eligibility to more families.

It is important to note that the aforementioned Child Tax Credit changes took effect before the COVID-19 pandemic, which resulted in additional legislation to temporarily expand the credit even further.

Itemized Deduction Limits

To offset tax cuts, the TCJA imposed limits on itemized deductions for home mortgage interest and state and local taxes, and doubled the standard deduction which eliminated the need for millions of taxpayers to itemize their deductions at all. The legislation also temporarily eliminated select miscellaneous itemized deductions.  

These changes are set to revert after 2025. 

Business Tax Expirations

Small business owners and corporations also face tax uncertainty due to scheduled changes to American tax policy. Throughout the debate season, 2024 Presidential hopefuls will need to address a number of key business tax issues, including these:

Research and Development

Companies can no longer immediately deduct research and development (R&D) expenses, which may discourage R&D investment. Instead, companies must now amortize their costs over a five-year period. 

It is worth noting that there has been a bipartisan Congressional effort to introduce new R&D tax credits. In March 2023, for instance, Senators Maggie Hassan (D-NH) and Todd Young (R-IN) reintroduced the American Innovation and Jobs Act. This aimed to extend and expand the R&D tax credit to allow more startups and small businesses to take advantage of the popular tax credit. 

Machinery and Equipment

The TCJA temporarily allowed business owners and corporations to immediately deduct the costs associated with short-lived assets like machinery and equipment. However, this provision, called bonus depreciation, is phasing out with other TCJA changes, possibly discouraging investments in these types of goods.

What Happens Next?

The next President will have the opportunity to reshape crucial sections of the tax code, impacting American families’ finances and business decisions. Before you vote in 2024, make sure you understand the policies each candidate intends to prioritiz – and how these priorities will play a role in your day-to-day life.

Beyond expiring TCJA policies, the newly elected President will face other tax policy issues, including the 138-nation Global Tax Agreement, international trade issues that could have substantial import tax implications, and a seeming resurgence of industrial policy.

Additionally, the federal budget is on an unsustainable trajectory, and. Fitch Ratings recently downgraded the U.S. credit rating, citing the “alarming rise” in the federal government's interest costs. With the debt ceiling currently expected to be reached in early 2025, it is essential for all candidates to outline their plans for proactively addressing these issues.

The tax questions at the forefront of this election season have the potential to shape the U.S. tax code for years – or even decades – to come. 

Using the Home Sale Gain Exclusion for More than Just Your Home

Article Summary:

  • Home Sale Exclusion
  • Primary Residence
  • Second Home
  • Fixer-upper
  • Rental

With careful planning, and provided you follow the rules, the tax code allows you to use the home sale gain exclusion every two years.

Let's assume you own a home, perhaps a second (vacation) home, or maybe are even thinking about buying a fixer-upper and flipping it. With careful planning, it is possible to apply the full home sale exclusion to all three of the properties.

Here is how it works. The tax code allows you to exclude up to $250,000 ($500,000 for married couples) of gain from the sale of your primary residence if you have lived in it and owned it for two of the five years counting back from the sale date, and you have not previously taken a home sale exclusion within the two years immediately preceding the sale. In addition, there is no limit on the number of times you can use the exclusion, as long as the requirements are met.

It makes sense to start off by selling the home you currently live in because you probably already meet the two-out-of-five-years ownership and use tests. The next step, if you have a second home, would be to move into it and make it your primary residence. After you have lived there for two full years and it has been more than two years since the previous home was sold, you can sell the property and take the home sale exclusion again. If you are handy, and find the right property, the next possible step would be to purchase and occupy a fixer-upper while you make repairs and improvements in preparation for its eventual sale after the two-year ownership and occupancy rules have been met. When that time is up, you can sell the fixer-upper and take the third exclusion. This makes it possible for a married couple to exclude as much as $1,500,000 of home sale profit in just over four years if they follow the rules carefully and time the sales correctly.

If you own a rental property, and you occupy the rental for two years prior to its sale, you will be able to exclude a portion of the gain for that property as well. Because so many rental owners were occupying their rentals before selling them and taking a home sale exclusion, Congress enacted a law barring the exclusion of gain attributable to rental periods after 2008. Thus, the home sale exclusion can only be used to exclude gain attributable to periods before 2009 and periods after 2008 in which the home was used as a primary residence.

Example: You purchased and began renting a residence on July 1, 2005. On July 1, 2014, you occupied the property as your primary residence; and on August 1, 2023, you sell the property for a gain of $230,000. You had owned the property for a total of 217 months, of which 151 were before 2009 or during the time after 2008 that you occupied the property as your primary residence. Thus 69.59% (151/217) of the gain is subject to the exclusion. As a result, $160,057 (.6959 x $230,000) of the gain qualifies for the exclusion.

In the preceding example, had the gain exceeded the exclusion limits of $250,000 for single taxpayers and $500,000 for married taxpayers, the exclusion would have been capped at the exclusion limits.

There is one final issue to consider. If any of the residences were acquired through a tax-deferred (Sec 1031) exchange from another property, then the residence must be owned for a period of five years prior to its sale to qualify for the exclusion.

Since situations may differ, we highly recommend that you consult with this office prior to initiating such a plan.


Business Succession Planning

Article Highlights

  • The Importance of Business Succession Planning
  • The Main Issues
  • The People Aspect
  • The Money Aspect
  • Cross-Purchase Agreements
  • Entity-Purchase Agreements
  • Sales, Gifts, and Inheritances
  • Summary

The Importance of Business Succession Planning

Every business — large and small — needs a business succession plan. Just like Warren Buffett and Jeff Bezos prepared for the day that they would step away from the C-suite, every small and mid-sized business owner should plan ahead so that the transfer of the leadership and/or ownership of their businesses will be smooth and effective, whether a sudden change requires it or a planned change occurs.

The Main Issues

The main issues addressed by business succession planning relate to people and money.

The People Aspect

The people aspect deals with ensuring that the most qualified individuals are ready to take leadership roles when needed.

With large corporations, a select pool of talent is generally available to take the reins when a CEO steps down. The Board of Directors and CEO will identify the people from within the company they believe are best qualified to assume top leadership roles. Industry leaders in the same or related industries can be added to the list so that the best talent will take charge of the company after a change.

With small to mid-sized companies, the decision might not be so easy. As the hit TV show "Succession" demonstrates, there are often several people who consider themselves to be viable successors but, often, there are none who possess all the characteristics required to run the company. This can be especially true with family-run and other closely-held businesses. For example, if a business owner has three children running different aspects of the business, which one has the experience and character to lead the company into the future when the parent leaves the company? How will the siblings respond to this choice? Will they stay with the company and focus on its continued success or will they leave for a different challenge? How does the current owner incentivize each of them so that they see the benefit of staying with the company after the parent has left? The longer the issue remains undecided or unannounced, the greater the stress on all the parties and the business. Once a successor is announced, the owner can more freely share his or her knowledge with the designated individual so that the company can continue forward after the leadership change without missing a beat.

The Money Aspect

While the people aspect is key to always having talented leadership in place, the money aspect of a change in ownership can also endanger the future of a business. This is not an issue with a corporation — especially when its stock is widely held. The outgoing leader often retains his or her stock but can also sell, gift, or otherwise transfer his or her shares. In most cases, what the outgoing leader does with his or her stock is inconsequential to the company's future.

With a partnership, however, a partner's exit can dissolve the partnership or require a restructuring and/or refinancing of the business. If the outgoing partner has died, the disposition of his or her interest in the partnership must be addressed in one way or another. It's important to have a written partnership agreement that specifies what is to happen when a partner leaves.

Cross-Purchase Agreements

Insurance is one way to prepare for a partner's exit. With cross-purchase agreements, the partners buy and own insurance policies on one another so that, if one partner dies, the remaining partners have the funds to buy out his or her interest at a previously-set price. The value of the insurance policies is based on the value of each partner's interest. This is calculated by dividing the value of the business — preferably determined by a qualified appraisal — by the number of partners (or multiplying by their respective percentage interests if not equal). The insurance coverage is then equal to the value of the partner's interest divided by the number of remaining partners (or multiplied by their ownership percentages if not equal). For example, if there are 5 equal partners and the business is valued at $6 million, the value of each partner's interest is $1.2 million. Each partner would purchase an insurance policy on each of the other partners with a face value of $300,000. If one partner dies, the others would then have $1.2 million in insurance proceeds (4 remaining partners times $300,000) to buy out the deceased partner's $1.2 million interest. Valuation of the business should be redetermined periodically so that the amount of the insurance coverage can be adjusted when needed.

Entity-Purchase Agreements

When a cross-purchase agreement is not practical (such as when there are many partners or there are large age differences between the partners), the business itself can purchase insurance on the life of each partner in order to buy out an exiting partner's interest.   The business is the policy owner and the beneficiary. Entity-purchase agreements reduce the complexity inherent in some cross-purchase agreements and the insurance premiums may be deductible by the business.

Sales, Gifts and Inheritances

Sole proprietors and corporate shareholders can transfer a full or partial interest in the business by sale, gift or inheritance. Partners cannot make the same transfers freely. In fact, an attempt to transfer a partnership interest can dissolve the partnership. This disparity in transfer options recognizes the unique relationship between partners and protects them from being forced to accept a new person or entity with whom they might not want to partner.

With a partnership, the partners share the management of the business. Changing even one partner can significantly alter the business dynamic that the partners have created. Thus, one partner cannot freely thrust a new partner into the mix without the other partners' consent. This is one reason why partnerships often rely on cross-purchase and entity-purchase agreements to ensure the ongoing viability of the enterprise. They allow a partner to exit without delivering a death blow to the business if the other partners are not otherwise financially positioned to purchase the outgoing partner's interest and/or they do not agree on a new partner to replace the exiting partner.

Stock transfers don't present the same issue. If a controlling shareholder sells their stock, this doesn't change the ability of the minority shareholders to impact the direction of the business. They didn't have the power to influence decision-making to begin with. If they do not like the direction that the company is taking, they are usually free to sell their stock without impacting the relationship between the company and the other owners. Thus, corporate owners are generally free to sell, gift, or bequeath their interest in a business without the consent or involvement of the other stockholders.

Sole proprietors are limited to either selling the business outright or changing the ownership structure of the business to add a new owner. If a sole proprietor brings a new owner into the mix, this would create a partnership with or without a written agreement. If a written agreement is signed, it can take the form of a general partnership, limited partnership, or limited liability partnership. The written agreement will dictate the terms of the relationship and the ways in which an ownership interest could be transferred. If the business is incorporated stock is issued and can be transferred subject to the company's stock transfer rules.


Business succession plans are most effective when they address the short- and long-term interests of the business and its owner(s). Taking people and money aspects into account is key to creating an effective plan.

With large corporations, the people aspect involves identifying top leadership replacements for the short- and long-term. The people aspect is similar for small and mid-sized businesses - with a twist since the owner's family and/or close associates are involved.

Partnerships add a money aspect that is best addressed by purchasing insurance policies on the lives of the partners to help the remaining partners buy out an exiting partner's interest. These policies can be purchased by the partners or by the partnership itself.

In all cases, there must be a short-term plan for dealing with unexpected events and a long-term plan that lays the groundwork for the company to continue to thrive from generation to generation. Better to prepare today than to be forced to pivot tomorrow.

If you are developing your business succession plan, we can help you review the tax aspects in advance. Please call for assistance.

Made a Mistake on Your Tax Return - What Happens Now?

Article Highlights:

  • Tax Return Mistakes are Common
  • Fixing Tax Return Mistakes
  • Amended Return
  • Superseding Return
  • Don’t Procrastinate in Responding to IRS
  • Common Family Tax Mistakes

Generally speaking, tax return mistakes are a lot more common than you probably realize. Taxes have grown complicated and the paperwork required to file proper tax returns is often convoluted. This is especially true if you're filing your taxes yourself.

Congress has passed numerous tax laws in recent years making taxes ever more complicated. Even seasoned tax professionals have a hard time digesting all of the changes that they and their clients have to deal with, requiring hours of continuing education. All of this is to say that if you've just discovered that you've made a significant mistake on your tax return, the first thing you should do is stop and take a deep breath, and then call this office. It happens. It's understandable. There are steps that you can take to correct the situation quickly — you just have to keep a few key things in mind, including that the mistake could be in your favor.

Fixing Tax Return Mistakes - Here's what you need to know:

  • You generally have three years from the date that you originally filed your tax return (or two years from the date you paid the tax bill in question) to make any corrections necessary to fix your mistakes or oversights.

  • There's a good chance that the IRS will catch an income omission, math errors, or an incorrect deduction or tax credit, in which case the IRS will probably send you a letter letting you know what happened and what you need to do to correct it.

  • If fixing the mistake ultimately results in you owing more taxes, you should pay that difference as quickly as possible. Penalties and interest will keep accruing on that unpaid portion of your bill for as long as it takes for you to pay it, so it's in your best interest to take care of this as soon as you can.

Many errors include not claiming tax benefits you are entitled to and cause you to pay more tax than required. You may have overstated or understated your income or received a late tax document, such as one if many varieties of 1099s or K-1s. To correct issues on an already filed return you generally need to file an amended return.

An amended return is used to make corrections to previously filed returns. The possible corrections include, but are not limited to:

  • Overstating or understating income
  • Changing an incorrect filing status
  • Adding or deleting dependents
  • Taking care of discrepancies in terms of deductions or tax credits

If any of the above apply to the error you've just discovered, you can — and absolutely should — file an amended return.

If you catch the error prior to the filing due date of the return, instead of filing an amended return, you can file what’s called a “superseding return” to replace the original return. The difference is that when you file a superseding return you submit a complete new return to take the place of the one originally filed, while with an amended return, you fill out a special form (1040-X) and attach only back-up forms or schedules that pertain to the change.

A sudden increase in your tax liability notwithstanding, it's again important to understand that errors on your income taxes aren't really worth stressing out about. The IRS understands that sometimes mistakes happen, and they have a variety of processes in place designed to help make things right.

If you have received a notice from the IRS about an error on your tax return, don’t procrastinate in handling it – address the issue(s) raised by the IRS right away. The same applies if you have discovered an error. Either way, you can contact this office for assistance with responding to the IRS, preparing a superseding or an amended return, and requesting penalty abatement.

Common Family Tax Mistakes – There are also common mistakes that occur when dealing with family members that you should avoid or correct if you have made them. The following are some commonly encountered situations and the tax ramifications associated with each.

Renting to a Relative – When you rent a home to a relative for long-term use as a principal residence, the rental’s tax treatment depends upon whether the property is rented at fair rental value (the rental rate of comparable properties in the area) or at less than the fair rental value.

  • Rented at Fair Rental Value– If you rented a home to a relative at a fair rental value, it is treated as an ordinary rental reported on your Form 1040 on Schedule E, and losses are allowed, subject to the normal passive loss limitations.

  • Rented at Less Than Fair Rental Value– If you rented the home at less than the fair rental value, which often happens when the tenant is a relative of the homeowner, it is treated as being used personally by you; the expenses associated with the home are not deductible, and no depreciation is allowed. The result is that all the rental income is fully taxable and reported as “other income” on your 1040. If you are able to itemize your deductions, the property taxes on the home would be deductible, subject to the current $10,000 cap on state and local taxes. You might also be able to deduct the interest on the rental home by treating the home as your second home, up to the debt limits on a first and second home.

  • Possible Gift Tax Issue – There also could be a gift tax issue, depending on if the difference between the fair rental value and the rent you actually charged the tenant-relative exceeds the annual gift tax exemption, which is $17,000 for 2023. If the home has more than one occupant, the amount of the difference would be prorated to each occupant, so unless there was a large difference ($17,000 per occupant, in 2023) between the fair rental value and actual rent, or other gifting was also involved, a gift tax return probably wouldn’t be needed in most cases.

Below-Market Loans – It is not uncommon to encounter situations where there are loans between family members, with no interest being charged or the interest rate being below market rates.

A below-market loan is generally a gift or demand loan where the interest rate is less than the applicable federal rate (AFR).The tax code defines the term “gift loan” as any below-market loan where the forgoing of interest is in the nature of a gift, while a “demand loan” is any loan that is payable in full at any time, at the lender’s demand. The AFR is established by the Treasury Department and posted monthly. As an example, the AFR rates for September 2023 were:

AFR (Annual September 2023
3 years or less
Over 3 years but not over 9 years
Over 9 years

Generally, for income tax purposes:

  • Borrowe– Is treated as paying interest at the AFR rate in effect when the loan was made. The interest is deductible for tax purposes if it otherwise qualifies. However, if the loan amount is $100,000 or less, the amount of the forgone interest deduction cannot exceed the borrower’s net investment income for the year.

  • Lende– Is treated as gifting to the borrower the amount of the interest between the interest actually paid, if any, and the AFR rate. Both the interest actually paid and the forgone interest are treated as investment interest income.

  • ExceptionThe below-market loan rules do not apply to gift loans directly between individuals if the loan amount is $10,000 or less. This exception does not apply to any gift loan directly attributable to the purchase or carrying of income-producing property.

Parent Transferring a Home’s Title to a ChildWhen an individual passes away, the fair market value (FMV) of all their assets is tallied up. If the value exceeds the lifetime estate tax exemption ($12,920,000 in 2023), then an estate tax return must be filed, which is rarely the case, given the generous amount of the exclusion. Because the FMV is used in determining the estate’s value, that same FMV, rather than the decedent’s basis, is the basis assigned to the decedent’s property that is inherited by the beneficiaries. The basis is the value from which gain or loss is measured, and if the date-of-death value is higher than the decedent’s basis was, this is often referred to as a step-up in basis.

If an individual gifts an asset to another person, the recipient generally receives it at the donor’s basis (no step-up in basis).

So, it is generally better for tax purposes to inherit an asset than to receive it as a gift.

Example: A parent owns a home worth (FMV) $350,000 that was originally purchased for $75,000. If the parent gifts the home to the child and the child sells the home for $350,000, the child will have a taxable gain of $275,000 ($350,000 − $75,000). However, if the child inherits the home, the child’s basis is the FMV at the date of the parent’s death. So in this case, if the date-of-death FMV is $350,000 and if the home is sold for $350,000, there will be no taxable gain.

This brings us to the issue at hand. A frequently encountered problem is when an elderly parent signs the title of his or her home over to a child or other beneficiary and continues to reside in the home. Tax law specifies that an individual who transfers a title and retains the right to live in a home for their lifetime has established a de facto life estate. As such, when the individual dies, the home’s value is included in the decedent’s estate, and no gift tax return is applicable. As a result, the beneficiary’s basis would be the FMV at the date of the decedent’s death.

On the other hand, if the elderly parent does not continue to reside in the home after transferring the title, no life estate has been established, and as discussed earlier, the transfer becomes a gift, and the child’s (gift recipient’s) basis would be the parent’s basis in the home at the date of the gift. In addition, if the child were to sell the home, the home gain exclusion would not apply unless the child moves into the home and meets the two-out-of-five-years use and ownership tests.

Another frequently encountered situation is when the parent simply adds the child’s name to the title, while retaining a partial interest. If the home is subsequently sold, the parent, provided they met the two-out-of-five-years use and ownership rules, would be able to exclude $250,000 ($500,000 if the parent is married and filing a joint return) of his, her or their portion of the gain. A gift tax return would be required for the year the child’s name was included on the title, and the child’s basis would be the portion of the parent’s adjusted basis transferred to the child. As mentioned previously, the child would not be able to use the home gain exclusion unless the child occupied and owned the home for two of the five years preceding the sale.

Incorrect Withholding – Often spouses who are both working will not coordinate with each other when they complete their Form W-4s they provide to their employers for the purpose of determining the amount of income tax to be withheld from their wages. Sometimes this lack of communication results in a substantial under-withholding and an unpleasant surprise at tax time.

Child Files Own Tax Return Incorrectly – Frequently a child who is eligible to be claimed as a dependent by their parent(s) files their own return without checking the “someone can claim you” box on page 1 of Form 1040 – and if the parent does claim the child there’ll be correspondence from the IRS. The child may have claimed more standard deduction than allowed and possibly could deprive the parents of deductions and credits that they are otherwise entitled to. The remedy in this situation requires the child’s return to be amended.

These are not the only examples of the tax complications that can occur in family transactions. Please contact this office before completing any family financial transaction. It is better to structure a transaction within the parameters of tax law in the first place than suffer unexpected consequences afterwards.




New Business Start-up Costs

Article Highlights

  • Starting a Business
  • What Expenses Qualify as Start-up and Organizational Costs
  • Tax Treatment of Start-up and Organizational Costs
  • Common Start-up and Organizational Costs
  • Summary

Starting a business can seem daunting to the prospective entrepreneur. A step-by-step plan to get started can alleviate some of the angst. The cost of getting started is one of the first considerations. These costs can be identified and addressed in a solid business plan.

Before getting into the details, let’s first define a couple of terms used extensively when discussing start-up and organizational costs:

  • Amortize: Amortization is a method of deducting certain capital costs over a fixed period. It is like the straight-line method of depreciation.
  • Capitalize: When capitalizing a cost or expense, the amount is entered on the business’s balance sheet and full recognition of the expense is delayed, until the business is closed or sold, although for tax purposes some assets can be depreciated (i.e., the cost is recovered over a specified period).

What Expenses Qualify as Start-up and Organizational Costs - Per IRS Publication 535, “Startup costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Organizational costs include the costs of creating a corporation or partnership.”

An expense qualifies as an amortizable start-up cost if:

  1. It would be deductible if the business was already operating in the same field, and

  2. It was paid or incurred before the business began operating.

Costs incurred to investigate the purchase of an active trade or business are treated as amortizable start-up costs. Costs incurred to attempt to acquire an ongoing business are not considered start-up costs, and so must be capitalized.

Referring again to IRS Publication 535, an expense qualifies as an amortizable organizational cost if:

  1. It was incurred for the purpose of creating the business structure,

  2. It is chargeable to a capital account,

  3. It would be amortizable over the life of the business if it had a fixed life,

  4. It was incurred by the end of a corporation’s first year of operations or prior to a partnership’s first tax filing date, excluding extensions, and

  5. As to partnerships, it is the type of expense that would be expected to benefit the partnership over its lifetime.

Tax Treatment of Start-up and Organizational Costs - Start-up and organizational costs generally must be capitalized and will only be recovered when you sell or close your business. Some assets can be depreciated but the rest are capitalized.

You can, however, choose to amortize eligible start-up and organizational costs over 180 months. The 180-month period begins with the month in which you first operate your business. No election is required to amortize start-up costs. You just take the deduction on your tax return. However, you ARE required to attach a statement to your tax return if you choose NOT to amortize these costs.

You can also elect to deduct up to $5,000 in eligible business start-up costs and $5,000 of eligible organizational costs in your first year of operations. These figures are reduced for every dollar by which your start-up or organizational costs exceed $50,000.

Once filed, an election to deduct or capitalize start-up and organizational costs is irrevocable.

Common Start-up and Organizational Costs - You can’t start a business without incurring some expense. Following are some common examples of business start-up and organizational costs. Remember, they are only considered start-up or organizational costs if they are incurred before you start business operations. Any expense you incur on or after the day you start your business is an operating expense, not a start-up or organizational cost.

Organizational Costs including Licenses and Permits – Most new business owners create a business structure before operations begin. A corporate structure can limit your personal liability for the risks inherent in running a business. Partnership agreements define how multiple owners will work together if no corporation is created. Sole proprietorships do not require the formation of a separate entity.

Regardless of business structure, most businesses need to obtain licenses and permits from the jurisdictions in which they will operate. These costs are considered organizational costs if incurred prior to the start of operations.

Analysis and Surveys – The cost of an analysis or survey of potential markets, products, labor supply, transportation facilities, etc., qualifies as a start-up expense.

Professional Advisor Fees – Professional advisor fees are organizational costs if they relate to setting up the business. This might include legal and accounting fees as well as appraisals and relevant business forecasts.

Insurance – Insurance coverage is best established before operations begin so you are covered from Day 1.

Payroll – You may need to hire and train employees before you get started. Eligible training costs can include expenses paid to others who train your new employees. Some employees may help you get your office or store ready for your opening.

Advertising and Marketing – You need to get the word out before you start operations to launch effectively. Logo design, website design, brochure and business card printing, and signage are examples of pre-opening advertising and marketing costs.

Travel - Costs of travel and other related expenses in connection with securing distributors, suppliers, and customers for the new business.

Operating Expenses – You can incur operating expenses (such as utilities and phone service) prior to opening.

Ineligible Expenses – Interest, taxes, and research and experimental costs do not qualify as start-up costs.

Other Expenses – Although not included in the definition of “start-up” or “organizational” costs that qualify for the special $5,000 deduction allowance, a new business will also incur other costs before business operations begin which cannot be deducted until the business is operational. Even then, these expenses may not be deductible all at once and generally will have to be depreciated or amortized over several years. These include:

Improvements – Improvements are often made to an office or other business structure to best serve the needs of the business. These expenses would not be deductible until the business is operational and, depending upon the nature of the business, may be expensed, or depreciated.

Inventory – Businesses that use inventory will need to obtain sufficient stock to get started. Although a considerable expense prior to the business opening its doors, inventory costs cannot be deducted until the inventory items are sold.

Equipment – You’ll need some sort of office equipment such as computers, printers, and/or equipment specifically related to your line of work. These expenses would not be deductible until the business is operational and depending upon the nature of the business may be expensed or depreciated.

Furniture – Desks, chairs, tables…you’ll need furniture to open your business. These must generally be depreciated over several years or may qualify for immediate write-off in the first year of business, depending on several factors.

Vehicles – You may incur the expense of acquiring a vehicle before your business becomes operational. That expense will not be deductible until the business is operational, and you may have the option of expensing, depreciating or even using the optional mileage deduction for the vehicle.

Amortizable Expenses – Some expenses that are incurred before a business becomes operational and start-up and organization expenses more than the $5,000 maximum expense amounts allowed can be amortized over a period of 180 months (15 years) starting from the month your business begins operations.

Summary - It takes an investment to get a business off the ground. A variety of start-up and organizational costs will welcome you before you’re ready to open your doors. From the cost of creating a business entity to the expense of hanging a sign on your storefront, these costs are generally classified as start-up and organizational costs if incurred before the start of business operations. As such, they are generally amortized over 180 months unless the business elects to capitalize all or a part of them or expense up to $5,000 of start-up and $5,000 of organizational expenses in the first year of operations.

If you are planning to open a business, it may be appropriate to call so the tax aspects and benefits of your start-up and organizational costs can be determined in advance.

Foreign Account Reporting for 2022 Due October 16

Article Summary:

  • Foreign-Account Reporting Requirement
  • Financial Crimes Enforcement Network
  • Penalties for Failure to File
  • Types of Accounts Affected
  • Form 8938 Filing Requirements

All United States entities (including citizens and resident aliens as well as corporations, partnerships, and trusts) with financial interests in or authority over one or more foreign financial accounts (e.g., bank accounts and securities) need to report these relationships to the U.S. Treasury if the aggregate value of those accounts exceeds $10,000 at any time during the year. Failure to file the required forms can result in severe penalties.

The U.S. government wants this information for a couple of pretty obvious reasons. One, foreign financial institutions may not have the same reporting requirements as U.S.-based financial institutions. For example, they probably won’t issue the 1099 forms to report interest, dividends and sales of stock. By requiring those in the U.S. to divulge their foreign account holdings, the IRS can more easily cross-check to see if foreign income is being reported on the individual’s tax return. The second (and probably more significant) reason is that the information in the report can be used to identify or trace funds used for illegal purposes or to identify unreported income maintained or generated overseas.

Due Date and Extension – For 2022, the due date for filing this report was April 18, 2023, but the government grants an automatic extension to October 16, 2023 for those who didn’t file by April 18. This filing, the Report of Foreign Bank and Financial Accounts (FBAR), is not made with the IRS; rather, it involves completing Bank Secrecy Act forms and filing them electronically through the U.S. Treasury’s Financial Crimes Enforcement Network.

Failure to Report Penalties – The government has been very aggressive about levying penalties against those who failed to file a FBAR when required, and even took the position that the penalties applied per each unreported foreign account and not the annual FBAR reporting on FinCEN Form 114. Lucky for taxpayers, after a disagreement in two different tax courts, the issue ended up at the U.S. Supreme Court where the justices ruled the penalties only applied to the FBAR reporting and not per individual account.    

A civil penalty of up to $10,000 may be imposed for a non-willful failure to report; the penalty for a willful violation is the greater of $100,000 or 50% of the account’s balance at the time of the violation. Both the $10,000 and $100,000 amounts are subject to inflation adjustment. For penalties assessed afterJanuary 19, 2023, the amounts are $15,611 and $156,107, respectively.A willful violation is also subject to criminal prosecution, which can result in a fine of up to $250,000 and jail time of up to five years.

CAUTION: On Schedule B of the Form 1040 tax return, you must state whether you have a financial interest in or signature authority over one or more foreign financial accounts. If you answer yes but don’t file the FBAR, your failure to file may be considered willful, which could subject you to the larger fine and jail time.

Financial Account – The term “financial account” includes securities; brokerage, savings, checking, deposit and time deposit accounts; commodity futures and options; mutual funds and even nonmonetary assets (e.g., gold). Such an account is classified as “foreign” if the financial institution that holds it is located in a foreign country. Shares of a foreign stock or of a mutual fund that invests in foreign stocks are not considered foreign if they are held in an account at a U.S. financial institution or brokerage, so they do not need to be reported under the FBAR rules.In addition, an account maintained at a branch of a foreign bank is not considered a foreign financial account if the branch is physically located in the U.S.

Unforeseen Foreign Accounts – You may have an FBAR requirement and not even realize it. For instance, say that you have relatives in a foreign country who have put your name on their bank account in case of an emergency; if the value of that account exceeds $10,000 at any time during the year, you will need to file the FBAR. The same would be true if your name was added to several of your foreign relatives’ smaller-value accounts that add up to more than $10,000 at any time during the year. As another example, if you gamble at an online casino that is located in a foreign country and your account exceeds the $10,000 limit at any time during the year, you will need to file the FBAR.

Additional Filing Requirements – You may also have to file IRS Form 8938, which is similar to the FBAR but applies to a wider range of foreign assets and has a higher dollar threshold. Unlike the FBAR that is filed separately, Form 8938 is filed with your income tax return. If you are married and filing jointly, you must file Form 8938 if the value of your foreign financial assets exceeds $100,000 at the end of the year or $150,000 at any time during the year. If you live abroad, these thresholds are $400,000 and $600,000, respectively. For other filing statuses, the thresholds are half of the amounts above. The penalty for failing to file Form 8938 is $10,000 per year; if the failure continues for more than 90 days after the IRS provides notice of your failure to file, the penalty can be as high $50,000.

As you can see, failure to comply with the foreign-account and/or foreign-asset reporting requirements can lead to very severe repercussions. Please call this office if you have questions or need assistance meeting your foreign account reporting obligations.

How Do You Qualify for Innocent Spouse Relief from IRS Tax Problems?

Few financial events are worse than a big tax bill with penalties from the IRS. If you are a spouse and you were unaware of potential errors or underreporting on your tax return, you may be eligible for innocent spouse relief. 

To qualify for innocent spouse relief, you must meet all three of the following conditions:

  1. You and your spouse filed jointly, and your tax bill was understated solely because of one or more errors that your spouse made. These errors, or willfully improper entries, only apply to income and deductions that belong to your spouse. They include improper deductions and credits, incorrectly reporting basis in property such as securities and business inventory, under-reporting income, or omitting items.

  2. You must establish that you didn't know your spouse did this and had no reason to know when you signed your tax return.

  3. Prove that considering the facts and circumstances surrounding your case, it wouldn't be fair to hold you responsible for the resulting underpayment. 

If your spouse is not transparent about finances with you, and you didn't find out about what they did until long after the tax return was filed, you're more likely to qualify for innocent spouse relief.

If the above scenario matches your personal circumstances, it might be time to get professional help. It is important that you put together a well-documented response when applying for innocent spouse relief. Contact this office to learn how we might be able to help resolve your tax issue.

Electric Vehicle Charging Taxes: A State-By-State Overview

The electric vehicle (EV) and hydrogen electric vehicle (HEV) revolution is well underway, with an increasing number of drivers switching to eco-friendly options every day. However, as EVs and HEVs become more common, states are implementing taxes and regulations on charging stations, potentially affecting drivers’ and businesses’ finances. 

In this brief guide, we'll explore how different states are handling EV and HEV charging taxes, providing valuable insights for both current and future clean vehicle owners. 

Delaware: Planning for an EV-Centric Future

Although Delaware has not passed recent legislation directly related to EV and HEV taxes, the state is taking proactive steps to prepare for an electric vehicle-dominated future. The state has passed a bill requiring newly constructed residential dwellings to include infrastructure for charging electric vehicles. This forward-thinking legislation positions Delaware for the projected surge in clean vehicle sales by the year 2040.

According to Representative Krista Griffith, co-sponsor of the bill, "Major vehicle manufacturers are pledging to go all-electric, and we need to take the step to ensure that we’ve got the appropriate electrical charging infrastructure in place." 

Furthermore, The First State offers The Clean Vehicle Rebate Program. This rebate is not a tax credit. is not a tax credit. It is a $2,500 cash rebate for electric vehicles purchased or leased after May 1, 2023. Residents must apply within 90 days of their purchase date.

Georgia: Excise Tax on EVs and Hydrogen Gas

Georgia is taking a unique approach to EV and HEV taxation with an excise tax on both electric vehicles and hydrogen gas used for charging. Effective on July 1, 2023, this tax amounts to 26 cents per 11 kilowatt-hours, equivalent to a gallon of conventional gasoline. Additionally, one recent report explains, Georgia requires private entities offering public chargers to meter the total kilowatt-hours dispensed per station. 

The Peach State’s taxation approach has garnered criticism as it primarily affects clean vehicle owners using public charging stations, potentially discouraging electric vehicle purchases. The Associated Press notes that alienating EV and HEV drivers is not in the state’s best interest. Georgia has been a major beneficiary of the nationwide electric vehicle investment boom, with over 40 electric vehicle-related projects getting underway since 2020. These projects are estimated to result in $22.7 billion of investment and 28,400 jobs.

According to Governor Brian Kemp, "We want to make Georgia the e-mobility capital of the nation."

Kentucky: Charging Stations Face New Taxation

Kentucky, a burgeoning hub for EV battery production, is introducing a new tax that might complicate the state’s charging infrastructure. Starting in January, all publicly available EV chargers, regardless of whether they offer free electricity, will be subject to a usage tax based on the amount of electricity dispensed, with a rate of $0.03 per kilowatt-hour. While the tax aims to capture revenue from out-of-state EV and HV drivers, critics argue that it may discourage the installation of public charging stations.

According to Lane Boldman, executive director of the Kentucky Conservation Committee, "The biggest concern is that it basically is not going to bring in the revenue that makes it worth the expense, so you're going to see people stop providing public chargers."

This is just the start for the electric vehicle industry in The Bluegrass State. WDRB notes that the Ford Motor Company and its Korean partner, SK On, are constructing two battery factories in Glendale, Kentucky. The $5.8 billion BlueOval SK Battery Park is expected to open in 2025. The factories will employ 5,000 people.

Additionally, the U.S. Department of Energy awarded two grants totaling nearly $500 million to Ascend Elements, a Kentucky manufacturing company. The grants will go toward production of battery materials and new batteries for electric vehicles. 

Texas: Higher Registration Fees For EV Owners

In Texas, owning an electric or hydrogen-powered vehicle has become more expensive thanks in large part to a new law signed by Governor Greg Abbott. This legislation imposes a registration fee of up to $400 for electric vehicle owners and an additional $200 for each renewal, with the aim of generating $38 million in new revenue. The measure took effect on September 1, 2023.

A Kiplinger report points out that proponents argue that it ensures EV drivers contribute to highway expenses. State Senator Robert Nichols (District 3), bill sponsor, said, “With the growing use of EVs, the revenue from the fuel tax is decreasing, which diminishes our ability to fund road improvements for all drivers.”

However, opponents are worried that the increased Texas EV and HEV registration fee will punish electric vehicle adopters, while still not effectively addressing the state’s problems with road funding. For instance, a Consumer Reports Advocacy article deemed the measure as a “punitive tax on people who choose to go electric.”

Utah: Cashing In on EV Adoption

Utah lawmakers have been cashing in on electric vehicle adoption by implementing multiple taxes and fees. All EVs, plug-in hybrid electric vehicle (PHEV), and hybrid electric vehicle (HEV) owners are required to pay an extra annual registration fee on top of the standard fee. According to the Alternative Fuels Data Center, 2023 fees are:


In addition, starting January 1, 2024, the retail sale of electricity for EV charging will be subject to a 12.5% tax. The tax may be based on kilowatt hours sold, the cost to charge per hour, or a flat subscription fee – final details are still being determined by state authorities.

Wyoming: Level 2 Chargers Caught In the Crossfire

In Wyoming, a recent draft bill initially raised concerns for Level 2 electric vehicle (EV) charging station operators. Now, however, state lawmakers have amended the proposal so that a new tax and annual licensing fee will no longer impact Level 2 chargers.

According to Cowboy State Daily, Level 2 chargers are more powerful than standard residential plugs but charge more slowly than Level 3 DC fast chargers, like the well-known Tesla Superchargers.

Following debate regarding the bill, the state’s Joint Transportation, Highways and Military Affairs Committee agreed that only Level 3 chargers should be subject to new fees. The revised bill proposes that Level 3 station operators will pay a 4-cent tax per kilowatt-hour sold, striking a balance between infrastructure growth and road support.

Level 2 operators like Patrick Lawson, CEO of Wild West EV, have spoken out to say they are relieved by this move – they believe the taxation and extra fees would have likely put most Level 2 stations out of business.

As electric vehicles become increasingly popular, state governments will continue to adapt their tax policies to account for a changing world. While taxation may help fund road infrastructure and bridge revenue gaps, it's essential to strike a balance that encourages EV and HEV adoption and ensures fairness for all drivers. Stay informed about your state's EV and HEV tax regulations to make the most of your eco-friendly driving experience.

Navigating the Challenge: How Rising Interest Rates Impact Start-up Fundraising

In the dynamic world of start-ups, securing funding is the lifeblood of growth and innovation. However, as interest rates begin to rise, entrepreneurs find themselves facing a new set of challenges. In this article, we'll explore the multifaceted impact of rising interest rates on start-up fundraising and delve into strategic approaches to navigate this shifting landscape.

The Cost of Borrowing

One of the most immediate and tangible effects of rising interest rates on start-ups is the increased cost of borrowing. As interest rates climb, the expense of loans for operational needs or expansion plans surges. This financial burden could potentially dissuade start-ups from resorting to borrowing, thereby impeding their fundraising endeavors.

Shifting Investor Behavior

Investor behavior is another critical aspect influenced by rising interest rates. The allure of traditional investments, such as bonds, intensifies as they promise higher returns in the face of escalating interest rates. This shift in preference could result in a decline in venture capital and angel investing, as investors gravitate towards the security and higher yields offered by these more stable investments.

Crowdfunding Considerations

For start-ups relying on crowdfunding platforms like Kickstarter or IndieGoGo, rising interest rates introduce an additional layer of complexity. Prospective backers may hesitate, mindful of potential increases in interest costs if they choose to borrow funds for project support. This caution could translate to fewer contributions, impacting the success of crowdfunding campaigns.

Valuation Dynamics

The valuation of a start-up is a pivotal factor in fundraising efforts. It's essential to recognize that rising interest rates can influence this valuation. In valuation models, the discount rate, closely tied to interest rates, sees an uptick. Consequently, this increment in the discount rate may lead to a reduction in the overall valuation of the start-up.

Macro-economic Ripple Effects

Beyond the microcosm of individual start-ups, rising interest rates can signal a broader shift in economic policy. Tightening monetary policy, often associated with increasing interest rates, can exert a decelerating effect on economic growth. This slowdown may translate into reduced consumer spending, potentially impacting the revenues and profitability of start-ups. 

Consequently, start-ups may appear less appealing to potential investors in this economic climate.

In navigating this intricate landscape, it is imperative for start-ups to recognize that the impact of rising interest rates is nuanced and contingent on a myriad of variables. Consulting with our team can provide invaluable insights into how these changes may specifically affect your start-up.

In conclusion, while rising interest rates undoubtedly present challenges, they also signify opportunities for astute entrepreneurs. By adopting a strategic approach, start-ups can not only weather the storm but emerge stronger, leaner, and more resilient in their pursuit of funding. Remember, adaptability and a shrewd financial strategy are the cornerstones of success in any economic environment.

Simplify Your Business With Recurring Transactions In QuickBooks Online

QuickBooks Online offers a world-class set of bookkeeping and accounting features designed to simplify financial management tasks for all business owners. Among these features is the ability to set up recurring transactions. This powerful, time-saving tool is a great way to automate certain expenses and payments.

Whether you're using QuickBooks Online or QuickBooks Desktop, recurring transactions can help you streamline your day-to-day financial processes. In this guide, we'll explore how to make the most of recurring transactions in the QuickBooks Online system.

QuickBooks Online: Mastering Recurring Transactions

Recurring transactions in QuickBooks Online are invaluable for businesses that have regular monthly expenses – note that bills are not eligible for the recurring transactions feature, however. By setting up recurring templates for certain costs, business owners can automate the process, ensuring they never miss a payment. Additionally, QuickBooks Online's recurring transactions are ideal for businesses with subscription-based revenue models. This makes it simple for proprietors to effortlessly create recurring invoices, saving time and preventing late payments from subscribers.

Creating Recurring Templates

Access Your Settings:
Log in to your QuickBooks Online account and navigate to the Settings ⚙ menu.

Select Recurring Transactions: In the Settings menu, locate and select "Recurring Transactions."

Create a New Template: To create a new recurring template, click on "New."

Choose Transaction Type: Select the type of transaction you want to make recurring. QuickBooks Online allows you to create templates for various transaction types, except for bill payments and time activities. Once selected, click "OK."

Name Your Template: Give your template a descriptive name to easily identify it.

Specify the Type: Choose the template type: Scheduled, Unscheduled, or Reminder. Your choice depends on the nature of the transaction and when you want it to recur.

Complete the Template: Fill in all the necessary fields for the transaction. This includes details like the payee or customer, items or services involved, and any other relevant information.

Save the Template: Once you've completed the template, save it. Your recurring transaction is now set up and ready to automate your financial processes.

Duplicating Existing Templates

QuickBooks Online also allows users to expedite the template creation process by duplicating existing templates. Here's how:

Access Settings: Again, navigate to the Settings ⚙ menu.

Select Recurring Transactions: Click on "Recurring Transactions."

Choose a Template: From your list of recurring templates, select the one you want to duplicate.

Duplicate the Template: In the Action column dropdown menu, choose "Duplicate." The duplicate copy will inherit all settings from the original template, except for the title.

Edit as Needed: Customize the duplicated template by editing fields, making adjustments, or adding new details.

Save the Duplicate: Save your duplicated template, and it's ready to use.

Harnessing the power of recurring transactions in QuickBooks Online can significantly simplify your financial management tasks. By automating routine transactions and reducing manual data entry, you'll save valuable time and reduce the risk of errors in your financial records. Whether you're managing your personal finances or handling accounting for your business, QuickBooks' recurring transactions feature is a valuable tool that can streamline your financial processes and contribute to your overall efficiency.

October 2023 Individual Due Dates

October 2 - Fiduciaries of Estates and Trusts

File a 2022 calendar year return (Form 1041). This due date applies only if you were given an extension of 5½ months. If applicable, provide each beneficiary with a copy of their Schedule K-1 (Form 1041) or a substitute Schedule K-1.s

October 10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during September, you are required to report them to your employer on IRS Form 4070 no later than October 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 8 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

October 16 - Taxpayers with Foreign Financial Interests

If you received an automatic 6-month extension of time to report your 2022 foreign financial accounts to the Department of the Treasury, this is the due date for Form FinCEN 114. 

October 16 - Individuals

If you requested an automatic 6-month extension to file your income tax return for 2022, file Form 1040 and pay any tax, interest, and penalties due.

October 16 -  SEP IRA & Keogh Contributions

Last day to contribute to a SEP or Keogh retirement plan for calendar year 2022 if tax return is on extension through October 16.

Weekends & Holidays:

If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. 

Disaster Area Extensions:

Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites:

FEMA: https://www.fema.gov/disaster/declarations
IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

For example, disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments.

October 2023 Business Due Dates

October 16 - Corporations

File a 2022 calendar year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension by April 18.

October 16 - Last Day to Establish a Keogh Account for 2022

If you received an automatic 6-month extension of time to file your 2022 tax return and are self-employed, October 16, 2023, is the last day to establish a Keogh Retirement Account if you plan to make a contribution for 2022.

October 16 - Taxpayers with Foreign Financial Interests 

If you received an automatic 6-month extension of time to report your 2022 foreign financial accounts to the Department of the Treasury, this is the due date for Form FinCEN 114. 

October 16 - Social Security, Medicare and withheld income tax

If the monthly deposit rule applies, deposit the tax for payments in September.

October 16 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in September.

October 31 -  Social Security, Medicare and Withheld Income Tax 

File Form 941 for the third quarter of 2023. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until November 13 to file the return.

October 31 -  Certain Small Employers

Deposit any undeposited tax if your tax liability is $2,500 or more for 2023 but less than $2,500 for the third quarter.

October 31 -  Federal Unemployment Tax

Deposit the tax owed through September if more than $500.

Weekends & Holidays:

If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday.

Disaster Area Extensions:

Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites:

FEMA: https://www.fema.gov/disaster/declarations
IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

For example, disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments.


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