December 2022 E-Newsletter

DECEMBER 2022 E-NEWSLETTER

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December Featured News

The 2022 Inflation Reduction Act

Learn about the key tax provisions of the 2022 Inflation Reduction Act (Act) signed into law by the President on August 16, 2022, most of which become effective in the new year.

Digitizing Tax Records

You don’t need to keep your tax documents and receipts in boxes or files. Free up space in your home or office by scanning them.

Year-End Tax Moves

There's still time for last-minute tax savings if you act before January 1.

Developing an Employee Handbook

Having an employee handbook makes it easy for you to communicate rules and responsibilities to employees, so there's no question about what's expected of them - or you, as a small business owner.

Learning About The Inflation Reduction Act

The Inflation Reduction Act was officially signed into law on August 16, 2022, carrying several provisions intended to combat inflation. What will this massive influx of money do for the agency, and how could it impact you?

DECEMBER 2022 Q & A

Q: How does inflation impact your tax bill?

A: Some tax provisions are indexed for inflation. Tax brackets, standard deduction amounts, and income caps on IRA contributions are adjusted yearly based on the prior year's inflation calculations.

But two bigger tax areas that aren't adjusted are the taxation of Social Security benefits and the home-sale exclusion. Income thresholds at which Social Security benefits are taxed have stayed static for decades despite benefits having gone up. As a result, more cumulative Social Security benefits will be taxed this year.

The home-sale exclusion has remained unchanged since 1997. Selling your home can provide a sizable tax break, but it's never been adjusted for the appreciation in residential real estate.

SHORT BITS

When to Switch Accounting Systems

If your business has grown during the post-pandemic recovery, you may have noticed that your old bookkeeping system needs an upgrade.

It might seem logical to change software at the end of the year so you can have a fresh start for 2023. However, at the end of the year, your accounting staff will be working in overdrive to prepare the financial records, financial statements, and tax returns. Also, the accountants and consultants you may need to help with a transition and implementation will be busy at year-end. So, they may have limited availability, and their fees may be higher than at other times of the year.

Consider the end of a quarter (e.g., March 31, June 30, or September 30) to make the change. Your tax advisor can provide guidance so you can make the right decisions.

2021 Holiday Spending

Americans spent $886 billion on gifts in 2021, which was considerably more than they spent in 2020. Here's how much more:

Clothing purchases: 33.1%

Sporting goods: 20.9%

General merchandise: 15.2%

Furniture & home furnishings: 15%

Electronics: 13.8%

Online purchases: 11.3%

Office Information

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Address: 415 Crossways Park Dr. Ste. C., Woodbury, NY 11797

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