Author: Jason Gooding

I missed the tax file deadline. Now what?I missed the tax file deadline. Now what?

Missing the tax deadline is not good and could cost a lot in fees and interest. The table below comes from the IRS and demonstrates how the fee works out over time. One year of not filing leads to 35% increase in tax liability. One decade will double the taxes due. One advantage is that you must owe taxes for this fee to add up. The IRS will also not refund any amount due if no return is filed. Gooding CPA is here to help and can get all your returns filed quickly. Contact us today to discuss.

Used Electric Vehicles can now claim Tax Credit!Used Electric Vehicles can now claim Tax Credit!

Beginning January 1, 2023, if you buy a qualified used electric vehicle or fuel cell vehicle from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit . The credit equals 30% of the sale price up to a maximum credit of $4,000.

The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.

At the time of sale, a seller must give you information about your vehicle’s qualifications. Sellers must also register online and report the same information to the IRS. If they don’t, your vehicle won’t be eligible for the credit.

Why is a CPA so expensive?Why is a CPA so expensive?

Compared to free then a CPA is expensive but is doing your taxes actually free? A lot of our clients have little time to even input all their information let alone study new tax laws. Not studying or having tax knowledge can cost much more than our fees. Gooding CPA really helps clients in setting up tax planning for families and small businesses. True tax savings does not come at year end but at the start of the year. Tax strategies put into place at the start of the year help clients save a lot using generous tax credits and deductions through out the year. Please contact Gooding CPA today to see what tax strategies we can help you start today.

Do I need a CPA?Do I need a CPA?

Our clients have many different reasons they decide to use our services. All have one thing in common and that is they needed help with their taxes. The vast majority of our clients are small business owners and their personal return. This includes realtors, electricians, plumbers, welders, dashers, farmers, landlords, retail store owners and restaurants. The firm helps the clients not only do their tax but also understand their financials at year end. Business owners are always advised to have a CPA to help them not only with taxes but also their financials. Gooding CPA would be thrilled to help you with your taxes and financials. We also have a few clients that don’t have a business but just want a CPA to do their taxes and advise them on tax issues at year end. We would be thrilled to help you to if you just don’t want the stress of doing your own taxes. Click here to start the process of having our firm do your taxes.

Do you need Quickbooks or Google Sheets?Do you need Quickbooks or Google Sheets?

As an accountant for a billion dollar business many times I pulled data from our Global Financial System in to Excel for data analysis. We used a Global Financial System that allowed hundreds of people to enter data at the same time. Excel is very powerful for data analysis but runs into problems the more people use it at the same time. I recommend most business to start with excel or google sheets the first year until they start having expenses or revenue almost daily. When I started my business I only had about 50 clients and a dozen expenses. I was able to use excel to do my books. As my business grew I moved onto Zoho for easier data entry and premade reports. Gooding CPA can help evaluate if you need monthly, quarterly or yearly financials as we review your taxes at year end.

New tax updates from the IRSNew tax updates from the IRS

Highlights of changes in Revenue Procedure 2022-38

The tax year 2023 adjustments described below generally apply to tax returns filed in 2024.

The tax items for tax year 2023 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900, and for heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400 from the amount for tax year 2022.
   
• Marginal Rates: For tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).
  
  The other rates are:
   
  • 35% for incomes over $231,250 ($462,500 for married couples filing jointly);
  • 32% for incomes over $182,100 ($364,200 for married couples filing jointly);
  • 24% for incomes over $95,375 ($190,750 for married couples filing jointly);
  • 22% for incomes over $44,725 ($89,450 for married couples filing jointly);
  • 12% for incomes over $11,000 ($22,000 for married couples filing jointly).
     
  The lowest rate is 10% for incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly).
   
• The Alternative Minimum Tax exemption amount for tax year 2023 is $81,300 and begins to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption begins to phase out at $1,156,300). The 2022 exemption amount was $75,900 and began to phase out at $539,900 ($118,100 for married couples filing jointly for whom the exemption began to phase out at $1,079,800).
   
• The tax year 2023 maximum Earned Income Tax Credit amount is $7,430 for qualifying taxpayers who have three or more qualifying children, up from $6,935 for tax year 2022. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
   
• For tax year 2023, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $300, up $20 from the limit for 2022.
   
• For the taxable years beginning in 2023, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,050. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $610, an increase of $40 from taxable years beginning in 2022.
   
• For tax year 2023, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,650, up $200 from tax year 2022; but not more than $3,950, an increase of $250 from tax year 2022. For self-only coverage, the maximum out-of-pocket expense amount is $5,300, up $350 from 2022. For tax year 2023, for family coverage, the annual deductible is not less than $5,300, up from $4,950 for 2022; however, the deductible cannot be more than $7,900, up $500 from the limit for tax year 2022. For family coverage, the out-of-pocket expense limit is $9,650 for tax year 2023, an increase of $600 from tax year 2022.
   
• For tax year 2023, the foreign earned income exclusion is $120,000 up from $112,000 for tax year 2022.
   
• Estates of decedents who die during 2023 have a basic exclusion amount of $12,920,000, up from a total of $12,060,000 for estates of decedents who died in 2022.
   
• The annual exclusion for gifts increases to $17,000 for calendar year 2023, up from $16,000 for calendar year 2022.
   
• The maximum credit allowed for adoptions for tax year 2023 is the amount of qualified adoption expenses up to $15,950, up from $14,890 for 2022

Source: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023