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The thrill of summer travel is always invigorating, but the prices to get there can be a real bummer. But not to fear. We’re here with some smart tips that will help you navigate in this price jungle and have a wonderful, memory-filled getaway. 

Plan Way Ahead 

Even though you can sometimes find great deals at the last minute, if you can wrap your head around thinking in advance about your vacay (especially if you’re buying long-haul flights), it’ll pay off. For instance, if you’re traveling to Europe or Asia, you’ll find that buying your tickets early not only provides significant savings, but also gives you a jump start on exploring other aspects of your trip, like hotels and excursions. Some helpful sites for comparing prices are Expedia, Kayak and Priceline. Check these when planning so you can snag the best deals. 

Be Flexible 

Do you have to travel in July? What about August? Are the fall and December holidays out of the question? If you aren’t stuck on a certain time of year, you’ll realize some significant savings. Also, must you leave town on a Friday? What about a Tuesday or Thursday? Choosing to fly on weekdays can dramatically change the price of your ticket. Plus, flights can be less crowded. 

Create a budget – and Stick To It 

While this is a challenge, it’s not impossible. That’s why it’s important to think about where you want to go. For example, San Francisco and New York City might be a little on the pricey side. Another thing to consider is how long you want to be away. If you’re thinking about a two-week long vacation, you might want to be a little stricter with how much you spend each day. That said, don’t be too strict! The whole idea of a holiday escape is to kick back and dive into the culture of a new place. 

Choose a Budget-Friendly Destination 

As mentioned above, choosing a vacation destination that won’t break the bank is a strategic way to cut costs. Southeast Asia and South America are great places to start. If you’ve decided you must go to Europe, you might want to stay away from the Scandinavian countries. Although they’re crazy beautiful, they have some of the highest cost of living index scores. One way to get ahead of what you might spend is to check out cost of living sites, where you’ll find current stats, estimates, and calculations of how much you might spend each day. 

Don’t Overpack 

While it’s probably irresistible to overpack (I want to have choices!), if you can travel light, you’ll save on bag fees big time. Even better, if you can limit what you’re taking to just a carry-on, you’ll really avoid those pesky charges, plus it’ll give you the ability to breeze on and off the plane in no time. In terms of what you bring, this also requires some forethought. While packing multiple bathing suits and shorts (if you’re going somewhere tropical) is fun, these fashionable items might be taking the place of necessary gear like a raincoat, a warm hoodie or even a sweater. So take a breath, think through your days and get packing – judiciously, that is. 

Find Free Activities 

Before you head out on your adventure, let your fingers do the walking over to your favorite search engine and get going. Search “free stuff to do” (or the like) at your intended destination. You’ll find things like free museums, parks, gardens, and festivals. Then let your feet do the walking! Getting outside, weather permitting, and strolling is one of the best ways to soak in a city. 

When you can stay on budget and have a fabulous time with family and friends, you’ll not only come back with amazing memories, you’ll also return without a lot of debt. And that’s a fantastic feeling that will stick with you for a good while. 

Tax law includes several tax- and financially favored benefits that employers can offer or provide to their employees. This article is intended to make you aware of these perks, with the caveat that all employers, especially small businesses, may not provide all, or perhaps any, of these covered perks. But whichever of these benefits your employer offers, you should seriously consider taking advantage of them, if you haven’t already. 

Health Insurance – For a company that has 50 or more employees, the Affordable Care Act requires the business to offer at least 95% of its full-time employees and their dependents (but not spouse) with affordable minimum essential health care coverage or be subject to a penalty. If you work for one of these larger employers and the company picks up the entire health insurance premium cost, consider yourself lucky, as the costs of health insurance coverage have risen dramatically over the last few years. More likely, you may have to pay part of the premium costs, and the plan may have a high deductible and/or co-pays. Even so, the tax-free benefit of what the employer covers is valuable. While not required to, businesses with fewer than 50 employees may offer health care coverage, often for competitive purposes in retaining employees. The health insurance premiums paid on your behalf by your employer are tax-free to you. If you aren’t aware of the value of this nontaxable employee benefit, you can look at your Form W-2, box 12a, code DD, which shows your share of the cost of employer-sponsored health coverage. You can claim the part of the coverage that you pay for with post-tax dollars as a medical expense, if you itemize your deductions. 

Retirement Plans – Although some larger employers may provide a company-funded retirement plan that will pay you a monthly benefit when you retire, most generally offer 401(k) plans with which an employee can save for retirement by making pre-tax contributions up to $22,500 for 2023, and if the employee is age 50 or over, they can qualify to make a catch-up contribution of up to $7,500, bringing the total to $30,000. Some employers also match their employees’ contributions up to a certain amount, which means an employee should endeavor to contribute at least the amount that the employer will match. 

Special Rule for Military Spouses – Starting in 2023, small employers (no more than 100 employees earning more than $5,000 per year) that have defined contribution plans may be eligible for new a tax creditthat can be up to $500 per eligible employee. The credit applies for their employees who are military spouses where the plan enables the military spouse to become eligible to participate in the plan within 2 months of being hired and meet other conditions. If you are a military spouse who hasn’t been able to contribute to an employer’s plan or receive matching contributions from the employer, you may be able to be covered by the employer’s plan much sooner than in the past. 

Qualified Transportation Fringe Benefits – Certain transportation-related fringe benefits that an employer may provide to employees are tax free to the employee. Prior to the passage of the tax reform in late 2017, employers were able to provide employees with tax-free reimbursement for parking, transit passes, commuter transportation, and bicycle commuting, subject to certain limits, and the employer could deduct the cost. The tax reform had a significant impact on these benefits. It eliminated the $20-per-month bicycle benefit and no longer allows the employer to deduct reimbursements made to employees for other transportation benefits, making some employers less likely to offer any transportation fringe benefits. However, they remain tax-free to the employee; for 2023, the limit on tax-free employer reimbursements is $300 per month each for qualified parking, transit passes, and commuter transportation. 

Flexible Spending Account (FSA) – This is a special account established by an employer that allows employees to contributeto the account throughsalary-reduction contributions. The benefit is that the contributions are pre-tax, meaning the employee doesn’t pay taxes on the money contributed to the account. This allows employees to payfor certain out-of-pocket health care costs with pre-tax dollars. The health careexpenses can be used forhealth plan deductibles, co-payments, and even some over-the-counter-medications. The annual limit on contributions is inflation adjusted and is $3,050 for 2023.However, if you don’t use the money in your FSA, you’ll lose it. 

Group Term Life Insurance – The cost for the first $50,000 of group term life insurance (GTLI) coverage provided by an employer is excluded from the employee’s taxable income. However, the employer-paid cost of group term coverage in excess of $50,000 is taxable income to the employee, even if he or she never receives it (i.e., it is “phantom income”). So, while the tax-free coverage of the first $50,000 is a good perk, an employee shouldn’t automatically sign up for more than $50,000 of GTLI coverage without considering whether they truly need the coverage and what the extra cost will be. In some cases, an employee who wants more than $50,000 in coverage may be able to privately acquire a policy that will cost less than the tax on the imputed income for the extra coverage through the employer’s plan. 

Qualified Employee Discounts – A certain amount of an employee discount on purchases from an employer or on services provided by an employer is excludable from the employee’s income. The exclusion is limited to the employer’s gross profit percentage for property, or 20% of the price at which the employer sells services to non-employee customers, for services. 

Employer-Provided Education Assistance – An employee doesn’t have to include, in his or her income, amounts paid by the employer for educational assistance under a qualified education-assistance program. The maximum amount of educational assistance that an employee can exclude is $5,250 for any calendar year. Excludable assistance under a qualified plan includes, among others, tuition, fees, books, supplies, and equipment. The education is any training that improves an individual’s capabilities, whether it is job-related or part of a degree program. Employer payments of an employee’s student loan debt made through 2025 are also included as excludable education assistance. However, when these payments include interest owed by the employee on the student loan, the employee then cannot also take a tax deduction for the interest that the employer paid. 

Adoption Expenses – An employee may exclude amounts paid or expenses incurred by the employer for qualified adoption expenses connected to the employee’s adoption of a child, if the amounts are furnished under an adoption-assistance program in existence before the expenses are incurred. If the adopted child is a special needs child, the exclusion applies regardless of whether the employee actually has adoption expenses. The maximum exclusion amount is inflation adjusted annually and is $15,950 for 2023 per child, for both non-special needs and special needs adoptions. The exclusion is phased out when the employee’s modified adjusted gross income is between $239,230 and $279,230 for 2023. Taxpayers can claim a tax credit for qualified adoption expenses, subject to the same phaseout range as for the exclusion, but any excludable employer-paid expenses can’t be used for the credit. 

Child and Dependent Care Benefits – Qualified payments made or reimbursed by an employer on behalf of an employee for child and dependent care assistance are excluded from the employee’s gross income. The amount of the exclusion is limited to the lesser of $5,000 ($2,500 for married individuals filing separately), the employee’s earned income, or the income of the employee’s spouse. A child and dependent care tax credit is available to taxpayers, but no credit is allowed to an employee for any amount excluded from income under his or her employer’s dependent care assistance program. 

Health Savings Accounts – Employees who have a high-deductible health plan through their employer can open a health savings account (HSA) and make annually inflation-adjusted pre-tax contributions, which, for 2023, can be up to $7,750 for families and $3,850 for a single individual. When distributions are made for medical expenses, the money comes out tax-free. However, distributions not used to pay qualified medical expenses are taxable, and if the plan’s owner is under the age of 65, nonqualified distributions are subject to a 20% penalty. Some individuals let the account grow and treat it as a supplemental retirement plan, waiting until after age 65 to begin taking taxable but penalty-free distributions. 

If you have questions on how job-related benefits might apply to you or if you are an employer interested in providing any of these benefits to your employees, please give this office a call. 

You think planning a wedding ceremony is complicated? Wait till you see the possible tax issues involved. If you are getting married this year, there is a long list of things you need to be aware of and plan for before tying the knot that can have a significant impact on your taxes. And there are a number of tax-related actions you should take as soon as possible after marriage.   

Considerations Before Marriage 

1. Filing Status – For tax purposes, an individual’s filing status is determined on the last day of the tax year. Thus, regardless of when you get married during the year, you and your new spouse will be treated as married for the entire year and, therefore, can no longer file as single individuals or use the head of household status as you may have done prior to this marriage. Your options are to file using the married joint status, combining your incomes and allowed deductions on one return, or to file two separate returns using the married filing separate status. The latter is not the same as the single status you may have used in the past and can include some negative tax implications. Filing separately in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin) can additionally be complicated. Also, the terms of a prenuptial agreement, if you have one, can affect your filing status choice. 
2. Deductions – The standard deduction for each year is inflation adjusted and for 2023 for a married couple is $27,700 and for a single individual is $13,850. So if both of you have been filing as single and taking the standard deduction, there is no loss in deductions. However, if in past years one of you had enough deductions to itemize and the other took the standard deduction, after marriage you would either have to take the joint standard deduction or itemize, which might result in a loss of some amount of deductions. There could also be an overall reduction of the standard deduction if one or both of you previously filed as head of household. 
3. New Spouse’s Past Liabilities – If your new spouse owes back taxes, past state income tax liabilities or past-due child support or has unemployment income debts to a state, the IRS will apply your future joint refunds to pay those debts. If you are not responsible for your spouse’s debt, you are entitled to request your portion of the refund back from the IRS by filing an injured spouse allocation form. 
4. Combining Incomes – Combining your incomes can push your taxable income into a higher tax bracket than when filing separately, resulting in a significantly higher income tax. The combined higher incomes can also cause you to lose certain tax benefits available to individuals in lower tax brackets, such as:

    - The child tax credit which begins to phaseout when your combined incomes (MAGI) reach $400,000,
    - The child care credit if either or both of you have a child and you both work (because a lower percentage of expenses applies as income increases) and
    - The possible loss or reduction of the earned income tax credit which applies to lower income individuals.

5. Healthcare Insurance – If either or both of you are obtaining health insurance through a government Marketplace, your combined incomes and change in family size could reduce the amount of the premium tax credit to which you would otherwise be entitled, requiring payback of some or all of the credit applied in advance to reduce your monthly premiums. More complicated yet, if either or both of you are included on your parent’s’ Marketplace policy, those insurance premiums must be allocated from the parents’ return to your return. 
6. Spousal IRA – Spousal IRAs are available for married taxpayers who file jointly where one spouse has little or no compensation; the deduction is limited to the smaller of 100% of the employed spouse’s compensation or $6,500 (2023) for the spousal IRA. That permits a combined annual IRA contribution limit of up to $13,000 for 2023. For each spouse age 50 or older, the maximum increases by $1,000. However, the deduction for contributions to both spouses’ IRAs may be limited if either spouse is covered by an employer’s retirement plan. 
7. Capital Loss Limitations – When filing as unmarried, each individual can deduct up to $3,000 of capital losses on their tax return for a possible combined total of $6,000, but a married couple is limited to a single $3,000. 
8. Impact On Parents’ Returns – If your parents have been claiming either of you as a dependent, they will generally lose that benefit. In addition, if you are in college and qualify for one of the education credits, those credits are only available on the return where your dependency applies. That generally means your parents will not be able to claim the education credits even if they paid the tuition.       

Things To Take Care of After Marriage:  

1. Notify the Social Security Administration − Report any name change to the Social Security Administration so that your name and SSN will match when you file your next tax return. Informing the SSA of a name change is quite simple. The Social Security Administration provides an online site to accomplish this task. Your income tax refund may be delayed if it is discovered that your name and SSN don’t match at the time your return is filed. 
2. Notify the IRS – If you have a new address, you should notify the IRS by sending Form 8822, Change of Address. 
3. Notify the U.S. Postal Service - You should also notify the U.S. Postal Service when you move so that any IRS or state tax agency correspondence can be forwarded. 
4. Review Your Withholding and Estimated Tax Payments – If both you and your new spouse work, your combined income may place you in a higher tax bracket, and you may have an unpleasant surprise when preparing your return for the first year of your marriage. On the other hand, if only one of you works, filing jointly with your new spouse can provide a significant tax benefit, enabling you to reduce your withholding or estimated payments. In either case, it may be appropriate to review your withholding (W-4 status) and estimated tax payments, if any, to make sure that you are not going to be under-withheld and that you don’t set yourself up to receive bad news for the next filing season. The IRS provides a W-4 Webpage that provides links to the form and a tax withholding calculator.  
5. Notify the Marketplace – If you or your spouse has purchased health insurance through a government Marketplace, you must notify the Marketplace of your change in marital status. If you were included on a parent’s health insurance policy through a Marketplace, then the parent must notify the Marketplace. Failure to notify the Marketplace can create tax-filing problems. 

If you have any questions about the impact of your new marital status on your taxes, please call this office. 

Now that most tax refunds are deposited directly into taxpayers’ bank accounts, the dream of opening your mailbox and finding an IRS refund check is all but a thing of the past. However, since the IRS now does most of its auditing through correspondence, an IRS letter can likely increase your heart rate and, in some cases, even ruin your day. 

CP-Series Notice – When the IRS thinks it detects a potential issue with your tax return, it will contact you via U.S. mail; this is done with a CP-series notice. Please note that the IRS’s first contact about a tax delinquency or discrepancy will never be a phone call or email. Such calls and emails are a common tool of scammers; if you get one, simply hang up the phone or delete the email. If you are concerned about the validity of a given message, please call this office. 

Most commonly, CP notices describe the proposed tax due, as well as any interest or penalties. The notice will also explain the examination process and describe how you can respond. 

These automated notices are sent out year-round, and they are quite common. As the IRS tries to close the tax revenue gap, it has become more aggressive in its collection efforts. In addition, as many taxpayers now use low-quality tax mills or do-it-yourself software, the number of notices sent because of preparer error have increased. Missed checkboxes, misunderstandings of available credits, and overlooked income all add up to more errors. 

The first step the IRS uses in this automated process involves matching what you reported on your tax return to the data that third parties (e.g., employers, banks, and brokers) reported. When this information does not agree, the automated collection effort begins. 

Don’t Panic – These notices often include errors. However, you do need to respond before the deadline specified on the notice (usually 30 days) or else face significant repercussions. The notice may even be related to suspected ID theft. For instance, someone may have gained access to your tax ID (or that of your spouse or one of your dependents) and tried to file a return using the stolen ID. The first step is to determine which type of notice you have received. 

The IRS currently has over 150 varieties of CP notices. The following is a very small sampling of these notices. The IRS provides an online search tool that provides information on all of the CP Notices. 

CP01C – The CP01C notice advises taxpayers that the IRS marked their account with an identity theft indicator and provides additional information and resources for identity protection. 

CP05A – If you received this notice, the IRS is examining your tax return and needs you to send verifying documents. 

CP05B – If you received this notice, the IRS is holding your refund because the income reported on your tax return may not match the income reported to the IRS by payers. 

CP12 – This notice tells you the IRS corrected one or more mistakes on your tax return, and a payment becomes an overpayment, or an original overpayment amount has changed. 

CP14 – If you received this notice, you owe money on unpaid taxes. Pay the amount you owe, establish a payment plan, or call if you disagree with the amount. 

CP27 – You received this notice because the IRS records indicate you may be eligible for the Earned Income Credit (EIC), but didn’t claim it on your tax return. 

CP49 – If you received this notice, the IRS used all or part of your refund to pay a tax debt. 

CP54E – Informs you that your tax return shows a different name and/or ID number from the information the IRS has for your account. Please provide the requested information. 

CP59 – If you received this Notice, the IRS has no record of you filing your prior personal tax return(s). The Spanish version of this notice is CP759. 

CP81 – Tells you the IRS hasn’t received your tax return for a specific tax year. The statute of limitations to claim a refund of your credits or payments (such as income tax that was withheld) for that tax year is about to expire. 

CP112 – This notice tells you the IRS made changes to your return because they believe there’s a miscalculation. As a result, you are due a refund. 

CP161 – If you received this notice, you have an unpaid balance due. 

CP180 – If you received a CP180/CP181 notice your tax return is missing a schedule or form. 

CP237 – Tells you the IRS sent you a replacement refund check. 

CP237A – Tells you to call the IRS to request your refund check. 

CP240 – If you received this notice, there’s a discrepancy between information you reported on your employment tax return and figures submitted to the IRS from your W-2, W-2G and 1099-R forms. As a result of this discrepancy, you owe an additional amount. 

CP501 – If you received this notice, you have a balance due on one of your tax accounts. 

CP516 – This notice informs you that the IRS still has no record that you filed your prior tax return or returns. 

CP521 – If you received a CP521, CP521 (SP) or CP621 Notice, the IRS is reminding you that you have an installment payment due. Send your payment immediately. 

CP523 – If you received a CP523, CP523 (SP) or CP623 Notice, the IRS is informing you of the intent to terminate your installment agreement and seize (levy) your assets. You have defaulted on your agreement. 

CP518 – The CP518 Business Notice is a final reminder that the IRS has no record that you filed your prior business tax returns. The Spanish version of this notice is CP618. 

CP2000 – A CP2000 notice is very different from the other CP notices (which deal with issues such as identify theft, audits, and the earned income credit). The CP2000 notice includes a proposed—almost always unfavorable—change to your tax return, and it gives you the opportunity to dispute the proposed change. Procrastinating or ignoring this notice will only cause the IRS to ratchet up its collection efforts, which in turn will make it more difficult for you to dispute the proposed adjustment. 

Sometimes, the IRS will be correct. You may have overlooked a capital gain or income from a second job. It is also possible that the IRS has caught someone else using your SSN in order to work or otherwise stealing your identity. Quite frequently, however, the IRS is incorrect, simply because its software isn’t sophisticated enough to pick up all the information that you report on the schedules attached to your return. 

These notices of proposed change will also include penalties and interest. Even if you do owe the tax, this office may be able to get the penalties and interest abated for due cause. 

When you receive an IRS notice, your first step should be to immediately contact this office and to provide us with a copy of the notice. If you are a current client, we will review the notice to determine whether it is correct, and then we will consult with you to determine how best to respond. For others, we may need a copy of the tax return on which the notice is based before being able to help. 

If you’ve been thinking about ways to save on medical expenses, now may be the perfect time to open a Health Savings Account (HSA). Thanks to persistent inflation, the IRS recently announced historic bumps to contribution limits for HSAs, making planning for health savings more beneficial than ever!

What is an HSA?

Established in 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act, Health Savings Accounts (HSAs) are a type of medical savings account with tax advantages. Individuals contribute pre-tax income to savings accounts that may be used to pay for qualified medical expenses. Funds in an HSA roll over from year to year, meaning it is possible to establish significant reserves for future medical costs while saving money by lowering your taxable income.

HSA funds can be used for a variety of qualified medical expenses, including office visits, dental care, eyeglasses, over-the-counter medications, and more. Funds may even be used for costs related to healthcare, like transportation expenses.

Who Qualifies for an HSA?

HSAs are available to those enrolled in High-Deductible Health Plans (HDHP). HDHPs are defined as a plan where the deductible is higher than the average, as determined by the IRS. For 2024 an HDHP includes any plan “with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,050 for self-only coverage or $16,100 for family coverage.”

In addition to being enrolled in an HDHP, you may not be enrolled in Medicare and must not be claimed as dependent on someone else’s tax return.

Contribution Limit Increases

For 2024 the IRS has raised the contribution limit for an individual to $4,150, an increase of $300 from the previous year, and $8,300 for family coverage, an increase of $550 from 2023.  These amounts represent the largest yearly adjustments since the accounts’ inception and reflect rising healthcare-related expenses due to ongoing inflation.

Conclusion

HSAs can provide advantages in both the short term, by lowering your taxable income, and in the long term, by helping establish a cushion for future medical expenses. Increased contribution limits make HSAs more beneficial than ever. If you have any questions about HSAs or tax-advantaged medical savings accounts, please contact your advisors at Ross Buehler Falk & Company. We are happy to help!

In 2023, Ruthanne Smith-Marston joined the Ross Buehler Falk & Company (RBF) team as firm’s office manager. In this role, she does a little bit of everything to ensure that the office runs smoothly. An administrative professional since 2016, Ruthanne’s sharp attention to detail and technological troubleshooting skills make them a welcome addition to the RBF’s administrative team.  

Ruthanne is no stranger to organizing and managing groups of people. She honed many of the skills that make her an effective office manager while serving as a stage manager for local and professional theatre groups. She earned a Bachelor’s in Musical Theatre from San Diego Christian College in 2014. While at school, they worked as both a writing lab tutor and a student reference desk librarian and was awarded the Amanda Graham Service Award. Prior to joining the RBF team, Ruthanne worked as the office manager for Zane & Associates, LLC, a Maryland-based family business.  

Originally from Millersville, MD, Ruthanne currently lives in York, PA with her husband Logan and their pets, a cattle dog mix named Dr. Martha Jones and a tuxedo cat named Salem.  

Want to get to know Ruthanne even better? Here are a few fun facts about her: 

• Before calling Pennsylvania home, Ruthanne lived in Germany, Maryland, California, and Arizona. Her dad was in the Air Force, which is how she came to live in Germany and Maryland. She attended college in California and worked as a nanny for a family in Arizona post-college. 
• The last show they binge-watched on Netflix was Crazy Ex-Girlfriend. 
• Her favorite book is The Princess Bride by William Goldman. She thinks everyone should give this beautifully written book a read.  
• Ruthanne’s dream vacation spot involves lots of trees, a river, and good company. 
• They love Doctor Who and both the graphic novels and the Netflix series of Neil Gaiman’s Sandman series. 
• Her hobbies include assembling Ikea furniture, building Legos, and playing Dungeons & Dragons. 
• Ruthanne enjoys listening to NPR and podcasts.  

Technology has greatly contributed to improving and streamlining everyday life. However, as technology advances, there is an increased reliance on digital tools powered by artificial intelligence and machine learning. Unfortunately, these technologies are also challenging the fundamental notion of human agency. As a result, there are rising concerns about humans losing the ability to make independent decisions.  

What is Human Agency? 

Human agency refers to the capacity of individuals to act intentionally and make choices that shape their lives. Although the human agency is influenced by various factors, including social, cultural and environmental contexts, individuals should maintain the ability to exert some degree of control and influence over their lives. As far as technology is concerned, individuals must retain control and decision-making power. This calls for technologies that support humans in making informed decisions rather than controlling the decisions made.  

Concerns Over the Effects of Digital Systems on Human Agency  

The Pew Research Center and Elon University’s Imagining the Internet Center conducted a nonscientific canvassing to gather expert views about the future of the human agency.  

The experts were specifically asked, “By 2035, will smart machines, bots and systems powered by artificial intelligence be designed to allow humans to easily be in control of most tech-aided decision-making that is relevant to their lives?“ 

Of the 540 experts from different fields, 56 percent disagreed with the statement, while 44 percent agreed. Some of the main themes raised by the experts who disagreed with the statement include: 

• The agendas of commercial interests and governments will determine the future.  
• The convenience that comes with automation makes users less vigilant over technology.  
• AI technology’s complexity and rapid evolution can be overwhelming, making it difficult for users to assert their agency. 

Common themes raised by participants that agreed with the statement include:  

• Humans also will evolve with technology, and there is the expectation that AI and tech companies will be regulated.  
• Expectations that businesses will protect the human agency to retain public trust and to keep ahead of competition.  
• Technology will allow varying degrees of human agency.  

Key Considerations for Upholding Human Agency 

Seeing that technology will keep advancing and more automated systems will be witnessed, it’s crucial to implement ways to help uphold human agency. Some considerations include the following: 

1. Implement mechanisms that contest AI systems. An AI system is as good as the information fed to it. Therefore, it can be faulty or deliberately flawed, and there should be ways to request redress. This can be through AI policies that allow users to contest or rectify a decision made by AI systems.  
2. Empower users through systems that include meaningful choices and controls, enabling users to decide how to interact with them. For example, a system should allow users to adjust preferences, customize settings and choose the features they want. This promotes a sense of ownership and autonomy over digital experiences.  
3. Promote digital literacy and education to teach about technology capabilities and limitations. Technology users must develop critical thinking skills to exercise human agency and make informed decisions.  
4. Integrate ethical principles into technology design and deployment. This can be done by creating guiding ethical frameworks that consider the likely societal impacts and consequences of digital systems.  
5. Guarantee transparency and explainability in technologies and algorithms, providing users with accessible explanations of how decisions are made and what data is utilized. This transparency fosters trust in the technology and empowers individuals to make informed choices. 
6. Establish accountability for the design, development and implementation of digital systems. Holding individuals and organizations accountable for the impact of their technology helps maintain human agency and promotes ethical behavior. 
7. Implement robust measures to safeguard individuals’ privacy and protect their data. This includes incorporating strong data protection mechanisms, giving users control over their personal information and establishing clear consent mechanisms for data collection and usage, accompanied by transparent policies. Respecting privacy rights is paramount for preserving human agency in the digital realm. 

Conclusion  

The essence of being human lies in exercising control over the nature and quality of an individual’s life. However, technological advances such as artificial intelligence are raising concerns about this human ability. Humans are responsible for actively embracing and comprehending the possibilities and implications of living in a world where digital systems take over various tasks and processes. Instead of surrendering their agency, humans should view partnering with these digital systems as a means to supplement and strengthen their intelligence rather than surrendering it. 

Some economists and market analysts have been predicting a U.S. recession ever since last fall. They’ve been wrong before – but they’ve also been right. Rather than try to predict how the stock market will react during the next recession, investors are better off planning for a range of potential outcomes. This will help reduce the risk of losses regardless of whether or not the United States experiences a recession in 2023. 

Bear in mind that stock and bond markets are forward-looking, and typically priced to take into account economic conditions such as higher interest rates, inflation and commodity prices. In response to whatever factors are in hand, the market adjusts in ways to try to keep returns on par with historical norms and practices.   

In its market perspective for 2023, Merrill Lynch suggested that the economic cycle would bottom out, market returns would begin turning a corner, and investors who hold diversified portfolios would see less volatility and be positioned to fully participate in a renewed bull market. 

There are several strategies you can implement to help mitigate the impact of an impending recession. Be aware, too, that these strategies are sound all-weather moves designed to help reduce your risk and maximize returns over the long term, regardless of economic and market conditions. 

Diversify Your Portfolio 

The recent failure of established regional banks is a reminder that there are no “safe” stocks – all stock market investing is subject to a wide range of risks. However, investors should be most wary of owning a high concentration in any single stock. After all, while it is unlikely the stock market will ever be reduced to zero, it is entirely possible for an individual stock to lose total value. This can happen due to a fall in demand, bankruptcy, corruption/embezzlement, a natural disaster or a public relations scandal. There are many situations that are unforeseen and out of an investor’s control that can lead to substantial losses. 

By diversifying your portfolio across a large number of stocks, even those within the same industry (such as competing banks), you can mitigate exposure to a single stock that experiences a major decline in performance. For 2023, Merrill Lynch recommended a broad global stock portfolio with a slight overweight in U.S. equities, including large cap value stocks and a mixture of small-cap growth and value stocks. It contends that the Energy, Financials, Healthcare, Utilities and Real Estate sectors offer stable returns via strong cash flow and attractive valuations.  

Well-established dividend stocks pay out steady income as well as offer growth opportunity, which is a good hedge for a strong long-term total return regardless of economic conditions. 

Merrill Lynch also favors global fixed income securities, including investment-grade corporates, 10-year Treasury bonds and longer-maturity municipal bonds. 

Fund Investing 

An easy way to diversify across a wide range of stocks and/or bonds is to invest in asset category-specific mutual funds or exchange-traded funds. The immense universe of funds offers a broad range of stocks (e.g., growth, value, large-, medium- and small-cap) and bond (high yield, high quality, government, corporate) fund options. A balanced fund offers a combination of both stock and bond securities to help capture growth as well as capital preservation. 

If you invest regularly through a 401(k) plan at work or defer income to an IRA, note that your money will purchase more shares when prices drop, which is often the case during a recession. As long as you have vetted and have faith in your investment choices, this discounted buying opportunity can set up your portfolio for stronger gains once the market recovers. 

Cash Allocation 

It is always a good idea – even more so during a recession – to hold an allocation in cash or cash-equivalent vehicles such as CDs and money market funds. However, it is not a good idea to sell stocks that have lost ground just to beef up your cash allocation. It may be better to sell a stock with significant appreciation instead, especially if it is in an industry that does not tend to perform well during a recession (e.g., Construction, Manufacturing, Retail, Leisure and Hospitality). 

Raising money through Internet crowdfunding sites prompts questions about the taxability of the money raised. Several sites host money-raising projects for fees generally ranging from 5 to 9%, including GoFundMe, Kickstarter, and Indiegogo. Each site specifies its own charges, limitations, and withdrawal processes. The money raised may or may not be taxable depending on what the purpose of the fundraising campaign was.

Gifts – When an entity raises funds for its own benefit and the contributions are made out of detached generosity (and not because of any moral or legal duty or the incentive of anticipated economic benefit), the contributions are considered tax-free gifts to the recipient.

On the other hand, the contributor is subject to the gift tax rules if they contribute more than $17,000 to a particular fundraising effort that benefits one individual; the contributor is then liable to file a gift tax return. Unfortunately, regardless of the need, gifts to individuals are never tax deductible. Please note the $17,000 amount is inflation adjusted and was $15,000 for years 2018 through 2021 and $16,000 for 2022. Please contact this office for any other year.

A “gift tax trap“ occurs when an individual establishes a crowdfunding account to help someone else in need (the beneficiary) and takes possession of the funds before passing the money on to the beneficiary. Because the fundraiser has possession of the funds, the contributions are treated as a tax-free gift to the fundraiser. However, when the fundraiser passes the money on to the beneficiary, the money is then treated as a gift from the fundraiser to the beneficiary; if the amount is over $17,000, the fundraiser is required to file a gift tax return and reduce their lifetime gift and estate tax exemption. Some crowdfunding sites allow fundraisers to designate a beneficiary to have direct access to the funds, in which case the fundraiser avoids encountering any gift tax problems.

Gifts to specific individuals, regardless of need, are not considered charitable contributions under tax law—for example, raising funds to help pay for someone’s funeral expenses. Another example, which includes a little tax twist, would be raising money to help someone pay for their medical expenses. Because it is a gift, it is not taxable to the recipient, but if the recipient itemizes their deductions, any amount of the gift the recipient spends to pay for their (or a spouse’s or dependent’s) medical expenses can be included as a medical expense when the recipient is itemizing deductions on Schedule A of their individual tax return.

Charitable Gifts – Even if the funds are being raised for a qualified charity, the contributors cannot deduct the donations as charitable contributions without proper documentation. Taxpayers cannot deduct cash contributions (including payments by check, credit card, or made electronically), regardless of the amount, unless they can document the contributions in one of the following ways: 

• Contribution Less Than $250: To claim a deduction for a contribution to a qualified charitable organization of less than $250, the taxpayer must have a cancelled check, a bank or credit card statement, or a letter from the organization; this proof must show the name of the organization and the date and amount of the contribution.  
• Cash Contributions of $250 or More: To claim a deduction for a donation of $250 or more, the taxpayer must have a written acknowledgment of the contribution from the qualified organization. This acknowledgment must be in the donor’s hands before the earlier of the due date or the date the return for the year the contribution was made is filed, including extensions, and must include the following details:o The amount of cash contributed;

  o Whether the qualified organization gave the taxpayer goods or services (other than certain token items and membership benefits) as a result of the contribution, along with a description and good-faith estimate of the value of those goods or services (other than intangible religious benefits); and

  o A statement that the only benefit received was an intangible religious benefit, if that was the case. Thus, if the contributor is to claim a charitable deduction for a cash donation made through a crowdfunding campaign, the contributor must have some way of obtaining a receipt. 

Business Ventures – When raising money for business projects, there are two issues to contend with: the taxability of the money raised and the U.S. Securities and Exchange Commission (SEC) regulations that come into play if the contributor is given an ownership interest in the venture. 

• No Business Ownership Interest Given – This applies when the fundraiser only provides the contributor nominal gifts, such as products from the business, coffee cups, or T-shirts; the money raised is taxable to the fundraiser.  

• Business Ownership Interest Provided – This applies when the fundraiser provides the contributor with partial business ownership in the form of stock or a partnership interest. In this circumstance, the money raised is treated as a capital contribution and is not taxable to the fundraiser. The amount contributed becomes the contributor’s tax basis in the investment. When the fundraiser sells business ownership, the resulting sales must comply with SEC regulations, which generally require any such offering to be registered with the SEC. However, the SEC regulations carve out a special exemption for crowdfunding:o Fundraising Maximum – The maximum amount a business can raise without registering its offering with the SEC is $5 million in a 12-month period. Non-U.S. companies, businesses without business plans, firms that report under the Exchange Act, certain investment companies, and companies that have failed to meet their reporting responsibilities may not participate.

  o Contributor Maximum – The SEC also limits the amount investors contribute. The amount an individual can invest through crowdfunding in any 12-month period is limited: 

– If the individual’s annual income or net worth is less than $124,000, their equity investment through crowdfunding is limited to the greater of $2,500 or 5% of the greater of the investor’s annual net worth.

– If the individual’s annual income and net worth are at least $124,000, their investment via crowdfunding can be up to 10% of their annual income or net worth, whichever is greater, but not to exceed $124,000.

- The forgoing limits are based on the SEC Updated Investor Bulletin posted on October 14, 2022. These limits change from time to time. The bulletin also includes examples of limits, included above, are computed as well as instructions for determining net worth.  

On the bright side, even if the money raised is income to the business, it will probably net out to zero taxable if it is spent on tax-deductible business expenses.

Does the IRS Track Crowdfunding? – Maybe. It depends on the aggregate number of backers contributing to the fundraising campaign and the total amount of funds processed through third-party transaction companies (credit card, PayPal, etc.). These third-party processers are required to issue a Form 1099-K reporting the gross amount of such transactions. There is a de minimis reporting threshold of $600 per year beginning 2023. The question is, will the third party follow the de minimis rule?

Be Cautious to Avoid Crowdfunding Scams – Keep in mind that the project or campaign you are considering backing is only as good as the people behind it. Some dishonest people can take your money but produce nothing—no product, no project, and no reward. If you’re thinking about contributing to a crowdfunding campaign, take time to research the fundraiser’s background and reviews before you pay. For example, have they engaged in previous campaigns? Were those campaigns successful? Be suspicious if you find that the person behind the campaign is on multiple crowdfunding sites—they may be attempting to raise as much money from as many people as possible and then disappear.

If you have questions about crowdfunding-related tax issues, please give this office a call. 

On the one hand, it’s almost a prerequisite for entrepreneurs of all types to have that “can-do spirit.” That sense that nobody else sees things quite like they do so, whatever it is they want to accomplish, it becomes something they know they’ll have to do themselves. In a lot of ways, this is an asset as it’s a big part of what has contributed to your success thus far. 

On the other hand, this type of mentality can certainly get people into trouble when it comes to the day-to-day necessities of actually running a business – with bookkeeping, accounting, and other financial matters being chief among them. While there may be a time when you can handle your books yourself, that time will likely pass. There are a few key warning signs in particular that you should watch out for to help clue you in as to when that becomes the case. 

DIY Bookkeeping Warning Signs: Breaking Things Down
Maybe the most immediate sign that you should stop doing your own books involves situations where you feel like you’re constantly dealing with last-minute tasks and missed deadlines. 

Filing your taxes late because you were too overwhelmed during a year is one thing. Having this crop up multiple years in a row is another matter altogether. Likewise, if you don’t consistently reconcile your books at the end of every month, you could wind up in a situation where you think you have access to more money than you really do, or you’re experiencing cash flow issues without realizing it. 

Not keeping up with these tasks because you “didn’t have enough time to do so” isn’t an excuse. If anything, it’s a major indicator that it’s time to bring in someone else to make sure the job gets done properly. 

Speaking of not having enough time, this is also another warning sign that you should stop doing your own books – albeit from a slightly different perspective. 

If you’re still trying to handle all of your own bookkeeping, it’s safe to say that it’s probably taking you far longer to complete straightforward tasks than it would an expert. Every minute that you’re focused on this is a minute that you’re not making money for your organization. Simply freeing yourself from the burden will allow you to turn your attention towards more essential matters, while also giving you the peace-of-mind that only comes with knowing that the financial elements are being handled by someone with the right expertise. 

Additional Considerations About Doing Your Own Books
Another major asset that most entrepreneurs share is confidence. When it comes to their competitors, for example, they know that while there may be a lot of other companies who do what they do, nobody else does it quite like how they do. 

That segues directly into another one of the warning signs that you should stop doing your own books: you completely lack confidence that anything is accurate in terms of your financials. 

You’re not 100% sure that all of your invoices are being paid. You have no idea how much money is coming in versus how much is going out. You’re not sure if you’re staying on top of deadlines or if you’re woefully behind. You know that there are no immediate issues to deal with – but you’re not sure if that’s through luck or by design. 

If you don’t have an accurate understanding of your business’s financial situation, you can’t begin to make decisions with confidence. That will quickly lead to you making the wrong decisions, which can only serve to put further financial stress on your organization if you’re not careful. 

For many, this will begin by having the confidence that only comes with knowing that their books are accurate and that they have been properly closed at the end of each month. 

In the end, think about the situation like this. A big part of what got you to the successful position you’re in today was your ability to surround yourself with professionals. Those who brought a particular skill set that you may have lacked and who were able to fill some void that you possessed. Why, then, should the financial side of your organization be any different? If you’ve already noticed any or even all the warning signs outlined above, it’s absolutely in your best interest to enlist the help of a professional moving forward – especially in a situation where the consequences of not doing so could be equal parts disastrous and long-lasting. 

If you’d like to find out more information about the warning signs to be aware of to indicate that you should stop managing your own books or to get answers to any other questions that you may have, please don’t delay – contact us today.