IRS News Release
IMPORTANT NOTE: Hawaii tax returns are still due on the usual dates. Hawaii has not complied with this extension.
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The Internal Revenue Service today further postponed until Aug. 7, 2024, various tax-filing and tax-payment deadlines for individuals and businesses affected by the Aug. 8, 2023, wildfires in Hawaii. Previously, the deadline was Feb. 15, 2024.
IRS News Release IMPORTANT NOTE: Hawaii tax returns are still due on the usual dates. Hawaii has not complied with this extension. HONOLULU – It’s tax season and fraudsters are looking to target taxpayers. The Hawaiʻi Department of Taxation (DOTAX) is cautioning taxpayers about activity involving tax-related scams, including this recent attempt.
Pursuant to section 231-8.5, Hawaii Revised Statutes (HRS), the Department of Taxation
("Department") requires the electronic filing of withholding tax filings for employers whose withholding tax liability exceeds $40,000 annually. Pursuant to section 231-9.9, HRS, the Department may also require electronic filing for any person who is required to electronically file a federal return. Hawaii Department of Taxation Announcement 2023-07 GE Tax for Maui County will increase to 4.5% (retail & services) effective January 1, 2024. Please be prepared to update your tax charged to customers/clients/guests accordingly on January 1st.
More information on GE tax increase: https://files.hawaii.gov/tax/news/announce/ann23-05.pdf Key Points
WASHINGTON — The Internal Revenue Service today provided guidance for employers whose employees forgo sick, vacation or personal leave to aid victims of the wildfires that began in parts of Hawaii on Aug. 8, 2023.
Notice 2023-69PDF provides that cash payments employers make to charitable organizations during 2023 and 2024 providing relief to victims of the wildfires in Hawaii in exchange for sick, vacation or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer. Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of the applicable sections of the Internal Revenue Code. Notice 2023-69PDF provides further details for employers with leave donation programs. Additional information about tax relief for those affected by the wildfires in Hawaii is available at IRS.gov. IRS provides guidance on employer leave-based donation programs that aid victims of the wildfires in Hawaii Moratorium on processing of new claims through year’s end will allow IRS to add more safeguards to prevent future abuse, protect businesses from predatory tactics; IRS working with Justice Department to pursue fraud fueled by aggressive marketing.
WASHINGTON – Amid rising concerns about a flood of improper Employee Retention Credit claims, the Internal Revenue Service today announced an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from scams. IRS Commissioner Danny Werfel ordered the immediate moratorium, beginning today, to run through at least Dec. 31 following growing concerns inside the tax agency, from tax professionals as well as media reports that a substantial share of new claims from the aging program are ineligible and increasingly putting businesses at financial risk by being pressured and scammed by aggressive promoters and marketing. The IRS continues to work previously filed Employee Retention Credit (ERC) claims received prior to the moratorium but renewed a reminder that increased fraud concerns means processing times will be longer. On July 26, the agency announced it was increasingly shifting its focus to review these claims for compliance concerns, including intensifying audit work and criminal investigations on promoters and businesses filing dubious claims. The IRS announced today that hundreds of criminal cases are being worked, and thousands of ERC claims have been referred for audit. The IRS emphasizes that payouts for these claims will continue during the moratorium period but at a slower pace due to the detailed compliance reviews. With the stricter compliance reviews in place during this period, existing ERC claims will go from a standard processing goal of 90 days to 180 days – and much longer if the claim faces further review or audit. The IRS may also seek additional documentation from the taxpayer to ensure it is a legitimate claim. This enhanced compliance review of existing claims submitted before the moratorium is critical to protect against fraud but also to protect the businesses from facing penalties or interest payments stemming from bad claims pushed by promoters, Werfel said. “The IRS is increasingly alarmed about honest small business owners being scammed by unscrupulous actors, and we could no longer tolerate growing evidence of questionable claims pouring in,” Werfel said. “The further we get from the pandemic, the further we see the good intentions of this important program abused. The continued aggressive marketing of these schemes is harming well-meaning businesses and delaying the payment of legitimate claims, which makes it harder to run the rest of the tax system. This harms all taxpayers, not just ERC applicants.” “For those people being pressured by promoters to apply for the Employee Retention Credit, I urge them to immediately pause and review their situation while we look to add new protections and safeguards to stop bad claims from ever coming in,” Werfel said. “In the meantime, businesses should seek out a trusted tax professional who actually understands the complex ERC rules, not a promoter or marketer hustling to get a hefty contingency fee. Businesses that receive ERC payments improperly face the daunting prospect of paying those back, so we urge the utmost caution. The moratorium will help protect taxpayers by adding a new safety net onto this program to focus on fraudulent claims and scammers taking advantage of honest taxpayers.” More: To protect taxpayers from scams, IRS orders immediate stop to new Employee Retention Credit processing amid surge of questionable claims; concerns from tax pros | Internal Revenue Service Our hearts go out to our Lahaina residents, businesses, and visitors affected by the wildfires.8/11/2023
Our hearts go out to our Lahaina residents, businesses, and visitors affected by the wildfires. Here are links to tax breaks, SBA and other help for both individuals and businesses, as well as County updates on where to find help or donate. Please don't hesitate to reach out to us for assistance with items needed these relief programs. Document copy fees will be waived for affected clients. Feel free to share these links with others. County of Maui Waivers for Property Tax IRS: Hawaii wildfire victims qualify for tax relief; Oct. 16 deadline, other dates postponed to Feb. 15 Maui County Update: How to Donate & Where to Find Help Maui Nui Strong - Get Support, Donate, Volunteer Hawaii Fire Relief Housing Program for Landlords & Tenants FEMA Disaster Assistance Grant Application 2023 Casualty Loss Deduction for Maui Wildfires May Be Claimed on 2022 Tax Return “2023 Wildfire Relief” Allowed for Late Filed Hawaii State Tax Returns and Income Qualifying for Exemption from GE &/or Income Taxes Apply for Unemployment If You Lost Your Job or Business in Maui Wildfires Hawaii Emergency Management Agency SBA Home and Personal Property Loans Maui Relief Programs & Resources - Bank of Hawaii (boh.com) Central Pacific Bank Loan Deferral Programs First Hawaiian Bank Loan Deferral & Relief Business Physical Disaster Loans (sba.gov) SBA Economic Injury Disaster Loans for Businesses (sba.gov) New links will be posted on this page as programs are announced. Bank of Hawaii, as I imagine most banks will, is offering loan deferments and emergency loans for businesses impacted by the Lahaina fire.
SBA has two loan options. For more information and applications: Business Physical Disaster Loans (sba.gov) If you are in a declared disaster area and have experienced damage to your business, you may be eligible for financial assistance from the SBA. Businesses of any size and most private nonprofit organizations may apply to the SBA for a loan to recover after a disaster. Economic Injury Disaster Loans (sba.gov) If you have suffered substantial economic injury and are one of the following types of businesses located in a declared disaster area ,you may be eligible for an SBA Economic Injury Disaster Loan (EIDL):
We’ve all been there. You’re short a little bit to get groceries this week. Sounds like a deal to buy whatever you want now and make 4 easy payments that are interest free. Hold up. Let's stop right there! Those payments may be interest free, but that doesn’t mean it’s the way go. Let’s look a few key factors: Making Ends Meet Let’s say you need $100 of groceries every week. Look at the chart and see what happens if you buy $100 of groceries every week on buy now pay later. By week 7 you are making $100 in payments on payment plans from groceries from 4 other weeks before you even buy your $100 of groceries for week 7. Do you have $200 in your budget for week 7? Or, will you have to buy now and pay later again, paying $125 in week 7 and building on future weeks. This sounds more like digging a hole than getting out of one. Now consider if you’re short again or you have too many payment plans in place and miss a payment during week 7. While there is no interest, you are charged a late fee. Klarna, for example, charges a $7 late fee for each missed payment, so if in week 7 you have 4 payments due from prior weeks and miss them, you’ve now spent $28 more, still owe Klarna $100 and don’t have the $100 you need for this week’s groceries. And the hole gets deeper.
Effects on Credit Score Beyond the finances, banks that offer buy now pay later may run credit checks. If they are soft credit checks, they will not impact your credit score. Hard credit checks will show up on your credit score and cause it to go down. Banks like Klarna may run credit checks, but they don’t usually report your payment information to the credit bureaus, so while a late payment won’t impact your credit, your timely payments are not building good credit either. If you miss too many payments, your account could be referred a collection agency. These collection agencies do report the delinquency to credit bureaus and your credit score will go down. Spending More Than You Can Afford The danger is that buying now and paying later encourages you to spend more than you can afford. Even though these banks convince you that you are "saving money" by not paying interest, it’s super easy to go over your budget and get into debt or stall your progress toward your other financial goals. The Takeaway Unless your kids are hungry and you can’t buy them food, think twice about using buy now pay later. Even if your kids are hungry, opt for help from family/friends, the food bank or other programs that serve meals to people who cannot afford food. If what you want to buy is not an essential for survival like food, such as a cool pair of shoes or sporting equipment that you cannot afford to pay for now, it’s best to go old school. Save now and buy later. Say you have a budget of $25/mo. for clothing and want to buy a pair of shoes that costs $100. It’s better to save for 4 months until you have enough to buy the shoes. If you go into debt for them there will be other things that will be wanted or needed when the payments come due, and the debt will grow. First, before buying consider a few things: • Do you really need those cool new shoes? Or would they be just for keeping up with the Jones’ and looking cool? If you have a pair of shoes that are in working condition, maybe you don’t really need another pair. You can only wear one pair at a time. Essentials come first. • Is the sporting equipment essential? Could you buy used sporting equipment that would do the same job for less money? Check Craigslist. Share with a friend. And, if you do decide to buy new, always shop for the best prices. Would you like to create a working budget to pay down your debt, save for a home, or just make ends meet? Give us a call and we can help you reach your goals! |
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