Author: Service2Client

How to Organize Your Tax Documents

3 min read

How to Organize Your Tax DocumentsSince tax time isn’t until next April, organizing your documents right about now might not be top of mind or even something you want to do. However, if you don’t want to have to scramble come springtime, you might want to organize your paperwork all year long. Here’s why: It expedites the process when you really do have to begin your tax prep, and it’s actually pretty easy. Start with simple categories (listed below), grab some folders, and put them in a filing cabinet – or any safe place. This way, when tax time comes around, you’ll be ready.

Income

This is pretty obvious, but it’s not just limited to your paycheck, W-2 forms, or 1099s. You’ll also want to keep jury duty records, income and expenses from a hobby (or side hustle), prizes and awards (monetary), health care reimbursements, as well as alimony you received. If you earned money doing something, keep the receipts and put them in this folder.

Vehicles/Cars

First, make a copy of the state taxes for your vehicles. Even if you don’t own your own business, make sure you keep track of miles driven, parking, and tolls. (Of course, if you have a company, you’re already doing this.) Next, keep all your receipts for gas, car washes, maintenance, etc., so you can claim these.

Kids

Be sure to keep receipts for childcare. Why? You can get a credit that will cover up to 35 percent of childcare expenses, up to $3,000 for a child under 13, or $6,000 for two or more qualifying children. Furthermore, your employer may offer a plan that excludes up to $5,000 from your taxable wages for qualified childcare expenses. In addition to these costs, make sure you keep a record of child and caregiver tax ID numbers and/or Social Security numbers. You’ll need them.

Doctor/Dentist

Keep these receipts for all out-of-pocket procedures. You know there will be some. In fact, if your total annual medical expenses are greater than 7.5 percent of your AGI (adjusted gross income), you can claim the deduction. Hang on to those precious receipts.

Investments

This is an important category. First, make sure you have all the necessary documents for your 401k, IRA, etc. But that’s not all. Do you have a college fund? Any other investments? If you have any doubt about something, don’t throw it away. Keep it.

Real Estate

Whether you own one home or many, make sure you keep your 1098, which is your mortgage interest statement. Your closing statement, property taxes, and home improvement receipts are also important papers to safeguard.

Charities

Did you give to a friend’s kid’s band fund? Give any clothes away to Goodwill? Donate to your alma mater? Wherever you’ve made contributions, document it. It’ll come in handy.

Other

This is the category for the things that don’t fit neatly into any of the above categories. If you have questions about any of your receipts, check out this guide.

Admittedly, keeping track of important tax documents and receipts isn’t the easiest thing to do – or the most fun. But if you designate categories, slow down and take time to stash important papers away, you’ll be way ahead next spring.

Sources

https://apersonalorganizer.com/tax-documents-checklist/

https://turbotax.intuit.com/tax-tips/family/sweet-child-of-mine-tax-credits-for-parents/L1DqxZ9mh

https://www.forbes.com/advisor/health-insurance/is-health-insurance-tax-deductible/#:~:text=You%20can%20usually%20deduct%20the,you%20can%20claim%20the%20deduction.

Securing Your Identity: The Role of Decentralized Identity Systems in Data Breach Prevention

4 min read

How to Securing Your IdentityData breaches have been on the rise as cybercriminals keep coming up with new ways to steal user-sensitive information. Just in the second quarter of 2023, 110.8 million user accounts were breached. Of these accounts, 49.8 million were from the United States, accounting for 45 percent of the global figure. However, amid the rising threats, a revolutionary concept known as decentralized identity systems has created a solution to reduce data breach cases.

Data Breaches and the Current State of Identity Management

A data breach happens when unauthorized individuals or entities gain access to sensitive information, often for malicious purposes. These breaches can happen to anyone, from individuals to large corporations, and they come with severe consequences that could include financial losses, reputation damage, and identity theft.

The current identity systems are centralized and have inherent vulnerabilities and limitations. These centralized identity systems involve a central authority, such as a government agency or a corporation, storing and managing individuals’ personal information. This means that if a hacker breaches the central authority’s security, he or she gains access to a vast amount of sensitive data.

Furthermore, since the centralized systems often collect extensive personal information, the practice raises concerns about data privacy. The entities storing user data predominantly control and monetize it, which has led to discomfort and distrust among users.

The centralized systems also create a fragmented user experience. This is because different platforms, such as social media, online retailers, news websites, etc., require users to create accounts. Users then must juggle multiple usernames, passwords, and data formats, complicating the digital experience. Businesses also incur high costs associated with ensuring secure systems, the latest infrastructure, and compliance.

How Decentralized Identity Systems Can Help Prevent Data Breaches

Decentralized identity systems are an alternative to centralized identity management. These systems put individuals in control of their own digital identities. The decentralized identity systems are enabled by technologies such as Web3, a concept based on a trust framework for identity management. Web3 evolution has led to decentralized identifiers, and this allows for secure management of user data and authentication through blockchain wallets.

Using blockchain technology ensures the security and immutability of identity data. Once information is added to the blockchain, it cannot be altered or deleted without the user’s consent.

However, they allow users to have control over their identity information. Users choose what data to share and with whom, enhancing privacy and security. There is no need for third parties to verify user identity.

Since users store data on their devices or a location they choose, it eliminates single points of failure. Instead of a centralized authority, identity data is distributed across a decentralized network of nodes. Additionally, these systems use advanced cryptographic keys, allowing only the user to access their data.

Decentralized identity systems are already making an impact in various industries, such as healthcare, financial services, and government services. The security benefits of decentralized identity include:

  • Enhanced Security

Decentralized identity systems offer robust security measures. With data stored on a blockchain, it becomes exceedingly difficult for hackers to breach the system. Even if one node is compromised, the decentralized nature of the network ensures that other nodes maintain the integrity of the data.

  • Privacy Control

Users regain control over their personal information. They decide what data to share and retain the ability to revoke access at any time. This puts an end to excessive data collection by corporations and governments.

  • Reduced Identity Theft and Fraud

Decentralized identity systems make it incredibly challenging for fraudsters to impersonate individuals or access their data. This significantly reduces the risk of identity theft and related fraudulent activities.

  • New Economic Models
    Decentralized identity models can create new economic models where consumers are awarded when they choose to share their data with service providers.

While decentralized identity systems offer promising solutions, they are not without challenges. The widespread adoption of decentralized identity systems presents scalability challenges. Another challenge is usability, as complexity can deter individuals and businesses from embracing this technology. The need for a regulatory framework is another challenge, as it is necessary to address factors related to legal and compliance.

Conclusion

Decentralized identity systems offer hope in an age where data breaches are a constant threat. These systems can revolutionize how users secure their digital identities by putting control back into individuals’ hands. While challenges exist, the benefits of enhanced security, privacy control, and reduced fraud make decentralized identity systems a promising solution in the ongoing battle against data breaches.

Common Financial Reporting Mistakes and How to Correct Them

3 min read

Common Financial Reporting MistakesWith accounting fraud and financial reporting mistakes creating a lack of confidence, understanding how financial reporting mistakes occur and are detected is an important topic. According to the Association for Federal Enterprise Risk Management and the U.S. Securities and Exchange Commission, the first nine months of 2018 saw 8.8 percent more accounting fraud enforcement action cases versus 2017.

Controls are procedures implemented to lower the chance of financial reporting issues. While these mechanisms are meant to prevent an overload of problems, they are not always foolproof. Corporations also are required to show that sufficient financial oversight is in place for financial records and assets by the Sarbanes-Oxley Act of 2002. There are two types of controls: preventive and detective.

As the name implies, preventive controls are devised to avert mistakes before they happen. Methods include ongoing training, worker evaluations, and mandating different layers of authorization for transactions.

Detective methods look at the granular accounting steps. Having internal and external audits performed and comparing real-world activity against what’s been budgeted or forecasted are two ways to implement this approach. However, performing account reconciliation where the business’ financial data is compared against third-party documentation can provide near real-time insight into what is actually occurring. This includes analyzing checks and cash the business has collected and documented on their books but that may not be reflected on bank statements. Another factor in the reconciliation process is checks the company has sent out that have not been processed by the business’ vendors, etc.

Since detective controls alert companies to errors after the fact, it is important that they are conducted in a timely manner – daily, monthly, quarterly, or annually. If there’s a discrepancy between the company’s ending cash balance and the bank’s monthly statement, there might be differing balances. This can be due to the financial institution’s service fees and checks taken into account by the business that aren’t yet reflected on the financial institution’s statement.  However, other cases of discrepancies could point to signs of fraud. 

According to the University of California Los Angeles, there are many ways to split tasks. Doing this is integral to successful mitigation of errors and unauthorized behavior because it deters the likelihood of multiple workers collaborating. Specifically, when it comes to authorizations, reconciliations, and responsibility for the assets, it is a high priority for businesses to break tasks up among multiple workers.

Examples include dividing the duties between opening the mail/preparing a list of checks to review and the individual who deposits the checks. The individual who oversees accounts receivables should be separate from the person who creates a list of checks received. It’s not advisable for a sole employee to initiate, approve, and record a transaction. Similarly, reconciling balances, handling assets, and reviewing reports should not be done by a single employee. A minimum of two individuals should be available to handle any transaction.

While the most diligent accounting professional has made a mistake from time to time, learning how to identify financial reporting mistakes can reduce the likelihood of even rare mistakes being unknowingly shared with others.

Sources

https://www.aferm.org/erm_feed/wrong-numbers-the-risks-of-inaccurate-financial-statements/

Sanctioning Terrorist Activities by Iran, Accelerating Disaster Assistance and Expanding Healthcare Opportunities for Native Americans

3 min read

HR 589, HR 3152, S 1528, S 70, S 460, S 1271MAHSA Act (HR 589) – The Mahsa Amini Human Rights and Security Accountability (MAHSA) Act is a bipartisan bill that was introduced on Jan. 27 by Rep. Jim Banks (R-IN). The purpose of this bill is to impose sanctions on the leaders of Iran for supporting human rights abuses and terrorism. The sanctions block both property and visas owned by certain foreign individuals and entities affiliated with Iran. The bill passed in the House on Sept. 12 and currently resides in the Senate.

Fight CRIME Act (HR 3152) – This bipartisan bill was introduced by Rep. Michael McCaul (R-TX) on May 9. It imposes visa- and property-blocking sanctions specific to Iran’s missile-related activities, including acquiring, developing, transporting, or deploying missiles or related items, such as drone technologies. These sanctions also may be imposed on adult family members of people directly involved, as well as foreign individuals and entities that engage in transactions and knowingly provide support for the Missile Technology Control Regime (MTCR). This legislation was passed in the House on Sept.12 and is under consideration in the Senate.

Disaster Assistance Simplification Act (S 1528) – This bipartisan bill aims to facilitate streamlined information sharing among federal disaster assistance agencies, accelerate life-saving assistance to disaster survivors, and expedite the ability for communities to recover from disasters, as well as other purposes. The legislation was introduced by Sen. Gary Peters (D-MI) on May 10 and was passed in the Senate on July 27. It is presently under review in the House.

Tribal Trust Land Homeownership Act of 2023 (S 70) – Introduced by Sen. John Thune (R-SD) on Jan. 25, this bill mandates that the Bureau of Indian Affairs expedite processing and completion of residential and business mortgage applications within certain deadlines (e.g., provide approval or disapproval within 20 or 30 days, depending on the type of application). The bipartisan bill passed in the Senate on July 18 and is currently under consideration in the House.

Urban Indian Health Confer Act (S 460) – This Act, introduced by Sen. Tina Smith (D-MN) on Feb. 15, passed in the Senate on July 18 and is currently in the House. Its purpose is to expand the requirements of the Indian Health Service (IHS) on matters relating to both American Indians and Alaskan Natives. At present, the IHS is required to confer only with urban Indian organizations. However, this new bill would mandate that the U.S. Department of Health and Human Services (HHS) ensure that the IHS and other agencies consult on matters related to the Indian Health Care Improvement Act, as well as other healthcare provisions for Native Americans. The Act passed in the Senate on July 26 and has been forwarded to the House.

FEND Off Fentanyl Act (S 1271) – The objective of this bill is to impose sanctions on individuals, cartels and transnational criminal organizations involved in trafficking illicit fentanyl and related products. The legislation was introduced by Sen. Tim Scott (R-SC) on April 25 and was assigned to the committee for review on June 21. This bipartisan bill is co-sponsored by 32 Republicans, 32 Democrats and two Independents. It has a high probability of being passed by both houses and enacted by the president.

How to Identify and Avoid Cash Flow Pitfalls

4 min read

Cash Flow Pitfalls, Cash Flow problemsLooking at expenses for one’s business is essential to reduce cash flow issues. For example, it would show if there’s too much money leaving the business or what type of scenario the business might face if there’s an unexpected and large expense that guts the business’ cash position. Tracking expenses on a monthly basis is one way to determine a company’s financial health.  

Estimating sales by starting with last year’s month-by-month figures is one way to start. Looking at credit and cash sales from a business’ monthly income statements provides historical reference. Examining both fixed and variable past expenses, specifically, is a good starting point. However, it’s important when projecting future sales and reasonable increases to remember that the business could be impacted negatively by a new competitor or positively if one goes out of business.

Determining when payment will be received is a good way to project cash flow. If it’s cash, then it’s instant and no further calculation is necessary. However, if payment is conducted by invoices, credit lines, etc., businesses are encouraged to perform the Days Sales Outstanding (DSO) calculation. This calculates, on average, how long customers take to pay outstanding invoices.

DSO = (Monthly accounts receivables/Total sales) x Days in the month

This is a good way to measure how long customers actually take to pay invoices versus what terms are specified in contracts or invoices.

Another consideration is to look at fixed and variable expenses. While fixed expenses are just that, fixed, it’s important to monitor variable expenses because they can fluctuate. One example is inflation, which can increase the cost of input materials, salaries, overhead, etc. Depending on the volume of production or sales, electricity, commission, or similar costs can also vary.

Once this information is gathered, the current month’s projected cash flow can be calculated.

The formula is as follows: (Last month’s cash balance + Current month’s projected receipts) – Projected expenses.

Preventing Bad Debt from Happening Before Collections is Necessary

According to SCORE, there are many things a business can do to reduce the likelihood of customer debt default and increase cash flow. Businesses can check the creditworthiness of both individual and commercial clients before offering credit to determine the likelihood of defaulting. 

Similarly, if Net 30 is the standard timeframe to pay an invoice, offering a 5 percent discount if it’s paid within seven days is one way to encourage prompt payment. Businesses that get a deposit when signing the contract or before beginning work will generate a more consistent cash flow.

Operating Cash Flow Ratio Example

This looks at how easily a company can satisfy current liabilities from its cash flows that are produced from the business operations. If there’s negative cash from operations, a business might be relying too heavily on financing or selling assets to run its operations. If earnings are steady, but cash flow from operations is falling, this is a negative indication of a company’s health. It’s calculated as follows:

(Operating Cash Flow/Current Liabilities) = ($15 billion/$45 billion) = 0.33

Businesses with an operating cash flow ratio greater than 1 have produced more cash in an operating period than is necessary to satisfy current liabilities. Businesses that have a reading less than 1 did not produce enough cash to satisfy current liabilities. However, further investigation is required to ensure that it’s not taking some of its excess cash to reinvest in projects with the potential to create future rewards.

While there’s no way to predict future cash flow trends, making projections can help businesses compare actual results to projects and adjust their plans more efficiently.

Sources

https://www.score.org/resource/article/10-ways-improve-collections-and-cash-flow

IRS Ruling: Crypto Currency Staking Rewards Are Taxable When Received

3 min read

Crypto Currency Staking Rewards Are TaxableThe IRS recently issued an important ruling on the taxability of cryptocurrency staking rewards, determining that staking rewards are essentially “income” and, therefore, taxable upon receipt and not deferrable until sale or swapping. Below, we will look at the ruling in more detail and what it means for taxpayers. But first, let us revisit the concept of cryptocurrency staking as a refresher.

Crypto Staking 101: What Is Staking?

Staking, at its most basic form, is a way for holders of cryptocurrencies to earn rewards or passive income on their digital assets without needing to sell.

One way to think of staking is like a high-yield savings account. When you stake digital assets, you deposit and lock up your coins. This helps run and maintain security on different blockchains (depending on the asset staked). In return, you typically receive more of the digital asset staked. 

Rates of return on digital asset staking can be lucrative; however, staking is not without risks.

Staking risks include:

The inherent volatility of cryptocurrencies, where the rewards earned can be less than the change in the underlying digital asset price (causing an overall loss).

Minimum lock-up periods, where staked assets cannot be unstaked and sold or swapped and therefore are illiquid for a period.

Counterparty risk if operating as part of a staking pool, where rewards can be negated as a bad actor and therefore never paid out.

The staking pool or underlying digital asset can be hacked, leading to a loss of funds (remember, there is such a thing as FDIC insurance to protect depositors in the cryptocurrency realm).

Taxability of Staking Rewards

The tax treatment of buying and selling cryptocurrencies is clear. In IRS Notice 2014-21, the government declares that crypto trades should be treated as property, resulting in capital gains treatment like other property bought and sold. Staking, however, is different than trading.

To clarify, given the vague mechanisms of crypto staking, the IRS recently issued a ruling declaring that crypto staking rewards need to be included when received in a taxpayer’s gross income. This ruling formalizes the position taken by the IRS in the Jarrett case.

The argument in the Jarrett case was that the coins received as staking rewards are new property that was created and not the same as income, interest, etc. Essentially, this means the staking rewards are zero-basis assets that would be taxed when sold and not upon receipt. They made the argument that staking rewards were like the products of a baker, where each new cake, although from the same recipe, is a newly created product/asset and, therefore, taxable upon sale.

The court determined that staking rewards, due to their proof-of-stake creation mechanism, are not a new asset, but compensation for helping to maintain and provide validation of the underlying blockchain, with the staked assets used as collateral.

Conclusion

As a result, staking rewards are income when “received.” The taxable amount is the fair market value of the coins when the taxpayer receives the staking reward in an “unlocked” manner. In other words, once the taxpayer controls the staking rewards, the taxpayer is capable (regardless of exercising this capability) of selling them.

IRS Announces End of Unannounced Taxpayer Visits (Mostly)

3 min read

IRS Announces End of Unannounced Taxpayer VisitsYou wake up in the middle of the night. Heart racing, drenched in sweat, and breathing heavily. Thankfully, it was just a nightmare when the IRS showed up at your doorstep unannounced. Recently, however, this was the reality for some taxpayers – and not just a bad dream. The IRS just publicized a significant shift in policy, effectively ending the vast majority of surprise taxpayer visits. The change comes in an effort to create safer conditions for IRS officers as well as ease public concerns.

Who’s Knocking at My Door?

In order to understand the change in policy, you’ll need to understand the three categories of IRS employees that typically interact with taxpayers: Revenue Officers, Revenue Agents, and Special Agents.

IRS Revenue Agents are tax return auditors. They don’t typically show up unannounced.

IRS Revenue Officers, of which there are approximately 2,300, have duties that include paying visits to taxpayers to collect back taxes and tax returns not filed. They are not auditors but instead focus on collection efforts, including issuing liens and levies. Revenue Officers are the main category of IRS employees impacted by the policy change.

Special Agents deal with criminal matters and are part of one of the largest law enforcement agencies in the United States. The change in policy does not impact Special Agents.

Safety

Why the shift to (mostly) eliminating surprise visits from IRS Revenue Officers? Safety is cited as the main concern. Unannounced visits to taxpayers, whether at home or their business, can be risky. Historically, IRS Revenue Officers faced contentious and sometimes dangerous conditions during their unannounced visits.

Taxpayer Confusion

There is also a growing number of scam artists pretending to be IRS agents or officers. As a result, taxpayers are increasingly wary of unannounced visits, and this causes confusion for both the taxpayer and law enforcement.

The difficulty in distinguishing between IRS representatives and fakes has caused concern for taxpayers already on guard for scam artists. The IRS believes that maintaining trust among the public will go a long way to maintaining the legitimacy of the organization.

Appointment Letters In Lieu of Visits

In place of these previously unannounced visits, the IRS will contact taxpayers through a 725-B letter, more colloquially known as an appointment letter.

An appointment letter will facilitate scheduling in-person meetings, with the opportunity for the taxpayer to prepare any information and documentation beforehand, allowing for quicker resolution of cases. These meetings occur at a pre-determined time, date, and place.

Limited Visits Will Still Occur

The policy change does not completely eliminate unannounced visits by the IRS. In “extremely limited situations,” such as serving summonses and subpoenas and the seizure of assets, unannounced visits will still occur. To give some perspective, these types of visits will account for only a few hundred per year compared to the tens of thousands of unannounced visits under the old policy.

Conclusion

Unannounced IRS visits are (almost) a thing of the past. They will be carried out only in rare, necessary cases, with most Revenue Officer visits being pre-scheduled. This should ease taxpayer anxiety and make case resolution more efficient.

How to Write an Awesome Accounting Bio

4 min read

How to Write an Accountant Bio, How to write CPA Bio, How to write a Tax Preparer Bio, How to write a Bookkeeper bioEven though numbers are probably the biggest thing in an accountant’s wheelhouse, getting people in the door with the right words in your bio can make all the difference in the world. Here are a few tips to make sure that how you present yourself to the public via your wording is powerful, succinct, and engaging.

Make it Short and Engaging

Yes, attention spans in our world are woefully short, much like that of gnat. You have seconds to grab someone’s attention. Write your bio as if you were looking for an accountant. How would you word it? What would catch your eye? Of course, you’d start with your name and title, but what after that? Spend time thinking about this.

Don’t Use First Person

While social media is all about saying “I this” and “I that,” when it comes to bios, it’s best not to do that, use the third person as if you were talking about someone else. For instance, “John Davis is a CPA at Ernst & Young.” After that, you can launch into telling the world just how awesome you are.

Use Active Voice

And avoid passive voice. An example of this would be something like, “John’s team was involved in the overhaul of the payroll system.” For active voice, you’d write it like this:  “John’s team overhauled the payroll system.” See the difference? You’ve cut out extra words and adjusted your verb to be active. A quick way to check your writing for passive voice is to do a search in your document for an “of.” If you spot these babies, fix them right away.

Update Your Social Media Profiles

While most people use LinkedIn, many others who are looking for a job include their bios on their social media pages. In fact, you might update your bio on your LinkedIn page and then share it on Facebook, Instagram, or other platforms you use. This way, when employers are casually scrolling, you’ll appear in their feed. And if they’re looking for someone, all the better.

End Strong

The abbreviation in the marketing world is CTA, or Call to Action. You see it on nearly every digital ad as a button. But if you reimagine it in terms of the last sentence of your bio, it can leave a lasting impression and, hopefully, trigger a response. You might end your bio with a short, friendly statement, your email, and your phone number: “John is actively seeking employment, can be reached at [FILL IN INFO], and is just a ping or phone call away.” No matter what you choose to end with, it should reflect you and your personality.

If you need a little help to get started, here are two different samples:

Sally Smith is a CPA and a Senior Accountant at ABC Company, a full-service tax and bookkeeping firm in Home Town, USA.

John Jones joined ABC Company in 2000. In his current role, he is a seasoned tax preparer with a focus on international taxes. This involves staying up-to-date with current and future tax regulations for foreigners living and working in the United States and abroad, as well as state tax regulations in California and Florida.

Writing an accountant bio that will stand out from the crowd will take a bit of time, but it is well worth it. You want to present yourself in the best possible light to your audience. When you do this, you’ll get more traction and, in turn, more business.

2021 Vs 2022 Vs 2023 Federal Income Tax Brackets

3 min read

2020 Vs 2021 Vs 2022 Federal Income Tax Brackets

The US tax system is progressive, meaning that the more you earn the more you pay. For the years 2021-2023 there are seven different brackets for each year (2020 was the same structure as well). Which bracket you are in depends on your taxable income; however, your bracket does not equal your tax rate.

Tax brackets work so that you pay part of your income at each level bracket as you move-up in income. In other words, someone in the 32% marginal rate bracket will pay 10% on part of their income, 12% on another part, then 22% on another band of income, 24% on the next tranche and finally, 32% on everything else. In other words, moving into a higher tax bracket does NOT mean you pay higher taxes on all your income.

Below are comparative tables for the taxable years 2021 – 2023. This way you can not only see the tax brackets that apply 2023 taxable income, but the trend changes over time.

Updates to 2023 Tax Rates and Brackets

Over the 3-year period shown below, there are seven brackets with progressive rates ranging from 10% up to 37% and they are the same overall years.

Federal income tax rate brackets are indexed for inflation. The brackets are adjusted using the chained Consumer Price Index (CPI). There were no structural changes to the tax brackets in any of the periods, so the only impact are increases year-over-year due to the inflation indexing.

The inflation adjustment factor for 2023 was 7% for example, raising income thresholds applied to the tax brackets across the board.

Tax Rates and Brackets

Below are the 2021-2023 tables for personal income tax rates. Note, that the 2023 figures below are the amounts applicable to the income earned during 2023 and paid in 2024 when you file your taxes.

 

Tax Brackets & Rates

Single Taxpayers
2021 2022 2023
10% 0 – $9,950 10% 0 – $10,275 10% 0 – $11,000
12% $9,951 – $40,525 12% $10,276 – $41,775 12% $11,001 – $44,725
22% $40,526 – $86,375 22% $41,776 – $89,075 22% $44,726 – $95,375
24% $86,376 – $164,925 24% $89,076 – $170,050 24% $95,376 – $182,100
32% $164,926 – $209,425 32% $170,051 – $215,950 32% $182,101 – $231,250
35% $209,426 – $523,600 35% $215,951 – $539,900 35% $231,251 – $578,125
37% $523,601and Over 37% $539,901 and Over 37% $578,126 and Over

 

Married Filing Jointly and Surviving Spouses
2021 2022 2023
10% 0 – $19,900 10% 0 – $20,550 10% 0 – $22,000
12% $19,901 – $81,050 12% $20,551 – $83,550 12% $22,001 – $89,450
22% $81,051 – $172,750 22% $83,551 – $178,150 22% $89,451 – $190,750
24% $172,751 – $329,850 24% $178,151 – $340,100 24% $190,751 – $364,200
32% $329,851 – $418,850 32% $340,101 – $431,900 32% $364,201 – $462,500
35% $418,851 – $628,300 35% $431,901 – $647,850 35% $462,501 – $693,750
37% $628,301and Over 37% $647,851 and Over 37% $693,751 and Over

 

Married Filing Separately
2021 2022 2023
10% 0 – $9,950 10% 0 – $10,275 10% 0 – $11,000
12% $9,951 – $40,525 12% $10,276 – $41,775 12% $11,001 – $44,725
22% $40,526 – $86,375 22% $41,776 – $89,075 22% $44,726 – $95,375
24% $86,376 – $164,925 24% $89,076 – $170,050 24% $95,376 – $182,100
32% $164,926 – $209,425 32% $170,051 – $215,950 32% $182,101 – $231,250
35% $209,426 – $314,150 35% $215,951 – $323,925 35% $231,251 – $346,875
37% $314,151and Over 37% $323,926 and Over 37% $346,876 and Over

 

Heads of Housholds
2021 2022 2023
10% 0 – $14,200 10% 0 – $14,650 10% 0 – $15,700
12% $14,201 – $54,200 12% $14,651 – $55,900 12% $15,701 – $59,850
22% $54,201 – $86,350 22% $55,901 – $89,050 22% $59,851 – $95,350
24% $86,351 – $164,900 24% $89,051 – $170,050 24% $95,351 – $182,100
32% $164,901 – $209,400 32% $170,051 – $215,950 32% $182,101 – $231,250
35% $209,401 – $523,600 35% $215,951 – $539,900 35% $231,251 – $578,100
37% $523,601and Over 37% $539,901 and Over 37% $578,101 and Over

 

 

Conclusion

While the tax brackets are the same in 2023 as the prior year, the income thresholds increased 7% following hot inflation in the CPI. You can lower your marginal rate or at least reduce the amount of taxable income subject to it by optimizing itemized deductions.

Monitoring Trade Agreements with Taiwan, Promoting Plain-Language Rules, and Expanding Recruiting and Training for Law Enforcement

3 min read

Monitoring Trade Agreements with Taiwan, Promoting Plain-Language Rules, and Expanding Recruiting and Training for Law EnforcementUnited States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act (HR 4004) – This bipartisan bill was introduced on June 12 by Rep. Jason Smith (R-MO). The purpose of this bill is to convey approval by Congress of the June 1 trade agreement between the United States and Taiwan. The bill addresses customs administration and regulatory practice issues, as well as dictates conditions for negotiations of subsequent trade agreements. Among its provisions, the bill requires that the U.S. Trade Representative share all negotiating texts with Congress prior to being sent to Taiwan or any parties outside of the executive branch. The bill passed in the House on June 21 and in the Senate on July 18. It was signed into law by the President on Aug. 7.

Providing Accountability Through Transparency Act of 2023 (S 111) – This bill, which was signed into law on July 25, requires each agency to provide a 100-word plain language summary of each new proposed rule posted at regulations.gov. The legislation was introduced by Sen. James Lankford (R-OK) on Jan. 26; passed in the Senate on June 22; and in the House on July 17.

Securing the U.S. Organ Procurement and Transplantation Network Act (HR 2544) – This bipartisan bill was introduced by Rep. Larry Bucshon (R-IN) on April 10. It modifies operations of the Organ Procurement and Transplantation Network, which is managed by the Health Resources and Services Administration (HRSA). In the past, the network of professionals was managed by only one organization, but this new bill allows the HRSA to award multiple grants, contracts or cooperative agreements for network management. The legislation was passed in the House on July 25, in the Senate on July 27 and is currently awaiting signature by President Biden.

Strong Communities Act of 2023 (S 994) – Introduced by Sen. Gary Peters (D-MI) on March 28, this bill permits funding by the Community Oriented Policing Services (COPS) grant program to be used to train officers and recruits who agree to serve in law enforcement agencies in their local communities. The bipartisan bill passed in the Senate on July 26 and is currently under consideration in the House.

Recruit and Retain Act (S 546) – Introduced by Sen. Deb Fischer (R-NE) on Feb. 28, this bill expands the Community Oriented Policing Services (COPS) grant program to enable law enforcement agencies to use funding for recruitment activities such as career and job fairs, as well as lower application fees for things like background checks, testing and psychological evaluations. The Act passed in the Senate on July 26 and has been forwarded to the House.

 

 

Department of Veterans Affairs Office of Inspector General Training Act of 2023 (S 1096) – This Act would require new Veterans Affairs (VA) employees to undergo training on how to report misconduct, respond to requests from and cooperate with the Office of the Inspector General. The bill was introduced on March 30 by Sen. Margaret Hassan (D-NH) and was passed in the Senate on July 13. Its fate now rests in the House.