The knowledge you need

The 2023 filing season for Georgia state income taxes officially began on February 1. While returns are being accepted for last year, there are several new tax credit programs in effect for 2023 and beyond. In addition to updates for the standard deduction and online sellers, new tax credits are available for donations supporting various programs. This includes the Qualified Law Enforcement Donation Credit, Qualified Foster Child Donation Credit, and the Georgia Heart Hospital Program.

The appeal of electric vehicles (EVs) is one that attracts the attention of organizations, families, and individuals. The combination of reduced maintenance expenses due to fewer mechanical parts (no spark plugs, no oil changes, and regenerative braking) lower operating costs. Beyond practical savings, many buyers are also attracted by the federal tax credit of up to $7,500 for eligible EVs. Taken together it is easy to see why EVs have become so popular. To demonstrate this point, a survey found that in Atlanta alone, there are 36,000 registered EVs, with 1,100 charging stations available across the metropolitan area.  

Extra fees that businesses pass on to consumers, like convenience, processing, and service fees, may now be subject to sales tax in certain states. These fees are a way to recoup the costs of doing business without increasing the prices of goods and services. If businesses fail to properly account for the sales tax implications of extra fees, it could unknowingly violate state sales tax rules. Affecting Atlanta area companies, Georgia and South Carolina recently issued guidance to help businesses better understand state and local sales tax compliance requirements.

The Taxpayer Advocate Service (TAS) released its annual report in January 2023. It provides a detailed analysis of the significant progress the agency has made in reducing the backlog of returns and the top problems as well. This includes challenges with processing delays, agency hiring and training, transparency, and a troubled appeals process. TAS is a nonpartisan, independent organization within the IRS that advocates for and supports taxpayers. Its 2023 report contains summaries of the most important issues in the fiscal year 2022 and recommendations for changes to improve the taxpayer experience.

What happens when you take established legislation, build on it, reconcile 3 bills into one, and then add more than 100 provisions? You get the SECURE Act 2.0, a bill that passed by a vote of 414-5 that was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act of 2023. The overall goal of SECURE 2.0 is to make enrolling in retirement plans and saving for retirement more accessible than ever. While most of the changes impact plan participants, there are several updates and changes that will impact plan sponsors this year alone.

The golden years are a time when the days of the daily grind of the working world are left behind and a new chapter begins. It often means spending more time pursuing hobbies, time with family, or traveling. As lovely as it sounds, this reality may simply be out of reach for many. Most workers do not have enough saved to be able to support themselves, even when coupled with anticipated Social Security payments. According to the U.S. Bureau of Labor and Statistics, only 55% of workers participate in an employer-sponsored retirement plan. This alarming statistic prompted Congress to take action resulting in the passage of the SECURE Act in 2019. The legislation made it easier to save, expanded plan eligibility to part-time employees, and more.

There are several new clean energy tax incentives available to construction companies in 2023 thanks to the Inflation Reduction Act. To qualify for the highest savings possible, taxpayers need to meet new prevailing wage and apprenticeship requirements. Unfortunately, the necessary guidance to allow compliance had not yet been issued. The good news is the IRS recently issued  Notice 2022-61, which provides important guidance for builders, contractors, and developers, to understand how to meet the new rules.

Most Atlanta construction contractors are going into the new year with a positive outlook. This is because of the convergence of positive indicators including sales, profits, staffing, and available jobs. In fact, the Construction Backlog Indicator, which highlights the amount of work companies are contracted to complete in the future is quite positive. It is now at the highest level since 2019. Despite this, many are concerned about the current economic situation and what steps to take should a recession hit in the coming months. While it's unclear what will happen, there are several steps that companies can take now to weather a potential storm.

The recent interest rate increases initiated by the Federal Reserve are designed to counteract increasing prices. While dealing with inflation is certainly important, many contractors are already challenged by the ill effects that it brings. Most notably, there has been an increase in the cost of building materials, equipment rentals, skilled labor, and supplies. The trend of increasing costs has made it difficult for many to thrive. While there are different ways to combat the effects of inflation, one of the most effective is through cash flow planning. Maintaining a consistent cash flow is essential to weathering the storm of economic issues.

The Employee Retention Tax Credit (ERTC) is one of the remaining federal tax incentives left over from the pandemic era. Although the program is no longer in effect, taxpayers can continue to file retroactive claims. This is certainly good news for eligible businesses that previously did not claim the savings. At the same time, it has also opened the door to unscrupulous ERTC mills and others falsely promising huge tax savings to unsuspecting business owners. The result has been a sharp increase in the number of fraudulent ERTC claims. In fact, the IRS has already identified over 11,000 fraudulent returns