Hello to our clients and friends! Welcome to a new year! We have a lot to cover, so hold onto your seats!
Individual and Entity Tax Preparation for 2023 Tax Returns
By now, all of our individual and business tax clients have received their engagement letter and, for individual returns, the opportunity to complete their deposit. Once you have signed your engagement letter, you will receive a link from Mary or Alannah through Karbon to complete your tax organizer. When you complete the organizer, please be sure to check the task as completed so we know your return is ready to start. If you don’t mark the task as done, we will assume you are still working on your organizer or uploading documents. Thorough completion of your organizer ensures accurate completion of your tax return. We understand that some of these questions may seem repetitive, especially if you have been a client for many years, but completing the organizer ensures that we are recording all deductions and credits you're eligible for. Based on the feedback we have received thus far, it seems our clients are really liking the new process. We have implemented this new process to ensure efficiency, accuracy, and organization.
Paperless and Fully Remote
In the last several months, Aurora Consulting Group has transitioned to a completely paperless process. We were about 90% paperless for nearly a decade, but we have now reached the point where we will no longer accept documents in paper format. Additionally, as of August 1st, we have become a fully remote team. Your accounting, tax, and advisory team now resides in three different states. Thanks to the technology we have implemented, we are able to communicate with you and each other more efficiently than ever before.
Pricing Updates and New Pricing Coming this Summer
In June of last year, we increased our rates by 20%. You can expect your pricing to be approximately 20% higher than last year, barring any major changes to your taxes.
Beginning June 1st, 2024, we are transitioning to a completely different pricing model. All our services will be subscription-based. Some of our new clients are already experiencing the benefits of this new subscription-based model, and the feedback we are receiving is extremely positive. Paige will begin sending out pricing for all individual and business clients in April. You will have the opportunity to sign up for a low monthly fee for year-round accounting, tax, and advisory support. All agreements will be based on your individual needs and the service levels we recommend.
Here’s a little background on why we are making this change...
For many years, in addition to tax and accounting, we have provided high-quality coaching, advisory, and CFO services to all of our clients. We never found a way to price those services without nickel-and-diming. It didn’t feel right to send an invoice for every little call and email. Sometimes on those calls, we ended up discussing things that weren’t directly related to accounting and tax, which made it even more challenging. On our clients' side, they weren’t always calling when they should have, as they didn’t know if they would get a bill or how much that bill would be. It was difficult to standardize, so we just got by, with no real pricing standard for these services. The result was that clients didn’t always call when they really should have, and there was a lot of confusion for both us and the clients on what was billable and what was not. Additionally, when tax time rolled around, there were sometimes significant problems to solve that could have been avoided if only the Aurora team had been aware of the circumstances. While we can’t solve every tax or business challenge out there, I have often found myself saying, “I wish you would have called”.
Hourly and per-form pricing no longer works for us, and it definitely is not beneficial for our clients. We don't like the model, and we don't like how it feels when someone calls and we have to consider whether or not to charge for each and every bit of time we spend. We would much prefer that when any client calls, texts, or emails, they get 100% of our attention without any thought of whether or not we are being paid. Moving to this model will also even out your cost for tax preparation, accounting, advisory, and financial advice. No more big bills that hit once or a few times per year for our services. Your cost will be the same every month, on autopay, with an annual renewal and price adjustment when necessary.
We are excited about this change and believe that, for the vast majority of our clients, it will bring value across the board, improve our relationship, and, in return, improve your financial situation and your confidence in yourself and your business, allowing you the greatest chance for success. This is proactive tax and financial strategy. We are excited about it. We believe in it. And we are looking forward to moving forward with you, our client, in a healthier, happier, more engaged, and more productive relationship.
Website Update
We are in the process of overhauling our website. Please check it out as we are proud of the changes we have made so far. The most significant changes you will notice are the addition of our Mission Statement and Values in the “About Us” section under the “Who We Are” tab. In addition we have also added useful links under the Resources tab and additional information about our services under the “What We Offer” tab. We have also added a searchable blog that includes all of our past newsletters. The website is an ongoing project and we will continue to update it so it can serve our existing and new clients. Please reach out with any suggestions.
ERC Fraud
The IRS has implemented a Voluntary Disclosure Program to support taxpayers who have accepted an ERC credit fraudulently. These taxpayers will have an opportunity to return the credit at a 20% discount. The deadline for participation in the Voluntary Disclosure Program is March 22nd. If you know anyone who needs assistance or feels like they have been a victim of fraud from an ERC company, please reach out to us, and we are happy to help. Aurora Consulting Group filed for approximately 2.5 million in ERC credits. Mary worked very hard to research every single ERC credit that was filed by our firm to ensure it was in complete compliance with the law. We have zero concerns that any of the ERCs we filed have any issues, but we know that there are taxpayers out there who received ERCs who should not have. This was not necessarily the fault of the taxpayers, as the ERC companies were preying on every single business owner in the United States that paid employee wages. This is the reason the IRS has developed this program to help taxpayers be compliant even if they were a victim of an ERC company. We understand, and we are here to help. We are also happy to conduct ERC reviews if you are uncertain if you were a victim of fraud. The deadline to participate in this program is March 22nd, so please reach out right away if you have questions. We will conduct a brief phone interview and provide pricing for a complete ERC examination and support through the process.
Income and Deductions
I receive a lot of questions and I also hear a lot of misinformation regarding income reporting. Clients are always asking me what they can deduct. I would like to share this article talking about tax evasion versus tax avoidance. My philosophy around taxable income and deductions is simple:
If it is earned or unearned income to you, it is reportable. Loans, gifts, and many settlements are not income and therefore not reportable.
In the realm of deductions, the standard is ordinary and necessary. The IRS does not define ordinary and necessary, and what is deductible can be somewhat subjective. The process I use when determining if a questionable expense is deductible is to first read the law, perhaps research case law, and then ask myself if I could reasonably argue for my client in tax court if it came to that.
We believe in taking a big view approach, to look at our clients' goals, their cash flow situation, and put them in the best situation possible to meet their goals. This may mean minimizing income, maximizing income, qualifying for certain credits, or calculating a specific wage for an S-Corp owner so they can maximize tax-free contributions to a retirement plan. This is long-term thinking, big-picture strategy, and can only be successfully done with a year-round, long-term proactive approach that includes Accounting, Tax, and Advisory services. We really believe in what we do, and we have seen the power of our model make massive changes for our clients and help them reach their goals. Our approach is for people who are not trying to save a quick buck but for those who have a long view and want success that is sustained year after year. This is why we use the “Team of Three approach”. Your Accountant, Tax Pro, and Advisor are your Team of Three! This also provides transparency, accountability, and a team approach to client solutions. It works! It really does!
And Finally!
In closing, I’d like to reiterate a few points I made in the December Newsletter. For additional details, please see the December 2023 newsletter, which is also posted to the blog.
The 2024 1099-K Threshold is lowered from $20,000 to $5,000. Please expect a 1099-K at the end of the 2024 calendar year for all payments received by you individually or to your business to any electronic payment platform totaling more than $5,000. This new mandate will add additional reporting requirements for millions of taxpayers who use Paypal, Venmo, Cashapp, or the like for personal transactions.
Beneficial Ownership Reporting Requirements are now in effect. If you have an LLC or Corporation, this new requirement is for you. Fincen reporting is mandatory for all limited liability companies and corporations in the United States. It is important to us that all of our clients are compliant, and we are here to assist you in ensuring your compliance with these new rules. Please reach out to us if you would like us to file this on your behalf. This service is included if you are on a full-service agreement with Aurora Consulting Group. If you would like assistance in filing your Fincen reports, please let us know; we are happy to complete the reporting for $250 per entity.
We are now offering Corporate Compliance monitoring for all of our Corporations and LLCs. If you want to know the status of your Corporation or LLC, please reach out, and we can give you a status update. We would be happy to assist in getting you compliant if you are not currently.
If you have a minute, please check out this article featuring our mission and dream. Our friends at Kinwork, LLC were featured in the Visalia Lifestyle magazine for the month of February. We are so excited and proud of them.
Have a great tax season! Please reach out and I look forward to sending you another update soon!
Sincerely,
Sandra