“What to Know About the Five-Year Rule for Roths” via Schwab
There are actually several versions of the five-year rule governing Roth accounts, some of which overlap, and falling afoul of any of them could trigger additional taxes and penalties.
A great summary of what to know.
New U.S. Department of Labor overtime / salary exempt rules OVERRULED – Changes expected for 1 Jan 2025, those that occurred 1 Jul 2024, and the automatic escalation programmed for every 3 years, are no longer in effect.
See our previous post for some of the background, but the gist is: Salaried employees who make more than $35,568/ yr are still exempted from mandatory overtime pay.
Thank you veterans — Your bravery is a vanguard for us all.
It’s here! 🥳 – MD Comptroller has just released an online payment tool for Pass-Through Entity Tax (PTET) payments!
So if your S-corp or Partnership is electing to pay tax on your business profit at the Maryland level, you can now remit those payments online 🛜 (& no longer have to write a manual check + mail with a paper voucher)
This should make things much easier for affected business owners (& in time for the 4th quarter PTET estimated payments due Dec 15) – Check out the new Payment Portal
🔔Reminder for Md. businesses🔔 -> Be sure to certify your compliance with MarylandSaves by Dec 1 to have your $300 Md. Annual Report fee waived next year 💲
This is related to the new requirement a couple years ago for businesses with at least 1 employee to have a retirement plan, either their own or the state’s free MarylandSaves option
If your business is using the MarylandSaves program, you’ll automatically get the fee waiver
If your business has its own retirement plan, you should certify compliance before Dec 1 to get the fee waiver
And if you’re exempt (e.g., no employees), be sure to certify exemption too
Energy efficiency incentives are available at both the federal and Maryland level, so check out these links if you’re contemplating, or have already, purchased an EV or use solar in some shape or form
Not only is the IRS' new DirectFile system going to be available in Maryland starting next year …
Maryland will also have its own “FileYourStateTaxesMD” platform that the same taxpayers can use to file their corresponding state return as well
What does that mean? -> Around 700,000 Marylanders will have the ability to file their income taxes for free using software created by the IRS and MD - wow.
You do have to be sure your return is on the simpler side in order to qualify (since the platform can only handle some complexities), but if it does, this promises to be a great stride forward for streamlining tax filings for hundreds of thousands of people!
See the link above for more info!
Under new overtime rules issued by the U.S. Department of Labor:
Then, starting 1 Jul 2027, these earnings thresholds will be updated every 3 yrs (rather than previous 5-9 yrs) to keep pace with changes in worker salaries and be more predictable for employers.
More detail in the DOL news release.
UPDATE: New rules over-turned 15 Nov 204 – See our updated microblog post.)
Xero’s mobile app is about to get some major upgrades taking it even further! 📱⚡
- [Coming soon] Tap to Pay: Starting early next year, businesses can accept payments on the spot using their mobile device. This makes it even easier to get paid, especially when you’re out and about.
- [Coming soon] Predictive cash-flow forecasting: Get a clear picture of your future finances directly in the app. AI-powered forecasting will help you anticipate cash flow needs, make informed decisions, and plan for growth.
- Create, modify and void invoices on the go: Need to send an invoice while you’re at a job site or meeting a client? No problem. Create, edit, or even void invoices right from your phone.
- Mobile bank reconciliation: Reconciling transactions is now easier than ever. Our upcoming sort and search feature makes it easy to navigate your bank statements on mobile. Plus AI-powered predictions suggest transaction details, saving you time and reducing manual effort.
- Drill down into P&L statements: Dive deep into profitability with just a few taps. Explore the transactions behind the numbers, identify any discrepancies, and fix errors, all from your mobile device.
Read more about on Xero’s blog announcement!
To all Xero users 📢 You may want to register for the beta of Xero’s new AI tool, JAX (I know we just did) 🤓 –>
This development is going to fundamentally change the way you complete routine business tasks on the go, as they can now be done outside of Xero. You won’t have to open up Xero to complete tasks like generating an invoice – just send an instruction to JAX via text message, WhatsApp message or email.
Here’s more on Xero’s GenAI strategy, including video demos that are very exciting - Check it out!
Was reminded of this quote recently while laying out goals for this fall …
Here’s to the spark of laborers everywhere who power it all🔋!
We’ll be closed Labor Day to honor them, and re-open Tuesday to further our mission helping power the creativity of entrepreneurs 🏄🏻♂️
Did you know? -> Even if you were never in a state all year, you may be required to file a ‘resident income tax return’ there.
It comes down to your “tax domicile” - i.e., ‘your true, fixed, permanent home’ (even if you weren’t there)
For a decent thumbnail, plus info on MD’s recent audits in this area, check out this article from Frost Law
Do you do business in DC? Then you almost certainly need a MyTaxDC login to take care of key compliance steps like personal property tax filings, franchise tax estimated payments, & more.
How do you get a MyTaxDC login? Check out this guide from DC on how to sign up.
(Added Bonus: If you add our firm as an authorized third-party, we can then assist you with those filings as well!) :)
The IRS recently released a ‘Scam Alert’ for misleading claims about non-existent “Self Employment Tax Credit” ->
We’ve actually had at least a handful of customers reach out to us about this one, and we like this line from the IRS' press release:
Taxpayers urged to talk to a trusted tax professional, not rely on marketers or social media for tax advice
I don’t fully know why, but the last few years there’s been this rash of small business ‘tax advice’ on TikTok, Instagram, & similar platforms from people who clearly don’t know what they’re talking about -> We have to agree with the IRS' advice on this one :)
Have you submitted your business' newly required “Beneficial Ownership Information Report” (BOI)?
Although still an unfolding situation, at a July 9 House Financial Services Committee hearing, Department of the Treasury Secretary Janet Yellen said ‘there are no plans to extend the Beneficial Ownership Information (BOI) reporting deadline’.
That deadline? Dec 31 for business that were already in existence when this year began.
For many small businesses it’s a fairly easy process – Check out our video tutorial in our YouTube channel for a walkthrough.
I recently heard a small business owner share the insight quoted below …
Is it time for you to pull aside and look at the big picture?
Our mission here at ElementsCPA is to help you design your business & your finances
Xero (our preferred online accounting platform) is giving away $460,000 to Xero customers across the globe as part of the Xero Beautiful Business Fund – Entries are now open & you can apply in one of the following 4 categories:
Check out the link above for more details and be sure to submit before Aug 27 (and if you remember, be sure to mention us as referring - we could get a prize too)! 🏆
Status Update: Our support team member, Alcides, is on vacation through mid-next week 🏖️
Our team is covering his duties in the interim & appreciate your flexibility
For any phone calls, please be sure to leave a voicemail so we can reach back within 24 hours ->
Thanks & happy Monday!
A business’ cost structure as it scales typically mirrors more stair steps than upward sloping line
If you’re not deliberate, you could get caught with a cost structure of one stair matched with the revenue structure of the previous stair 😕
So decide on your optimal size & don’t get stuck between steps
Our team wishes you a 🎆 happy 4th of July!
We’ll be closed in honor of our nation’s birth, then back on Friday to continue helping power the creativity of the entrepreneurs we collaborate with! ⚡ > 🔌 > 🎨 > 🖼
Curious how to use AI in your small business?
Check out this primer from Xero to get quick insight on:
Looking for a bank that’s:
Check out our referral Relay Bank, where ElementsCPA does its primary banking too!
BIG changes to MD labor law to take effect in 2025 ->
New requirement for quarterly wage & hour report to calculate a new benefit: “Family & Medical Leave Insurance”
Depending on biz size, also required to remit 0.45% towards (a la unemployment insurance)
More info: MD DOL Paid Leave website
