As we head toward winter and the busy holiday season, we wanted to take a minute to pause and check in with our valued clients, family, and friends to bring you up to date on the newest legislation and law changes.

Inflation Reduction Act of 2022

On August 16, 2022, new Federal legislation called the Inflation Reduction Act or IRA was signed into law. It is a complicated and far reaching reconciliation bill; but some key points are:

  • energy-related tax credits,
  • caps on the out-of-pocket amounts for certain prescription drug costs,
  • expansion of the Research and Development (R&D) tax credit, and
  • additional funding for the IRS to hire taxpayer service and enforcement members over a 10-year period.

The energy-related tax credits, and the R&D credits, are worth highlighting as this new Act allocates additional funds to expand existing credits. For more information, The Tax Advisor summarizes key provisions in this new legislation.

Family and Medical Leave Insurance (FAMLI) Program

Colorado’s new Family and Medical Leave Insurance (FAMLI) program will be implemented over the next two years. Colorado employees will likely see a new deduction on your first paycheck in January 2023. The associated Family and Medical Leave benefit will become available one year later in January 2024. Employers must post a Poster explaining the FAMLI Program on or before January 1, 2023. For additional resources, see the FAMLI website.

Professional fees and services

As a Firm, our professionals spend many hours in training to stay on top of the ever-changing laws. Congress often passes legislation throughout the year that requires us to gain an understanding of the law quickly so that we can share this knowledge with you. Training allows us to have answers readily available. It appears as if the knowledge was easily gained, however, it was possible because of our year-round training program. The amount of time we may spend on any given matter is inherently unpredictable; accordingly, estimates of fees are only that, and not a guaranty or limitation. This year our engagement letter will outline minimum fees for all types of tax returns, consulting, and deduction optimization services.

Consulting and Deduction Optimization

Taxpayers have faced new and unexpected challenges from multiple law changes over the past few years. Employers are turning to innovative benefits and enticements to keep employees engaged, while employees are exploring options and considering opportunities. All of this comes at a cost to the business, so this is a wonderful time to evaluate your budgets and costing strategies to ensure you’ve captured any additional costs in your invoices. If you need any assistance with costing strategies, please do not hesitate to Email Us or call the front desk at 303-988-5648 to schedule a time to chat with one of our professionals.

The Employee Retention Tax Credit

This credit is still around! The IRS has warned us of opportunistic companies reaching out to business owners proclaiming that the credit is available to everyone. It is a great credit; however, it isn’t easy to calculate and not all employers will qualify for it. Please reach out if you want to discuss this with our team as they are now taking appointments to discuss this credit with existing clients.

Be sure to check out our prior newsletters, Q&A’s, and blogs for great information on other tax changes and frequently asked questions

Please contact our office today at 303-988-5648 to discuss your specific situation. As always, planning ahead can help you maximize your family’s financial situation and position you for greater success.

Kim Hitchcock, CPA

Kim Hitchcock, CPA

KIM HITCHCOCK is a CPA and the owner of McNurlin, Hitchcock & Associates, PC.  

Kim has worked in public accounting, assisting individuals and small businesses for more than 26 years.  She has traveled from Maryland, to Alaska, to Colorado where she now lives with her husband and daughter.  Read more about Kim and the members of her accounting team.