PMM Newsletter: March 2024 Tax Edition

March 15, 2024

With about a month left before the tax deadline, we hope you get your taxes filed with minimal frustration!  As we embrace the arrival of another tax season, we are excited to provide you with valuable information, tips, and even some history to help you through this crucial time of the year!

While tax season can be frustrating, it’s important to remember the core reasons why we pay taxes! Paying taxes is a privilege because it reflects an individual's or a business's contribution to society and the benefits derived from that contribution. From supporting public services, to contributing to democracy, as American’s we all try to do our part to make this country stronger, one dollar at a time.

We encourage you to explore the content of our newsletter, ask questions, and take advantage of the resources provided. Remember, proactive tax planning can lead to significant benefits. Thank you for having us as your tax season partner, and let's strive to make this tax season a successful one together!


A Comprehensive Guide to Gathering Documents for Your Tax Accountant

By, Brandon Leeder

As the tax season approaches, the importance of efficient document gathering cannot be overstated. A smooth process not only gives confidence but also facilitates accurate and timely tax preparation. Begin by compiling essential forms, including W-2s and 1099s, which delineate your income and taxes withheld. These documents, typically distributed by employers and financial institutions by January 31, form the cornerstone of your tax filing.

Next, turn your attention to investment statements, providing a comprehensive overview of dividends, capital gains, and losses. For homeowners, mortgage interest statements (Form 1098) and property tax statements are critical for potential deductions.

Educational expenses should not be overlooked, especially for those with higher education pursuits. Gather Form 1098-T from educational institutions, shedding light on tuition payments and scholarships, potentially offering valuable tax credits or deductions.

Organizing receipts for deductible expenses is crucial. Whether it's medical expenses, charitable contributions, or business-related costs, maintaining a meticulous record enhances your ability to optimize deductions.

Self-employed individuals and business owners should meticulously document business-related expenses. From office supplies to travel costs, every expenditure contributes to a clearer financial picture.

Embrace technology to streamline the process. Many financial institutions offer online tools, providing convenient access to tax-related documents. This digital approach facilitates a more organized and efficient document compilation.

Lastly, communication with your tax accountant is key. Regular updates on any changes in your financial situation, queries about specific documents, and seeking guidance on tax optimization all contribute to a collaborative and effective tax preparation process.

In conclusion, by diligently following these steps, individuals and businesses can transform tax preparation from a daunting task into a manageable and potentially rewarding process. Stay organized, leverage technology, and maintain open communication to make tax season a more straightforward and efficient experience.

Jacksonville small business tax | Tax Preparation Jacksonvil… | Flickr


On RMDs & The 10 Year Rule

By, Daniel Hostetler, CFP®

On December 19, 2019, the SECURE Act was signed into law by President Donald Trump. With the stroke of a pen, many of the long-standing rules governing IRAs and other retirement accounts were changed. 

Next, SECURE Act 2.0 pushed back the age at which individuals must begin taking Required Minimum Distributions (RMDs) from their retirement accounts to 73 for some and 75 for other and eliminating the maximum age at which Traditional IRA contributions can be made.

The most impactful part of the legislation was the changes to the post-death distribution rules for retirement accounts and the “10-Year Rule”.  The “10-Year Rule” applies to certain beneficiaries and requires them to empty the retirement account within 10 years.

This may drive up the income tax liability a beneficiary may pay.  It is more important than ever to develop a proactive retirement plan strategy to consider the taxation of retirement accounts to the next generation.

It is important before making withdrawals, beneficiaries should assess their financial needs, tax implications, and long-term goals. PMM financial advisors may help you and your family navigate the complexities of withdrawing from an inherited IRA effectively.


Independence without Taxation?

By, Greg Holzer, CFP®

With another tax season among us, there is collective dismay that comes with it. It is stressful getting everything together, wondering if you have it all, multiple trips to see your tax preparer, and all the nuances that go into a sound tax season. Followed by relief and excitement when it comes to an end, only for it rear its head again.

Do you ever stop and think though that taxation played a crucial role in the United States becoming the great, independent nation that it is today?

Let’s take a step back in time at some of the tax acts that are partly responsible for pivoting us from the colonial days to an independent nation.

Stamp Act (1765): One of the notable taxes was the Stamp Act, passed by the British Parliament in 1765. This act required the use of stamped paper for legal documents, newspapers, and other printed materials. The American colonists strongly opposed this tax, arguing that it violated their rights as Englishmen to be taxed only by their own elected representatives. The widespread resistance and protests against the Stamp Act marked a turning point in colonial opposition to British taxation without representation.

Townshend Acts (1767): Following the repeal of the Stamp Act, the British government introduced the Townshend Acts in 1767. These acts imposed taxes on various imported goods, including tea, glass, and paper. Colonists, already sensitive to perceived taxation without representation, responded with boycotts and protests.

Boston Tea Party (1773): The climax of colonial resistance came with the Boston Tea Party in 1773. In protest against the Tea Act, which granted the British East India Company a monopoly on tea sales in the colonies, colonists, dressed as Native Americans, dumped chests of tea into Boston Harbor. This act of defiance further strained relations between the colonies and Britain.

These colonial tax measures contributed to the broader sentiment of discontent among the American colonists, fostering a growing desire for self-governance. The rallying cry of "no taxation without representation" echoed throughout the colonies, ultimately fueling the flame of independence. The grievances over taxation played a crucial role in the events leading up to the American Revolution, shaping the course of American history and the establishment of the United States.

While it’s easy to be disgruntled when collecting W-2’s, 1099’s, and every other number of form to take to your tax preparer (trust me I get it!) let’s not forget that we might not be the nation we are today if it weren’t for taxes.

 Boston Tea Party w - Drawing. Public domain image. - PICRYL - Public Domain  Media Search Engine Public Domain Search

As we conclude this edition of our Tax Season Newsletter, we want to extend our heartfelt gratitude for your readership and support. We hope the information, tips, and insights shared have been valuable in navigating this tax season with confidence and ease.

Remember, our team is always here to assist you with any questions or concerns you may have regarding taxes or financial planning. Feel free to reach out to us for personalized guidance and support.

Wishing you a successful and stress-free tax filing experience. Thank you for choosing us as your tax season partner, and we look forward to seeing you in the future!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.