Bette Hochberger, CPA, CGMA Bette Hochberger

Hi, I'm Bette Hochberger, CPA, CGMA, and I will talk a little about how we get into tax planning. Honestly, the best way to start is to keep good records. That may sound like you're not really doing anything, but you are. Because if you think about it, many times, people ask me, "Oh, how do I lower my taxes?" Well, are you taking all the expenses you can take and that you have spent money on? So again, we talked about tax evasion before. We're not making up expenses; that's not what we're doing. We're actually keeping track of things that we are spending already.




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Hi, I’m Bette Hochberger, CPA, CGMA, and on today's Finance Friday, we have Vishal Mahtani, a Digital Marketer and serial entrepreneur. Vishal has been in the digital marketing industry for over 20 years and has worked on all aspects within it. Mahtani has been a publisher, advertiser, and digital marketing network and has played these roles more than once. He also has valuable expertise in maximizing ROI by aligning digital and business strategies within growing corporations and start-up environments. Vishal can plan and implement high-growth initiatives by leveraging new and emerging technologies to drive increased brand awareness, consumer engagement, and customer satisfaction.

In this video, Vishal talks about his company's growth and how it all started. We discuss the value a Contract CFO has brought to his Affiliate Marketing Company. He goes into all the details of what had to be done to get his company from the bottom to the top. Over the past couple of years, both Vishal’s businesses, Kashkick and mine, have almost tripled in revenue.  During these years of having his business, he has learned a lot from all the experiences. If you want to learn more about Vishal and his business, be sure to watch this video.


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Hi Everyone - this was quite an exciting weekend in the world of Crypto-friendly Finance and Accounting. We spent the weekend watching the Silicon Valley Bank collapse and FDIC intervention. The end of SVB will change venture financing in the near future.  

TL;DR; Silicon Valley Bank - the main banking institution of Venture Capitalists and Venture Capital backed startups, collapsed in the second-largest US Bank failure ever. By the end of the weekend, the government agreed to make all depositors whole and sort out liquidating the funds later, but it was an exciting and terrifying weekend.  

After a day to reflect, we reviewed the events chronologically and highlighted some tweets for this social media round-up. Thank you to all our friends and family who were patient with us as we followed Twitter more than normal over the weekend.  

On Wednesday, a few VC-backed companies started making large withdrawals, prompting discussions in various group chats popular with the silicon valley investor crowd. According to Bloomberg, the run started when Peter Thiel advised Founders Fund Startups to withdraw their funds. As other venture capitalists followed suit, SVB had a classic bank run that took place at 21st Century Speed. Because of the intricacies of bank accounting, the speed of the withdrawals forced them to sell "hold to maturity" assets - which are not marked to market - at market rates, causing immediate losses and a liquidity catastrophe.  

By Friday morning (8 AM PST/11 AM EST), FDIC seized SVB Bank, unwilling to wait until 5 PM for more billions to leave the bank.  

FDIC nearly immediately announced that:  

250K insured deposits would be available Monday 

Some portion of the remaining funds would be available as a “Special dividend” later in the week. 

The remainder owed would be documented to be paid as assets were sold. 

On Saturday, it became clear that Circle, the backer of USDC, had $3.3 Billion (out of $40 Billion) in reserves at SVB. Circle temporarily dropped the USDC-Dollar Peg, dropping as low as 88 cents.  

Many VC-backed startups had 100% of their money at SVB. Payrolls of Tech companies were in danger of not running.  

By Sunday, Treasury, Federal Reserve, and FDIC issued a joint statement saying SVB would be shut down. Also, depositors would have access to 100% of their funds on Monday, and SVB assets will be sold. If FDIC resources are used to cover uninsured accounts (over $250,000), they will be collected from all banks with a special assessment.  

Some blame investors, but the tweet below exemplifies the problem with that mindset.   

We are glad that we were able to reach all of our clients who bank at SVB and check in on them. If you are banking with SVB and are looking for new accounting and finance advice with experience in treasury functions, we are here for you, so reach out.


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Hi, I'm Bette Hochberger, CPA, CJMA, and today I will talk about how not to screw up your relocation to Florida. There have been a lot of people moving here in the last couple of years, and there are so many reasons to live here! It's such a great place, but especially during the pandemic, there's been a big influx of people.

I talk to people all the time about why they're moving, what they need to do to move, and how to do it the right way and not screw it up because, most likely, you have a large financial situation that is part of the reason. I'm not going to say it's everybody, but usually, there's a financial incentive for people to move to Florida if they still need to be retired.

For those who don't know, Florida has no state income tax, so living here is so popular. We get a lot of people coming from up North, especially New York. Also, some people from out West, like California, these higher-income tax states. It seems all you have to do is pick up and leave, and boom, you’re a Florida resident. You’re here, everything is great, and you feel like you’ll never have to pay taxes again.

Well, part of the issue is that there are quite a few steps that you need to take to remove your domicile from your old state and become domiciled in Florida. I usually tell people that Florida doesn't care that you're here. Not that we don't love you or want you to be here, but we don't have an income tax trying to get claws into your wallet and take your money. So in that regard, Florida doesn't care if you're domiciled here. There are other reasons that you want to be domiciled here.

For example, if you buy a primary residence, you’ll want it homesteaded. The state you're leaving is where you need to be not domiciled any longer. Some places like New York have a declaration of non-domicile that says, I'm leaving, I'm done. You need to take so many steps to not screw up this new Florida residency of yours, so we're going to go through a couple of what those things are. This is not an exhaustive list. This will not be an ironclad case that says, no way are you still subject to taxes in your old state, but this is a minimum that you should be doing to ensure you're domiciled in Florida.

First things first, driver's license. You must move your driver's license from your old state to Florida. If you're still in the system of your old state, it's really hard for you to go then, "Oh yeah, by the way, I moved. I never updated my driver's license. And oh yeah, I don't live there. I don't want to pay taxes anymore." That's probably the first thing you should move. Then along with that, your automobile registration. You want to get everything that ties you to that state severed and moved to Florida. Along that same line, voter registration. You want to be on the rolls in your new state of Florida.




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Hi everybody. I'm Bette Hochberger, CPA, CGMA. Today I’m going to talk about extensions. We have the saying, "An extension of time to file is not an extension of time to pay." This makes perfect sense to accountants and probably sounds like a bunch of gibberish to everybody else.

During tax season, many people will say, "Oh, I'm not ready." Maybe they're not emotionally ready to handle dealing with their taxes. Maybe they don't have everything they need yet to file their taxes, which happens if you're a business owner or if you're an investor, especially if you're invested in another business that needs to produce tax documents for you like a K-1 or maybe you're scared about this bill that you have coming up. You can't pay it right now. So, people want to file an extension, which you can do alone. I have some videos explaining how to file some pretty regular extension forms, or they’ll ask us to do it if they’re our clients. But the thing you have to understand is when you file that extension, it's literally extending the date by which you need to file the return.

If you file an extension, for a business, instead of the return being due on March 15th, it's now due on September 15th. Instead of your personal return is due on April 15th, it's due on October 15th. But that doesn't mean the IRS says, "Oh, you owe us a bunch of money, that's fine; just wait a few more months." No. That's what we mean by an extension of time to file is not an extension of time to pay because you'll see the IRS is what we call a “pay-as-you-go” system. So really, you're supposed to be withholding money from your paycheck. Most W-2 people probably get a refund or don’t owe anything when they file their taxes because the money's being paid throughout the year, or you need to make quarterly estimated payments. That's what the IRS means by “pay-as-you-go.”

The penalty for failure to pay is a late payment penalty of 0.5% of the tax owed after the due date for each month or part of a month; the tax remains unpaid up to 25%. Wow, it could be a lot, right? So, if you ever see a situation where somebody owed taxes and didn't pay them for a couple of years, you'll notice that the penalties and interest related to those penalties are often much higher. Then, the taxes are high after a couple of years because it grows quickly. And the one thing you really, really don't want to do, especially if you're like, "Look, I can't deal with my taxes right now, and I don't have the money for it." Don't say, "Eh, I'll deal with it later." Because there's another penalty called the “failure-to-file penalty,” it's another penalty based on unpaid taxes, and that failure to file can be avoided by filing an extension.

If you can file on time and pay everything on time, fantastic, you’re on the happy path, as we call it. If you can't pay immediately, it's not as great, but the worst thing to do is not to file an extension or a tax return and not pay. It's like you're putting yourself in a bad position regarding dealing with the IRS.

So, now you understand why an extension of time to file is not an extension of time to pay. If you've got any issues with filing extensions or paying the IRS needing payment plans set up, or anything else like that, please feel free to contact my office. We work with clients on all sorts of issues dealing with the IRS.


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Hey everyone, I’m Bette Hochberger, CPA, CGMA. Today, I will talk about the differences between e-filing (filing electronically) and paper filing and go into some of the advantages and disadvantages of each one. Let’s jump in!

What is E-Filing?
Electronically filing, or e-filing is the process of submitting your tax return to the IRS over the internet.

Advantages


Faster process. The IRS typically processes electronically filed returns within one or two days. The IRS will also send an almost immediate confirmation when they receive an e-filed tax return. If there was an error, your IRS e-file provider is requ
Fewer errors. Your tax return must be accurate, so filing your tax return electronically will do the calculations for you. The IRS won’t need to re-enter your tax information in its system.
Quicker refund! Probably everyone’s FAVORITE advantage to e-filing. E-filing reduces processing time, which can get individuals and businesses their refunds faster (most likely three weeks or less after filing).

Disadvantages


There are limitations. For individual tax returns, you can’t e-file if you need to attach statements or other attachments or if you’re filing decedent returns. You also cannot e-file if you file before it begins (January 28th) or after it ends (October 20th).
Technology isn’t perfect, so data loss is possible when e-filing.

What is Paper Filing?
Paper filing is sending tax returns through mail.

Advantages


Security. Paper filing may have fewer security risks rather than e-filing. Paper filing allows you to avoid entering personal information via the internet. When e-filing, information such as your social security number or address could be at risk.
Some people aren’t tech-savvy, so paper filing may be easier.

Disadvantages


Longer processing time. Paper filing requires mailing, which can take a longer
time to process. While e-filing only takes a day or two to process, paper files may take weeks to process. This means that individuals might wait up to 6 weeks to receive their refund.
Less time to prepare. When paper filing, you must consider the time it takes to prepare and mail your tax return. If you wait too long, you could miss the deadline and experience consequences and interest.

Overall, e-filing is definitely the go-to when it comes to filing your taxes. But again, if you aren’t tech-savvy, paper filing is probably the better option. If you can’t decide which is best for you and need help filing, feel free to reach out and schedule a discovery call with me, and I’ll be happy to help.

I hope you learned something new today. As always, stay safe, and I will see you next time.




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