Bob Dyer and likely millions of other taxpayers are still awaiting refunds from the IRS for the 2020 tax year.
Earlier this summer, I wrote a column about Dyer, who retired as the Beacon Journal’s “column with attitude” in December 2020.
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He had a big problem with the IRS as he was still waiting for a tax refund due to a backlog since the start of the COVID-19 pandemic.
Dyer’s wait in June had lasted more than 16 months for what he calculated to be $1,027 from the IRS and $182 from the state of Ohio.
Now Dyer has been waiting for 21 months – and unfortunately there are no meaningful updates for him and the millions of others who are waiting. Believe me, I tried.
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Here’s what happened with Dyer:
On February 19, 2021, Dyer filed his federal taxes electronically. He owed $2,559 and mailed a check, which was quickly cashed, he said.
In the summer of 2020, Dyer and other employees at Beacon Journal and Gannett, our parent company, had to take multiple week-long leaves. We applied for unemployment benefits for these weeks off.
On March 11, 2021, Congress passed the American Rescue Plan Act, which among other things allowed taxpayers to exclude from taxable income up to $10,200 of unemployment benefits paid in 2020 if your modified adjusted gross income was less at $150,000.
But taxpayers affected by this change were told not to change their taxes if they had already filed.
The IRS said it will automatically refund money — or apply the refund to tax debts — for people who have already filed their taxes by reporting unemployment compensation as taxable income.
So Dyer and the others are still waiting.
In August, Dyer emailed me to say he had a letter addressing his May 17, 2022 application.
“We are working on your account. However, we need an additional 60 days to send you a full response on the actions we are taking on your account. We don’t need any additional information from you at this time.”
“OH MY GOD!!!” Dyer wrote to me at the time.
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In early October, Dyer emailed me again:
“Remember when I wrote to you in early August to tell you that the IRS had sent me a notice that they needed another 60 days to figure out my simple return? Well, I just opened another letter from them saying they still need 60 more days!
In the meantime, several readers have also contacted me asking if Dyer had heard any updates, as they were also waiting.
Tricia Nelson filed her return in February 2021 and paid taxes on her unemployment.
“Here it is, almost two years later, and I’ve (tried) contacting the IRS dozens of times. I’ve been told a few times that I’ll have my money within 60 days, and that date is come and go several times.
“I even opened a case with my US Senator’s office and haven’t done anything with it. I probably only owe a refund of about $500, but now it’s become the principal of the business,” she wrote.
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Tried to get an update from IRS Media Relations. I told Dyer and readers that I didn’t expect much from an update and especially not on their particular returns because the IRS says federal law prohibits it from commenting on specific taxpayers.
IRS spokesperson Bruce Friedland directed me to an IRS webpage that provides updates titled “IRS Operations During COVID-19: Mission Critical Functions Continue” . You can check it out by going to https://tinyurl.com/5ym38rmp
There are a lot of numbers and information on the page. Here are some highlights:
As of Nov. 4, the IRS had received 4.2 million unprocessed individual returns this year. This does not include unprocessed returns received before this year, such as outstanding returns filed in 2021 by Dyer and others.
Here’s what the website says about the status of unemployment compensation exclusion fixes:
“The IRS continues to review returns for the 2020 tax year and process corrections for taxpayers who paid taxes on unemployment compensation, to exclude compensation from income if it is To date, the IRS has issued more than 11.9 million refunds totaling $14.6 billion.Some taxpayers will receive refunds, while others will see the overpayment applied to taxes owed or owing. Other Debts The IRS will send a letter to affected taxpayers notifying them of the corrections, usually within 30 days of the completion of the corrections.
The information takes you back to a frequently asked questions page from March 2022.
When I asked for more information, Friedland said it was “an unknown number of people who are still waiting” for a refund or credit on the taxes they owe for the unemployment problem dating back to 2021.
“The IRS has not provided an update on when these taxpayers might expect the IRS to return to them,” he said.
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Erin Collins is the National Taxpayer Advocate. The Taxpayer Advocate Service is an independent organization within the IRS and “helps taxpayers resolve their IRS account issues, advocates on behalf of taxpayers, and works for systemic change to alleviate taxpayer issues,” according to information on its website.
It is unclear whether the Taxpayer Advocate Service can help taxpayers who are awaiting their 2020 unemployment refunds. The website is www.taxpayeradvocate.irs.gov and the Cleveland office phone number is 216-415 -3460.
The attorney’s website says the service is backlogged by at least four weeks due to the high volume of late processing requests from taxpayers. According to an FAQ, the service only helps with unprocessed 2020 returns filed by paper before June 21, 2021, which doesn’t cover Dyer or most of the other millions in his predicament.
In a recent three-part blog series, Collins shared even bigger numbers than the number shared with me by the IRS.
As of Oct. 21, the IRS had just under 8 million tax returns in its backlog.
“Millions of taxpayers continued to experience unreasonably long delays in repayments, as the IRS administered another filing season while simultaneously trying to catch up on its backlog carried over from the previous year,” Collins said. “Paper remains a serious problem and is its Achilles heel. The IRS is getting closer to its goals, but unfortunately millions of personal and business returns are still waiting to be processed, millions more have been withdrawn due to errors or discrepancies that need to be corrected, and millions of amended returns and correspondence still await processing.. For some, this filing season may have felt like Groundhog Day.“
She also acknowledged that some taxpayers are “even still waiting for pandemic relief benefits as the IRS continues to review and process unemployment compensation exclusion corrections and systematically issue refunds and corresponding notices to taxpayers on returns for the 2020 tax year”.
Dyer just shakes his head about his expectation.
“It’s been so long now that I’ve been almost more amused than angry. Almost. But not quite,” he said. , when you miss your own deadline, write another letter telling me you need another 60 days? How about using that time to work on my stinky refund! »
Beacon Journal reporter Betty Lin-Fisher can be reached at 330-996-3724 or [email protected]. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ To see her most recent stories and columns, go to www.tinyurl.com/bettylinfisher
]]>The cruise industry is recovering from Covid-19. Royal Caribbean Cruises Ltd., a publicly traded Liberian company and the world’s second largest cruise ship operator, reported book income of approximately $2 billion in 2019. The company reported a book loss of $6 billion in 2020, a loss of $5 billion. financial accounting loss in 2021 and an annualized financial accounting loss of $3 billion in the first half of 2022. But in an 8-K filing from September 2022, Royal Caribbean said its bookings had exceeded 2019 levels since its Covid restrictions -19 were relaxed in August.
Royal Caribbean’s 202110-K acknowledges that the company and several of its principal subsidiaries, which are also incorporated in Liberia, are, in the course of operating cruises between U.S. and foreign ports, engaged in a trade or business in the United States and derive US-source income. . The 10-K observes that Section 883 generally provides corporations with a statutory gross income exclusion and, in practice, provides an exemption from U.S. corporate income tax and U.S. corporate branch tax, for shipping income from foreign corporations whose country of incorporation provides the United States to incorporated shipowners with a reciprocal exemption.
Specifically, Section 883 provides that qualifying maritime income “shall not be included in the gross income of a foreign corporation and is exempt from tax under this [income tax] Subtitle.” Conversely, IRS Rev. Rul. 80-147 and Tres. Reg. 1.883-1(j) imply that expenses attributable to such exempt income are not deductible and cannot create a loss carryforward. net operating in the United States on non-exempt, non-delivery income actually tied.
The IRS, relying on an exchange of diplomatic notes between Liberia and the United States, concluded Reverend Rul. 2008-17 that Liberia is such a reciprocal country. Accordingly, for United States corporate income tax purposes, Royal Caribbean and its financially consolidated Liberian subsidiaries appear to have relatively little effectively United States-related income or losses from their maritime transport.
Royal Caribbean’s 10-K notes that Treasury regulations, namely Treas. Reg. 1.883-1(h)(2): Disqualifies certain income from the Section 883 tax exemption. Such disqualified income includes providing Miami city tours before or after cruises end.
Beginning in 2023, the Reducing Inflation Act of 2022 may impose a U.S. minimum corporate income tax on certain corporate groups with foreign parent corporations whose adjusted worldwide average financial statement income exceeds $1 billion.
However, the CAMT only applies in a limited way to those groups whose parents are foreigners. Section 56A(c) states that in determining the amount of AFSI of a foreign company, “the principles of Section 882 apply”. CAMT generally only applies to a group with a foreign parent company if the AFSI of the group is at least $100 million, taking into account the application of the limitation of section 56A (c) (4) foreign member companies of the group. A foreign parent group, even if it has a worldwide AFSI greater than $1 billion, must have a minimum of $100 million in AFSI to be subject to CAMT, excluding U.S. net income of foreign members of the excluded group under the principles of Section 882 and 56A(c)(4).
If a foreign-owned group, apparently including Royal Caribbean, has more than $1 billion in AFSI worldwide, it will not be subject to CAMT if the group’s income that is not exempt under Section 56A(c)(4), such as the non-exempt income described in Treas. Reg 1.883-1(h)(2), is less than $100 million. Even if such a group has $1 billion in AFSI worldwide and at least $100 million in AFSI limited to Section 56A(c)(4), CAMT’s AFSI tax base is limited. by Section 56A(c)(4).
The cruise industry faces some ambiguity about the interaction of Section 883 with Section 56A(c)(4). For example, many Royal Caribbean cruises sail from Fort Lauderdale, Miami, or Port Canaveral, Florida, to Nassau, Bahamas, and then return to Florida. Under Section 863(c)(3), 50% of passenger revenue from these cruises is treated as income effectively connected with a U.S. source described in Section 882. See TAM 9348001. However, Section 883 may exempt this 50% from US corporate income tax and branch profits tax. For purposes of the $100 million AFSI threshold and CAMT tax base if that $100 million is exceeded, would the AFSI include 100%, 50%, or none of this Florida-Bahamas cruise revenue?
Section 59(k)(2)(A) treats Section 56A(c)(4) as inapplicable to foreign-invested groups only to determine whether the global AFSI threshold of $1 billion is met, not to determine if the $100 million threshold has been met or, if so, what is CAMT’s tax base. Therefore, it appears that the IRS cannot include 100% of Royal Caribbean’s Florida-Bahamas round-trip passenger revenue in the AFSI to determine whether the $100 million threshold is met or, if so, what is the CAMT tax base.
When it comes to the inclusion of 50% of Royal Caribbean’s Florida-Bahamas return passenger revenue in the AFSI, the situation is less clear. As noted, Section 56A(c)(4) states that “in the case of a foreign corporation, to determine [AFSI], the principles of Article 882 apply. Some IRS rulings are unclear on the question, which was moot prior to the enactment of CAMT, of whether such reciprocally exempt shipping income should be considered effectively related income under the principles of section 882 but excludable under the independent application of s. 883, or as excludable from consideration under s. 882 in the first place. Compare Rev. Rule. 87-15—which states that “[a] part of [the shipping company’s] Income [is] actually connected with a trade or business in the United States…. Such income, however, is exempt from United States tax under the reciprocal shipment exemption of section 883(a)(1) “- with PLR 8129051, which says, “The IRS National Agency notes, without negative comment, that the shipping company concluded that its earnings were excluded from its “gross income under section 882(b) because of the “reciprocal exemption” provisions of section 883(a)(1)”.
Under the anti-cruise line view that Section 56A(c)(4) only incorporates the exceptions of Section 882 and not those of Section 883, the 50% of net passenger revenue qualifying as revenue actually connected could be included in the AFSI. In the short term, the application by section 59A of a three-year average to determine the applicable corporate status, and the allocation to companies affected by section 56A(d) of an unlimited carry-over of losses of post-2019 financial statements to offset up to 80% of current year AFSI, could reduce CAMT exposure to Royal Caribbean and other cruise lines, whose businesses have been harmed by Covid- 19 between 2020 and 2022. According to the cruise lines’ favorable opinion, section 56A(c)(4) also incorporates the exceptions of section 883, 0% would be included in the AFSI.
Some cruise lines, such as Royal Caribbean, have ship-owning subsidiaries that lease the ships to affiliated companies that operate the cruises. These vessel-owning subsidiaries apply Section 883 to avoid being subject to the otherwise applicable Section 887 gross transportation tax of 4% on their non-effectively connected US-source income. The analogous question arises whether such income is exempt from inclusion in the AFSI under Section 56A(c)(4). A further, analogous question arises whether any shipping or other income that is exempt from U.S. corporate income tax and U.S. transportation tax under a tax treaty is also excluded by the 56A(c)(4).
One source of optimism for the cruise industry is that of the former Treas. Reg. Sections 1.56-1(b)(6)(ii)(B) and 1.56(g)-1(m)(4), dealing with the repealed analogous alternative minimum tax on accounting income and adjusted tax preferences. of current earnings, the Treasury favorably excluded a foreign shipping company’s earnings attributable to its Section 883 or treaty earnings that were exempt from ordinary U.S. corporate income tax.
This article does not necessarily reflect the views of Bloomberg Industry Group, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Alan S. Lederman is a shareholder of Gunster, Yoakley & Stewart, PA in Fort Lauderdale, Florida.
We would love to hear your smart and original point of view: write for us
]]>by: Nexstar Multimedia CableRussell Falcon
Job :
Updated:
(NEXSTAR) – There are major changes to tax deductions for the 2022 tax year (to be filed Spring 2023) as many of the extended US bailout benefits go away.
TurboTax reminds filers to know what credits will be canceled or withdrawn for filing, including changes to the Child Tax Credit and the Earned Income Tax Credit. Here is a breakdown.
Rules 2021 leave
2022 rules you will use for filing:
Rules 2021 leave
2022 rules you will use for filing:
Rules 2021 leave
2022 rules you will use for filing:
TurboTax also explains that neither the recovery refund credit (for those who did not receive a third stimulus payment) nor the sick leave and family leave credits for the self-employed will apply to the year of deposit 2022.
For more information about credits and deductions for the 2022 filing year, visit the Internal Revenue Service. The deadline to file 2022 taxes will be Tuesday, April 18, 2023.
Published: 03/11/2022 21:19:32
Northfield
To party:
Residence:
Political profession/experience:
Incumbent:
Abortion:
Income, sales tax:
Marijuana:
Should NH pass tougher gun control laws?
To party:
Residence:
Political profession/experience:
Incumbent?
Abortion:
Income, sales tax:
Marijuana:
Should NH pass tougher gun control laws?
Voters in the slightly redesigned 127th Assembly District must choose between a seven-term incumbent and a political newcomer in this year’s election.
The 127th District includes the city of Clay, where Micron will invest $100 billion over the next 20 years in its semiconductor facilities. Holder Al Stirpe sponsored the Green CHIPS Act, which helped attract the company to central New York. Stripe has now said the region and state are ready for the real estate boom the microchip company will produce.
“There must be incentives for these developers to build affordable housing,” said Stripe. “Everyone wants to build luxury housing, and luxury housing is great, but there are a lot of people who don’t fall into the luxury category.”
Stirpe adds that the state will also be involved in transportation infrastructure to deal with increased traffic caused by the construction and operations of the plant. GOP challenger Karen Ayoub said education will also be key to building the workforce.
“Bringing our children into the classroom with a focus on core academics, STEM programs,” Ayoub said. “When Micron arrives, it’s [a] very exciting time. There is a lot of work to be done, a lot of catching up to do to ensure that our children are ready for the future.
Ayoub also wants to ensure that Micron and the state meet its benchmarks and receive $10 billion in incentives under the green chip legislation.
“We need to have benchmarks for everything from transportation to making sure Micron meets the environmental standards it has set; that our children go to school and learn”, Ayoub said. “We need to set benchmarks throughout the process and make sure we all respect that. Keep in touch with community residents to see what their concerns are, try to resolve issues proactively rather than waiting for ‘a problem is a problem.’
Ayoub said she was convinced that Micron could benefit the region as much as the company promoted it. While all eyes are on the chipmaker, Stirpe said he was proud to have helped small businesses during the pandemic as chairman of the small business committee. As of now, Stripe said the Covid Recovery Grant Program has provided $865 million in assistance.
“95% of that went to micro businesses with 10 employees or less and that was kind of our goal because the federal P3 program had taken care of the large and medium-sized businesses pretty well,” said Stripe. “But a lot of micro businesses don’t have the human resources to fill the demands. There’s a whole bunch of reasons why they kind of fell through the cracks,” he says.
Stirpe estimates that about 42,000 businesses have received an average of $19,000 in assistance through the program. But Stirpe fears those and other efforts are being ignored due to the plethora of political ads targeting him and other Democrats in Albany.
“They’re all negative and they’re all saying they’re going to do these things, which, if you look very closely, we’ve already done,” Stirpe said. “This year, we had a $2.2 billion property tax rebate program that granted homeowners with adjusted gross income less than $250,000 between $400 and $960. It’s a very good check. We eliminated the sales tax on gasoline.
Still, Ayoub said not enough was being done and voters were growing increasingly frustrated with what was happening in the state.
“I watch our state get so expensive that people leave,” Ayoub. “I’m concerned about the number of people leaving and we’re losing our tax base. There seems to be a lack of understanding about that in much of Albany right now.”
The redesigned 127th Ward covers the towns of Clay, Cicero, Manlius and now Cazenovia and no longer includes Lafayette, Pompey or Tully.
Early voting is underway in Onondaga County at 10 locations through Sunday. Election day is November 8.
]]>Although the proposed taxes appear similar, there are differences in how each state plans to use the revenue.
In Massachusetts, assuming voters pass the measure, the tax is expected to generate about $1.3 billion in revenue in 2023, according to an analysis by Tufts University. The state aims to use the revenue to fund public education, roads, bridges and public transportation.
The California tax is expected to raise between $3.5 billion and $5 billion a year if passed, and the state plans to use the revenue to pay for zero-emission vehicle programs and wildfire response and prevention .
Whether or not voters support higher income taxes, revenue plans often affect Election Day results, experts say.
“We’ve seen voters reject tax increases on high incomes, even when they apply to relatively few people,” said Jared Walczak, vice president of state projects at the Tax Foundation. “And we’ve seen them pass income tax changes that would affect a lot of people.”
We have seen voters reject tax hikes on high earners, even when they apply to relatively few people.
Jared Walczak
Vice President of State Projects at the Tax Foundation
Overall, there’s a clear pattern with state ballots: Voters care about plans for money, he said.
With funds earmarked for subsidies for zero-emission vehicles, Proposition 30 is opposed by Governor Gavin Newsom, who believes the measure will negatively impact the state’s economy without a benefit that “largely accrues to Californians.” “Walczak said.
Another factor that may affect voters is the current income tax structure in each state, experts say.
“Massachusetts has been talking about creating a progressive tax rate for a long time,” said Richard Auxier, senior policy associate at the Urban-Brookings Tax Policy Center, noting that the current flat income tax is 5%, regardless of or income.
“Part of it is that they want this ability to shift some of the state’s overall tax burden up the ladder,” he said.
In contrast, California has a progressive income tax system, with a top rate of 13.3% for individuals earning more than $1 million per year.
“California already has a very high top margin [tax] “Walczak said. “Even though voters are broadly in favor of progressive taxes and support higher rates for high earners, they may think this goes far enough.
Walczak said he doesn’t believe the proposed taxes on millionaires are part of a larger trend at the state level. Since 2021, some 21 states have reduced personal income taxes, and only one state, New York, and the District of Columbia have increased levies.
“You can’t read much about what voters want based just on poll access,” he added.
Despite growing interest in taxing the ultra-rich, the federal proposals failed to gain traction.
After releasing dueling wealth tax proposals in the 2020 presidential primaries, the senses. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., along with other Democrats, in March 2021 launched the Ultra-Millionaires Tax Act, a 2% annual top wealth tax 50 million dollars and 3% on assets over 1 billion dollars.
And Senate Finance Committee Chairman Ron Wyden, D-Ore., in October 2021 proposed a plan for a tax affecting Americans with more than $1 billion in wealth or adjusted gross income above $100 million for three consecutive years.
In March, President Joe Biden unveiled a wealth tax proposal as part of his 2023 budget, calling for a 20% levy on households worth more than $100 million.
While many Americans endorse higher taxes for the ultra-wealthy, these plans have not garnered widespread support.
Q: As the year drew to a close, I wondered how long I should keep important documents. I’m running out of space and have to start throwing away some of the old ones.
Answer: Different documents need to be kept for different lengths of time. Here are some recommendations from the Internal Revenue Service and the Better Business Bureau.
“Generally, you must retain your records supporting an item of income, deduction, or credit shown on your tax return until the statute of limitations for that tax return expires,” the statement reads. ‘IRS.
Keep records for three years, unless you are reporting income no more than 25% of your reported gross income. Keep these records for six years.
If you do not file a return or if you file a fraudulent return, keep the records permanently.
Lechelle Yates of the Better Business Bureau of Central and Northwest North Carolina provided information on keeping other types of records.
Keep these records permanently:
* Major financial documents.
* Birth and death certificates.
* Military discharge documents.
* Life insurance policies.
* Wills and living wills.
Keep the following documents for one year:
* Regular statements, payslips.
* Keep a digital or paper copy of your monthly bank and credit card statements for the past year.
*You should also keep pay stubs so you can use them to verify the accuracy of your Form W-2 when tax season and receipts for major purchases arrive.
* The Federal Trade Commission suggests keeping your medical bills paid for a year before throwing them away.
The BBB recommends keeping records supporting the information you provided on your tax return for three to seven years.
They also recommend keeping brokerage statements, tuition payments, and charitable donation receipts for three to seven years.
The BBB also recommends keeping utility bills and bank deposits and withdrawals for one month until you can verify that the transactions cleared.
Need for volunteers for the preparation of declarations
The AARP Tax-Aide program releases individual federal and state tax returns during tax season.
Volunteers are needed to prepare returns. Volunteers should be computer literate, have good communication/interpersonal skills, be attentive to detail and be willing to learn.
Volunteers are also needed to schedule appointments and to verify taxpayer identification and information prior to assignment to a tax preparer. Training is required and tax preparers must pass an exam to be certified.
To complete an application, go to www.aarp.org/taxaide and click the Become a Volunteer button.
AARP Tax-Aide volunteers must be vaccinated against COVID-19.
For more information, call Paul McElroy at 336-955-1062 or Andy Surasky at 336-777-6189. Leave a message with your name, phone number and the reason for your call.
Email: [email protected]
Write: Ask SAM, 418 N. Marshall St., Winston-Salem, NC 27101
Republican gubernatorial candidate Mark Ronchetti has proposed a tax plan that includes tax cuts that his main opponent in the general election says are unachievable.
The proposed tax plan includes permanent tax cuts for middle- and low-income workers, rebates on state oil and gas revenues, economic incentives for companies wishing to move to New Mexico and create jobs and a small business bailout.
The proposed plan says all New Mexicans would receive $100 for every billion dollars in oil and gas revenue New Mexico receives.
“Right now, the state of New Mexico has one of the worst tax structures in the country for small businesses and people from all political backgrounds agree that it needs to change,” the spokesperson said. Ronchetti campaign, Ryan Sabel, in response to a survey by NM Policy Report. “New Mexico’s state government has never been so wealthy and [Gov.] Michelle Lujan Grisham has grown the government 40% as our people struggle to surrender at the end of the month. We have more than enough state revenue to give taxpayers back some of their hard-earned money while funding needed government programs. Reforming our tax structure will provide lasting economic relief to New Mexico families and businesses for years to come, creating the long-term economic growth our state sorely needs.
Ronchetti is challenging incumbent Lujan Grisham, a Democrat. Libertarian candidate Karen Bedonie is also running for governor.
The Ronchetti Plan cuts and rebates could cost the state about $2 billion each year, according to a former cabinet secretary in the New Mexico Department of Finance and Administration.
“Over four years, the plan costs $8.2 billion,” New Mexico Voices for Children Action Fund executive director James Jimenez said in a statement. “To put that into context, these cuts and rebates would be roughly equal to the current state budget, which is $8.4 billion. So unless some magic happens in these four years, the state budget should be cut irresponsibly. The specific programs the legislature should cut are not a “black hole” as Ronchetti suggests. Rather, they are the very programs that people depend on, such as public education, higher education, health care, public safety and environmental protection. These plans reflect little knowledge of how the state’s most essential services – education, public safety and health care – are funded. It doesn’t take a budget expert to know that this plan can’t and won’t work.
Jimenez was Governor Bill Richardson’s chief of staff. While on the Legislative State Finance Committee, he served as an economist and supervisor of the performance audit unit.
New Mexico’s current state budget has $8.4 billion in its general recurrent fund which includes public education, higher education, health and human services, public safety, commerce, and government. industry, agriculture, energy and natural resources, justice, general control and the legislature.
General oversight includes funding for public entities such as the National Ethics Commission, Border Authority, Economic Development, Public Regulatory Commission, and National Department of Tourism.
“The Governor has been in state government, she has been a public servant in New Mexico for over a decade, and she has proven over the past four years how to have an effective budget that increases funding for the things that New Mexicans find the most important: education, health care, public safety,” said Lujan Grisham’s re-election campaign spokeswoman Delaney Corcoran. “She was also able to offer relief taxes and reforms to help vulnerable New Mexicans.”
One of the tax relief efforts signed into law in 2022 by Lujan Grisham was House Bill 163 which amended things such as removing the Social Security tax, reducing the gross receipts tax rate of state and the addition of a child tax credit.
THOSE who requested an extension to file their 2021 tax return only have one day left as the deadline is Monday, October 17.
The extension deadline is usually October 15, but this year the date falls on a Saturday.
This means it has been moved to the next business day.
If returns are not filed by tomorrow, taxpayers could face late filing penalties.
The penalty is called the Failure to File Penalty and it is calculated based on how late you file your tax return plus the amount of unpaid tax by the original payment due date – not the date extension deadline.
Unpaid tax is the total tax that must be reported on your return minus amounts paid by withholding tax, estimated tax payments, and allowable refundable credits, according to the IRS website.
The penalty for failing to file is five percent of unpaid taxes for each month or part of a month that a tax return is late.
However, the penalty does not exceed 25% of your unpaid taxes.
Although there are many companies and websites to file your return, the IRS has a tool called IRS Free File, which is available to anyone with an Adjusted Gross Income (AGI) of $73,000 or less in 2021.
Taxpayers can use the IRS Free File to claim credits like Child Tax Credit, Earned Income Tax Credit and others.
To use the tool, create an online account as this will help you file an accurate return.
Taxpayers can also get answers to tax law questions using the IRS’ Interactive Tax Assistant tool.
There are specific cases where the IRS has given taxpayers additional time to file after the October 17 deadline.
This includes military personnel and others serving in a combat zone.
These taxpayers will have 180 days after leaving the combat zone to file returns and pay any taxes due.
Additionally, those suffering and recovering from recent national disasters have until November 15, 2022.
The areas include parts of:
In addition, taxpayers in the following states have until February 15, 2023 to file:
If you’ve been affected by recent storms, visit the Disaster Relief page on IRS.gov for the latest information.
The Sun reveals how millions of Americans stand to benefit from tax relief of up to $1,000 – are you eligible?
Plus, a tax expert shares steps to take before the end of 2022, including preparing direct payments worth up to $1,000.
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CTP (NASDAQ:PTC) released its FQ3 2022 financial results on July 27, 2022, missing expected revenue and EPS estimates.
The company offers a range of software for product design and lifecycle management.
Given macroeconomic the uncertainties and potentially rich valuation of the stock currently, I’m on hold for PTC in the short term.
PTC, based in Boston, Massachusetts, was founded in 1985 and has developed a family of CAD/CAM and product lifecycle management software for organizations around the world.
The company is led by President and CEO Jim Heppelmann, who was previously co-founder of Windchill Technology, which was acquired by PTC in 1998 and was previously CTO of Metaphase Technology.
The company’s main offering applications include:
CAD/CAM/CAE software
Augmented reality
PLM
Industrial IoT
The company acquires customers through its direct sales and marketing efforts, as well as through partner referrals.
According to a 2022 market research report by Grand View Research, the global product lifecycle management market [PLM] was estimated at $26.9 billion in 2021 and is expected to reach $56.4 billion by 2030.
This represents a projected CAGR of 8.6% from 2022 to 2030.
The main drivers of this expected growth are growing demand for cloud-based PLM solutions in a secure IT infrastructure and increased customer focus on developing “smart” products and factories.
In addition, the history of the US PLM market and projected future growth trajectory are presented below:
Major competitors or other industry participants include:
Aras Corporation
Arena Solutions
Oracle Corporation (ORCL)
SAP SE (SAP)
Autodesk (ADSK)
Siemens AG (OTCPK: SIEGY)
The company also offers offerings in the CAD/CAM and Industrial Internet of Things markets, both of which are large and growing global markets.
The total turnover per quarter increased according to the following graph:
Gross margin by quarter followed approximately the same trajectory as total revenue:
Selling, G&A expenses as a percentage of total revenue per quarter have slightly decreased in recent quarters, as shown in the chart below:
Operating profit by quarter followed the trajectory shown below:
Earnings per share (diluted) fluctuated significantly:
(All data in the graphs above are in accordance with GAAP)
Over the past 12 months, PTC’s stock price has fallen 10.4% compared to the US S&P 500 Index’s decline of around 15.9%, as shown in the chart below :
Below is a table of relevant capitalization and valuation figures for the company:
Measure [TTM] |
Rising |
Enterprise Value / Sales |
7.29 |
Revenue growth rate |
11.0% |
Net profit margin |
26.2% |
% EBITDA GAAP |
25.8% |
Market capitalization |
$12,590,000,000 |
Enterprise value |
$13,890,000,000 |
Operating cash flow |
$442,150,000 |
Earnings per share (fully diluted) |
$4.21 |
(Source – Alpha Research)
Below is an estimated DCF (Discounted Cash Flow) analysis of the company’s projected growth and earnings:
Assuming conservative DCF metrics, the company’s stock would be valued at around $90.35 from the current price of $107.90, indicating that it is potentially overvalued currently, with the assumptions for earnings, DCF growth and discount rate data.
For reference, a relevant partial public comparable would be Autodesk; Below is a comparison of their main evaluation metrics:
Metric |
Autodesk |
CTP |
Variance |
Enterprise Value / Sales |
9.00 |
7.29 |
-19.0% |
Revenue growth rate |
17.4% |
11.0% |
-37.0% |
Net profit margin |
11.8% |
26.2% |
122.7% |
Operating cash flow |
$1,680,000,000 |
$442,150,000 |
-73.7% |
(Source – Alpha Research)
A full comparison of the two companies’ performance metrics can be viewed here.
The Rule of 40 is a software industry rule of thumb that states that as long as the combined revenue growth rate and EBITDA percentage rate are equal to or greater than 40%, the company is on a trajectory acceptable growth/EBITDA.
PTC’s most recent GAAP Rule of 40 calculation was 36.7% in the second quarter of 2022, so the company performed quite well in this regard, according to the table below:
Rule of 40 – GAAP |
Calculation |
Recent Rev. Growth % |
11.0% |
GAAP EBITDA % |
25.8% |
Total |
36.7% |
(Source – Alpha Research)
In its latest earnings call (Source – Seeking Alpha), covering FQ32022 results, management highlighted the growth in the company’s annual recurring revenue, which grew 15% in constant currency terms.
Management believes that the company’s cost structure is “in very good shape”, with “most of the pain… behind us”, following the restructuring of the previous year and a “prompt [to] a more aggressive and efficient SaaS strategy.’
Notably, the firm said bookings increased by 20% in Europe, less than in other regions. The company recently left Russia.
In terms of its financial results, total revenue grew 6.2% year-over-year, with “broad” strength across its product lines.
Management didn’t disclose any information on the company’s retention rate, but said it was “the lowest turnover the company has seen in many quarters.”
PTC’s Rule of 40 results have been reasonably strong, especially for a company of this size.
Revenue growth would have been 12% had the company not faced significant foreign exchange headwinds due to the strong dollar, particularly against European currencies.
Gross profit decreased, in part due to the implementation of ASC 606, a revised accounting standard on revenue recognition currently in effect.
On the balance sheet, the company ended the quarter with cash and cash equivalents of $322 million and gross debt of $1.43 billion at an all-in interest rate of 3.5%.
In the past twelve months, free cash flow was $419.1 million, including $23.0 million in capital expenditures.
Going forward, the company aims to return half of its free cash flow to shareholders through share buybacks, assuming its debt-to-EBITDA ratio is below 3x.
On the valuation side, the market values PTC at an EV/Sell multiple of around 7.3x.
The SaaS Capital Index of publicly held SaaS software companies had an EV/Average Revenue multiple of approximately 6.9x as of September 30, 2022, as shown in the chart below:
So, by comparison, PTC is currently priced by the market at a slight premium to the broader SaaS Capital Index, at least as of September 30, 2022.
The main risk to the company’s outlook is an increasingly likely macroeconomic slowdown or recession, which could slow sales cycles and reduce its revenue growth trajectory.
Another risk is a continued rise in the value of the US dollar against other major currencies, which would negatively impact its earnings as a result.
A potential upside catalyst would include a “short and shallow” economic slowdown or a pause in US interest rate hikes, reducing upward pressure on the dollar and likely increasing the valuation multiple of the dollar. ‘company.
So, given the macro uncertainties and potentially rich valuation of the stock, I’m holding onto PTC stock in the near term.
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