Retirement accounts such as 401Ks and IRAs are a great way to save for the future and help protect your financial security. When you contribute money to these accounts, it grows over time, and in most cases, you will not have to pay taxes until you withdraw the funds. This can provide tremendous benefits, such as tax-free compounding of your investments and significant savings when you retire. However, there may be times when you may need to access money in retirement accounts early due to unforeseen circumstances or emergencies. Early withdrawals can result in significant penalties, and taxes will typically apply. Fortunately, with the recent passage of the SECURE 2.0 Act, some exceptions have been made that allow individuals to make withdrawals from their retirement accounts without incurring excise taxes or penalties in certain circumstances.

New Exceptions to the Excise Tax on Early Retirement Account Withdrawals

Typically, a 10 percent excise tax will apply to distributions from a retirement plan that occur before the account holder reaches the age of 59 1/2. However the SECURE 2.0 Act, which was passed by Congress in December 2022, provides some exceptions to the excise tax, including:

• Birth and adoption expenses - Distributions may be made from a retirement plan to address qualified expenses related to the birth or adoption of a child. These distributions can be repaid to make up for the amount that was withdrawn. However since tax refunds are generally not available for contributions made after a certain amount of time, the new law has limited the recontribution period to 3 years.

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Taxpayers with foreign assets must take extra care when filing their annual tax returns and reporting information to the IRS through other means. By law, taxpayers with foreign accounts are required to report these assets and pay any applicable taxes. Failure to report accounts or other assets when required could result in tax penalties. By understanding the specific requirements that apply to them, taxpayers can avoid tax-related issues, and they can determine the steps to take to respond to any penalties that have been assessed.

The Basics of Foreign Account Reporting

When it comes to reporting foreign financial accounts, there are two main forms that taxpayers should be familiar with: the Report of Foreign Bank and Financial Accounts (FBAR) and Form 8938. The FBAR is used to report the value of a taxpayer’s foreign bank and financial accounts in total at the end of a tax year. A taxpayer will be required to file an FBAR if they have an interest in one or more bank accounts, brokerage accounts, mutual funds, or other financial accounts in countries other than the United States, as long as the aggregate value of all of these accounts exceeds $10,000 at any time during the calendar year. FBARs are filed electronically with the Financial Crimes Enforcement Network (FinCEN), and they are due on April 15.

Form 8938 is used for reporting certain specified foreign financial assets when the aggregate value of all such assets exceeds a certain threshold amount. In addition to foreign financial accounts, Form 8938 will include stocks and securities issued by foreign entities and ownership interests in foreign businesses. The following reporting thresholds apply for Form 8938:

California property taxes can be complex and challenging to understand. While the laws regarding property taxes apply statewide, the ways these issues are handled can differ from county to county. Understanding the specific requirements that apply to property owners can be difficult, and failure to follow the correct procedures could result in penalties. To address issues related to property tax assessments, payment of taxes that are due, and other related concerns, property owners will need to be aware of important dates and deadlines that apply throughout the year.

Dates Related to Property Taxes

• January 1: Lien Date - Anyone who owns taxable property on this date will be liable for the taxes that apply to that property. Property taxes are generally calculated as 1 percent of the assessed value of the property on the lien date.

• January 18: Homeowners' Exemption Claim Form - Certain owner-occupied homes will qualify for a $7,000 exemption toward the taxable value of the property, and this exemption can be claimed by making a one-time filing with the county assessor. Assessors are required to mail claim forms for the homeowners' exemption to new property owners by this date.

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In California, property taxes are a notoriously complex issue, and they may apply to both individual taxpayers and businesses. While property taxes will generally apply to real estate property owned by an individual, married couple, or business, they may also apply to other types of personal property. Specifically, assets that fall under the category of "business personal property" will need to be reported, and taxes may be applied to some of these assets. By understanding the requirements that apply to business personal property, owners of small businesses and other types of companies can make sure to avoid potential penalties.

What Is Business Personal Property?

Business personal property refers to the tangible assets owned by businesses and used to conduct their operations. This includes furniture, fixtures, equipment, and other miscellaneous items used by a business in its day-to-day operations. It also includes vehicles, aircraft, and boats, as well as supplies used by a business, such as office supplies, janitorial products, or fuel for vehicles. A business may also be required to pay taxes on personal property that has been leased and is used as part of its ongoing operations.

Real estate property is not included in business personal property. Inventory, such as products meant to be sold to consumers or parts used to make products, is considered business personal property, but it is exempt from property tax.

Many businesses rely on non-compete clauses in employment contracts, severance agreements, and other types of contracts. These clauses can help businesses protect their interests and prevent unfair competition by restricting former employees, independent contractors, or other types of workers from working for competitors or starting their own competing businesses. However, under the administration of President Joe Biden, the federal government is looking to take action to restrict the use of non-compete clauses or even prohibit them altogether.

Proposed FTC Rule Regarding Non-Compete Clauses

On January 5, 2023, the Federal Trade Commission (FTC) proposed a new rule that would affect the use of non-compete clauses in the United States. Under this rule, the use of non-compete clauses would be defined as an "unfair method of competition," and employers would be prohibited from using these clauses in employment contracts or similar agreements. In addition, the rule would require employers to rescind any existing non-compete clauses and notify employees or other workers of this rescission. This rule would supersede any state laws or regulations that specify when non-compete agreements can or cannot be used.

Notably, the rule would not only apply to non-compete clauses that have been included in an employment contract or a similar agreement but also to "de facto" agreements that function in a similar fashion. For example, non-disclosure agreements that are so broad that they would prevent a person from working in the same field after leaving an employer would be considered to be non-compete agreements. Other contractual terms that would restrict a person's ability to seek future employment, such as the requirement to pay an employer for training expenses that are not functionally related to the actual costs of training the employee received, may also be considered to be non-compete clauses. Employers would also be prohibited from claiming or implying that a worker is subject to a non-compete agreement when they do not have a good-faith basis for believing that an enforceable non-compete clause applies to a person.