Year-End Update: DIR Fees, PTE Tax, and Christmas!

Merry Christmas from Sykes & Company, P.A.!  

With the New Year almost here, we want to say thank you for your service and all that you do for your community. 

Our Christmas gift to you is a bonus year-end update episode! On this episode of the Bottom Line Pharmacy Podcast, we’re giving you updates on 2024 DIR fees, PTE Tax, big box chain closures, inflation, and more!  

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If you prefer to read this content, the video transcript is below:

Scotty: That movie’s so good.    

Bonnie: We watched it again the other night. I got it recorded and I just, every year, just turn it on.  So good.  

Scotty: He says like, bend over and I’ll show you. And then the guy’s like, what’s he say? He’s like, I wasn’t talking to you.  

Bonnie: Yeah, it’s the best.  And if you like have, there was a version of it that we used to watch that I had recorded on something, but now it’s different and I’ve got apparently the full version and there’s scenes in it that was not in the original one I used to watch so it’s even funnier. It’s good.  What’s your favorite Christmas movie, Scotty?   

Scotty: Oh, man. That’s a good question. I’d be able to tell you if you didn’t ask me.  

Bonnie: Is it gonna be something like… 

Scotty: Oh, I got it. Obviously, Christmas Vacation. I mean, come on, classic.  But Carol got me on an old classic movie, Bing Crosby Holiday Inn.  

Bonnie: I have not seen that. 

Scotty: Great movie. Love it. That’s a good one.  

Bonnie: You know what else is gonna go down as a classic? Which, I thought it was newer, but it’s not. It’s Elf. Elf is 20 years old, I believe. I think I saw it the other day.  

Scotty: I can’t. I can’t do Elf.  

Bonnie: I love Elf.  Everything about it is great. My kids love it. And they, everywhere we go for like in any city that’s bigger than Edenton, they’re like, if they go in an elevator, they’re hitting all the buttons like he does. They’re hopping across the street from the lines. There’s an escalator. They’re like, got their legs stretched.  

Scotty: I did watch, last night, a Biltmore Christmas Hallmark movie. Pretty good for a Hallmark.  

Bonnie: Yeah, I’m not a Hallmark movie, Christmas movie person.  It’s probably because I like watching True Crimes and all that stuff all year. So, getting into like the gushy holiday movies aren’t for me. I feel like there’s other Christmas movies I’m not thinking about. What are some other Christmas movies?  

Scotty: Home Alone’s a classic. Come on.  

Bonnie: The first one. I don’t care for the second and the third and all that. The second one’s not bad.   

Scotty: The first one? Macaulay Culkin? Yeah, Pete’s been watching that on repeat. I mean, it’s on every day at our house. Home Alone.   

Bonnie: I could watch that every day. With Pete. It’s a good one. I don’t know why, but I also like Christmas with the cranks. I’m not sure why.  

Scotty: I haven’t seen that one. It’s Tim Allen.  Maybe I have seen it.  

Bonnie: His daughter, his daughter goes away for Christmas. She’s like in college and she’s not gonna be home for Christmas and they’re usually like, they do Christmas up, like that’s their thing. Yeah. They decide they’re gonna go on a cruise and cancel Christmas. They’re just not gonna. They’re not gonna decorate. They’re not gonna buy any gifts. They’re just gonna forget Christmas and go on a cruise and I don’t know why, but I like it.   

Scotty: I like the Santa Claus, the first one. I think that’s Tim Allen too. 

Bonnie: Mm hmm, mm hmm, mm hmm.  

Scotty: And he goes to the Denny’s because he burns the turkey.  And there’s a bunch of divorced dudes in there with their kids. The guy pulls his hand up, he’s like, burn the turkey? And he’s like   

Bonnie: Yeah, that’s a lot of good ones. This is our Christmas episode. It’s the first time we’ve had a Christmas episode.   

Scotty: We got a jam-packed episode. There is a lot going on, lots of things to discuss. There’s a lot, there’s a lot of stuff out there. So, this is our Christmas episode, update, year-end update. Obviously right now Bonnie what’s on everybody’s mind is year-end DIR fees.  

Bonnie: It’s coming.  

Scotty: What that’s gonna be like, nobody knows yet, but we’ll know here soon. In fact, we’re gonna be speaking at Pioneer about it in May.   

Bonnie: Yeah, that’s the first time we’ve kind of gotten, you got a topic that you have to speak about that you don’t actually, you can’t start to prepare for yet because the topic was what it was gonna be kind of talking about. How that situation, how the DIR fee thing played out. So, you can’t prepare for that one yet, because you don’t quite know.   

Scotty: Well, they need a title, so I gotta come up with one.  But that one is yet to be determined.  It’ll be interesting to see how that goes. Fun.  

Bonnie: But yeah, I mean, there’s a lot of people concerned. People are even concerned that have the cash flow to handle it. So, It’s gonna be an interesting first quarter.  

Scotty: I’ll tell you we’re still seeing a lot of pharmacies that are coming through the door here that definitely have a lot of tax opportunities. Folks You got to be looking at these tax planning opportunities because we’re seeing a lot of, I mean hundreds of thousands of dollars some people… 

Bonnie: You still have a couple weeks  

Scotty: …with tax planning opportunities. Yeah, and I’m still seeing some pharmacies come through the door that are doing GLP ones all everywhere and they’re losing money. So, yeah, obviously everybody on this watching this is not probably doing that but there’s some pharmacies out there that are just… 

Bonnie: Filling them.  

Scotty: Not…really…I don’t know not paying attention or mindful of what they’re doing there, but… 

Bonnie: Yeah, I mean, it’s definitely different, I’m sure.  

Scotty: I think a current ratio of about two and a half to one is where you need to be, you need to be getting towards however you need to do that. 

Bonnie: Yeah.  

Scotty: Whether that’s from a revenue side, a margin side, an expense side, managing the balance sheet, what’s coming off of there, distributions, debt.  

Bonnie: And you definitely have to be looking every day at your, you know, your script system and what you’re filling. And what you’re making your margin on each drug, picking out the winners, picking out the losers and determining those losers if they’re worth keeping. I mean, every day, that’s what I would do if I was there.   

Scotty: We’re seeing a lot of pharmacies go into the combo shop. Seeing pharmacies looking at other opportunities. I had one do a hospice deal cash, hospice contract. That’s been very beneficial.  For them, so you got to go out there and find those opportunities where you can.  

Bonnie: Diversify some things out. I’ve got some people looking into infusion pharmacies, closed door, different opportunities other than just your normal script. So, they’re out there.  

Scotty: They are,   

Bonnie: But yeah, Scotty, we got a couple more weeks for tax planning. I mean, there’s still, even though we’re, we’re heading into, you know, first of the year, there’s a lot of things you can do to help your tax situation, even at this point.  

Scotty: There is. One, one thing I like…I switched to tea, by the way. Coffee was a little hard on my gut. I don’t know if there’s any pharmacy out there.   

Bonnie: Anybody want to help Scotty out with that?  

Scotty: Gut health. 

Bonnie: Let us know.  

Scotty: Tea seems to be working. No, I like, I’m liking some retirement plan options. Because you can maybe, you know, save 20, 30, whatever amount of tax, come April 15th. By doing a profit sharing or even a high-powered retirement plan option, but you don’t have to fund those plans until your calendar year, September.  

Bonnie: Right, and that’s key for someone who may have a cash crunch in that first quarter from DIR fees. You can still get the deduction for that profit sharing plan when you do your tax return. You just don’t file it yet.  

Scotty: Yeah.  

Bonnie: You can go on extension. No penalties or issues with that and wait to pay that, which is huge.   

Scotty: Yeah.  

Bonnie: Till September. So.   

Scotty: So, I like that one.  

Bonnie: Cash basis, taxpayers. We’ve got a lot that are pre paying everything they can right now before the end of the year, non-inventory expenses. So inventory wouldn’t count, but…people pre paying their rent for the year, some insurances.  

Scotty: Yeah, remember that you can’t write off inventory.  So, if that balance sheet on your tax return doesn’t show inventory, you got a problem.  

Bonnie: Yeah.  

Scotty: That’s not in compliance with tax law.  

Bonnie: Yeah, we’re talking about operating expenses. Yeah, I’m seeing that a lot. People are prepaying professional fees, rent, rent’s a big one.  Insurance.  Anything that’s due in January that, you know, you can go ahead and expense for the end in December, write that check or make that payment before December 31st, take that expense.  Anything you can do like that to bring income down, that is fantastic. It’s probably a little late for some equipment installation. We want to make sure everybody realizes that we’ve said that a few times. It’s got to be in use in the pharmacy. So even if you’ve purchased it, if it’s sitting in a box in the back. The IRS says it is not in use and therefore can’t deduct it for the year.   

Scotty: And of course the PTE tax, pass through entity tax, we’ve talked about that and some other items where you elect to pay state tax at the entity level, pharmacy level, and that flows through to your individual return as a credit or something to the state. Every state’s different here.  But just by essentially what you’re doing just by making this election could save you 5, 10, 15, $20,000 just on how you’re paying your state tax.  So, because you’re already gonna have to pay state tax. It’s just. You’re paying it. It’s just who pays it. Yeah. And it saves you five, ten, fifteen, twenty thousand bucks. So, definitely seeing, definitely doing some of those.  

Bonnie: Still seeing a lot of big box chains closing. Yeah. Staying open. That’s something we’re seeing a lot of recently.  

Scotty: I mean, I know ours in town. You go on a Saturday. Flip of a coin. Wednesday, and their pharmacy’s closed.   

Bonnie: Didn’t have staff.  

Scotty: It’s crazy.   

Bonnie: Which is causing growth in lots of our stores. We’ve had many clients that I’ve talked to that are, you know, growth is always great, but they’re like, holy cow, like we’re being bombarded because the Walgreens down the street or CVS or whoever is closed every day. Can’t stay open. People are moving their scripts. 

Scotty: Yeah.  

Bonnie: So, it’s great, but it’s growth and growth can cause cash crunches like we’ve talked about in the past for sure. So, I think you mentioned you heard from maybe Live Oak Bank last week about some funding opportunities they’re offering?  

Scotty: Live Oak Bank sent out a mass email. I think about they’ve got a new funding option for this particular type of growth, pharmacy closures, chain closures, from what I read with the flyer they got, it was pretty, pretty strict that it was for pharmacy closures. You know, this is not a DIR…   

Bonnie: Right.  

Scotty: Funding vehicle or anything like that. It’s, if you’re seeing a lot of growth with pharmacy closures, Live Oak Bank has a funding program out there to consider.  

Bonnie: And it sounded like it was going to be, if all things are, you know, in good shape, a pretty quick one. 

Scotty: Yeah, it seems like it was turnkey.  

Bonnie: Yeah. So that’s exciting. People should reach out to them on that, if they’re in that situation for sure. Experiencing growth with the closures because growth will suck your cash.  

Scotty: Sure will.  

Bonnie: See that a lot with startups but this is even say with any growth is going to be the same because you’re paying those wholesaler bills before you’re getting paid so money’s going out quicker than that’s coming in. 

Scotty: Yep. You got to be careful with growth I mean that includes growth with these brand drugs too because you can get in big trouble there.  

Bonnie: Yes.  

Scotty: What else is new out there, Bonnie?  

Bonnie: Well, I hate to ask.  

Scotty: I guess it wouldn’t be a…  

Bonnie: I hate to ask. Is there anything new in the ERTC arena? These days?  

Scotty: Man, we haven’t talked about ERTC. We gave you a little break there. A couple months. It’s been almost three months since we gave you the update. It’s never gonna go away. But there’s been some updates.  

Bonnie: Hit em. Hit me with em. What are they?   

Scotty: Let’s see here. There was a court case, not a court case, there was an audit. IRS did an audit of a medical practice in Arizona and an urgent care in California. So, these are medical practices, and the IRS denied their ERC, they had a few orders listed, but their arguments were not strong, and they didn’t show, which we’ve said on many podcasts, our ERTC due diligence podcast, go back and listen, gotta show that nominal impact. 

Bonnie: Yes.  

Scotty: And that was highlighted in there. And there was no mention of the nominal impact it had on the pharmacy for a partial suspension. So those were disallowed.  

Bonnie: Ouch.   

Scotty: So, you know, this is just going to keep expanding. The IRS did send out 20, 000 rejection letters recently for people who have applied recently I think a lot of those were fraudulent, like, fake businesses and stuff.  

Bonnie: I was about to say, I’m pretty sure they accepted a majority of them. It must have been pretty obvious.   

Scotty: So, I mean, even, they were just signing off on all of them there for a couple years. So, they put, you know, they put the moratorium in there, we talked about that on a previous podcast. The freeze is still in, I think it opens up back in January. And then you have maybe through, is it March or April, to file.  And then after that, ERTC will be out because the statute of limitation to go back will be, will be met so that, they sent out those letters. They’ve also, they’ve also got the voluntary disclosure program coming out this month, maybe the end of this month on, I got the ERC, I don’t think I qualified, I want to return the money, so that’s, you know, I want to come clean with it before you audit me or whatever, type thing.  

Bonnie: We’ve had some clients return the money.   

Scotty: Yeah, we have. Yeah. 

Bonnie: It’s hard to do, but.  

Scotty: Well, they couldn’t, the group that prepared it for them couldn’t answer the questions, couldn’t, there was no documentation. No documents. To support it. Nothing. Or if they did, it was like one, two pieces of paper, or it was like 20 pieces of paper, and it was just the government orders that were written out.  

Bonnie: I saw one of those.   

Scotty: To make it look like it was this big fancy package. So, you know, no nominal.  

Bonnie: This will be going on for years. 

Scotty: Yeah, it will be. It sure will be. I had a taxpayer that new client, a new client, they got it before they got with us. They got the checks right when they pretty much came on board from the IRS back earlier in the year. And we kept reminding them you need to amend your prior year returns, you know, that’s what you’re supposed to do. And so, he did it. They got the amended returns from the CPA, old CPA, and he owes about $70,000 in tax. It’s taxable. He has to amend the returns. It’s taxable. And, so he’s having to pay tax on that, that money. So that’s something to consider. Oh, we also had another case for ERTC where a pharmacy sold stock sale. The new owners, the new owners went and filed for ERTC probably incorrectly because it was an aggregate group. And this group didn’t have the numbers from the other pharmacies that were part of one for ERTC, that’s questionable to begin with, but they’ve applied for it. And, you know, we’re telling the new owners “Hey, you know, technically, you should be getting a new K1.  And you’re going to, you’re you as the old owner will be paying tax on this money.”  I don’t know if they baked that into the deal or not, but I would be, you know what if I was the old owner and I get a random amended K1 with $150,000 of taxable income on it, whatever. This is a big pharmacy, so it’s probably closer to $250,300.  

Bonnie: I have seen one deal where there was some terminology listed about something like that.  What, got it? Yeah, just if this happens. Like in a deal?  

Scotty: In the deal. In the deal, yeah. I don’t think this was in the deal. So we haven’t had that call yet.  

Bonnie: Uh oh. 

Scotty: But that’s gonna be interesting because she don’t, this person doesn’t like the, you know, she don’t like paying taxes.  

Bonnie: Nobody does.  

Scotty: Well, nobody does. She’s gonna be hot. So that’s something, you know. These are real world examples of things happening with the ERTC. The IRS did come out. I got my notes here. The IRS did come out with a couple of GLAMs, which are General Legal Advice Memorandums. 2023-005, we’ve talked about this one, was the supply chain argument, where the IRS discussed that, saying it’s going to be extremely hard to make that argument.  

Bonnie: Right.  

Scotty: They also issued GLAM 2023-007…Bonnie. OSHA communications not considered orders for the ERTCs. If you’re doing an OSHA argument, IRS is not too fond of that one. Either way, you gotta be careful.  

Bonnie: They’re not being really friendly, are they?  

Scotty: They don’t, they don’t, they’re cracking down on this thing. A lot of people are abusing it. This is what happens, and they’re playing catch up, so it’s gonna, it’s gonna, it’s gonna go from here.  

Bonnie: Ugh, it’s gonna get ugly.  

Scotty: I’ll tell you what’s ugly, is This, this shirt from 1980.   

Bonnie: Is that a Christmas shirt?   

Scotty: This is dad’s old shirt. I still rock it.  

Bonnie: Really?  

Scotty: Yep. From 1980.  I wear it once or twice a year. Christmas time.  

Bonnie: Do you, did you go get it out of his closet or do you now own it?  

Scotty: Yeah, yeah, yeah. When I was, like, in high school or college, I would… 

Bonnie: You stole it 

Scotty: I got a few of his shirts. 

Scotty: I mean, they are some 80 classics.  I have to whip out another one sometime.  

Bonnie: You should wear one for each podcast.   

Scotty: Well, I only have, like, two or three. My wife threw away, like, five of them, because she was like, “these are absolutely hideous.”  They’re still starched, you know? They still have that thick starch on them. So they’re like they’re like cardboard.  

Bonnie: I mean, it’s… 

Scotty: I like them.  

Bonnie: It goes for Christmas, for sure.   

Scotty: Yeah, this one’s perfect. Yeah, I love this. I don’t know if it’s like a misprint or something because… 

Bonnie: the logo is way down there.  

Scotty: It’s like on my belly button.   

Bonnie: I’ve never seen that.  

Scotty: Tommy Hilfiger. It may be like a vintage. 

Bonnie: Might be worth something since it’s like, it’s messed up.   

Scotty: I like it.  

Bonnie: I’ve seen it on the on the pocket or above the pocket.  

Scotty: Yeah, usually it’s on the pocket. I don’t get it.   

Bonnie: Does he have his initials in the sleeves? He didn’t do that back then.  

Scotty: No, this was, I think this was off the rack at Belk’s.   

Bonnie: He probably gave it to him for Christmas. I hear about your shopping, according to your dad, you do some shopping at his house.   

Scotty: I do? What do you mean?  

Bonnie: He says he goes to Costco and puts a bunch of stuff in the garage and then you come over and take stuff out of the garage and take it to your house.  

Scotty: Have I done that before? Yes.   

Bonnie: Now you’re telling me you’re taking his shirts.  

Scotty: Look, if you go into his garage, it’s a Costco distribution center in it.  

Bonnie: Like pallets.  

Scotty: There’s pallets of paper towels and toilet paper.   

Bonnie: I mean, you just don’t want stuff to go to waste.  

Scotty: There’s boxes of green beans stacked to the ceiling. How many green beans?  

Bonnie: I feel like I should go over there. Kitty litter?   

Scotty: There’s bags of kitty litter. Keep going.  

Bonnie: I just know he always talked about having to go get kitty litter.  

Scotty: Dish soap, laundry. I mean, you’re covered.   

Bonnie: So you could live in there for a good amount of time.  

Scotty: Yeah, they’re, they could probably. 

Bonnie: If there was like a zombie apocalypse.   

Scotty: They could probably ride out next year without it. So occasionally I’ll grab a paper towel roll or two.  

Bonnie: Paper towels are expensive. I would go there. I’m actually thinking about stopping by this afternoon now that you mentioned there’s so many there.  

Scotty: I’ll be there. Yeah.  

Bonnie: Oh, what else we got, Scotty?   

Scotty: We got, we got the, well…   

Bonnie: Uh oh.  

Scotty: There’s a whole new reporting requirement. That’s going to impact all businesses pretty much in 2024.   

Bonnie: So, but not for Tax Year ‘23.  

Scotty: Not for Tax Year 23. Thank you.  But FinCEN, which is a branch of the Department of Treasury, not under the IRS, Financial Crimes Enforcement… 

Bonnie: Financial Crimes Enforcement Network.  

Scotty: This is an anti-money laundering thing.  

Bonnie: Okay.  

Scotty: As far as I know. Understand it. And essentially, all businesses if you’re a LLC and you’re the only owner of that LLC and you bring in $1,000 a month, I believe, or a year, you own an LLC.  If you own a corporate, if you filed anything with the state to register as a business or a corporation or LLC, you have to file a report, this is 2024… 

Bonnie: A thousand bucks is the baseline?  

Scotty: No, there is no baseline. You could have no income at all, and you’d have to file this report. You file a report that gives the business information, tax ID number, whatever. And then you also have to list the owners, their address, name, birth date, their ID number, whatever the ID number. And so, this is all new starting next year. Now, there are some exclusions. So, pretty much, this will apply to all pharmacies, unless you’re excluded. There are some exclusions for big businesses. More than 20 United States employees.  

Bonnie: Okay.   

Scotty: Revenue over five million dollars on your previous tax return.  

Bonnie: Okay.  

Scotty: Was there any others?   

Bonnie: So, basically, all our pharmacies are gonna fall in that A little below, a little above, a lot in that range, so you’ll have to, there’s going to be.  

Scotty: The average pharmacy, the average pharmacy for four and a half million.  

Bonnie: Yeah, you might be close to 20 employees, but maybe not.   

Scotty: Yeah, looking back at the previous year to determine, you know, you’re going to be having to file this report. Penalties are $500 a day, civil penalty, criminal penalty is $10,000 plus up to two years in prison. This is some serious stuff.  

Bonnie: What’s the point though with this?  

Scotty: It’s the anti, I think it’s anti money laundering.  

Bonnie: I know, but isn’t a lot of this information already on tax returns?  

Scotty: I know, I know, it’s just, it’s, I, I don’t, I don’t get it. I, I don’t know.  

Bonnie: Okay.  

Scotty: It’s a good question. You know, they’ve already got tax returns. All that information’s there. States, you know, I don’t know. It’s just something new, you know, all these shell companies and stuff trying to get trying to get to the bottom all of it I guess.  

Bonnie: Yeah figure it out. Bring in some revenue from the funds.  

Scotty: This is foreign entities, too. I think so if you got foreign businesses you got to look at that.  The reporting is due,  they’re going to scale it in for 2024. So, if you’re an existing business before 1/1/2024,  you have until 1/1/2025 to file the report.  So, you get a year. New businesses, let’s say you open your new LLC on 1 1 24, your new pharmacy in January, file the state documents. You have 30 days to file the report. From there as far as I understand.  

Bonnie: Okay, so it’s not gonna coincide with the tax return to make it easy It’s gonna be a whole separate.  

Scotty: Yeah, a whole separate thing. So, you know, we’re helping.  

Bonnie: Fantastic. That’s good.  

Scotty: And here’s the other thing. Nobody knows who can do these reports like obviously if you’re the owner of the business you can file your report Right. If you’re an attorney you can you can do it. There’s a lot of questions on whether CPAs can do this report because is it a practice of law?  So, some states are like, this is a practice of law. 

Bonnie: Right, because it’s all the ownership information and all of that good stuff.  

Scotty: Right now, we’re not sure if we’re going to be able to assist our clients or not. We’re looking into it. We’re trying to figure out. Figure it out. So, if you’re a client of ours, we’re working on that. But this is here. It’s, it’s another, another thing we got. 

Bonnie: Another form.  

Scotty: Another form. Another reporting.  

Bonnie: Hmm.  

Scotty: So that’s coming. That’ll be fun.   

Bonnie: Another fun thing people are dealing with now.  

Scotty: And we’ll have a lot more content on this topic, by the way.  

Bonnie: Oh, for sure. Yeah. Another fun item is interest rates.  

Scotty: Yeah.  

Bonnie: They’re super, they’re super fun for folks right now. Definitely causing, you know, you know, we were looking at financials. When you look at them quickly, I love to look at comparatives year to date  and you look down and you see the incomes lower and it’s like, uh, then you got to go figure out why and that’s where you see a lot of DIR fees, of course, and then you see that change in interest rates,  especially people with adjustable rates, which most of, you know, a lot of our clients are on with your SBA loans, you can see year over year, how much difference that makes when those interest rates rise. So that’s a big portion of the difference for a lot of our stores with expenses for the year.  

Scotty: Give you a good example of this, good example. We had a pharmacy come to us and he had, he had bought the store about a year prior. The due diligence that was performed was not…  

Bonnie: The best.  

Scotty: It was not the best. Put it to you this way, he overpaid that pharmacy by a million, two million bucks. He paid a top premium, way overpaid for the pharmacy. And he has an adjustable.   

Bonnie: Oh, so it’s even worse.  

Scotty: Adjustable loan here. And his interest, I mean, he’s, he might not make it.   

Bonnie: It’s terrible.  

Scotty: I mean, when you look at the, you know, pharmacy itself and then the interest he was paying, it was like 10, 15% of the revenue. It was crazy.  

Scotty: There’s not, not much you can do about it.   

Bonnie: There’s not, yeah, there’s not.  

Scotty: You got a bad deal, I mean.   

Bonnie: That’s something you don’t think about, though. Overpaying is one thing, overpaying, but then also on top of it, the interest going up, and then affecting that.  

Scotty: The takeaway is there, if you’re buying a pharmacy, you better be doing the right due diligence. 

Bonnie: Yeah.   

Scotty: And he had some, he had some experienced people in there helping him buy that pharmacy, but it happened.  

Bonnie: Yes.  

Scotty: I don’t know, but it is going to cost taxpayers because I think they’ve pushed the rate up to 8% now for like underpayment penalties and stuff. So, if you’re not paying taxes, you know, those estimated taxes and you’re not in the past, it was like 2-3% percent is minimal underpayment penalties.  

Bonnie: Right. Now, it’s a bigger deal.  

Scotty: Never really saw a payment penalty, like over a couple few thousand bucks, that was for a big taxpayer, but, you know, now that’s going to be pushing some serious money.   

Bonnie: Yep.  

Scotty: That’s going to get your attention and that’s just more money paying the IRS. So, be careful of that. Those estimated taxes, you need to be mindful of that now.   

Bonnie: Absolutely.  

Scotty: More than maybe you were in the past.  

Bonnie: Mileage rate’s have gone up.   

Scotty: That was released yesterday.  

Bonnie: Yep. Yep. Sixty seven cent. Maybe.  

Scotty: Sixty seven cents.  

Bonnie: Everything’s gone up. It’s just like going to the grocery store.   

Scotty: I saw something, you know the Prince song, ‘Party Like It’s 1999’? Forget party, I want groceries like it was 1999.  

Bonnie: There’s so many great memes with all of that. It’s like, what do you want for Christmas? Groceries and gas will be great. Thank you.  

Scotty: Oh. Inflation’s no joke, man.   

Bonnie: Yep.   

Scotty: What else we got, Bonnie? What else is new?  

Bonnie: How about the 1099ks? Anything new on that?   

Scotty: Yeah, and we, we haven’t mentioned this in the past, although it’s kind of been ongoing the past couple years, because they keep delaying this stuff, but essentially, if you, this applies to a lot of people. So, if you do any marketplace sales online, or you have a side gig, or even you’re using a Venmo app or something, you don’t get a 1099K unless it’s over $220,000 in transactions.  

Bonnie: Right.   

Scotty: That was, Congress put in where that goes down to $600. So, if you’re paying your mom for groceries for that day and it’s $601 or whatever, reimburse them, you’d get a1099K.  

Bonnie: Mm.  

Scotty: So, you know, and then all these taxpayers do this stuff, and all these taxpayers would be getting 1099Ks.  

Bonnie: Nightmare. 

Scotty: What the heck is this? And then all these taxpayers will be like, well, I was just reimbursing, but they’re going to put that on their tax return. Maybe some of them will and pay back $600. 

Bonnie: Yep.  

Scotty: So, they’ve delayed this again and again, and next year it’s going to $5,000.  

Bonnie: Positive, in the right direction.  

Scotty: So, if you have more than $5,000 in 2024, $5,000 bucks. You’ll get a 1099k. So, and of course, I know the AICPA, our governing bodies, push into like, I think, keep the $5,000.  

Bonnie: Keep it, yeah.  

Scotty: Or something, yeah. So, we’ll see.  

Bonnie: I mean, $600 is way too, too low. 

Scotty: Too low.  

Bonnie: Nightmare.  

Scotty: Nightmare. AICPA was telling, you know, Congress and IRS like, y’all are nuts.   

Bonnie: So much paperwork, oh my gracious.  

Scotty: So, it’s work. Right now, it’s $5,000 next year, but we’ll see where that goes.  

Bonnie: Have you done your Santa shopping, Scotty?  

Scotty: I have not.  

Bonnie: Or are you one of those dads that on Christmas morning you’re just as surprised as the kids….Clark’s, the kids are opening presents and Clark’s like, “huh, didn’t know we got that.”  

Scotty: Yeah. I mean, I had no idea. And I asked Carole, I’m like, “what do you want for Christmas?” and she’s like “I already bought Christmas. Don’t worry about it.” So I asked her all the time, like, “just so I can get out of it, be like, what do you want for Christmas?”  She can’t come back at me.  

Bonnie: Most important thing is, are you cooking for Christmas dinner like you did Thanksgiving?  

Scotty: I am prime rib. Again. Tradition.   

Bonnie: You do the cooking, huh?  

Scotty: I do. Chris is gonna do the cooking though, I think day 2. I’m not, because we have off on the 26th and I’m not cooking.  

Bonnie: You just sit around in that shirt you got on.   

Scotty: I will be wearing this shirt Christmas. And Christmas Eve.   

Bonnie: I like the shirt.  

Scotty: It’s good. And then it goes back into the closet.  

Bonnie: I like my sweatshirt.  

Scotty: [laughing] Where do you think you’re gonna put a tree?  

Bonnie: My favorite movie.   

Scotty: Have you done all your shopping?   

Bonnie: There’s a tennis racket sitting in here right now that I opened this morning that I ordered. I’m almost done. I think I did everything online.  

Scotty: Well, we got a jam-packed list. We’ve, we’ve booked out our podcast through, I think, May.  

Bonnie: Yes, very exciting for 2024 for the podcast.  

Scotty: May next year.  

Bonnie: Lots of great guests, great topics. Obviously, we’ll insert things as they come up.   

Scotty: Oh yeah.  

Bonnie: Hoping to try out some more live. Podcasts like we’ve done in the past. 

Scotty: Yeah. We’ll have some current events, always current, current updates thrown in there.  Love podcasts or two.  I’m going to get some pharmacy owners on in addition to some random vendors.  

Bonnie: Hey, also NCPA is having another ownership workshop in March.  If anybody listening is thinking about buying or starting up a store, we’ve definitely talked to some people on some cold calls that have reached out to us about that and sent them that way. It’s the first step in the game, in my opinion. Hit that up. So, they’re definitely, that sign up for that is ongoing, I know. They, I think you can do that on their website.   

Scotty: When is it, March? March when?  

Bonnie: I don’t think that they have 100 percent set the date but I know it’s March. And then again, ahead of McKesson, the summer, and then ahead of NCPA, in the fall. Three of those available for 2024. I will not be with the McKesson one. I will be out of the country, but you are going to fill in for me for that one. So, if anybody wants to hit up Scotty at the NCPA ownership workshop in June.  

Scotty: I’ll be there?  

Bonnie: You said you would.  

Scotty: I guess so. I’d be remiss if we didn’t mention, I’m sure that our loyal listeners are wondering. Mr. Kendell has decided to move into a part-time role here. Focus on some personal issues that are in his life, and we support that.  

Bonnie: 100%.  

Scotty: Let him take a step back from the podcast. Doors always open for Kendell when he wants to, when and if he wants to come back on the cast.  

Bonnie: Absolutely.  

Scotty: He’ll be making a cameo next year sometime.  

Bonnie: Of course.   

Scotty: And… 

Bonnie: We might bring on some other staff members, team members here.  

Scotty: We could.  

Bonnie: Mix it up here and there.  

Scotty: We might. We might. We’re taking applications for a third host.  

Bonnie: Auditions.  

Scotty: Auditions, yeah. So, that’s our, that’s our man, Kendell. 

Bonnie: Love Kendell.  

Scotty: Yeah, we support him and wish him to be back here soon on the podcast with us. I think that’s it, Bonnie. I think that’s all.  

Bonnie: Well, that’s a good summary. Wrapping up the year here. Very interesting 2024.   

Scotty: It is. You know, we might have to do some, a lot of podcasts, like, updates.  

Bonnie: Yes.  

Scotty: As, as the stuff unfolds. I’m thinking we’re gonna have, a lot of good data to show and present at Pioneer on the, In May.  

Bonnie: Yeah, that’ll be a good.  

Scotty: 16th or something.  

Bonnie: That’ll be a good talk to hear real life examples and how it all played out. Again, we don’t know yet.  

Scotty: Yeah, so we’ll have some numbers like, you know, April we’ll have some numbers through May at that time and so we’ll have some data.  

Bonnie: Yep, we’ll have some real, real data and see how it played out.  

Scotty: Yeah, so it’s gonna be exciting. I might not even…  

Bonnie: Technically, we’ll be able to say that it wasn’t as bad as we expected.  

Scotty: That’s up. I saw the NCPA pushed out, or CMS is continuing to push, NCPA in their QAM this morning mentioned how CMS is continuing to push PBMs and such to be mindful of all this stuff. I mean, God only knows what they’ll do, but we’ll see.  

Bonnie: Yep.   

Scotty: And I might not be there in May.  

Bonnie: That’s right. Are you going to make an announcement to the podcast? To the listeners?   

Scotty: We have a number two on the way?  

Bonnie: It’s a baby! It’s another baby Sykes!  

Scotty: I don’t know what I’m going to be doing. Freaking out. But.  

Bonnie: Aw, the baby can make an appearance when it gets here.  

Scotty: What on the podcast?  

Bonnie: Yeah! The big reveal. Baby’s here! It’s very exciting.  

Scotty: Yeah, it is.  At least it’s after tax season.   

Bonnie: Yeah, if you work here you know you have to make the plan that thing, like that. Done it a few times. I did have a baby in January one time accidentally.  

Scotty: Whoops.   

Bonnie: That didn’t go over real well. But all the others were born in the summer.   

Scotty: I’m pretty sure you were still working like, into January.  

Bonnie: I was still working. I was home working, I was working here, I was working. But, it was, that was bad. I remember being like, that was a hard one to, to tell. “Oh, congratulations! When are you due? January! Good times.  

Scotty: Tax season’s coming up, y’all. Get your tax planning done. Get it in there. There’s things you can do.  

Bonnie: And be nice to your accountants and your CPAs during those January, February, and March time frame when they’re bugging you for information every, every other day. It’s a lot to do during that time. 

Scotty: Unless you’re Bonnie. Email her every day and say, where the hell…  

Bonnie: Leave me alone.   

Scotty: Alright everybody, well we wish everybody a Merry Christmas. Merry Christmas. And a Happy New Year. And we appreciate everybody subscribing and listening in. We’ve enjoyed this podcast. I don’t know what episode we’re on. Everybody counts episodes. I guess we need to start counting episodes.  

Bonnie: We do need to start doing that.  

Scotty: I guess the bottom line is we, here we are in accountants and we’re not even counting our episodes.   

Bonnie: Maybe starting in ‘24. We need to know where we are for our first one in ‘24. And we’ll, we need to know.  

Scotty: So that’s the bottom line.  

Bonnie: We’re accountants!  

Scotty: Thank you to our listeners and for all you guys do in your communities and serving your patients… 

Bonnie: Yes.  

Scotty: Your communities value you guys and you’re doing the right thing. So, we appreciate that. And we appreciate the opportunity to help in a little way here with this podcast. So with that, sign them off, Bonnie.  

Bonnie: Merry Christmas and happy 2024! Exciting to see how it goes.