Early bird tips: Answering your tax season questions
The IRS will start the 2025 filing season for individual income tax returns on Jan. 27. Even if you usually don’t file until April, you may want to file early. It can potentially protect you from tax identity theft. In this crime, a thief uses your personal information to file a fraudulent return early in the filing season and claim a bogus refund. Another benefit of early filing is that if you’re getting a refund, you’ll get it faster. This year, the filing deadline to submit 2024 returns, file for an extension and pay tax owed is generally April 15. If you’re requesting an extension, you’ll have until Oct. 15 to file. Contact us for an appointment to prepare your return.
The standard business mileage rate increased in 2025
The optional standard mileage rate used to calculate the tax-deductible cost of operating a business vehicle increased in 2025. The IRS announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck is 70 cents. In 2024, the rate was 67 cents per mile. The standard rate is useful if you don’t want to track actual vehicle-related expenses. But you still must record certain information, such as the mileage, date and destination for each trip. The standard mileage rate is adjusted annually and calculated based on driving costs, including the price of gas. According to AAA, the national average price of a gallon of regular gas on Jan. 17 was $3.11.
3 ways businesses can get more bang for their marketing bucks
Small to midsize businesses generally don’t have massive marketing departments with limitless resources. You’ve got to pursue savvy campaigns while controlling costs. Here are three ways to get more bang for your marketing bucks: 1) Set a budget and adjust it regularly by comparing “marketing spend” with return on investment. 2) Use metrics and technology. Relevant metrics may include lead conversion rate and customer acquisition cost. Search engines and social media channels can provide insightful analytics. 3) Avoid common mistakes, such as not defining your target audience, overinvesting in paid ads and ignoring the power of referrals. Contact us for help managing your marketing costs.
Do you have questions about taking IRA withdrawals? We’ve got answers
You can’t keep funds in your traditional IRA indefinitely. You must start taking withdrawals from a traditional IRA (including a SIMPLE IRA or SEP IRA) when you reach age 73. You must take your first RMD by April 1 of the year following the year in which you turn 73, regardless of whether you’re still employed. The RMD for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS’s “Uniform Lifetime Table.” If you take money out of a traditional IRA before age 59½, you may be subject to a 10% penalty tax and income tax on the distribution. Contact us with any questions.
Small business strategy: A heavy vehicle plus a home office equals tax savings
Your small business may be eligible for big first-year Section 179 depreciation tax deductions for new and used heavy SUVs, pickups and vans placed in service in 2025. You must use the vehicle more than 50% for business. The write-off will reduce your federal income tax and self-employment tax bill, if applicable. This tax break is only available for a purchased (not leased) SUV, pickup, or van with a manufacturer’s gross vehicle weight rating above 6,000 pounds. The 2025 limit on Sec. 179 deductions for heavy SUVs $31,300. First-year depreciation deductions for lighter vehicles are subject to smaller depreciation limits of up to $20,400 in 2024. (The 2025 amount hasn’t come out yet.)
NEWS UPDATE ON RECENT BENEFICIAL OWNER INFORMATION – FEBRUARY 10, 2025
The Department of Treasury through the Department of Justice has filed an appeal with the U.S. District Court for Eastern District of Texas on the Smith vs U.S. Department of Treasury case to overturn the preliminary reporting injunction. FINCEN posted an alert on its website that if the district court’s order is overturned and the […]
UPDATE ON RECENT SUPREME COURT RULING ON BOI – JANUARY 25, 2025.
On January 23rd the Supreme Court of the United States ruled to overturned the nationwide injunction on the Texas Top Cop v. McHenry case requiring entity’s to report Beneficial Owners Information ‘BOI” to Financial Crimes Enforcement Network “FINCEN”. FINCEN posted an alert on its website that the BOI reporting requirement is still VOLUNTARY as a […]
How companies can better control IT costs
Does your company keep blowing its information technology (IT) budget? You may be able to control these costs better through various proactive measures. First, establish a coherent IT philosophy to guide your spending and help you develop clear IT governance policies and procedures. Second, conduct regular IT audits. These are formal, systematic reviews of your IT infrastructure, policies, procedures and usage that can reveal redundant subscriptions, underused software and outdated hardware. Last, keep a close eye on the cloud services you pay for. Many businesses neglect to claim usage-based discounts or lower rates. Contact us for help better identifying and analyzing your IT costs.
Saving for college: Tax breaks and strategies your family should know
As college costs continue to rise, you may be concerned about how to save and pay for it. Tax-favored strategies may be available. For example, you can contribute to a 529 plan set up to meet a child’s or grandchild’s education expenses. Contributions aren’t deductible but earnings accumulate tax-free. Contributions are taxable gifts to the child and are eligible for the $19,000 gift tax exclusion in 2025. By taking advantage of a five-year gift tax election, a grandparent can contribute up to $95,000 ($19,000 × 5) per beneficiary this year, free of gift tax. Distributions of earnings that aren’t used for qualified expenses are subject to income tax plus a 10% penalty. Other rules apply.
How Section 1231 gains and losses affect business asset sales
When selling business assets, understanding the tax implications is crucial. One area to focus on is Section 1231 of the tax code, which governs the treatment of gains and losses. Sec. 1231 assets generally include 1) business real property (including land) that’s held for more than one year, 2) other depreciable business property that’s held for more than one year, 3) intangible assets that are amortizable and held for more than one year, and 4) certain livestock, timber, coal, domestic iron ore and unharvested crops. Gains and losses from selling Sec. 1231 assets receive favorable federal income tax treatment. We can help you plan the timing of gains and losses for optimal tax results.
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