You may be able to make a deductible IRA contribution for last year this year
Getting ready to file your 2024 return and finding your tax bill is higher than you’d like? There may still be an opportunity to lower it. If you qualify, you can make a deductible contribution to a traditional IRA up until this year’s April 15 filing deadline and benefit on your 2024 return. An eligible taxpayer can make a 2024 IRA contribution of up to $7,000 ($8,000 if you’re 50 or older). You must meet income requirements to qualify. Business owners can also set up and contribute to SEP plans up until the filing due date, including extensions. For 2024, the most you can contribute to a SEP is $69,000. Contact us for more information about growing your nest egg on a tax-favored basis.
Do you have an excess business loss?
If an individual taxpayer has substantial business losses, unfavorable federal income tax rules may come into play. If your business or rental activity throws off a tax loss (and many do during the early years), things can get complicated. For example, you can’t deduct an excess business loss in the current year. For 2024, an excess business loss is the excess of your aggregate business losses over $305,000 ($610,000 for married joint filers). For 2025, the thresholds are $313,000 and $626,000, respectively. An excess business loss is carried over to the following tax year and can be deducted under the rules for net operating loss (NOL) carryforwards. Contact us with any questions.
TREASURY ANNOUNCES IT WON’T ENFORCE BOI FINES OR PENALTIES – MARCH 3, 2025
On February 27th, the Financial Crimes Enforcement Network (FINCEN), a division of the United States Department of Treasury, announced that it will not issue any fines or penalties or take any enforcement action against companies that do not file their Beneficial Owner Information “BOI” report by the March 21st deadline. They are expecting to announce […]
Changes to Michigan’s Flow-Through Entity Tax
The Michigan House of Representatives approved, and the Senate passed changes to the FTE tax on December 11, 2024. The governor signed the bill on January 17, 2025. The changes are being made due to the challenges in implementation as originally passed. Generally, the changes are effective for the tax years beginning on and after […]
COURT RULING ON BENEFICIAL OWNER INFORMATION REPORTING– FEBRUARY 19, 2025
On February 17th, the United States District Court for the Eastern District of Texas overruled the preliminary reporting injunction on the Smith vs U.S. Department of Treasury case; that means the beneficial owner information reporting requirement is back in effect. As mentioned in our previous BLOG, FINCEN has agreed to a 30 day extension for […]
On developing an effective IT modernization strategy
Information technology (IT) is constantly evolving. The concept and challenge of keeping business technology current is called “IT modernization.” To stay competitive in most industries today, you’ve got to excel at it. However, you also have to approach IT modernization carefully and cost-consciously. Here are four tips: 1) Begin with an IT audit to get a clear picture of your infrastructure, policies, procedures and usage. 2) Align modernization efforts with strategic objectives; keep return on investment in mind. 3) Take a phased, pragmatic approach to initiatives; don’t try to do everything at once. 4) Train and upskill your users so they can roll with the changes. Contact us for help.
Financial relief for families: The benefits of the Child Tax Credit
The Child Tax Credit (CTC) is available to eligible taxpayers with children under age 17. For 2024 and 2025, the credit is up to $2,000 for each qualifying child and is partially refundable. You qualify for the full CTC amount if you meet all eligibility factors and your adjusted gross income isn’t more than $200,000 ($400,000 if married and filing jointly). Parents with higher incomes may be eligible to claim a partial credit. You must include the child’s Social Security number on your return. In 2026, the maximum CTC is scheduled to drop to $1,000 per qualifying child unless Congress acts to extend the higher amount. Contact us with any questions about your situation.
Questions about taxes and tips? Here are some answers for employers
President Trump has pledged to end taxes on tips. But so far, no law eliminating taxes on tips has been enacted. For now, employers must follow existing IRS rules. Here are some employer responsibilities: 1) Send each employee a W-2 that includes reported tips. 2) Keep employees’ tip reports. 3) Withhold taxes, including income taxes and the employee’s share of Social Security and Medicare taxes, based on wages and reported tip income. 4) Pay the employer share of Social Security and Medicare taxes based on the total wages and reported tip income. 5) Report this information to the IRS on Form 941. 6) Deposit withheld taxes according to federal deposit requirements. Contact us with questions.
D&O insurance may be worth considering for some companies
Running a successful business can force you to make tough decisions that expose you to legal claims. To hedge against this risk, business owners can buy directors and officers (D&O) insurance. These policies financially protect business owners, executives and other leaders from legal claims arising from management-related decisions and actions. Under the right circumstances, coverage can benefit some small to midsize businesses. To decide whether it’s right for you, first assess your litigation risks. Also consider if having a D&O policy would help you recruit and retain executives and other leaders. Contact us for more information and help shopping for coverage if you decide to buy.
Taming the tax tangle if you’re retiring soon
Retirement is a chance to travel, visit with family or just enjoy relaxing. Yet retirement may bring a tangle of tax implications. For example, will you downsize by selling your home? If you sell your home and the capital gain exceeds $250,000 ($500,000 for married couples filing jointly), you must pay tax on the amount over the exclusion limit. Will you work part-time? If so, your earnings could reduce your Social Security benefits (depending on your age) or push you into a higher tax bracket. Also keep in mind that once you turn 73, you must take required minimum distributions from traditional IRAs and 401(k)s or a penalty will generally be imposed. Contact us with questions.
You must be logged in to post a comment.