Many business tax limits have increased in 2025
A variety of tax-related limits that affect businesses increased in 2025 based on inflation. For example, the Section 179 expensing limit has gone up to $1.25 million from $1.22 million. Also up are the income-based phaseouts for certain limits on the Sec. 199A qualified business income deduction for owners of pass-through entities. And most limits related to employer-sponsored retirement plans, such as 401(k)s, are higher this year. This includes employee contribution limits for 401(k) plans, which are up $500 this year to $23,500. With Republicans in control of the White House and Congress, there could be more tax changes this year. Contact us if you have questions about your situation.
Looking ahead to 2025 tax limits as you prepare to file your 2024 return
Many people are more concerned about their 2024 tax bills than they are about their 2025 tax situations. That’s because 2024 individual tax returns are due to be filed by April 15. However, it’s a good time to acquaint yourself with tax amounts for this year, some of which have increased due to inflation. For example, the amount of your earnings taxed for Social Security in 2025 is $176,100 (up from $168,600 in 2024). For 2025, the standard deduction amount is $30,000 for married joint filers (up from $29,200). For singles, the amount is $15,000 (up from $14,600) and for heads of households, it’s $22,500 (up from $21,900). Questions? Contact us.
So many KPIs, so much time: An overview for businesses
From the moment they launch their companies, business owners are urged to use key performance indicators (KPIs) to monitor performance. As you may have noticed, however, there are so many to choose from. To make picking KPIs easier, separate them into two broad categories: financial and nonfinancial. Examples of financial KPIs include debt to equity (total debt / shareholders’ equity), which is good for monitoring growth, and current ratio (current assets / current liabilities), which helps manage cash flow. Nonfinancial KPIs can allow you to set goals and track progress in areas such as customer service, sales, marketing and production. Contact us for more information.
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 […]
TCJA Provisions Set to Expire in 2025/26
The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, brought significant changes to both individual and business tax provisions. While many provisions were made permanent, several key individual tax provisions are set to expire at the end of 2025 and 2026, reverting to pre-TCJA rules unless Congress acts. Below is a detailed breakdown […]
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