Is an HDHP plus an HSA a financially smart health care option for you?
Pairing a high-deductible health plan (HDHP) with a Health Savings Account (HSA) can be a financially smart option, particularly for healthy individuals. Insurance premiums will be lower because of the high deductible. And the HSA provides a tax-advantaged way to fund the deductible and other medical expenses. It can even help fund retirement. Among the tax benefits: 1) Contributions are pretax or deductible. 2) Contributions your employer makes aren’t included in your taxable income. 3) Earnings in the HSA aren’t taxed. 4) Distributions to pay qualified expenses are tax-free. 5) Distributions after age 65 are penalty-free even if not used for medical expenses (but income taxes do apply).
Review your business expenses before year end
Now is a good time to review your business’s expenses for deductibility. Accelerating certain expenses into this year will reduce 2025 taxes and might even provide permanent tax savings. There’s no master list of deductible business expenses in the federal tax code. Some deductions are expressly authorized or excluded, but most are governed by the general rule that businesses can deduct their “ordinary and necessary” expenses. Understanding what’s deductible and what’s not isn’t easy. We can review your current expenses and help determine whether accelerating expenses into 2025 makes sense for your business. Contact us to discuss year-end tax planning and to start strategizing for 2026.
Fundamental building blocks of an employee wellness program
Employee wellness programs are employer-sponsored initiatives designed to promote physical, mental and emotional well-being in the workplace. A program built on certain fundamental building blocks can help businesses manage health care costs, boost productivity and improve retention. For example, create a straightforward design that’s easy to explain and implement. Communicate clearly with concise and engaging materials. Rely on qualified vendors for program services. Monitor participation and outcomes so you can make informed adjustments. Whether you’re launching or refining your program, we’d be happy to help you budget effectively, identify tax benefits and measure its financial impact.
The 2025 SALT deduction cap increase might save you substantial taxes
If you pay more than $10,000 in state and local taxes (SALT), such as property tax and state income tax, a 2025 tax law change could significantly reduce your federal income tax liability. For 2018–2024, the SALT itemized deduction was limited to $10,000. For 2025, you can deduct up to $40,000. But the deduction drops by 30% of the amount by which modified adjusted gross income (MAGI) exceeds $500,000; when MAGI reaches $600,000, the $10,000 cap applies. (Be aware that lower limits and thresholds apply to married taxpayers filing separately.) To maximize your deduction, you may want to take steps to keep your MAGI under the reduction threshold or accelerate property tax payments into 2025.
Should your business maximize deductions for real estate improvements now or spread them out?
Have you made improvements to business real estate? You may be eligible for tax breaks for qualified improvement property (QIP). QIP includes any improvement to an interior portion of a nonresidential building that’s placed in service after the date the building was placed in service. QIP can be depreciated over 15 years (rather than 39). It’s also eligible for bonus depreciation and Sec. 179 expensing, which have been enhanced for 2025 and beyond. While maximizing first-year depreciation can be beneficial, sometimes spreading out depreciation deductions over multiple years can be better, such as if you’re in a higher tax bracket in the future. We can help you determine what’s best for you.
Why start-ups should consider launching as S corporations
Launching a new business means making key decisions, including how to set it up for tax purposes. Electing S corporation status can offer major advantages to start-ups. These include avoiding the double taxation faced by C corporations, reducing payroll taxes by dividing shareholder-employee income between salary and distributions, and protecting shareholders’ personal assets from claims against the business. But there are limits on eligibility, compliance requirements are strict, and administrative costs can be high. Let us help you evaluate whether operating as an S corporation would suit your start-up. If it does, we can assist you with filing the election and compliance going forward.
Boost your tax savings by donating appreciated stock instead of cash
Are you charitably inclined and looking for a powerful year-end tax-saving strategy? Consider donating appreciated publicly traded stock you’ve held more than one year to a qualified charity. You may be able to enjoy two tax benefits: First, if you itemize deductions, you can claim a charitable deduction equal to the stock’s fair market value. Second, you won’t be subject to the capital gains tax you’d owe if you sold the stock. Donating appreciated stock can be especially beneficial if you’re facing the 3.8% net investment income tax or the top 20% long-term capital gains rate this year. To learn more about minimizing capital gains tax or maximizing charitable deductions, contact us today.
There’s still time for businesses to benefit from clean energy tax breaks
The One Big Beautiful Bill Act eliminates many business-related clean energy tax incentives. For example, the Qualified Commercial Clean Vehicle Credit is available only for vehicles that were acquired on or before Sept. 30, 2025. But businesses can still take advantage of other clean energy breaks if they act soon. The Alternative Fuel Vehicle Refueling Property Credit is available for property that stores or dispenses clean-burning fuel or recharges electric vehicles if placed in service by June 30, 2026. Similarly, the deduction for energy-efficient improvements to commercial buildings is available for eligible property beginning construction by June 30, 2026. Contact us to learn more.
The 2025–2026 “high-low” per diem business travel rates are here
The “high-low” per diem method is a simplified way to reimburse employees who travel for your business vs. tracking actual business travel expenses. The IRS announced the 2025–2026 high-low per diem rates that became effective Oct. 1, 2025. The per diem rate for high-cost areas in the continental U.S. is now $319. For other areas, the per diem rate is $225. High-cost rates are available only part of the year in certain areas. If eligible, you can use these rates to reimburse employee expenses for lodging, meals and incidentals when traveling. Contact us if you have questions about efficient and tax-compliant travel reimbursement methods.
Designing the right bonus plan for your business
Does your business offer performance-based bonuses? A well-designed plan can sharpen employee focus, align daily efforts with strategic objectives and fuel sustainable growth. To be effective, however, a bonus plan must establish clear, measurable goals tied to meaningful metrics, such as sales growth, customer retention or waste reduction. Keep the arrangement simple and transparent. Also, calculate payouts carefully to motivate employees without unduly straining cash flow. And review your plan regularly as business conditions change. Let us help you create a bonus plan that motivates employees, safeguards profitability, and complies with tax and accounting rules.