Tax filing FAQs for individuals
The IRS is opening the filing season for 2025 individual income tax returns on January 26. This is about the same time as when the agency began accepting and processing 2024 tax year returns last year, despite IRS staffing having been significantly reduced since then. The filing deadline is April 15, but filing earlier can be beneficial. If you’re getting a refund, you’ll likely receive it sooner. Filing early can also potentially protect you from tax identity theft, where a thief uses your personal information to file a fraudulent return and claim a bogus refund. Contact us to answer your tax filing questions or to discuss getting started on your 2025 return.
How the new Trump Accounts for children will work
A new tax-advantaged way to help children build savings for the future was created by the One Big Beautiful Bill Act: Trump Accounts (TAs). One way to set up a TA is to file Form 4547, “Trump Account Election(s),” with your 2025 income tax return. Under a pilot program, the federal government will fund a TA with $1,000 of free money for U.S. citizen children born in 2025 through 2028. But older children also are eligible for TAs, just not for the free money. After July 3, 2026, you can make nondeductible annual TA contributions up to $5,000 (adjusted for inflation after 2027) until the year your child turns 18, when the TA will turn into a traditional IRA. Contact us to learn more.
There’s still time to set up a SEP and reduce your 2025 taxes
If you own a business or are self-employed and haven’t set up a tax-advantaged retirement plan, it’s not too late to establish one and contribute for 2025. You can set up a Simplified Employee Pension (SEP) and make 2025 contributions as late as the due date (including extensions) of your business’s income tax return, either March 16, 2026 (Sept. 15 if extended) or April 15, 2026 (Oct. 15 if extended), depending on entity type. SEPs are easy to set up, and contribution limits are generous, potentially providing a large deduction. If you have employees, you’ll generally have to include them and make contributions to SEP-IRAs on their behalf, which are also deductible. Contact us to learn more.
Bad reputation: Why you should perform adverse media screenings
Before doing business with you, many customers and business partners search online for negative information about your company. Consider taking a similar approach to protect your own business. To help ensure your adverse media screening efforts are effective and minimize legal risks, create a formal policy that identifies sources you intend to access, clarifies off-limit actions and explains how results will be used. Search only reputable sites and corroborate findings. Be careful with social media platforms, where content is rarely verified or removed. Contact us to help develop a cost-effective screening plan aligned with your business objectives.
When medical expenses are — and aren’t — tax deductible
Eligible medical expenses are deductible 1) if they weren’t reimbursable by insurance or paid via tax-advantaged accounts, 2) to the extent that, in aggregate, they exceed 7.5% of your adjusted gross income, and 3) if you itemize deductions. Now is a good time to review your medical expenses for 2025 and see if you had enough so you can claim the medical expense deduction. Eligible expenses include many costs besides hospital and doctor bills, such as prescription drugs and certain costs related to transportation, insurance, therapy, dental and vision care, smoking cessation, and weight loss. Contact us to determine if you can benefit from the medical expense deduction on your 2025 return.
A new year means new tax figures for individuals
Many tax figures are annually adjusted for inflation and typically increase each year. For example, for 2026, the standard deduction increases to $16,100 for single filers, $24,150 for heads of households and $32,200 for married couples filing jointly. And the IRA contribution limit increases to $7,500. Other figures increase in 2026 due to the One Big Beautiful Bill Act. For instance, it boosts the lifetime gift and estate tax exemption to $15 million and the child and dependent care FSA contribution limit to $7,500. These are only some of the figures and limits that could affect your 2026 taxes. To learn more and begin planning for the new year, contact us.
Important 2026 tax figures for businesses
A new year brings many new tax-related figures for businesses. While bonus depreciation remains at 100%, the Sec. 179 expensing limit increases to $2.56 million for 2026, with the phaseout threshold at $4.09 million. The income ranges over which the Sec. 199A qualified business income deduction limitations phase in also increase. For 2026, they’re generally $201,750 – $276,750, double those amounts for married couples filing jointly. But under tax legislation signed into law in 2025, the threshold for the excess business loss limitation drops significantly for 2026, to $256,000 (double that amount for joint filers). We can help you factor these changes and others into your 2026 tax planning.
More individuals with disabilities will be eligible for tax-advantaged ABLE accounts in 2026
Did you know there’s a tax-advantaged way to save for the expenses of a person with a disability? Achieving a Better Life Experience (ABLE) accounts can help fund qualified disability expenses for an eligible beneficiary. And eligibility expands beginning in 2026! For 2025 and prior years, the individual must have become disabled or blind before turning age 26 to be eligible. But this age increases to 46 for 2026 and beyond. Contributions of up to $19,000 in 2025 and $20,000 in 2026 can be made to an ABLE account. They’re not deductible, but distributions used for qualified expenses are tax-free. To learn more about the tax benefits and other financial considerations, contact us.
Avoiding inadvertent S corp termination
S corporation structure provides most of the tax benefits of a partnership plus the liability protection of a corporation. But because of the strict requirements that apply to these entities, preserving S corporation status requires due diligence. To avoid inadvertent termination of S corporation status, among other things, you should continually monitor the number and type of shareholders, scrutinize the terms of any trusts that hold shares, and include provisions in buy-sell agreements that prevent transfers to ineligible shareholders. Also, avoid actions that may be deemed to create a second class of stock, such as making disproportionate distributions. Contact us if you have questions.
Revisiting the balanced scorecard approach to strategic planning
Strategic planning can be challenging for small to midsize businesses that rely primarily on financial reports to make decisions. Introduced in the early 1990s, the balanced scorecard approach offers a proven framework for turning strategy into action by looking beyond the numbers. It organizes planning around four critical areas: 1) customers, 2) finance, 3) processes, and 4) learning and professional growth. By focusing on clearly defined objectives and a limited set of meaningful metrics for each area, you can gain a clearer view of your company’s performance and future direction. Regardless of how you approach strategic planning, contact us for guidance and support.