Before claiming a charitable deduction for 2025, make sure you can substantiate it
If you itemize deductions on your 2025 individual income tax return, you potentially can deduct your 2025 donations to qualified charities. If you made a donation of $250 or more, you must substantiate it with a “contemporaneous written acknowledgment” from the charity. “Contemporaneous” means you receive it by the date you file your return (or the due date, including extensions, if earlier). If you haven’t yet received an acknowledgement for a 2025 gift (or filed your 2025 return), request it from the charity now. Additional substantiation rules apply to certain types of donations, such as noncash contributions. Contact us for help determining what you can deduct on your 2025 tax return.
How to get inventory under control
Businesses face many unknowns in today’s marketplace. But one thing is certain: Carrying excess inventory is expensive. The good news? You don’t have to sacrifice revenue or customer service to get inventory under control. Performing a thorough inventory count, reviewing your overall product mix and benchmarking inventory ratios against industry peers can help you right-size your inventory levels. Operating leaner can free up cash flow and improve margins. For more tips on managing inventory more efficiently and using forecasting tools, contact us.
Increase your current business deductions under tangible property safe harbors
Did your business make repairs to tangible property, such as buildings, equipment or vehicles, in 2025? Such costs may be fully deductible on your 2025 income tax return, if they weren’t actually for “improvements” that must be depreciated over a period of years. Some IRS safe harbors can help: 1) the routine maintenance safe harbor, 2) the de minimis safe harbor, or 3) the small business safe harbor. However, improvements might also be eligible to be deducted immediately in certain circumstances. Contact us to discuss what you can deduct on your 2025 return and to start planning for tax-efficient repairs, maintenance and improvements in 2026.
Advisory boards provide family businesses with independent perspectives
Does your family business keep strategic decisions within the family? It’s common to assign relatives to positions of authority and limit input from nonfamily employees. But an independent advisory board can help your business minimize certain risks without diminishing family control. Because advisory boards serve only in a consulting capacity, they can provide fresh perspectives and potential solutions to family disagreements over strategy, compensation and succession. Consider asking your professional advisors to serve and recommend others who can offer candid opinions. Contact us for more information.
Is your business vulnerable to payroll fraud?
The median loss from occupational payroll fraud incidents is $50,000, but these schemes can lead to losses in the millions. Watch for “ghost” scams, where crooked staffers put invented employees on the payroll and steal their “paychecks.” Another risk: Cybercriminals that phish for employee data and use it to divert direct deposits. Even falsified overtime claims can be considered payroll fraud. Strong internal controls are essential for preventing these scams. Require two or more workers to perform sensitive tasks, verify changes to direct deposit instructions, conduct payroll audits and educate employees. Contact us for help with internal controls.
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.