Caudell CPA, PC

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. https://lnkd.in/g3ZT6_pv

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.

A new year usually brings inflation-based adjustments to various limits and thresholds for employer-sponsored retirement plans. So it goes for 2025, which will largely see increases to key amounts. For example, the contribution limit for 401(k), 403(b) and 457 plans will rise to $23,500 (up from $22,500). The annual limit on catch-up contributions for participants age 50 or over will remain at $7,500 for these plans. However, under SECURE 2.0, a higher catch-up contribution limit of $11,250 will apply to participants who are 60, 61, 62 or 63 in 2025. Carefully note applicable changes to your plan and, as needed, revise employee communications and plan procedures. Contact us for more info. https://lnkd.in/gKFRFjJi

Intangible assets, such as patents, trademarks and goodwill, play a key role in businesses. The tax implications of intangibles can be complex, but businesses should understand them. IRS regulations require the capitalization of costs to 1) acquire or create intangibles; 2) create or enhance a separate, distinct intangible; 3) create or enhance a future benefit identified in IRS guidance as capitalizable; or 4) facilitate the acquisition or creation of intangibles. Capitalized costs can’t be deducted in the year paid or incurred. They must generally be ratably deducted over the asset’s life if they’re deductible. However, there are exceptions. Contact us with questions about intangibles. https://lnkd.in/gBRcbX5E

When considering U.S. savings bonds, you should understand the tax implications. EE bonds don’t pay interest currently. Instead, accrued interest is reflected in the redemption value. (Owners can elect to have interest taxed annually.) Series I savings bond interest is based on inflation. Owners may either: 1) defer reporting the increase in the redemption value (interest) to the year of maturity, redemption or other disposition (whichever is earlier), or 2) elect to report the increase annually as it accrues. Savings bond interest isn’t subject to state income tax. And using the money for higher education may keep you from paying federal tax on the interest (but income limits apply). https://lnkd.in/gganakYw

Could your organization be losing precious dollars to fraud? It’s possible. One way to stay on guard is to conduct fraud risk assessments regularly. A fraud risk assessment is a formal, comprehensive process for identifying risks, evaluating their severity, developing mitigation strategies, and strengthening monitoring and response procedures. Large employers may be able to perform one internally; small to midsize organizations often engage external auditors, such as Certified Fraud Examiners. Assessments generally involve scrutinizing internal controls, conducting interviews with executives and key employees, and performing statistical and financial analyses. Contact us for more info. https://lnkd.in/gcpXPFrT

The IRS has a lot of great info. They publised this tax time guide to help you with your 2024 tax return. Give us a call if you need more help! https://lnkd.in/gAJh4raw

You and your small business likely incur a variety of local transportation costs each year. Commuting costs aren’t deductible, but the cost of any local trips you take for business purposes is a deductible business expense. Your deduction can be computed using actual expenses or the standard mileage rate (for 2024, 67 cents per business mile) plus tolls and parking. Actual expenses include depreciation (subject to limitations), gas, repairs, maintenance, insurance, tolls, parking, loan interest and any other related costs allocable to the business portion of using the vehicle. https://lnkd.in/ggpEEdbp

Two tax breaks help eligible parents offset the costs of adopting a child. In 2025, adoptive parents may be able to claim a credit against their federal tax for up to $17,280 of “qualified adoption expenses” for each eligible child. This is up from $16,810 in 2024. A credit is a dollar-for-dollar reduction of tax. Also, employees may be able to exclude from gross income up to $17,280 in 2025 ($16,810 in 2024) of qualified expenses paid by an employer in an adoption assistance program. The credit and the exclusion are phased out if the parents’ income exceeds certain limits. Parents can claim both a credit and an exclusion for the costs of adopting a child but not for the same expenses. https://lnkd.in/eXFMcaic

In April, the U.S. Department of Labor (DOL) announced it was rolling out a new final rule on eligibility for overtime pay. The first “stage” of the rule took effect in July. However, a federal district court in Texas struck down the final rule in November. As a result, the minimum annual salary threshold that partly determines whether certain executive, administrative or professional employees are exempt from overtime has returned to its previous amount of at least $35,568 annually for regular salaried employees ($107,432 for highly compensated employees). Although the DOL has appealed, the rule isn’t expected to survive under the current presidential administration. https://lnkd.in/gX_QjhrW