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If you own a small business with no employees (other than your spouse) and want to set up a retirement plan, consider a solo 401(k) plan. This is also an option for self-employed individuals or business owners who wish to upgrade from a SIMPLE IRA or SEP plan. For 2024, you can make an elective deferral contribution of up to $23,000 of your net self-employment (SE) income ($30,500 if you’ll be 50 or older as of Dec. 31, 2024). On top of the elective amount, an extra contribution of up to 20% of your net SE income is allowed for solo 401(k)s. For 2024, the combined elective and extra contributions can’t exceed $69,000 ($76,500 for 50 or older) or 100% of net SE income. Questions? Contact us.

Business driving may come to mind when you think about tax deductions for vehicle-related expenses. However, businesses aren’t the only taxpayers that can deduct driving expenses. Individuals may also be able to deduct them in certain circumstances. Unfortunately, under current law, you may be unable to deduct as much as you could years ago. For 2018 through 2025, miles may only be deductible in limited circumstances. The 2024, the per-mile rate varies depending on the purpose. For business, it’s 67 cents; for medical driving for eligible itemizing taxpayers, it’s 21 cents; for active-duty military moving, it’s 21 cents; and for charitable itemizers, it’s 14 cents. Questions? Contact us.

Every employer’s culture will differ based on factors such as industry, purpose and size. However, certain key building blocks tend to pertain to all organizations. Here are five: 1) Carefully crafted mission and vision statements, as well as highlighted values that prompt desired behaviors. 2) Top-down commitment by executive leadership to be transparent, accessible and effective communicators. 3) Plentiful communication channels so staff can share concerns, thoughts and ideas. 4) Mutual trust between management and staff, which empowers employees. 5) Recognition and rewards. Ultimately, a strong organizational culture is imperative for driving productivity and financial performance.

Companies that suffer unexpected downtime of key IT systems can incur substantial revenue losses. They also may face regulatory fines, blown IT budgets and elevated insurance premiums. The good news is your business can address the threat proactively. Begin with a formal risk assessment to identify the most likely causes of IT failures based on the distinctive features of your systems and users. From there, explore or enhance strategies such as tracking incidents carefully, investing wisely in cybersecurity, training and upskilling employees, establishing a disaster recovery plan, and reassessing and stress testing regularly. Contact us for help managing your technology costs.

The Social Security Administration has announced that the wage base for computing Social Security tax will rise to $176,100 in 2025. This is up from $168,600 in 2024. (Believe it or not, it was just $3,000 from 1937–1950!) Wages and self-employment income above this amount aren’t subject to Social Security tax. The Federal Insurance Contributions Act imposes two taxes on employers, employees and self-employed workers. One is Social Security and the other is Medicare. A maximum amount of compensation is subject to the Social Security tax, but there’s no maximum for Medicare tax. For 2024 and 2025, the FICA tax rate for employers is 7.65% (6.2% for Social Security and 1.45% for Medicare).

How much can you contribute to your retirement plan in 2025? The IRS just revealed the answer: The IRS has issued its 2025 inflation-adjusted contribution amounts for retirement plans in Notice?2024-80. Many retirement-plan-related limits will increase for 2025 — but less than in prior years. Thus, depending on the type of plan you have, you may have limited opportunities to increase your retirement savings. Type of limitation 2024 limit 2025 limit Elective...Read More The post How much can you contribute to your retirement plan in 2025? The IRS just revealed the answer appeared first on Frazee Ivy Davis. https://bit.ly/3Cm7zgk

How the U.S. election changes the outlook for taxes: The outcome of the November?5 election is likely to significantly impact taxes. Many provisions in President-elect Donald Trump's signature tax legislation from his first time in the White House, the Tax Cuts and Jobs Act (TCJA), are scheduled to expire at the end of 2025. Now, there's a better chance that most provisions will be...Read More The post How the U.S. election changes the outlook for taxes appeared first on Frazee Ivy Davis. https://bit.ly/48JWiTk

As year end approaches, you may be thinking about tax strategies. One way to reduce potential estate taxes and show generosity to loved ones is to give cash gifts before Dec. 31. Taxpayers can transfer large amounts using the annual exclusion. In 2024, the exclusion amount is $18,000. It covers gifts you make to each recipient. That means if you have three children, you can transfer $54,000 to them in 2024, free of federal gift taxes. Married couples can consent to give each recipient up to $36,000 a year. Other rules may apply, and you need to file a gift tax return if you give more than $18,000 or consent to give gifts with your spouse. We can prepare a gift tax return for you.

Earlier this year, the U.S. Department of Labor announced a new final rule on the minimum annual salary threshold that partly determines whether employees are exempt from overtime pay. For employers, it renewed focus on compliance with the Fair Labor Standards Act. One way to ensure your organization complies with the law is to conduct voluntary “wage and hour” audits. These methodically review your compensation and labor practices, including employee classification, payroll records, timekeeping methods, rest and meal breaks, and wage deductions. Remember, if just one employee files a complaint with a government agency, you could be subject to a much more arduous involuntary audit.