Gray, Callison, & Jones CPA, P.C.

Did you make significant gifts to your children, grandchildren or other heirs last year? If so, it’s important to determine whether you must file a gift tax return by April 15 (Oct. 15 if you file for an extension). The annual gift tax exclusion was $18,000 in 2024 (increasing to $19,000 in 2025). Generally, you’ll need to file a return if you made gifts in 2024 that exceeded the $18,000-per-recipient gift tax annual exclusion (though there are exceptions in certain situations). But it may be desirable to file a gift tax return even if you aren’t required to. Contact us if you’re unsure whether you must (or should) file a 2024 gift tax return.

President Donald Trump discussed many second-term tax priorities in his March 4 address to Congress, including a proposed restoration of 100% bonus depreciation. It allows businesses to deduct the costs of certain assets in the first year they’re acquired, rather than depreciate them over time. The Tax Cuts and Jobs Act included bonus depreciation at a 100% rate through 2022. However, in 2023, bonus depreciation began phasing out at 20% per year. Currently, the rate is 40% and it will drop to 0% in 2027 unless Congress acts to restore it. Supporters see a return to 100% bonus depreciation as a way to grow the economy. Stay tuned.

Are you starting a business with partners and considering the best entity to form? An S corporation might be the ideal choice. One significant advantage of an S corp over a partnership is that, as an S corp shareholder, you won’t be personally liable for corporate debts. If you anticipate early losses, an S corp is more favorable than a C corp from a tax perspective. C corp shareholders typically don’t benefit from such losses, but S corp shareholders can deduct their share of the losses on their personal tax returns, up to their basis in the stock and any loans made to the entity. Contact us for more information.

Pay transparency is the practice, or lack thereof, of a company sharing its compensation philosophy, policies and procedures with job candidates, employees and even the public. If your business has yet to formalize or articulate its pay transparency strategy, here are five general steps to creating one: 1) Conduct a payroll audit to get a complete picture of your compensation structure. 2) Define or refine your criteria for making pay decisions. 3) Develop a communications “substrategy” that includes written guidelines and Q&A sessions. 4) Train your supervisors to champion and accurately explain your strategy. 5) Get input from professional advisors such as your attorney and our firm.

The IRS has published its “Dirty Dozen” tax scams for 2025. Ranging from email schemes to misleading tax credits, many of the scams increase during filing season as individuals prepare their tax returns. However, these crimes can occur throughout the year as fraudsters look for ways to steal money, personal information and data. A growing concern this year involves incorrect tax information on social media platforms that can mislead taxpayers with bad advice, potentially leading to identity theft and tax problems. Rather than turning to social media, the IRS is urging taxpayers to follow trusted advice from tax professionals. Indeed, contact us with questions and to prepare your tax return.

Does your organization sponsor a 401(k) or similar qualified plan? If so, you’re no doubt familiar with hefty plan administration fees. Overpaying for such fees can hurt your financial performance and even expose you to lawsuits filed by plan participants. One way to address this challenge is to conduct a retirement plan benchmark analysis. This formalized study compares your plan’s fees, services and investment performance with current industry standards for similar plans. Based on its results, you may determine that you need to negotiate lower fees with your current plan provider, improve investment options or strengthen fiduciary compliance. Contact us for more information.

A reminder for businesses: Use IRS Form 8300 to report cash transactions of $10,000 or more within 15 days of a transaction. If you file electronically, the forms are delivered to the Financial Crimes Enforcement Network. Paper forms are submitted to the IRS. Generally, you also should provide written statements to parties whose names you’ve reported by January 31 of the year following the transactions. If a transaction you report is suspicious, don’t provide a statement to the individual involved. Although you aren’t required to file Form 8300 for cash transactions less than $10,000, the IRS encourages reporting suspicious transactions of any amount. For more: https://bit.ly/4kg48cx

Current tax law generally limits deductions of business interest, with certain exceptions. If your business has significant interest expense, it’s important to understand the impact of the Section 163(j) deduction limit on your tax bill. Unless your company is exempt, your maximum business interest deduction for the tax year equals the sum of 1) 30% of your company’s adjusted taxable income (ATI), 2) your company’s business interest income, if any, and 3) your company’s floor plan financing interest, if any. If your company is affected by the business interest deduction limitation, contact us to see if you can avoid it or reduce the impact. We can help assess what’s right for your business.

Getting ready to file your 2024 return and finding your tax bill is higher than you’d like? There may still be an opportunity to lower it. If you qualify, you can make a deductible contribution to a traditional IRA up until this year’s April 15 filing deadline and benefit on your 2024 return. An eligible taxpayer can make a 2024 IRA contribution of up to $7,000 ($8,000 if you’re 50 or older). You must meet income requirements to qualify. Business owners can also set up and contribute to SEP plans up until the filing due date, including extensions. For 2024, the most you can contribute to a SEP is $69,000. Contact us for more information about growing your nest egg on a tax-favored basis.

The IRS’s Taxpayer Bill of Rights represents 10 fundamental rights to which taxpayers are entitled when interacting with federal tax authorities. One of these is the right to confidentiality. Any information provided to the IRS can’t be disclosed to third parties unless the taxpayer requests it or the law requires it. If IRS employees or others privy to tax information wrongfully use or disclose it, they’re subject to legal action. The Bill of Rights also includes the right to privacy, which means that IRS inquiries, examinations or enforcement actions must comply with the law and be no more intrusive than necessary. To view the full Bill of Rights: https://bit.ly/4k7dyad