Murray Wells Wendeln & Robinson - Accountants & Advisors

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employers with 20 or more employees that sponsor a group health plan must offer “continuation coverage.” That means if employees leave their jobs for certain reasons, the organization must offer them ongoing health coverage for a specified period. If your organization meets the criteria, stay sharp on your responsibilities. For example, you must notify departing employees of their right to COBRA coverage within a certain period. Some employers may want to ask such employees to sign a release of employment-related claims against the organization as part of the process. But you must handle such releases very carefully.

Are you filing your 2024 income tax return electronically? If not, why not? Filing and paying tax online is quick and safe. Recent federal government turmoil, including IRS layoffs, may lead to slower tax return processing and delayed refunds. So the sooner you file and receive confirmation that the IRS has accepted your return, the better. Then, after a short waiting period, you can track any refund you might be due online. If we prepare your taxes, we generally use electronic methods to file (unless your tax situation requires us to mail paper forms to the IRS). We’ll provide you with copies of all electronically submitted forms.

If your employer offers tax-favored transportation fringe benefits, you should probably take advantage of them. For 2025, employer-provided mass transit passes for train, subway and bus systems are tax-free to an employee, up to $325 a month. Your company can’t deduct the cost of this benefit. However, your company can offer a salary-reduction arrangement that allows you to set aside up to $325 per month from your salary to pay for transit passes. That way, you pay with before-tax dollars. For 2025, employer-provided parking allowances are also tax-free up to $325 per month. You can be given this fringe on top of the tax-free $325 a month for transit passes. Contact us with questions.

Is your organization looking to differentiate itself as an employer from competitors? If so, consider adding a student loan repayment matching feature to your qualified retirement plan. Under the SECURE 2.0 Act, employers that sponsor certain plans may make matching contributions to participants’ retirement accounts that align with qualified student loan payments (as defined under the law). So, as participants make payments to their loan servicers, you can ensure their retirement accounts are still funded. This benefit may help you attract job candidates and retain employees. However, you’ll need to conduct thorough due diligence before rolling it out. Contact us for more information.

The IRS is reportedly making plans to cut up to half of its workforce. The tax agency will do this through a combination of layoffs, attrition and incentivized buyouts. The IRS currently employs approximately 90,000 workers, according to its latest data. Nearly 7,000 probationary workers with one year or less of service were let go in February. The mass layoffs of federal workers are part of President Trump’s efforts, through the Department of Government Efficiency, to root out perceived fraud, waste and abuse in the federal government.

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.