As July settles in with its peak summer sunshine, our focus shifts to understanding upcoming tax legislation – a crucial step in anticipating changes and fine-tuning your financial strategy for the months ahead. Even with filing deadlines behind us, staying organized and current on key tax and business issues remains essential to keeping the rest of the year on track.

OUR OFFICES WILL BE CLOSED JUNE 30TH - JULY 4TH TO CELEBRATE INDEPENDENCE DAY

We know the tax extension deadline probably isn't on your mind - you're busy living your life, enjoying your summer, and trying to remember where you left your sunglasses.  But guess what?  It's definitely on our minds - we think deadlines are exciting.  While you're soaking up the sun, we're keeping tabs on the calendar so you don't have to panic when the extension deadlines sneak up.

Once you've found your sunglasses and made it to the beach, the last thing on your mind is digging through drawers for paperwork, sending your life story through the mail, or trying to squeeze in a meeting with your accountant between sunscreen applications.  

Good news - we handle everything electroncally, so you can send us your documents from your phone, your laptop, or even your beach chair (we won't judge).  Quick, easy, and stress-free so you can keep your toes in the sand and let us take care of the rest!

CHECK OUT OUR ELECTRONIC TRANSFER CLIENT PORTAL

Sending us your information electronically is quick, secure, and hassle-free.  It allows us to get started right away, saving you time and streamlining the entire process.  No need for printing, mailing, or in-person visits - just upload your information through our SafeSend portal from wherever you are.  Electronic transfers also save us time, helping us serve you more efficiently and keep everything moving smoothly.  Rest assured, your information is handled with the utmost confidentiality and care.  We're here to make things as easy and convenient for you as possible.

Unfamiliar with SafeSend?  Watch a tutorial here: SafeSend Video Tutorial

SafeSend is an easy, secure way for you to review, sign, and send back your tax documents - all online.  No printing, no mailing, no complicated steps.  Just a few clicks from your phone or computer, and you're done.  It's like DocuSign, but made specifically for taxes.  It keeps your informtion safe, saves you time, and makes the whole process way less stressful.  Trust us - once you use it, you'll never want to go back to the old way!

More information on SafeSend, our proceedures, and your experience is available on our WEBSITE

JUNE RECAP:

Chamber Classic - Davidson Fox was on par for a perfect day at the GBCC 28th Annual Golf Classic!  With sunny skies, smooth swings, and plenty of laughs on (and off) the green, our team had a tee-rific time connecting with clients and colleagues.  Whether they were sinking birdies or just enjoying the breeze, it was a hole-in-one kind of tournament once again.  While our team was out on the course, our Firm Liaison, Kelly, was chillin' in the shade - keeping things cool and stocked with swag, cigars, and cold drinks for all the players.  We look forward to the next!

Rotary Club of Binghamton, Annual Dinner and Big Raffle:  We're proud to have so many Rotary members on our team - it's a true reflection of our commitment to service above self.  Their dedication to giving back helps strengthen our community, build meaningful connections, and support causes that make a lasting impact.  It's not just good business - it's the right thing to do.  Davidson Fox proudly donated a raffle basket in support of their incredible initiatives.  Thanks to the generosity of all involved, the event raised over $6,000 that will be reinvested right back into our community.  Congratulations Shelly, the winner of our basket raffle! (pictured below, Shelly Sellepack)

Tompkins Chamber Awards: It's tough not to have a great time where there's a photo booth in the mix!  Our team made the trip to Ithaca on June 18th for the Tompkins Chamber Annual Celebration, where we enjoyed a night of networking, dinner, and getting to know the inncredible people and businesses that help Ithaca thrive.  Congratulations to all the well-deserved award winners!

Dave & Busters: Maintaining work-life balance is key to staying healthy, motivated, and bringing your best self to both the office and home.  Our team traded spreadsheets for joysticks and let loose at Dave & Buster's!  From friendly competition to nonstop laughter, it was the perfect chance to recharge, connect, and show off those hidden gaming skills.  Who knew team bonding could be this much fun?!?  Follow us on social media to see more pictures, videos, and find out who the winners of our competition were!

Upcoming JULY Events:

OUR OFFICES WILL BE CLOSED JUNE 30TH - JULY 4TH TO CELEBRATE INDEPENDENCE DAY

- we look forward to connecting with you when we return to the office on Monday, July 7th - 

Dick's Sporting Goods Open - Not only will we be featured on the big board, but we're also proud to volunteer our time to supporting nonprofit organizations.  Stay tuned for pictures and we hope to see you at the Maroon 5 concert on July 11th!

Greater Binghamton Chamber Annual Company Clambake - Our team is all in when it comes to winning the Team Spirit Award!  We bring energy, enthusiasm, and a passion for food.  Nothing says team spirit like matching outfits - especially when they are fun.  Why blend in when you can stand out in style?  You wont want to miss the photos in our next newsletter - they're guaranteed to bring a smile!

This month we’ll take a closer look at the proposed tax legislation and why a cautious planning approach is wise, how an apparent slowdown at the IRS could actually heighten your audit risk, and the best ways to handle seasonal workers, interns, and payroll compliance during summer hiring – delivering timely guidance to keep you ahead of the curve as summer reaches full swing.

And remember, our services extend to your colleagues, family, and friends. Should they require assistance, we're just a phone call away. We remain committed to identifying every opportunity to ensure our client's prosperity. Your kind reviews and referrals are invaluable to us.

• Permanent Extension of the Increased Standard Deduction and Changes to Tax Rates
• Senior Bonus Deduction
• Adjustment to the Qualified Business Income Deduction (QBI)
• Estate and Gift Tax Exemption Enhancements
• Saver's Credit Adjustments
• “No” Tax on Social Security Income
• “No” Tax on Overtime
• “No” Tax on Tips
• Reinstatement of Bonus Depreciation
• Increased State and Local Tax (SALT) Deduction Limit
• No Tax on Car Loan Interest
• Termination of Clean Vehicle Credits
• Termination of Residential Solar Credit
• Termination of Energy Efficient Home Improvement Credit
• Termination of Certain Deductions

In recent months, legislative activity in Congress has spurred considerable discussion around the proposed One Big Beautiful Bill Act (OBBBA). This article explores the key components of the OBBBA House and Senate versions of the tax bill as deciphered from various Congressional documents and highlights the importance of cautious tax planning given the potential changes in the legislation by the time it is reconciled in Congress.

Key Provisions

Both houses of Congress have proposed several changes aimed at extending and enhancing tax benefits introduced under the Tax Cuts and Jobs Act (TCJA), which was enacted in 2017. Most of the TCJA changes are scheduled to expire at the end of 2025. Here’s a summary of some key provisions:

1. Permanent Extension of the Increased Standard Deduction and Changes to Tax Rates: Proposals seek to make the standard deductions, which were increased under the TCJA, permanent. Furthermore, temporary enhancements are slated for 2025 through 2028, with an additional increase of $1,000 for individuals, $1,500 for heads of household, and $2,000 for married couples. The TCJA also temporarily modified the tax rates and brackets, including dropping the top rate from 39.6% to 37%, and indexed the bracket thresholds for inflation. The 2025 legislation would make permanent the TCJA’s income tax brackets and modifies the indexing methodology.
   
   
2. Senior Bonus Deduction: Under current law, up to 85% of Social Security benefits could be taxable, depending on the recipient’s other sources and amounts of income. The legislation aims to reduce the taxation of Social Security benefits for years 2025 through 2028 by providing those age 65 and older an additional $4,000 or $6,000 standard deduction amount, reduced when modified adjusted gross income exceeds $150,000 for married couples ($75,000 for others).
   
   
3. Adjustment to the Qualified Business Income Deduction (QBI): The bill proposes increasing the QBI deduction, sometimes referred to as the Sec 199A deduction, from 20% to 23% and making these changes permanent. The phase-in limitation mechanics are revised for simplification.
   
   
4. Estate and Gift Tax Exemption Enhancements: The unified estate and gift tax exemption will see a permanent increase to an inflation-indexed $15 million.
   
   
5. Child Tax Credit Modifications: Scheduled enhancements temporarily increase the child tax credit from $2,000 to $2,200 or $2,500 per qualifying child through 2028 before reverting to $2,000, starting in 2029. Additional modifications pertain to indexing, refundability, and Social Security number reporting.
   
   
6. Saver's Credit Adjustments: Modifications to the Saver's Credit are geared towards encouraging more savings among lower- and middle-income families. The law establishes a permanent inclusion of contributions made to ABLE accounts for the beneficiary who is the account's designated recipient, effectively treating these contributions similarly to those made to more traditional retirement accounts.
   
   
7. “No” Tax on Overtime: The legislation creates an above-the-line deduction for overtime premium pay. Both the House and Senate bills limit the deduction in different ways to lower income taxpayers.
   
   
8. “No” Tax on Tips: The tax bill introduces a new above-the-line tax deduction for qualified tips received by individuals working in occupations where tipping is customary. The tips must be voluntarily given, not negotiated, and determined solely by the customer. The deduction is not allowed to highly compensated individuals.
   
   
9. Reinstatement of Bonus Depreciation: A full reinstatement of the 100% first-year depreciation deduction is proposed for business property placed in service between 2025 and 2030.
   
   
10. Increased State and Local Tax (SALT) Deduction Limit: This is a bone of contention between the House and Senate, with proposals making the SALT deduction as high as $30,000 but phasing out the increase over the existing $10,000 limit for higher-income taxpayers. These changes would be permanent. This expansion is substantial, as it can potentially aid numerous taxpayers previously limited by the TCJA's deduction cap.
    
    
11. No Tax on Car Loan Interest: Would allow taxpayers to deduct up to $10,000 in interest paid on auto loans for vehicles assembled in the U.S. for years 2025 through 2028. The deduction would phase out for taxpayers with an AGI of $100,000 ($200,000 for married individuals filing jointly).
    
    
12. Termination of Clean Vehicle Credits: The legislation would terminate the tax credit for purchasing both new and previously owned clean vehicles after 2025. There is an exception for manufacturers that have not sold 200,000 new clean vehicles as of December 31, 2025, to qualify for the credit in 2026.
    
    
13. Termination of Residential Solar Credit: The legislation would terminate the tax credit for solar electric, solar water heating, fuel cell, small wind energy, geothermal heat pump, and battery storage property generally after 2025.
    
    
14. Termination of Energy Efficient Home Improvement Credit: The legislation would terminate the 30% tax credit for household energy efficient improvements.
    
    
15. Termination of Certain Deductions: The deduction for personal exemptions is permanently repealed. The new law would make permanent the current restrictions on miscellaneous itemized deductions.

There are more, but these are the key issues affecting most taxpayers.

It is imperative for taxpayers approach these prospective changes with caution. They are still in the “proposed” stage, with the House and the Senate still negotiating the final legislation. The final reconciled version of the OBBBA is expected in July. If you have questions, please contact this office.

Well, this is earlier.

And if you’re a business owner who’s having a good year so far (or even just a better-than-expected one), now’s the time to stop the silent tax creep. Because waiting until Q4? That’s when the windows start to close—and the stress starts to spike.

Let’s change that. 

If you’ve invested in equipment, vehicles, or software this year—or plan to—you may qualify for accelerated depreciation, like Section 179 or bonus depreciation. But here’s the catch:

• These strategies work best when coordinated before year-end purchases
  
  
• The bonus depreciation phaseout is happening now

Many business owners miss out simply because they didn’t discuss with their accountant until December

Pro tip: Even leased assets may qualify, depending on your structure. 

Mid-year is a golden time to assess solo 401(k)s, SEP IRAs, or even consider a defined benefit plan if your income is trending higher than expected.

Why now?

• You have time to set up or amend plans to capture more tax-deferred savings
  
  
• Contributions may reduce your taxable income now and build long-term wealth
  
  
• You can adjust estimated payments with better visibility into Q3/Q4 income

A defined benefit plan might sound complex, but for certain business owners, it’s the most powerful deduction left. 

You can’t always control revenue, but you can often influence when income is recognized and when expenses hit your books.

Strategies might include:

• Deferring or accelerating billing
  
  
• Prepaying certain expenses
  
  
• Timing asset purchases before depreciation limits tighten
  
  
• Using your current cash flow strength to fund deductions proactively

Not all strategies apply to every entity—S corps, partnerships, and sole props have different timing rules. 

Here’s what we see all the time:

• Business is going great
  
  
• The books get reviewed in January
  
  
• Tax bill arrives—and it’s way too late to do anything about it

That’s avoidable.
But only if you act now, when there’s still room to adjust. 

If it’s been more than six months since you reviewed your tax strategy—or if you’ve made big moves in your business lately—reach out.

We’ll help you:

• Identify missed deductions
  
  
• Recalculate estimated taxes
  
  
• Make smart moves that protect your cash flow and your future

Contact our office if you'd like to take a proactive look at your tax picture before Q3 sneaks up.

Because tax season shouldn’t be a surprise attack.
Let’s plan like it’s part of the business—because it is.

 

• The One, Big, Beautiful Bill
• Previously Owned Clean Vehicle Credit
• New Clean Vehicle Credit
• Energy Efficient Home Improvement Credit
• Residential Clean Energy Credit

The legislative landscape of environmental tax credits may soon change significantly, as "The One, Big, Beautiful Bill" awaits Senate approval following its passage by the House of Representatives on May 22, 2025. This proposed legislation aims to sunset several critical environmental tax credits by December 31, 2025, instead of the original end date of December 31, 2032. Although not yet law, the bill’s passing in the Senate could mean an expedited deadline for those considering investments in environmentally friendly projects. Taxpayers are therefore urged to act swiftly if they are considering any of these opportunities.

Comprehensive Overview of Key Tax Credits:

• Previously Owned Clean Vehicle Credit: Here is a brief overview of the qualifications for the Previously Owned Clean Vehicle Credit. The vehicle must have a model year that is at least two years older than the calendar year in which you acquire the vehicle. The original use of the vehicle must have begun with someone other than you, meaning that it must have been previously owned. The sales price of the vehicle must not exceed $25,000. The vehicle must be purchased from a dealer, and the transfer must be the first since August 16, 2022, to an individual eligible to claim the credit. The vehicle must be propelled to a significant extent by an electric motor drawing electricity from a battery with a capacity of at least 7 kilowatt hours, which is capable of being recharged from an external source of electricity. The vehicle must have a gross vehicle weight rating (GVWR) of less than 14,000 pounds.
  
  1.    Tax Benefit: Credit of the Lesser of $4,000 or 30% of the sale price.
  
  2.    Buyer Income Limitations: $75,000 for single filers, $112,500 for head of household, and $150,000 for joint filers.
  
  3.    Credit Expiration: December 31, 2025
  
  
• New Clean Vehicle Credit: Here is a brief overview of the qualifications for the Clean Vehicle Credit. Vehicles must be manufactured by qualified manufacturers who report vehicle identification numbers (VINs) and relevant information to the IRS. The dealer must provide necessary documentation to the buyer and the IRS, including the buyer’s name, taxpayer identification number (TIN), VIN, battery capacity, and confirmation of original use. Ownership of the vehicle is required (lessors are eligible, but not lessees). The vehicle must be placed in service during the tax year, and the original use must begin with the buyer. The vehicle must be acquired for personal use or leasing, not for resale. Primary use must be in the United States.
  
  1.    Tax Benefit: Credit of $7,500 or $3,750
  
  2.    Buyer Income Limitations (MAGI): $150,000 for individuals, $300,000 for married couples filing jointly, and $225,000 for heads of household.
  
  3.    Expiration Change: December 31, 2025
  
  
• Energy Efficient Home Improvement Credit: Here is a brief overview of the qualifications and improvements that qualify for the Energy Efficient Home Improvement Credit. The credit is applicable to homeowners who make energy-efficient improvements to their main home, which must be in the United States. New construction is not eligible for this credit. The overall annual limit on the Energy Efficient Home Improvement Credit is set at $1,200, which applies to the total amount for all qualifying improvements within a single tax year. There are specific per-item and aggregate annual credit limits; for example, individual items such as doors, windows, and air conditioning systems each have specific maximum credit limits. Qualified improvements include:

• Insulation: Installation of insulation materials designed to reduce heat loss or gain qualifies for the credit.
  
  
• Exterior Doors and Windows: Doors and windows meeting Energy Star program requirements are eligible, subject to credit limits.
  
  
• Roofs: Metal or asphalt roofs designed to reduce heat gain may qualify.
  
  
• Heating and Cooling Systems: Includes improvements like high-efficiency central air conditioners and air-source heat pumps.
  
  
• Water Heaters: Qualifying hot water boilers and furnaces using natural gas, propane, or oil, along with qualified heat pumps, are covered.
  
  
• Advanced Main Air Circulating Fans: These fans used in natural gas, propane, or oil furnaces, can qualify for a limited credit amount.
  
  1.    Tax Benefit: 30% of qualified expenditures, $1,200 cap annually (up to $2,000 for heat pumps and biomass stoves).
  
  2.    Buyer Income Limitations (MAGI): None.
  
  3.    Expiration Change: December 31, 2025, 100% project completion and possible inspection by deadline required.

• Residential Clean Energy Credit: Here is a brief overview of the qualifications for the Residential Clean Energy Credit. The credit applies to taxpayers who install qualified clean energy improvements on residential properties. The property must be in the United States and can include both primary and second homes. However, rental properties typically do not qualify. Eligible costs include the equipment and associated labor costs for on-site preparation, assembly, or original installation. There are no maximum credit limits for the qualified solar property. Qualified Improvements include:
  
  
• Solar Energy Systems: Solar electric (photovoltaic) systems and solar water heaters are eligible for the credit. These systems must be used to generate electricity or heat water for use in the home.
  
  
• Geothermal Heat Pumps
  
  
• Small Wind Turbines
  
  
• Fuel Cell Properties
  
  
• Battery Storage Technologies:
  
  1.    Tax Benefit: 30% of qualified expenditures
  
  2.    Buyer Income Limitations (MAGI): None.
  
  3.    Expiration Change: December 31, 2025, 100% project completion and possible inspection by deadline required.

In conclusion, while "The One, Big, Beautiful Bill" has not been finalized, the urgency remains strong as taxpayers must prepare for the possibility of a shortened eligibility window for these valuable environmental credits. Planning proactive steps now could ensure significant savings before these opportunities close.

Contact this office for further details on these environmental expenditures, whether they are refundable, and how you might benefit from them.

If you’re a business owner, investor, or part of a high-earning household, you may be thinking: Finally, some breathing room.

But here's the reality:
The IRS isn’t pulling back. It’s just getting smarter about who it goes after.

With fewer agents and a push for efficiency, the IRS is relying more than ever on technology, especially something called the Discriminant Inventory Function System, or DIF.

Think of DIF like a risk-scoring engine for tax returns. It compares your numbers—income, deductions, expenses—to national norms for similar taxpayers. The more your return deviates from what’s typical for your income level, industry, or filing status, the higher your score… and the greater your audit risk.

Want to dig deeper into the DIF system? Read the GAO’s breakdown on how the IRS selects returns for audit.

According to industry data and IRS enforcement trends, here are some of the top audit triggers:

• Unreported income – This includes anything from 1099 income to tips, crypto gains, or rental income. If the IRS has a record of it and you didn’t include it, a CP2000 notice may be coming.
  
  
• Large deductions vs. income – If you earn $75,000 and claim $40,000 in business deductions, expect the DIF to notice. Especially true for Schedule C filers.
  
  
• Crypto transactions – Digital assets are a growing audit target. If you’re dabbling in crypto but skipping IRS Form 8949 or the crypto checkbox, you’re on thin ice.
  
  
• Repeated business losses – If your business consistently reports losses, the IRS may classify it as a hobby, not a business, and disallow deductions.
  
  
• Cash-intensive businesses – Restaurants, salons, contractors, and others operating heavily in cash are often scrutinized for underreporting.
  
  
• Home office deductions – A common mistake? Claiming a home office without meeting the strict “exclusive and regular use” test.

Today’s IRS isn’t about paper mail and phone calls.
It’s about algorithms and matching engines quietly reviewing your data and issuing notices like the CP14 (balance due) or CP2000 (income mismatch) months after you file.

Often, taxpayers don’t even realize they’ve been flagged until interest and penalties have already started piling up.

Here’s the good news: You don’t need to be afraid of an audit—you just need to be prepared.

• Double-check your return for accuracy and consistency with any W-2s, 1099s, or crypto reports
  
  
• Keep solid records of deductions, mileage, and business expenses
  
  
• If you’re unsure about a past return or received a notice, don’t ignore it—review it with a pro
  
  
• Know that audit selection is increasingly about patterns, not just income level

If something on this list hits close to home—or if you've received a confusing notice from the IRS—don't guess.
Our office can help you review your IRS transcripts, explain the notice, and decide if action is needed.

No scare tactics. Just straight answers, grounded in what’s really happening inside the IRS today.

Contact our office if you’d like help reviewing your situation or understanding your risk. We’re here to guide, not judge.

• The Work Opportunity Credit
• Employer-Provided Childcare Credit
• Research Credit
• Disabled Access Credit
• Pension Startup Credit
• Business Energy Credit
• General Business Credit
• Educational Assistance Programs

Tax credits offer businesses significant opportunities to reduce their tax liabilities while simultaneously incentivizing certain beneficial activities. By understanding and utilizing these credits, businesses can not only save money but also contribute positively to community well-being and innovation. Here's an in-depth look at several key business tax credits.

The Work Opportunity Credit

The Work Opportunity Tax Credit (WOTC) serves as a powerful incentive for business owners to hire individuals from specific targeted groups who face significant barriers to employment. By leveraging this federal tax credit, employers not only contribute to the economic empowerment of disadvantaged communities but can also enhance their workforce diversity and talent pool. This article explores the intricacies of the WOTC program, including the eligible targeted groups, certification process, qualifications, and its relationship to the general business credit.

The Work Opportunity Credit targets several distinct groups that include Veterans, Recipients of Temporary Assistance for Needy Families (TANF), Long-Term Family Assistance (TANF) Recipients, Long-term unemployed individuals, Vocational rehabilitation referrals, Supplemental Nutrition Assistance Program (SNAP) recipients, Summer Youth Employees, SSI recipients, and certain residents of a Designated Community (empowerment zones and specified rural renewal counties).

• Certification Process - The certification process for the Work Opportunity Tax Credit is critical to ensure compliance and determine eligibility. Here's how the system operates:
  
  1.    Pre-Screening Notice: Employers must complete IRS Form 8850, the Pre-Screening Notice, and Certification Request for the Work Opportunity Credit. It must be filled out on or before the day the job offer is made.
  
  2.    Submission: This form must be submitted to the respective State Workforce Agency (SWA) within 28 days of the employee's start date.
  
  3.    Certification by SWA: The SWA reviews the application to determine if the employee belongs to a targeted group and meets the necessary qualifications.
  
  4.    Receiving Certification: Once certified, the employer may claim the tax credit in their tax return by completing IRS Form 5884.
  
  
• Qualifications and Credit Determination -To qualify for the WOTC, the following general criteria must be met:
   
  o    Employment Duration and Hours Worked: The employee must work at least 120 hours to qualify for the credit. If they work over 400 hours, the potential credit increases. For instance, if the employee works a minimum of 120 hours but fewer than 400, the credit equals 25% of the first $6,000 in wages ($1,500). For over 400 hours, it equals 40% ($2,400).
  
  o    Percentage of Wages: The employee must receive at least 50% of their wages from the employer for work performed in the employer's business.
  
  o    Relation Restrictions: The employee cannot be a relative of the employer or have previously worked for the employer.
  
  o    Specific Qualification Criteria: Each targeted group has particular qualifications specified in IRS Form 8850's instructions.
  
  
• Integration with the General Business Credit - The WOTC is part of the general business credit.
  
  
• Cannabis Businesses Excluded - The credit is unavailable for wages paid in carrying on a cannabis business.

Employer-Provided Childcare Credit

In today's complex economic landscape, where dual-income households are increasingly the norm, access to affordable childcare remains a cornerstone issue for many working parents. Recognizing this pressing need, the Employer-Provided Childcare Credit, delineated under IRC Section 45F, emerges as a vital economic incentive designed to encourage businesses to offer childcare services to their employees. This tax provision aims not only to support the workforce but also to provide significant tax savings to participating employers. As of recently, Congress has been contemplating legislation to potentially expand this credit, signifying its growing importance in public policy discussions.

The Employer-Provided Childcare Credit allows businesses that furnish childcare facilities and services to reclaim a portion of their expenses through tax credits. Specifically, businesses can claim a credit worth 25% of qualified childcare expenses and an additional 10% of childcare resource and referral expenditures. The aggregate limit for any given tax year is capped at $150,000, making it an attractive, albeit capped, option for firms looking to invest in their workforce.

Eligibility for the credit encompasses a wide range of expenses. Qualifying businesses include corporations, partnerships, and sole proprietorships that incur costs in providing childcare services. Expenses associated with the acquisition, construction, rehabilitation, or expansion of property used as part of a qualified childcare facility qualify under this credit. Moreover, operational costs, such as employee training, scholarship programs, and enhanced compensation for staff with advanced childcare training, also are eligible expenses. Critically, qualified childcare facilities must primarily provide childcare assistance, comply with relevant state and local regulations, and not be provided in the principal residence of the operator. Non-discriminatory policies regarding employee eligibility also apply.

The advantages of this credit extend beyond mere financial reimbursements for employers. By offering employer-subsidized childcare services, firms can significantly alleviate the childcare burden on their employees, fostering a more productive, loyal, and satisfied workforce. Employees with access to these facilities benefit from reduced stress and greater work-life balance, enhancing job performance and retention rates. Moreover, these benefits can frequently translate into tax savings for employees, assuming the benefits align with IRC Section 129's guidelines for a Qualified Dependent Care Assistance Program (DCAP).

Nevertheless, the credit involves intricate compliance conditions. Employers must navigate the nuances of IRS Form 8882 (for calculating the credit) and Form 3800 (to report the credit under the general business credit). Notably, if a qualified childcare facility ceases operation or changes ownership, firms may face recapture issues, increasing their tax liability. Thus, businesses must ensure that all childcare benefits are structured to meet the exclusion requirements, maintaining vigilance over licensing and operational standards to avoid potential recapture events.

As legislative discussions about expanding the Employer-Provided Childcare Credit gain traction, businesses of all sizes may soon find greater incentives to offer childcare solutions. Whether through on-site facilities, partnerships with local childcare providers, or resource referral services, the expanded credit holds promise for transforming workplace dynamics, ultimately supporting working families while enabling businesses to thrive. The broader economic implications of such a shift, encompassing increased workforce participation and economic productivity, underline the Employer-Provided Childcare Credit as not just a financial instrument, but a pivotal socio-economic catalyst in modern times.

Research Credit

The research credit is a tax incentive designed to encourage businesses to invest in research and development (R&D) in the United States. It provides a credit for increasing research activities, allowing qualifying businesses to reduce their tax liability based on expenditures related to R&D.

• Qualified Research: Qualified research refers to activities that meet specific criteria defined by the Internal Revenue Code. Generally, it must involve a process of experimentation aimed at improving a product or process, and it must encompass elements of technological uncertainty and be intended for discovering information that is technological in nature.
  
  
• Regular and Simplified Methods:
  
  o    Regular Method: This calculates the credit as a percentage of the qualified research expenses above a base amount.
  
  o    Simplified Method: 14% of the qualified research expenses over 50% of the average annual qualified research expenses in the three immediately preceding tax years. If no such expenses were incurred in the prior years, it may be 6% of the current year's qualified research expenses. This method is often preferred by taxpayers with incomplete records or complications from mergers and acquisitions.
  
  
• Qualified Small Business Payroll Election: A qualified small business (QSB) may elect to apply a portion of its research credit against its payroll tax liability, specifically the employer's share of FICA withholding. To qualify, the business must be a corporation whose stock is not publicly traded, partnership, or sole proprietorship with gross receipts of less than $5 million for the credit year and must not have gross receipts before the fourth preceding year.

Disabled Access Credit

The disabled access credit, under Section 44 of the Internal Revenue Code, aims to assist small businesses in accommodating individuals with disabilities. This credit allows eligible small businesses to claim up to 50% of the expenditures incurred for compliant accessibility improvements, up to a maximum credit of $5,000 annually. The expenditures can include physical changes to the business premises or interpreting services, making facilities more accessible to employees and customers with disabilities.

Eligible expenses for this credit include:

1. Removing barriers that hinder access for individuals with disabilities.
   
   
2. Providing interpreters or audio materials for hearing-impaired individuals.
   
   
3. Offering readers or taped texts for visually impaired individuals.
   
   
4. Acquiring or modifying equipment for individuals with disabilities.

Importantly, expenses claimed for this credit cannot be used for other deductions or credits.

Pension Startup Credit

The Pension Start-Up Credit is a benefit for small employers starting new retirement plans. It allows eligible employers to claim a credit for costs related to establishing and administering a new pension plan. The credit is part of the general business credit and includes a one-year carryback and a 20-year carryforward for any unused credits. In addition, there is a specific credit for companies incorporating automatic enrollment in their plans, providing up to $500 per year for the first three years. The credit is designed to support small businesses in setting up retirement plans for their employees and applies to entities with 100 or fewer employees who earn more than $5,000 annually.

Business Energy Credit

To promote the use of renewable energy, the business energy investment credit encourages investing in energy-efficient technologies and sustainable practices. Activities such as solar, wind, and geothermal installations can qualify for this credit under Section 46. The business energy investment credit is significant because it reflects the broader intent to move towards sustainable energy sources. The credit varies depending on the technology and can greatly reduce the overall costs of energy projects.

General Business Credit

The general business credit is a comprehensive tax credit that combines several specific individual credits. This includes the credits mentioned above and others such as the Indian employment credit, the small employer health insurance premiums credit, and the clean vehicle credit. The general business credit allows business taxpayers to utilize tax credits against not only their regular income taxes but sometimes their alternative minimum tax as well. Limitation rules apply to ensure these credits do not exceed the taxpayer's net income tax liabilities.

Educational Assistance Programs

Although not a tax credit, educational assistance programs offered by employers can be advantageous for both employers and employees when it comes to taxes. Under Section 127 of the Internal Revenue Code, businesses can provide employees with up to $5,250 annually for educational assistance without the amount being taxable to the employee. This tax-exempt status encourages employers to invest in their workforce's education and skills development, fostering a learning culture and competitive edge in the industry.

A program must not favor highly compensated employees and no more than 5% of the benefits during the year can be provided to shareholders or owners (or their spouses or dependents).

In conclusion, understanding and effectively utilizing these various business tax credits can serve as a vital part of a company's financial strategy. From supporting employment of diverse groups and providing employee benefits to fostering sustainable and innovative practices, these credits offer significant opportunities for financial savings and positive societal impacts.

Contact this office to efficiently navigate and apply these credits for optimal benefit.

• Understanding Reasonable Cause Abatement
  
  o   What Constitutes Reasonable Cause?
  o   How to Apply for Reasonable Cause Relief
  o   Who Can Apply?
  o   IRS Guidelines on Evaluating Reasonable Cause
  o   Grounds Used for Requesting Abatement
  o   Exploring First-Time Abatement Penalty Relief
• Qualifications for First-Time Abatement
  
  o   Is FTA a One-Time Benefit?
  o   Scope and Limitations of FTA
  o   How to Apply for FTA
• Interest Charges Generally Not Eligible for Abatement

For taxpayers facing IRS penalties, understanding the pathways to request penalty abatement can provide relief both financially and emotionally. From reasonable cause abatement to First-Time Abatement (FTA), this article explores these options, detailing the qualifications, processes, and considerations essential for crafting a successful request.

UNDERSTANDING REASONABLE CAUSE ABATEMENT

Reasonable cause abatement is a provision that allows taxpayers to request the removal of certain penalties based on circumstances that prevented the taxpayer from complying with tax laws. This relief is grounded in the principle that, despite the taxpayer’s best efforts, compliance was not possible due to unforeseen events or circumstances beyond their control.

What Constitutes Reasonable Cause? Reasonable cause is determined based on all the facts and circumstances in a taxpayer’s situation. Some common situations that might be considered reasonable cause include:

1. Natural Disasters: Events such as hurricanes, floods, wildfires or earthquakes preventing timely filing or payment.
   
   
2. Serious Illness or Death: The illness or death of the taxpayer or an immediate family member that impacts the taxpayer's ability to comply.
   
   
3. Unavoidable Absence: Situations where the taxpayer is unavoidably absent during critical tax periods may qualify.
   
   
4. Inability to Obtain Records: If records needed for filing were unobtainable for reasons beyond the taxpayer’s control.
   
   
5. Fire, Casualty, or Other Disruptive Event: Events causing significant disruption to the taxpayer’s ability to maintain proper records or file.
   
   
6. Mistake Made Despite Ordinary Care: Errors made even though the taxpayer exercised ordinary business care and prudence.

How to Apply for Reasonable Cause Relief - To apply for reasonable cause abatement, taxpayers should:

• Submit a Written Request: Explain in detail the reason for the late filing or payment. Include documentation supporting the claim, such as hospital records, insurance claims, or any correspondence related to the circumstances.
  
  
• Provide Specifics: Focus on the timeline of events and how each impacted tax compliance. Specificity aids the IRS in understanding and evaluating the request.
  
  
• Use Form 843 (Claim for Refund and Request for Abatement): This is typically the form used for penalty abatement requests, apart from initially submitting statements with the late-filed return or payment.

Who Can Apply?

Any taxpayer (or their representative with a power of attorney) assessed with a penalty and having reasonable cause for non-compliance can apply for relief. This includes:

• Individuals: Facing personal tax penalties.
  
  
• Businesses and Corporations: Encountering penalties related to payroll taxes, income tax, etc.
  
  
• Estates and Trusts: Affected by penalties during administration or distribution processes.

IRS Guidelines on Evaluating Reasonable Cause -The IRS evaluates reasonable cause requests based on guidelines that consider:

• Ordinary Business Care and Prudence: Whether the taxpayer exercised ordinary business care and prudence and still could not comply.
  
  
• Circumstances Causing Non-compliance: The nature of events and their direct connection to the failure to comply.
  
  
• Compliance History: Previous compliance history can be a factor. Taxpayers with a good history may have a more favorable outcome.
  
  
• Length of Delay: The duration of the delay and whether the taxpayer made efforts to comply as swiftly as possible after the circumstances changed.
  
  
• Efforts to Comply: Actions taken by the taxpayer to mitigate or resolve the circumstances preventing compliance.

Grounds Used for Requesting Abatement - While the grounds for requesting reasonable cause relief vary, success often hinges on the strength and documentation of the reason.

• Successful Grounds:
• Medical emergencies with thorough documentation.
• Natural disasters with official declarations or documentation.
  
  
• Unsuccessful Grounds:
  
• Financial inability to pay (typically not sufficient unless extreme circumstances can be proven).
• Lack of funds due to a downturn without external unforeseen cause.

EXPLORING FIRST-TIME ABATEMENT PENALTY RELIEF

The First-Time Abatement provides an additional avenue for penalty relief, recognized for its promotion of compliance through forgiveness for a single error.

Qualifications for First-Time Abatement - To qualify for FTA penalty relief, the taxpayer must meet:

1. No Penalties Prior: No prior penalties (except estimated tax penalties) for the preceding three tax years, aside from minor deviations.
   
   
2. Filing Compliance: Filing of all required returns or extensions for the year in question and three years prior.
   
   
3. Current Tax Obligations: Settlement of any taxes due or actively in an installment agreement.

Is FTA a One-Time Benefit? FTA may sound like a one-time offer, but it can be revived after three successive years of compliance, offering ongoing incentive for good compliance practices if maintained.

Scope and Limitations of FTA

• Applies To:
• Failure-to-File Penalties
• Failure-to-Pay Penalties
• Failure-to-Deposit Penalties
  
  
• Does Not Apply To:
• Accuracy-related penalties
• Fraud penalties
• Other non-compliance-related penalties

How to Apply for FTA

• Automatic Consideration: Often applied automatically when a taxpayer who has received a penalty notice calls the IRS to inquire about penalties.
  
  
• Verification Needed: Tax records and account standing must be verified for eligibility by an IRS representative.
  
  
• Documentation: Less documentation-intensive compared to reasonable cause, but keeping impeccable records can always benefit the taxpayer.

INTEREST CHARGES GENERALLY NOT ELIGIBLE FOR ABATEMENT

The IRS is required by statute to assess interest on unpaid tax due or penalties. IRS sets and publishes current and prior years interest rates quarterly that are used to calculate interest on underpayment and overpayment balances. The only circumstance when the IRS may reduce the amount of interest owed is if the interest is applied because of an IRS officer or employee's unreasonable error or delay. Among other criteria, the error or delay must have occurred after the IRS contacted the taxpayer in writing about an examination, underpayment, or payment. Meeting the qualifications for abating interest is extremely difficult to achieve.

Understanding and utilizing penalty relief options such as reasonable cause and First-Time Abatement equip taxpayers with vital tools for reducing their IRS burdens. By thoroughly documenting circumstances, maintaining compliance, and being aware of IRS guidelines, taxpayers can alleviate financial distress and continue a path of compliance. As these provisions aim to recognize the unexpected and encourage compliance, they play a crucial role in fostering a more forgiving yet structured tax system for all parties involved.

Contact this office if you believe you qualify for either the reasonable cause or the first time-abatement penalty relief and need assistance applying for the relief.

While onboarding interns or part-time help sounds simple enough, summer hiring is one of the most common ways small business owners get tripped up on payroll, compliance, and classification.

And yes, even a single misstep—like putting a W-2 employee on a 1099 “just for the summer”—can cost you big.

You’re not alone if you’ve ever said:

“We’re just paying them a flat rate—it’s easier that way.”
“They’re only here for 10 weeks.”
“They’re a student; it’s not really a job-job.”

Here’s the hard truth:
If you control when, where, and how someone works—you’re probably supposed to issue a W-2.

The IRS doesn’t care if it’s part-time, seasonal, freelance, or “just a favor.” If they look like an employee, they are one—and they want to see payroll taxes, not contractor payments.

Need the official word? See IRS guidelines on worker classification 

Many businesses think unpaid internships are a gray area. But unless it’s tied to a formal educational program with no expectation of compensation, the Department of Labor may classify your intern as an employee.

That means:

• Minimum wage laws apply
  
  
• You may owe payroll taxes
  
  
• Workers’ comp coverage could be required

Rule of thumb: If they’re contributing to your business, they probably need to be on payroll.

Here’s some good news: 

If you’re hiring people from certain target groups—like veterans, long-term unemployed, or summer youth employees—you might qualify for the WOTC, which can reduce your federal income tax liability by up to $2,400 per qualifying hire.

But:

• You have to apply before hiring
  
  
• The paperwork needs to be filed with your state agency
  
  
• Most businesses never realize they’re eligible

More info? Explore the WOTC program here 

• Set up correct federal and state withholding
  
  
• Ensure you have an active payroll system (manual payments often miss required filings)
  
  
• Collect and retain Form I-9s and W-4s
  
  
• Check if local labor laws require sick leave or additional reporting for part-time workers
  
  
• Know if you need to pay overtime—even if it’s “just for the summer”

We get it—your focus is on growing your business, keeping clients happy, and getting help in the door. But ignoring payroll compliance (even for “just a few weeks”) can lead to:

• Penalties for misclassification
  
  
• Missed tax credits
  
  
• State audits
  
  
• Unhappy former employees filing claims you didn’t see coming

We’ve helped hundreds of small business owners set up summer payroll the right way—without overcomplicating things or drowning in red tape.

If you’re planning to bring on part-time, seasonal, or intern help in the next few weeks, let’s talk.
We’ll help you stay compliant, minimize tax risk, and maybe even find some credits you didn’t know existed.

Contact our office before you run that first paycheck—we’ll help you do it right from the start.

• Household Employees
• Tax Avoidance
• Form 1099-K
• Filing 1099s
• Correct Procedures
• W-2s, Payroll Taxes and Reporting
• Babysitters
• Overtime
• Hourly Pay or Salary
• Separate Payrolls
• Eligibility to Work in the U.S.

If you hire a domestic worker to provide services in or around your home, you probably have a tax liability that you don’t know about – or one that you do know about but are ignoring. Either situation can come back to bite you. When the worker is your employee, your liability includes both withholding and paying payroll taxes as well as issuing a W-2 after the close of the year.

Sure, it is a lot easier simply to pay your worker in cash so as to avoid federal and state payroll taxes – and all the paperwork that goes with them. Your domestic worker will likely be fully cooperative with a cash deal because he or she can also avoid paying taxes. However, if the IRS or your state employment department finds out about these payments, the result could be very unpleasant for you.

Some families may be paying their household help via a third-party payment processor such as PayPal, Venmo, etc. These payment processors must begin reporting those payments (on Form 1099-K) when the total for the year exceeds $600 in 2025 (down from $5,000 in $2024)

Not everyone who performs services in or around your home is classified as an employee. For instance, a plumber or electrician who makes repairs in your home will generally be a licensed contractor; the government does not classify contractors as employees.

On the other hand, the IRS has conclusively ruled that nannies, housekeepers, senior caregivers, some gardeners and various other domestic workers are employees of the people for whom they work. It makes no difference if you have a written contract with the worker; similarly, the number of hours worked, and the amount paid do not matter.

You are probably thinking, “Wait a minute” – perhaps ­­everyone you know pays in cash, and none of them has paid payroll taxes or issued a W-2 for a household employee. However, if a worker gets injured on your property or if you dismiss the worker under less-than-amicable circumstances, it’s a pretty sure bet that your household employee will be the first one to throw you under the bus by reporting you to the state labor board or by filing for unemployment compensation.

Generally, an unemployment insurance claim form requires the worker to list all employers and wage amounts to get benefits. That, in turn, creates a letter audit to collect state employment taxes and a referral to the IRS to collect federal employment taxes (FICA and FUTA).

Some individuals try to circumvent the payroll issue by treating a household employee as an independent contractor, incorrectly issuing the household employee a Form 1099-NEC.

The easiest way to comply with the law, both federal and state, is to engage a payroll company to make the payroll payments and take care of the paperwork and required filings.

If you are a do-it-yourselfer, here are the correct actions you should take for domestic employees:

• Obtain a Federal Employer Identification Number (FEIN), which you will use in lieu of your Social Security Number when filing the required reporting forms. Note: If, as the owner of a sole proprietorship business, you already have a FEIN, you should use that number instead of requesting a separate one as a household employer.
  
  
• Obtain a state ID number for unemployment insurance and state tax withholdings.
  
  
• Withhold Social Security and Medicare taxes (also known as FICA taxes) from the employee’s pay if it exceeds the annual threshold, $2,800 in 2025 (Up from $2,700 in 2024).
  
  
• Withhold income tax from the employee if requested by the worker and if you agree to do so.
  
  
• File state employment tax returns as required – generally quarterly (although beware that some states require monthly returns) – and make the required deposits for state employment taxes.
  
  
• Prepare a W-2 for the employee and a W-3 transmittal; file them by the end of January.
  
  
• File Schedule H with your federal individual income tax return and pay all the federal payroll and withholding taxes (i.e., the federal taxes that you withheld from the employee’s pay, plus your matching share of Social Security and Medicare taxes plus federal unemployment tax, which is entirely your responsibility). Limited exception: If you operate a sole proprietorship with employees, you may include the payroll taxes of your household workers with those of the business’s employees, but you cannot take a business deduction for those taxes. Generally, it is better to keep the personal and business reporting separate.

Some additional issues to consider are as follows:

Babysitters – When employing babysitters for occasions such as when you leave your home to go to dinner, the movies, or other outings, it is crucial to recognize that these individuals fall under the household employee category. Unfortunately, the law mandates compliance, even for some teenage babysitters, with no exceptions provided. We acknowledge that many taxpayers might not adhere to these regulations, but legal requirements remain. However, certain circumstances exempt a babysitter from FICA withholding:

• Domestic services rendered by individuals under 18 years old.
  
  
• Services performed by a child under 18 as an employee of their parent are not subject to FICA taxes.
  
  
• Services by a child under 21 as an employee of their parent are exempt from FICA tax considerations if the services do not relate to the parent's business activities or consist of domestic tasks within the parent's household.

Overtime – Under the Fair Labor Standards Act, domestic employees are nonexempt workers and are entitled to overtime pay after working 40 hours in a week. Live-in employees are an exception to this rule in most states.

Hourly Pay or Salary – It is illegal to treat nonexempt employees as if they are salaried.

Separate Payrolls – If you own a business with a payroll, you may be tempted to include your household employees on the company’s payroll. The payments to the household employees are personal expenses, however, and are not allowable deductions for a business. Thus, you must maintain a separate payroll for household employees; in other words, you must use personal funds to pay household workers instead of paying them from a business account.

Eligibility to Work in the U.S. – It is illegal to knowingly hire or continue to employ an alien who is not legally eligible to work in the U.S. When hiring a household employee who works on a regular basis, you and the employee each must complete Form I-9 (Employment Eligibility Verification). You will need to examine the documents that the employee presents to establish the employee’s identity and employment eligibility.

Other Issues – Special situations not covered in this overview include how to handle workers hired through an agency, how to gross up wages if you choose to pay an employee’s share of Social Security and Medicare taxes, and how to treat noncash wages.

Please call this office if you would like assistance with your household employee tax and reporting requirements or with any special issues that apply to your state.

• Joint and Several Liability in Tax Matters
• Tax Rights and Responsibilities
• Relief Options for Survivors
• Undisclosed Income and Fraudulent Activity
• Independent Filing Options
• Empowering Financial Independence

Domestic abuse often involves not only physical violence but also a manipulative control over financial resources. Survivors of domestic abuse, while navigating their recovery, may face many financial challenges, including tax-related issues. It's essential for survivors to understand their rights and available relief options to safeguard their economic future and provide a pathway to financial empowerment and resilience

Joint and Several Liability in Tax Matters

When spouses file a joint tax return, both are responsible for the tax and any additions to tax, interest, or penalties that arise from the joint return, even after divorce. This is known as "joint and several liability." Conversely, each spouse would only be responsible for the liabilities on their separate returns if filed separately.

Survivors of domestic abuse who previously filed jointly may face significant burdens if their abusive partner engaged in tax deceit or failed to report income. It's crucial for survivors to know that there are ways to seek relief from these liabilities under certain conditions.

Tax Rights and Responsibilities

Domestic abuse survivors have several essential tax rights that enable them to make informed decisions about their finances:

• Right to File Separately: Even if married, individuals can choose to file separate tax returns. This option can be particularly beneficial if there are concerns about the accuracy or legitimacy of a spouse's financial transactions.
  
  
• Understanding the Full Tax Return: Before signing a jointly filed return, survivors are entitled to review the entire document, including supporting documents, to ensure accuracy and transparency.
  
  
• Refusal to Sign a Joint Return: Survivors have the right to refuse signing a joint return if they suspect discrepancies or potentially fraudulent activities orchestrated by their spouse.
  
  
• Filing Extension Requests: If additional time is required to prepare a tax return, a 6-month extension can be requested, allowing the survivor more time to gather necessary documentation or seek professional guidance. However, any tax anticipated to be owed is required to be paid with the extension request, which needs to be made by the April due date of the return.
  
  
• Access to Past Returns: Obtaining copies of previous tax returns from the IRS can help reconstruct financial histories and identify potential inaccuracies or omissions.
  
  
• Requesting Liability Relief: If a spouse has been responsible for errors or omissions that affect the tax liability, survivors may seek relief to avoid being unfairly burdened.
  
  
• Independent Tax Advice: Navigating tax issues can be complex, and seeking out independent tax advice can provide survivors with the guidance needed to fully understand and assert their rights.

In addition to these rights, survivors also hold several responsibilities, including timely filing of tax returns, reporting all income accurately, and communicating with the IRS regarding any changes in personal information such as a name and/or address change.

Relief Options for Survivors

The IRS offers several distinct forms of relief to assist domestic abuse survivors who may otherwise find themselves encumbered by tax liabilities resulting from their spouse's or former spouse’s actions. These include: 

Undisclosed Income and Fraudulent Activity

A significant challenge for survivors of domestic abuse is dealing with undisclosed income or fraudulent tax activities conducted by their spouse. The ramifications of these actions can continue to impact the survivor long after a divorce or separation. Survivors should:

• Maintain Vigilance: Regularly review current and past tax documents to identify and address potential discrepancies or unreported income.
  
  
• Seek Professional Advice: Engaging a tax professional or legal advisor can help in gathering evidence and presenting a strong case for relief.
  
  
• Gather Evidence: Collecting documents, such as W-2s, 1099s, and bank statements, provides critical support in establishing the true financial picture and refuting fraudulent claims.
  
  
• Seek Tax Assistance: Timely communication with a tax professional enables survivors to become alert about discrepancies, request records, and initiate necessary actions to secure relief.

Independent Filing Options

When dealing with an abusive spouse, survivors have several filing options aside from filing jointly. Here are the available alternatives:

1. Married Filing Separately: This option allows each spouse to file their own tax return, thereby being responsible only for their individual tax obligations. It can be beneficial when there is a lack of trust about how the other spouse is handling finances, or to ensure that one spouse isn't held accountable for any errors or fraudulent activities made by the other spouse.
   
   
2. Head of Household: In some cases, a survivor may qualify to file as "Head of Household," which generally offers better tax rates, and a higher standard deduction compared to filing separately. To qualify, the survivor must:
   
   
• Be considered unmarried as of the last day of the tax year (this can apply to separated spouses under certain conditions).
  
  
• Pay more than half of the household expenses for the year.
  
  
• Have a qualifying person, such as a child or dependent, living with them for more than half the year.
  
  
3. Single: If the survivor is officially divorced by the end of the tax year, and has not remarried, they would file as "Single," unless qualifying for the Head of Household status. This Single status might also apply if the marriage was annulled or if they were legally separated under a decree of divorce or separate maintenance.

Choosing the right filing status involves assessing the specific situation, potential qualifications, and possibly seeking advice from a tax professional. This approach helps ensure that survivors of domestic abuse can take control of their financial situation while minimizing any additional stress or liability.

Empowering Financial Independence

Understanding and asserting tax rights and relief options is a fundamental step toward achieving financial independence and security. For survivors of domestic abuse, the road to reclaiming control over personal finances may be fraught with challenges. However, understanding and asserting your tax rights can play a crucial role in this journey towards independence.

As discussed above, the IRS has provisions in place to support those unknowingly burdened by liabilities as a result of deceitful actions by an abusive partner. By leveraging these relief options and actively seeking guidance from experienced professionals, survivors can manage these challenges more effectively.

Rebuilding financial independence involves more than addressing immediate concerns; it extends to building a secure future free from the economic constraints exerted by past abuse. With education, support, and informed decision-making, survivors can confidently embrace the next chapter of their lives, embodying resilience and empowerment.

Contact this office for assistance.

Tags are customizable labels that you can apply to transactions, like invoices, expenses, bills, or bank transfers, to help you track the information that’s most important to your business. Unlike Classes or Locations, Tags don’t affect how your books are categorized for tax purposes. Instead, they provide a custom reporting layer that’s entirely your own.

Think of them as digital sticky notes you can sort, filter, and analyze. Want to know how much you spent on your summer marketing campaign? Tag every related transaction with "Summer 2025" and pull a report in seconds.

QuickBooks® Online's Tags are particularly helpful for small business owners, consultants, creatives, and firms that don’t want to overcomplicate their general ledger but still need meaningful insights. Here are just a few benefits:

• Custom tracking without cluttering your chart of accounts
  You don’t need to create dozens of new accounts to track temporary campaigns or event-based expenses.
  
  
• No limits on creativity
  You can tag by project, client, department, job title, marketing funnel—whatever’s relevant to your business.
  
  
• Detailed insights with Tag Group reports
  Group similar tags together and run summary reports to see how much you're spending or earning across those categories.
  
  
• Greater visibility into business drivers
  Identify trends, compare performance across tags, and use that data to make smarter decisions.

As of this year, QuickBooks® has improved the user interface for Tags, making it easier to apply them in bulk and filter them in real-time reports. You can now add tags directly from the Banking tab during transaction review, and Tag Group reports have become more detailed, offering filter options and exportable views that can easily be shared with your team or accountant.

1. Go to the Banking or Transactions menu in your QuickBooks® Online dashboard.
2. Select the Tags tab.
3. Click New Tag Group to create a group (e.g., “Events” or “Clients”).
4. Within the group, add individual tags like “Tradeshow 2025” or “Client X.”
5. When entering a new transaction (expense, invoice, etc.), simply apply the relevant tag or tag group.

You can use multiple tags across transactions, but each transaction can only have one tag per group.

• A boutique marketing firm uses tag groups like “Campaigns” and “Clients” to track profitability across different projects without creating sub-customers or additional income accounts.
  
  
• A small construction company tags expenses by job site, helping them identify which builds are the most cost-efficient.
  
  
• A solo entrepreneur who sells on Etsy, Shopify, and in-person at markets uses tags to track sales by channel for better planning and pricing.

Tags offer an elegant way to track what's important to you, without reengineering your books. They give you added control and insight without complicating your accounting process.

If you're not using Tags in QuickBooks® Online yet, now’s the time to start. With just a little setup, you’ll gain visibility into the metrics that matter and make more informed decisions for your business.

If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. 

Disaster Area Extensions:

Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites:

FEMA: https://www.fema.gov/disaster/declarations
IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

Weekends & Holidays:

If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday.

Disaster Area Extensions:

Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites:

FEMA: https://www.fema.gov/disaster/declarations
IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations