I’ve received several telephone calls in reference to Tax Planning for this year so I thought that I’d address a few issues. May and June are traditionally the time when we begin the process for the upcoming season, so it’s not any sort of a surprise that our clients have this expectation.
The problem is that major tax legislation is currently on its way through Congress. No one actually knows what tax laws we’ll be enforcing in the 2025 Tax Season.
This makes tax planning at this point in the year rather difficult. But there are a few basics where we probably won’t get into much trouble by applying them while still waiting for the details on the final bill. Those basics include…
1 – Energy Credits
The bill going through Washington eliminates the majority of these. Exactly what will or won’t be allowed and when the deadline for those improvements will be set is anyone’s guess at this point.
But if you were planning on doing any of these improvements, I’d suggest that you get to it post haste.
Obviously, there are no guarantees one way or another. I’ve seen legislation that was done retroactively going back into history. But the chances of them saying that these credits are negated back to the beginning of 2025 are probably either slim or nil, so get to it.
2 – Estimated Tax Deposits
Making sure that you’re properly deposited for the upcoming tax year is always a concern. There are many rules involved.
But the general rule, depending on your ultimate income, is that 100% of your taxes from the prior year should be deposited at both the Federal and State Levels for the upcoming return. These deposits can be made via Quarterly Estimated Tax Deposits or through regular payroll withholding.
If you own a C Corp, you may need to make deposits, depending on your income, as well.
3 – Stay The Course
Other than those two items, we must all stay the course, not knowing what the future will bring. But one thing is certain.
We’re probably going to have a significant number of tax law changes to learn and implement by the end of this year. Not just a few, but plenty.
Let me leave you with this…
The last time we went through such a major shift in tax policy was the 2017 Tax Cuts and Jobs Act. Many entrepreneurs are still trying to get a good understanding of that one, and here comes the next one.
But no matter what happens, I’m sure that the basics will still be in place. Once they pass this thing, whatever it ends up being, we’re going to have a lot of work to do in the fall.
I’ll continue writing about these issues to keep you updated. And once we have a new law in place, we’ll make the necessary changes to your individual tax plans.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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