View Padgett President Roger Harris' congressional testimony on the impact of the Corporate Transparency Act and the BOI reporting requirements here.
Are tips tax-free? What small businesses should know
February 18th, 2025 | Business Growth and Strategies, Financial Advisory Tips
If your business employs staff who receive tips—such as in restaurants, hotels, or salons—it’s crucial to understand and comply with tax regulations regarding tip income. Here’s a straightforward guide to help you navigate these responsibilities. Are Tips Tax-Free? There have been discussions about eliminating taxes on tips, but as of now, no legislation has been enacted. Therefore, tips remain taxable, and businesses must adhere to existing IRS guidelines. What Qualifies as a Tip? A tip is a voluntary payment from a customer to an employee. Tips can be: Cash Tips: Direct payments from customers, including those distributed through electronic means or tip-sharing arrangements. Noncash Tips: Items of value other than cash, like tickets or passes. For a payment to be […]
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Section 199A and SALT Caps: A Tug-of-War That Could Reshape 2024
For tax practitioners following the political landscape, a unified Republican government signals potentially sweeping changes—especially with key provisions like Section 199A approaching expiration and the SALT cap’s future in doubt. However, as revealed in a recent Federal Tax Updates podcast episode with host Roger Harris, EA, and Thad Inge, Vice President at Van Scoyoc Associates, the gap between political promises and real-world implementation is often substantial. Navigating the complexities of budget reconciliation, regional divisions, and administrative obstacles will be critical for practitioners advising clients through the next year. The Reconciliation Reality Check Budget reconciliation will guide the path to tax reform under Republican control of the House, Senate, and White House. The budget reconciliation process allows the Senate to pass […]
Read More >>Tax limits for businesses increasing in 2025
Every year, tax-related limits that affect businesses are adjusted based on inflation. In 2025, many of these limits are increasing, though at a slower pace due to cooling inflation. Here are some key updates that may impact your business. Key Tax Deductions for 2025 Section 179 Expensing: Deduction limit: $1.25 million (up from $1.22 million in 2024) Phaseout threshold: $3.13 million (up from $3.05 million) Expensing limit for heavy vehicles: $31,300 (up from $30,500) Standard Mileage Rate for Business Use: 70 cents per mile (up from 67 cents) Qualified Business Income Deduction (Sec. 199A) Phaseouts Begin At: Married filing jointly: $394,600 (up from $383,900) Other filers: $197,300 (up from $191,950) Retirement Plan Contribution Limits 401(k) Plans: Employee contribution limit: $23,500 […]
Read More >>The Unexpected 1099-K Changes Tax Professionals Must Understand Now
As the 2025 tax season begins, tax practitioners are at a critical juncture. Uncertainty in information reporting requirements, evolving digital payment thresholds, and new cryptocurrency frameworks are converging just as the IRS races to modernize decades-old systems. In a recent Federal Tax Updates podcast episode, hosts Roger Harris, EA, and Annie Schwab, CPA, interviewed Wendy Walker, VP of Regulatory Affairs at Sovos and Chair of the IRS Advisory Council, to offer insights to help practitioners prepare for these sweeping changes. “We’re kind of expecting an eleventh-hour communication drop that might change the reporting threshold,” explains Wendy, referencing speculation about a $5,000 threshold for 1099-K reporting on 2024 transactions. Practitioners must contend with statutory requirements, administrative guidance, and practical implementation challenges—all […]
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Understanding IRAs: your retirement savings guide
With the recent passing of the SECURE 2.0 Act of 2022, you may have questions about the different types of Individual Retirement Accounts (IRAs) available. How do you choose what retirement plan is right for you? IRAs are a powerful tool for retirement savings. They are savings plans that come with tax advantages to help taxpayers build a retirement fund. Each type of IRA has its own set of regulations and deadlines. Here’s a quick overview of the most common kinds: Traditional IRA: Contributions to a traditional IRA may be tax deductible and earnings grow tax-deferred until distribution, which means you won’t pay taxes on your traditional IRA funds until you make a withdrawal. The contribution limit for 2022 is […]
Breaking Down the SECURE Act 2.0
Roger and Annie discuss the changes in the SECURE 2.0 Act of 2022 and how this impacts small business owners with regards to offering retirement plans to their employees. They also talk about recent changes in IRS regulations that could prove …
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