Is Extending Your Tax Return the Right Move?
As we continue to progress through the year, many taxpayers are relying on extensions to file their returns by October 15. While extensions can be useful for some, they may not always be in your best interest. Filing an extension delays the completion of your tax return, which can delay your financial planning and decisions. Waiting until the last minute often reduces the opportunity for strategic planning and may leave you scrambling to address tax liabilities or missing out on potential savings.
If you’ve found yourself on extension again this year, it might be time to ask if it’s due to unavoidable circumstances or simply a matter of habit. A proactive approach to tax planning can help avoid these delays and give you a better grasp of your financial situation earlier in the year. If your CPA is pushing another extension, it may be time for a fresh perspective. Schedule a consultation with us to explore how we can help you file on time and plan more effectively for the year ahead.
Q4 is the Time to Plan for S Corp Status in 2025
Now that we’re in the final quarter of the year, it’s a great time to evaluate whether 2025 is the right year for your LLC to make the S Corporation election. The S Corp structure can offer tax advantages, such as reducing self-employment taxes on profits, but it’s important to weigh the costs and benefits before making the switch.
Not every business will benefit from S Corp status, so the timing and structure of the election are critical. The last quarter of the year is the ideal time to assess your business’s financial health and consider whether making this election will help you meet your long-term goals. If you’re unsure about the best path forward, our team is here to help you review your options and set your business up for success in the new year.
IRS Update: Premium Tax Credit Adjustments for 2025
The IRS recently issued Rev. Proc. 2024-35, which provides key updates for calculating premium tax credits under the Affordable Care Act for 2025. The updated Applicable Percentage Table determines the percentage of household income individuals will need to contribute toward their health insurance premiums, depending on their income level. For those earning less than 150% of the federal poverty line, the contribution rate remains at 0%, while those earning more than 400% will contribute 8.5%.
Additionally, the Required Contribution Percentage for determining whether employer-sponsored health insurance is affordable has been updated to 9.02%. These adjustments could impact the amount of premium tax credit you or your employees may be eligible for. We’re staying on top of these changes, and if you have questions about how they affect your taxes or healthcare planning, we’re happy to assist.
Employee Retention Credit (ERC): Supplemental Claim Process
The IRS has introduced a new supplemental claim process for businesses that may have incorrectly filed for the Employee Retention Credit (ERC) through a third-party payroll provider. If your business used a third-party payer to handle payroll and file ERC claims, and now you’ve determined that you were ineligible for the credit, this process offers a way to correct those filings.
The IRS is accepting supplemental claims through November 2024, which allows third-party payers to withdraw erroneous claims while maintaining valid claims for eligible clients. If you believe this applies to your business or you want to ensure your ERC filings are in order, now is the time to address it. Our team can guide you through this process to avoid penalties and ensure compliance.
Staying Ahead of Tax Fraud Trends
Recent enforcement actions by the Department of Justice have focused on fraudulent tax schemes and unscrupulous tax preparers. These cases serve as a reminder of the importance of working with a tax professional who adheres to strict ethical and legal standards. We always prioritize accuracy and transparency in preparing and filing your tax returns, and we encourage you to be diligent when selecting your tax professionals.
If you have concerns about past returns or suspect something may be amiss with how your taxes were handled, it’s never too late to get a second opinion. We’re here to offer expert advice and ensure you’re in full compliance with tax laws.
Conclusion
Tax season may seem far away, but staying proactive now can save you time, money, and stress down the line. Whether you’re considering an S Corp election for your LLC, need help with your tax filings, or want to ensure your business stays compliant with the latest IRS regulations, our team is ready to help. Reach out today to schedule a consultation and let’s keep your tax strategy on track all year long.