Van de Ven CPAs

Two bills that recently passed unanimously in the U.S. House are intended to make it easier for victims of disasters to obtain tax relief. H.R. 517 would enable the IRS to grant federal tax relief to affected taxpayers as soon as governors of states declare a state of emergency. Currently, the IRS must wait until the federal government declares a state of emergency, which can take weeks. The bill would also give affected taxpayers a maximum 120 days (vs. the current 60 days) extension to file their returns. H.R. 1491 extends deadlines for disaster victims to file for tax refunds and credits. What’s next? The U.S. Senate is expected to incorporate these bills into its own draft legislation.

Why smuggling was popular in 18th century Britain

President Trump has announced that the IRS (and all other federal agencies) must soon stop accepting and issuing paper checks and money orders. His March 25, 2025, executive order calls for a migration to electronic payments by Sept. 30, 2025, (with limited exceptions). The IRS has long encouraged taxpayers to pay electronically for faster, more efficient and less fraud-exposed processing. But by next year’s tax season, taxpayers won’t have a choice. For its part, the IRS will make disbursements via direct deposit or use debit and credit card payments and digital wallets. This order also affects the Social Security Administration, which currently issues a substantial number of paper checks.

Taxpayers living and working abroad have until June 16, 2025, to file their 2024 income tax returns and pay any tax due. This deadline applies to U.S. citizens and resident aliens, including those with dual citizenship. It includes those in the military on duty outside the United States. These individuals generally are allowed a two-month extension from the usual deadline to file without having to request it. Even with the extension, interest will apply to any 2024 tax payments received after April 15. This means that after April 15, unpaid 2024 tax balances will begin accruing interest, currently 7% per year, compounded daily. For more from the IRS: https://bit.ly/42u8RAu

April 15 is the deadline for filing your 2024 tax return. But another essential tax deadline is coming up for some taxpayers: April 15 is also the deadline for making the first 2025 quarterly estimated tax payment if you’re required to make one. You may have to make estimated payments if you receive interest, dividends, self-employment income, capital gains or other income and you expect to owe tax of $1,000 or more when your tax return is filed. These are the general rules. The requirements are different for others, including those in the farming and fishing industries. Contact us if you have questions. We can help you stay on top of your tax obligations and avoid underpayment penalties.

President Donald Trump has announced a new 10% baseline tariff on all goods imported into the United States. In addition, he announced custom tariffs of up to 49% on more than 50 countries. For example, there’s a new 20% tariff on imports from the European Union and a new 46% tariff on Vietnam. As part of the announcement, Trump said: “From 1789 to 1913, we were a tariff-backed nation, and the United States was proportionately the wealthiest it has ever been.” In 1913, Trump added, the federal income tax was established. The 10% baseline tariff takes effect April 5, and the custom tariffs begin April 9. To see a White House list of tariffs on various countries: https://bit.ly/4je8O1d

If you have a dependent who doesn’t meet the criteria for the Child Tax Credit, you may qualify for the Credit for Other Dependents. The $500 nonrefundable credit can be claimed for eligible dependents of any age. This includes college students, parents you support financially and unrelated people who live with you. The dependent must be a U.S. citizen, a national or a resident alien, and have a Social Security number or tax ID number. The credit begins to phase out for incomes above $200,000 ($400,000 for married joint filers). Here’s an online tool to help determine eligibility for the Child Tax Credit or the Credit for Other Dependents: https://bit.ly/3XGiQQs

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.

Are you an employer seeking ways to attract and retain top talent? The IRS Taxpayer Advocate Service (TAS) recently highlighted a tax-smart strategy for employers that provide childcare services to their staff members. They may qualify for a credit of up to $150,000. Qualifying expenditures include the purchase, construction, expansion, or rehabilitation of a childcare facility, as well as related operating expenses. Or employers may choose to contract with a qualified childcare facility to provide such services. The credit is claimed on Form 8882 (Credit for Employer-Provided Childcare Facilities and Services). Contact us with questions or learn more from TAS: https://bit.ly/4c8m8Sv

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.