New Vehicle Interest in 2025

In 2025 did you purchase a new vehicle for your personal use, with final assembly being in the United States?  If so, provide documentation showing the amount of interest you have paid on this vehicle in 2025.  Your lender should provide a statement by January 31, 2026.  Please also provide the vehicle’s VIN.

Overtime Pay in 2025

Did you earn overtime in 2025?

Please provide documentation that indicates, in a separate listing, the amount of overtime earned in 2025.  This can be done three ways:

1. There should be a separate box on your W2 form that indicates the amount of overtime that you earned in 2025.
2. Your final paystub in 2025 may have a place that indicates overtime earned for the 2025 year.
3. If neither your W2 nor your final paystub lists overtime earned in 2025 in a separate field, please have your employer provide a letter stating the amount of tips earned in 2025.We CANNOT prepare your return with a overtime earned deduction without proper documentation.

Tax on Tips in 2025

Did you earn tips in 2025?

Please provide documentation that indicates, in a separate listing, the amount of tips earned in 2025.

This can be done three ways:

1. There should be a separate box on your W2 form that indicates the amount of tips that you earned in 2025.
2. Your final paystub in 2025 may have a place that indicates tips earned for the 2025 year.
3. If neither your W2 nor your final paystub lists tips earned in 2025 in a separate field, please have your employer provide a letter stating the amount of tips earned in 2025.We CANNOT prepare your return with a tips earned deduction without proper documentation.

IRS Scam Alerts!

Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone and email to set up individuals, businesses, payroll and tax professionals.

The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Know the telltale signs of a scam and how to know if it’s really the IRS.

IRS Offers Guidance on 100% Business Tax Deduction for Food and Beverages

The Treasury Department and the Internal Revenue Service have issued Notice 2021-25 providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants.

Reasonable compensation of S Corporation Shareholders

As a reminder, the IRS requires all S Corporation shareholders to take “reasonable compensation”.  After the 2nd year of operations of your S Corporation, if the IRS challenges that reasonable compensation was not paid & reported on quarterly payroll returns and an annual W-2, they will reclassify 100% of shareholder distributions as wages.

Reasonable salary needs to be related to services performed.  If there are other employees working in the S Corporation and business would continue with very little involvement from the owner, an argument could be raised for a lower salary to the shareholder.

What is a deductible medical expense?

If you itemize your deductions for a taxable year on Schedule A (Form 1040 or 1040-SR), Itemized Deductions PDF, you may be able to deduct expenses you paid that year for medical and dental care for yourself, your spouse, and your dependents. You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you’re allowed to deduct on Schedule A (Form 1040 or 1040-SR).

Tax checklist for newly married couples

Marriage changes a lot of things and taxes are on that list. Newlyweds should know how saying “I do” can affect their tax situation.

Here’s a checklist of items for newly married couples to review:

Read more

Steps to Take Now to Get a Jump on Next Year’s Taxes

Tax planning is for everyone. Get ready today to file your federal income tax return next year. How to making necessary adjustments to withholding, gather records, renew expiring tax identification numbers and more.

Here’s Five Reasons to Use Direct Deposit for a Tax Refund

As taxpayers prepare for the start of filing season, they should consider a direct deposit of any refunds due. It’s easy, safe, fast — and the best way to get a refund. That’s why 80 percent of taxpayers choose it every year. IRS Direct Deposit: Is Fast. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit. They can use IRS Free File to prepare and e-file federal returns for free.  Taxpayers who file a paper return can also use direct deposit. Is Secure. Since refunds go right into a bank account, there’s no risk of having a paper check stolen or lost. This is the same electronic transfer system that deposits nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts. Is Easy.  Choosing direct deposit is easy. With e-file, just follow the instructions in the tax software. For paper returns, the tax form instructions serve as a guide. Make sure to enter the correct bank account and routing number. Has Options. Taxpayers can split a refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. Use IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), to deposit a refund in up to three accounts. Do not use this form to designate part of a refund to pay tax preparers. Taxpayers should deposit refunds into accounts in their own name, their spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules. There is a limit of three electronic direct deposit refunds made into a single financial account or pre-paid debit card. The IRS will send a notice and a refund check in the mail to taxpayers who exceed the limit. Additional IRS Resources: Publication 17, Your Federal Income Tax Where’s My Refund? Frequently Asked Questions about Splitting Federal Income Tax Refunds Share this tip on social media — #IRSTaxTip: Here’s Five Reasons to Use Direct Deposit for a Tax Refund.  https://go.usa.gov/xnp8Q

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