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(502) 426-0000 ∙ www.Roberts.cpa January 2025 EARN THE EARLY EDGE
A Head Start to Winning Tax Season Welcome to 2025! I hope you all had a wonderful holiday season and a chance to unwind after a hectic 12 months. Now that we’re back to reality at the start of a new year, it’s time to hit the ground running to get your finances and bookkeeping in order before the tax season crunch arrives. Successfully managing your taxes — especially those associated with employee payroll — is as important as mastering the products and services you provide to the public. Unfortunately, many businesses miss the mark in properly preparing and filing their taxes until it’s too late to save them from penalties and other problems. That’s why getting a head start on putting things in order before tax season arrives is essential. This month, I’d like to offer three pointers and some food for thought on how to make 2025 your smoothest and least frustrating tax year yet. Strategies for Streamlining Even the strongest businesses can have weak spots when properly paying and reporting payroll taxes. It can often be a juggling act to follow federal, state, and local guidelines regarding your employees’ taxes — and even how to categorize them. (For example, do your team members receive W-2s or 1099s? Are you giving the correct forms to the right employees/contractors?) Start by organizing your paperwork and ensuring your documentation clearly represents your employees’ status and answers every question that may come up during your filing. If you have any questions about proper filing or concerns over possible gaps in your documentation, please contact us immediately to get ahead of any obstacles you may face in the not-too-distant future. Tax Tactics for Remote Workers The COVID-19 era set the stage for the growth of remote work. Even as concerns over the pandemic began to settle, the remote work model largely became the norm. After all, if your company serves a client base beyond your state, wouldn’t it make sense to employ the best and brightest in those outside markets? Although there are several advantages to having a remote staff — including reduced office expenses — you face logistical risks at tax time if you’re not documenting your employees’ status properly. If you’re
new to employing remote workers, ensure you know the income tax requirements in the states where they live. If you have questions, seek guidance sooner rather than later to ensure you and your employees aren’t hit with surprises as the deadline approaches. Deductions Done Right Many business owners miss documenting activities that can qualify for tax deductions. Let’s say you travel out of state to attend a business- related conference. Airline tickets and hotel charges are clear business expenses, but so are the Uber rides to and from the airport and the restaurant receipt for that business lunch meeting. Many seemingly inconsequential things can add up to greater deductions at the end of the year. It’s better to save receipts for more things you can deduct than to discover missed opportunities after the fact. Of course, every business tax situation is different, and you may have unique requirements and issues beyond anything mentioned here.
Don’t wait until the last minute and get overwhelmed by the process! We are here and happy to tailor the right tax plan for your business and its employees — and the earlier you reach out to us, the better. —Kevin Roberts
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Being named an executor is an honor that comes at a difficult time. But looking after the estate of a loved one after they are gone is a privilege that comes with many responsibilities. You must manage paperwork, assets, and maintenance costs. Moreover, as executor of the estate, you are responsible for carrying out the will of the deceased. If you have been named executor of an estate, here are three duties you must manage. Asset Distribution The primary role of the executor is to distribute the estate's property according to the decedent's wishes. This also includes paying for maintenance costs during probate and before distribution can occur. As the executor, you are responsible for paying any mortgage, utility, car, and other necessary bills until the beneficiaries take over those responsibilities. Although some assets may avoid probate, the executor must file the will in probate court in most states. Paperwork and Notification As executor, you must obtain copies of the death certificate from the funeral home. This is necessary to file a tax return for the decedent’s final year of Your Role as Executor Estate Plan Responsibilities Explained
life and to file a life insurance claim. It will also be required when notifying applicable government agencies, such as the Social Security Administration, of the decedent’s passing. It will also be your responsibility to notify the decedent’s credit card company, banks, and mortgage lenders. Funeral Arrangements and Accounts The decedent’s wishes for funeral arrangements will most likely be included in the will, and it is your role as executor to carry them out. Additionally, all payments made on behalf of the decedent should come from an estate account. Establishing an estate account for dividend payments, paychecks, tax refunds, and burial expenses is key. This role may seem complicated, but whoever gave it to you knew you were up to the task.
MOVIEMAKING MUCK
TINSELTOWN’S BIGGEST FINANCIAL FUMBLES
When it comes to financial success, not all of Hollywood’s glitter turns out to be gold. The history of filmmaking is full of shocking tales of economic disasters that left studios with significant shortfalls and movie stars with stained reputations. Whether they're caused by hubris, happenstance, or monetary mishaps, some films are remembered more for their failure than for dazzling fans. Here are three of the most jaw-dropping flops.
The ‘Ishtar’ Implosion This major marquee muscle, courtesy of legendary actors Warren Beatty and Dustin Hoffman, had a then-staggering $51 million budget. What could possibly go wrong? Well, everything . With rumors of production woes making headlines well before its premiere in May 1987, “Ishtar” was disastrous enough for its title to become the go-to word to describe bloated creative debacles. Despite its high- powered cast and mountains of cash, the film was almost universally criticized for its lack of engaging storytelling, earning a dismal $14 million at the box office. Late film critic Roger Ebert infamously called the film “truly dreadful” and a “lifeless, massive, lumbering exercise in failed comedy.” In an industry where money talks, “Ishtar’s’’ swift plummet in public opinion was no joke. The ‘Waterworld’ Washout Back in the ‘90s, Kevin Costner was a big enough household name to receive $100 million to make his 1995 sci-fi epic,
“Waterworld” — and then pile on an additional $72 million when production issues and the departure of original director Kevin Reynolds necessitated more funding. Oh, and an extra $60 million was spent on marketing. After blowing nearly a quarter of a billion dollars, “Waterworld” made just $88 million in ticket sales. Unlike Costner’s namesake character in “Robin Hood: Prince of Thieves,” Costner took from the rich and … well … that was about it. The ‘Cats’ Cash Crisis Andrew Lloyd Webber’s “Cats” is one of Broadway’s most beloved productions. (After all, how can anyone who’s ever heard actress Betty Buckley’s rendition of the song “Memory’’ ever forget it?) So, when the CGI-heavy trailer for its 2019 film adaptation hit social media, fans were … immediately perplexed. Despite boasting the on-screen talents of Dame Judi Dench and “The Wire’s” Idris Elba, the controversial feline-centric flick spilled the milk at $75.5 million worldwide, dumping dismal returns on its larger budget.
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PROTECT YOUR PAY POWER
Inspired by TasteOfHome.com
One-Pot Chicken Noodle Soup
• 2 1/2 lbs skinless, • 1 tsp salt • 1 tsp pepper • 2 tbsp olive oil • 1 large onion, chopped • 3 garlic cloves, minced • 10 cups chicken broth • 4 celery ribs, chopped bone-in chicken thighs INGREDIENTS
• 4 medium carrots, chopped • 2 bay leaves • 1 tsp dried thyme • 3 cups uncooked egg noodles (about 8 oz) • 1 tbsp chopped fresh parsley • 1 tbsp lemon juice
DIRECTIONS
1. Season chicken with salt and pepper. In an 8-quart stockpot over medium-high heat, add oil and chicken and cook until golden brown, 3–4 minutes. Remove chicken and set aside. 2. Add onion to drippings; cook over medium-high heat for 4–5 minutes. Add garlic and cook for 1 minute. Add broth and bring to a boil. Return chicken to pot. Add celery, carrots, bay leaves, and thyme. Reduce heat and cover; simmer until chicken is tender, 25–30 minutes. 3. Turn off heat. Remove chicken to a plate. Add noodles and let stand, covered, until noodles are tender, 20–22 minutes. 4. Shred chicken meat into bite-size pieces, and return to pot. Stir in parsley and lemon juice, and discard bay leaves.
Surprising Saving Strategies Even the most frugal spender and saver can’t think of every way to preserve their funds. Here are four strategies to help you enjoy your money while ensuring it doesn’t disappear too quickly. Follow savvy shopping schedules. When it comes to becoming wiser with cash, when you shop is as important as how you shop. If you’re typically a weekend grocery shopper, try adjusting your schedule to hit the store Tuesday through Thursday. You may notice midweek sales and promotions that aren’t available when most people hit the aisles. Master the 50/30/20 method. If you need a clear budget direction each month, follow the 50/30/20 rule. Plan to spend 50% of your post-tax income on necessities, like your mortgage or rent, groceries, bills, and childcare. Next, commit to spending only 30% every month on discretionary expenses, like going out to eat, hitting the gym, or catching a concert. The remaining 20% should be tucked away to save for vacations, pay down debts, or make contributions toward your emergency fund. Adhering to this method is beneficial because it lets you identify the areas draining your finances the fastest, enabling you to adjust your spending habits for better balance. Pause before you pay. Did you just see a fantastic dress or shiny new tool advertised on social media that you must have right now? Give it a day. The convenience of online shopping has made impulse buying the norm, draining bank accounts faster than a speeding hacker. If you still want — and can afford — that precious item in the morning, go for it. Seal your spending. Your home may be gorgeous, but that doesn’t mean it’s not a money vacuum in disguise. Unsealed spaces around window frames, vents, and doors may add considerable expense to your utility bills. Give your living space a thorough once-over to ensure you’re not literally throwing your money out the window.
SUDOKU
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INSIDE THIS ISSUE 1 Take Charge Before Tax Time 2 The Responsibilities of an Executor Star-Powered Money Pits 3 Unseen Paths to Full Pockets One-Pot Chicken Noodle Soup 4 Big Tax Changes May Be Coming in 2025
WILL THE TCJA BE EXTENDED? If Not, Here’s What You Need to Know
While some people have benefited from lower tax payments due to recent legislation, much of that help may start decreasing soon. This upcoming year, many provisions of the Tax Cuts and Jobs Act (TCJA) of 2017, which included significant changes to our tax code, are due to expire. However, since the Republican party gained control of the House and Senate in November, it’s likely the Act will be extended. Since we don’t know yet, here is what you need to know about how potential changes may impact your income tax season. Deductions If the TCJA expires, it will lead to large differences in deductions for many. Married couples will be particularly impacted. For instance, the standard deduction for a married couple is set to be $16,525 in 2026, but if the TCJA stays in effect, that deduction
will be $30,725. However, the personal exemption was eliminated through the TCJA and will be brought back if it expires. That means the personal exemption will go from $0 in 2025 to $5,275 in 2026. The child tax credit was doubled under the TCJA from $1,000 to $2,000 and would decrease to pre-2017 levels. The TCJA also set a $10,000 cap on the maximum state and local taxes that could be deducted each year. If this expires, it will benefit high-income taxpayers in certain states. Marginal Tax Brackets For many taxpayers, their marginal tax bracket rate was heavily affected by the TCJA. Before 2017, the marginal tax bracket rates were 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. These were changed to 10%, 12%, 22%, 24%, 32%, 35%, and 37%, respectively, when the TCJA went into effect. If the TCJA
expires, depending on your tax bracket, you may be paying anywhere from 3%–6% more every year. It is important to understand the full breadth of changes possibly coming your way and budget accordingly. Depending on what happens, you may end up paying more (or, fingers crossed, less) in taxes.
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