Taxpayer Letter – December 2024
Dear Client:
We appreciate your continued business and trust in our firm and look forward to working with you in 2025.
We are pleased to announce than Stefan LaBrie has joined our firm as a staff accountant. Stefan has earned both a Bachelor of Business degree from Radford University and a Master of Science in Accounting degree from Liberty University. He also has several years of tax and accounting experience in both the public and private sector and we are very excited to have him join our team.
Please let this letter serve as a reminder to get your work into our office early this year. In previous tax seasons as the April 15th deadline drew near, the waiting time for us to process tax returns has approached four weeks. We appreciate your patience and understanding during this very busy time as we give each tax return all the time and attention it deserves.
While most of the tax provisions affecting individuals and businesses remain the same for the 2025 tax year, we do expect major changes in 2026. This is because many of the 2017 tax law changes impacting individuals and estates were temporary and thus are set to expire at the end of 2025. These include lower tax rates, a bigger child tax credit, higher standard deductions, the $10,000 cap on state and local tax deductions (SALT cap), and larger lifetime estate and gift tax exemptions. Unless lawmakers act to extend these changes, they will revert back to the rules in effect for 2017.
Here is a brief summary of some important developments that will affect many of our individual and business clients for the 2024 tax year:
- For our business clients, a new beneficial ownership information (BOI) reporting requirement for small firms began in 2024. It’s run by the Financial Crimes Enforcement Network and requires most corporations, S-corporations and LLCs to report information about themselves and their beneficial owners. The deadline for filing this on-line report was December 31, 2024 so if you have not already filed this report, please do so ASAP. You can find more information and file online at the FinCEN website: fincen.gov/boi.
- Form 1099-K – 2024 forms sent out in early 2025 will now have a $5,000 reporting threshold, which is significantly smaller than the $20,000 threshold used for the 2023 tax year.
For our individual clients considering home improvements, “go green” to claim one of two eligible tax credits:
- The residential clean energy property credit is equal to 30% of the cost of alternative energy systems that rely on a renewable energy source – solar panels, solar-powered water heaters, geothermal heat pumps, wind turbines and more.
- The smaller energy-efficient home improvement credit applies to certain types of insulation, boilers, central air-conditioning systems, water heaters, heat pumps, exterior doors and windows and the like that meet certain energy efficiency ratings. This credit for 30% of the cost of these eco-savings upgrades is now available for up to $1,200 each year.
Please remember that we are here to assist you with any tax and accounting needs year-round, not just during tax season. All of us at Cole, McIlwain & Company, P.C. hope you had a wonderful holiday season and we look forward to working with you in the New Year!