Goldstein and Loggia CPA’s, LLC Tax Tips

Tax Tip #293

Tue, 07 Apr 2026 13:02:20 GMT

Catch-Up Retirement Plan Contributions

Retirement plan participants age 50 or older with prior-year FICA wages over $145,000 (adjusted for inflation) who make age-based catch-up contributions are required to do so on a Roth basis only. Additionally, plans may allow a higher catch-up limit for Retirement Plan participants who attain age 60 through 63 during the calendar year.

Retirement Plans that do not allow for Roth contributions may not offer catch-up contributions for employees who make over the $145,000 threshold. Retirement Plans, SARSEP, SIMPLE IRA, and SIMPLE 401(k) plans are not required to offer the higher catch-up for ages 60 to 63.

If you are between the ages of 50 and 63 and have questions regarding catch-up contributions, reach out to a team member for more information.

Tax Tip #292

Tue, 31 Mar 2026 13:04:48 GMT

Time to Pay the Tax on the Opportunity Zone Deferral Gain

For those taxpayers who took advantage of the deferral of gain offered by investing into a Qualified Opportunity Zone Fund, congratulations. However, that deferral period ends on 12/31/2026. Then Uncle Sam and perhaps your resident state will collect the tax on perhaps only 85% of the original gain.

If you are in this boat, reach out to a team member to discuss what can be done to help minimize the tax impact. Keep in mind that these gains can then be reinvested in 2027 and are then subject to the new opportunity zone rules with a tax deferral until February 1, 2032.

Tax Tip #291

Tue, 24 Mar 2026 12:56:24 GMT

Social Security Benefits While Working

If you’re under the full retirement age, you can earn up to $24,480 in 2026 through your work before it impacts your Social Security benefits. However, the reduced benefits will come back when you reach full retirement age as an increase in your Social Security benefits to make up for it. The effect of exceeding the $24,480 limit is a $1 deduction from benefits for every $2 you earn in wages above $24,480. For example, if you work and earn $34,480, then you have earned $10,000 more than the $24,480 limit. Thus, your Social Security benefits will be reduced by $5,000

In the year you reach full retirement age, $1 in benefits for every $3 earned above the $65,160 limit is deducted.

When you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.

If you fall into this situation and would like to find out the amount your social security benefits would be decreased, feel free to contact a team member for assistance.

Tax Tip #290

Tue, 17 Mar 2026 13:00:34 GMT

USPS Changes Could Affect Tax Filing Deadlines

The U.S. Postal Service (USPS) changed how postmark dates are determined. This update could impact anyone mailing time-sensitive documents like tax returns.

Old Rule: The postmark usually reflects the date you drop your mail in a USPS mailbox or at the post office.

New Rule effective December 24, 2025: The postmark will now show the date your envelope is first processed by an automated USPS sorting machine. This could be later than the day you mailed it.

Example: Taxpayer drops a tax return in a blue collection box at 6PM on April 15 (Tax Day). USPS picks up the mail that night but doesn’t process it until April 16. Under the new rule, the postmark will read April 16. Result: Late filing penalty, even though it was mailed timely.

Solutions to avoid potential late filing penalties:

Go to the counter & request a manual/hand-stamped postmark at the post office showing the actual mailing date.
Buy postage at the counter. The printed label includes the correct acceptance date.
Use Certified or Registered Mail. These services provide a receipt with the mailing date as proof.
Better yet, e-file on or before the due date.

Tax Tip #289

Tue, 10 Mar 2026 12:59:31 GMT

Options for Excess College Savings Funds

A nice problem to have – excess 529 college savings funds. Here are some options:

Pay off college debt of the account beneficiary. Up to $10,000 from 529s can be used for this without having to pay federal income tax on the withdrawal. This $10,000 is a lifetime limit, not an annual limit.
Roll over money to a 529 account for another family member’s education.
Transfer funds to an ABLE account for a disabled beneficiary or sibling.
Some 529 funds can be rolled over tax-free to a Roth IRA for the beneficiary in a trustee-to-trustee transfer, subject to many rules. There’s a lifetime $35,000 cap. The 529 account must have been open for at least 15 years, with the same beneficiary. Amounts contributed to a 529 plan made in the previous five years can’t be rolled over. Annual rollover amounts can’t exceed the yearly contribution limit for Roth IRAs, which is $7,500 for 2026.

Tax Tip #288

Tue, 03 Mar 2026 14:09:52 GMT

New ID Required for Energy-Efficient Home Tax Credit

A 4-character alphanumeric unique Qualified Manufacturer Identification Number from the manufacturer of the improvement(s) placed in service during 2025 is needed to claim the tax credit.

The tax credit is 30 percent (up to $1,200), and applies to:

Exterior doors
Windows and skylights
Central air conditioners
Natural gas, propane, or oil water heaters
Natural gas, propane or oil furnaces or hot water boilers
Insulation or air sealing material or systems
Panelboards, branch circuits, or feeders
Home energy audits.

This credit is claimed on tax form 5695 and expires after the 2025 tax year.

Tax Tip #285

Tue, 24 Feb 2026 13:21:03 GMT

IRS Refunds No Longer Issued by Paper Check

For refunds, taxpayers who do not include direct deposit information will receive a letter from the IRS requesting that information or the reason it was not provided. If direct deposit information cannot be provided, this will likely delay the issuance of the refund. Refunds by direct deposit are usually received within 21 days.

Client Planning Tip: If you have not utilized direct deposit in the past, we strongly encourage you to do so. Simply log in to your client portal to submit the bank account and routing numbers of the account you’d like to use and indicate if this is a checking or savings account. Alternatively, you can call our office and give the information to a team member. Do not email this sensitive information or reply to this email with it.

Tax Tip #286

Tue, 17 Feb 2026 14:40:39 GMT

Contribute $2,000 to an IRA - IRS Might Give You $1,000

Taxpayers with an AGI of $23,750 or less in 2025 may be eligible for a $1,000 tax credit — if they contribute $2,000 or more to a traditional or Roth IRA.

This credit, claimed on IRS Form 8880, gradually decreases and phases out completely for an AGI above $79,000 (married filing jointly) and $39,500 (single). For 2026, the phase-out limits increase to $80,500 (MFJ) and $40,250 (single).

If you think this may apply to your tax situation, reach out to see if you qualify.

Tax Tip #285

Tue, 10 Feb 2026 15:55:15 GMT

W-9 Guidelines for Disregarded Entities

W-9s can be a bit tricky when preparing one for a disregarded entity (DE). It is important to include the information of the individual/entity that is filing the tax return in which the activity of the DE is being reported. For instance, if a DE is owned by an individual, include both the DE’s information as well as the individual owner.

Line 1 – Name of the individual/entity owning the DE. If the direct owner of the DE is also a DE, enter the first owner that is not a DE for federal tax purposes. (ex: One, LLC is a DE owned by Two, LLC and Two, LLC is a DE owned by Three, LLC. Since Three, LLC is the first entity that is not a DE, enter that on Line 1.)
Line 2 – The disregarded entity

Line 3a – Check the box that describes type of ownership - Individual, C-Corp, S-Corp, Partnership, Trust/Estate or LLC. (Note: If an LLC owns the DE, the LLC box should be checked and the tax classification of either C-Corp, S-Corp, or Partnership would have to be indicated as well.)

Line 5 – Address of the disregarded entity.

Part I – SSN of individual or EIN of entity listed on Line 1, not the EIN of the DE.

Example 1: John Smith owns 100% of Smith’s Landscaping LLC

Example 2: Landscaping Rocks LLC—an LLC that classifies as a partnership—owns 100% of Smith’s Landscaping LLC.

Tax Tip #284

Tue, 03 Feb 2026 14:01:19 GMT

NY Minimum Wages Increases in ‘26

Important update for NY employers and employees — the state has announced its minimum wage adjustments, effective January 1, 2026.

General minimum wage

NYC, Suffolk, Nassau & Westchester Counties (NYC)
$17.00 per hour (up $0.50)
All other areas of the state
$16.00 per hour (up $0.50)

Industry-specific minimum wages

Tipped hospitality service workers
$14.15 (NYC) & $13.30 (NYS)
Tipped hospitality food service workers
$11.35 (NYC) & $10.70 (NYS)
Home care aides
$19.65 (NYC) & $18.65 (NYS)

Employers and employees should review pay rates now to ensure they reflect the new minimum wage increases.

Tax Tip #283

Tue, 20 Jan 2026 14:40:19 GMT

New York State Secure Choice Savings Program

New York employers who do not offer a qualified retirement plan, have been in business for at least two years, and have 10 or more employees are required to offer their employees a retirement plan.

The New York State Secure Choice Savings Program is a no-cost option for employers, and they are not permitted to match employees’ contributions. Employee participation is completely voluntary. Employee contributions are added to a Roth IRA.

For more information, visit: www.NewYorkSecureChoice.com

Tax Tip #282

Tue, 13 Jan 2026 14:01:15 GMT

Dependent Care FSAs

Employers seeking to offer family-friendly benefits may want to consider flexible spending accounts (FSAs) for dependent care. These accounts allow employees to make pre-tax contributions through payroll withholding to help cover eligible expenses.

The annual contribution limit, currently $5,000, will rise to $7,500 in 2026. FSA contributions reduce employees’ income and payroll taxes, as well as employers’ payroll taxes. Withdrawals used to pay qualified expenses are tax-free, including expenses for care for a child under age 13.

A dependent care tax credit is available to taxpayers who do not have access to an employer-sponsored FSA. However, when given the choice, the FSA is usually a better option.

Have this option and want to know for sure which is best for your situation? Reach out to a team member for assistance.

Tax Tip #281

Tue, 06 Jan 2026 14:01:23 GMT

Selling Your Primary Home

If you have owned and lived in your main residence for at least 2 out of the 5 years before the sale date, up to $250,000 of the gain (or $500,000 for joint filers) is tax free.

Example: Married couple Deanna and Steve meet the requirements and are selling their home for $900,000, which they purchased for $250,000. Their taxable gain is $150,000 ($900K - $250K - $500K). The gain can be further decreased by closing costs and improvements.

Examples of improvements:

Landscaping
Swimming pool
Roof, doors, windows
Insulation to attic, walls, floors
Pipes & duct work
Security system
Lawn sprinkler system
Fireplace

Examples not considered improvements:

Repairs or maintenance
Painting
Cost of any improvement with a life expectancy of less than 1 year

Check with the IRS for more information about what is and is not considered an improvement.

Need assistance in calculating your potential gain on the sale of your residence? Have unforeseen circumstances where you need to sell but do not meet the 2 out of 5 year test? Reach out to a member of our team for assistance.

Tax Tip #280

Tue, 30 Dec 2025 14:15:51 GMT

Medicare Part B Premiums

Medicare Part B monthly premium amounts are determined by your Modified Adjusted Gross Income (MAGI). As little as $1 can push your income into a higher premium amount. That could be the difference between paying $7,790 for the year versus paying $6,330 — an extra $1,460.

2026 Medicare Part B premiums by MAGI*

*For married filers, the income thresholds double (e.g., $109,000 to $137,000 becomes $218,000 to $274,000).

The Goldstein & Loggia team can review your tax return to identify any planning opportunities that may reduce your MAGI, helping you qualify for a lower Medicare Part B premium and save money. Reach out to a team member for assistance.

Tax Tip #279

Tue, 23 Dec 2025 14:02:22 GMT

1099 Nonemployee Compensation Reporting

Businesses, business owners and payments to certain individuals require a 1099 to be issued and filed with the IRS & in some states.

Some key points to know:

Payments of $600 or more to non-employee individuals, partnerships, physicians and all attorneys are reportable on Form 1099-NEC.
Payments to corporations are typically not reported, unless to an attorney.
The recipient should complete a Form W9 in order to complete Form 1099. The W9 form can be found on the IRS website.
College athletes who receive Name, Imagine and Likeness (NIL) income will also owe self-employment tax on net earnings.
Penalties: Range from $60 to $340 per return or statement (per 1099).
Form 1099 needs to be provided to the recipient by 1/31.

If you have questions, please reach out to a team member for assistance.

Tax Tip #278

Tue, 16 Dec 2025 14:33:25 GMT

Itemizing & Charitable Donations in 2026

Beginning in 2026, itemizers who donate to charity will see their tax deductions get a haircut as the IRS implemented a 1/2 % floor on charitable deductions.

Example: Amelia has AGI of $600,000 in 2026 and donates $9,000 to charity. Her tax deduction is $6,000 ($9,000 - $3,000 ($600,000 * 1/2 %).

Tax planning tip: Charitable donations made in 2025 are not subject to this haircut.

Tax Tip #277

Tue, 09 Dec 2025 14:01:51 GMT

NJ Minimum Wage Increases in ‘26

Important news for both NJ employers and employees — the state has announced its minimum wage adjustments, effective January 1, 2026:

Most employees: $15.92 per hour (up $0.43)
Small business and seasonal employers: $15.23 per hour (up from $14.53)
Agricultural workers: $14.20 per hour (up from $13.40)
Long-term care facility direct care staff: $18.92.
Tipped employees: $6.05 per hour (up from $5.62). Employers must ensure tipped employees earn at least the state minimum wage when tips and cash wages are combined.

Tax Tip #276

Tue, 02 Dec 2025 13:58:06 GMT

Are You in the Top 1% Class?

Based on 2022 data, individuals with a Federal Adjusted Gross Income (AGI) of $663,164 or more ranked in the top 1% of earners. An AGI of at least $261,591 placed taxpayers in the top 5%, while an AGI of $178,611 or higher fell within the top 10%.

If you happen to be a member of one of these categories, Uncle Sam says thank YOU for your contribution!

Tax Tip #275

Tue, 25 Nov 2025 14:04:36 GMT

Social Security Benefit Increase in 2026

If you are receiving Social Security benefits, you may be happy to know that there is a 2.8% increase in benefits in 2026 compared to 2025.

Why 2.8%? This is the cost of living (COLA) adjustment that the Social Security Administration (SSA) determined was needed. This is up from 2.5 percent last year.

Up to 85% of social security benefits are taxable for a single income over $25,000 or married filing jointly (MFJ) taxpayers with an income over $32,000.

Example: MFJ taxpayers with an income of $100,000 in the 22% federal income tax bracket received $20,000 in Social Security benefits in 2025. In 2026, this amount will increase to $20,560.

After taxes, a total of $455 of the $560 increase remains, and $105 goes to Uncle Sam ($560 x .85 x .22).

Here’s some good news — NY and NJ are among many states that do not tax Social Security benefits.

Tax Tip #274

Tue, 18 Nov 2025 13:58:36 GMT

Tax Impact of Earning Over $176,100 in 2026

In 2026, individual taxable earnings up to $184,500 will be subject to Social Security tax, an increase of $8,400 from 2025.

As a result, employees earning this amount or more will pay an additional $521 into Social Security compared to 2024.

Employers will also contribute the same amount. Self-employed individuals with net income at or above this level in 2025 will pay $1,042 more.

Unsure how these changes might affect your income? Reach out to our team for guidance.

Tax Tip #273

Tue, 11 Nov 2025 13:56:46 GMT

Owe $$$ to the IRS???

Owe the IRS money? Make a secure payment online at IRS.gov/payments . Even if you can’t pay the full amount right now, paying what you can helps reduce interest and penalties.

What to know:

Late filing penalty: Usually 5% per month on the unpaid balance
Interest: Currently 7% per year, compounded daily
Late payment penalty: Usually 0.5% (one-half of one percent) per month

Online payment plan options:

Online Payment Agreement
Setup fees may apply.
Short-term payment plan
For balances under $100,000 in combined tax, penalties, and interest.
Gives a taxpayer up to 180 days to pay their balance in full.
No setup fee.
Long-term payment plan
New Simple Payment Plan criteria make it easier and more accessible to enter a long-term payment plan when the total balance owed is less than $50,000 in combined tax, penalties, and interest.

Once the online application is complete, taxpayers are notified immediately if their plans are approved.

Another option is an Offer in Compromise . This option allows the taxpayer to settle a tax liability for less than the total amount owed. Use the Offer in Compromise Pre-Qualifier tool on IRS.gov to see if you qualify.

Not sure if you owe the IRS? Use their Individual Online Account tool to find out.

Tax Tip #272

Tue, 04 Nov 2025 14:03:10 GMT

Year-End Tax Planning - Act Now!

With 2025 quickly coming to an end, the Goldstein & Loggia team wants to be proactive in tax planning with our clients — especially with all of the changes this year in the tax world due to One Big Beautiful Bill.

If you are interested in this analysis:

Employees: Please provide your most recent paystub. Be sure to indicate your pay frequency — weekly, bi-weekly, bi-monthly, or monthly — if not indicated on the paystub itself.
Business owners: Please provide a year-to-date Profit & Loss statement.

You can also include any extra details that might affect your taxes including:

Capital gains or losses
Major life events such as purchasing a home, getting married or having a baby. If you have moved since your 2024 filing, please include the new address & move date.

Once we have received your information, a team member will reach out to discuss potential planning opportunities to help improve your tax situation as much as possible.

There is still time to implement tax strategies to minimize your 2025 tax liability. Have questions? Contact a team member to discuss tax strategies that may apply to you.

Tax Tip #271

Tue, 28 Oct 2025 13:00:08 GMT

LLC Transparency Act of New York

Remember Beneficial Ownership Information? (See Tax Tip #161) Courts ruled that most businesses are no longer required to report BOI to FINCEN.

However, NY enacted its own reporting which is still valid. Starting January 1, 2026, the LLC Transparency Act of New York (NY LLCTA) will require LLCs to disclose their BOI to the NY Department of State (NYDOS).

This act applies to LLCs formed or qualified to do business in NY. These companies must report their beneficial owners (BO) to the NYDOS. BOs who own or control at least 25% of the LLC or have significant control over the company must be reported.

Information needed:

Name
Date of birth
Address
Identification number

Filing deadlines:

LLCs formed on or after 1/1/26 must be reported within 30 days
LLCs formed before 1/1/26 must be filed by 1/1/27

Unlike the federal Corporate Transparency Act (CTA), the NY LLCTA only covers LLCs, which also applies to corporations and partnerships. LLCs that meet one of the 23 exemptions under the CTA will also be exempt from the NY LLCTA but must file an exemption. The NY LLCTA also requires annual reports to confirm or update the information on BO. If there are changes, LLCs must file corrected reports within 90 days. Fines are up to $500 daily for non-compliance.

If you own an LLC in NY and would like Goldstein & Loggia to handle the filing, please reach out to a team member for assistance.

Tax Tip #270

Tue, 21 Oct 2025 13:00:01 GMT

Maximizing Your Tip Income

Employees are not the only taxpayers who can benefit from deducting up to $25,000 of tips received from income. Self-employed individuals are eligible as well. The tip deduction can’t exceed net income from the business.

Examples:

Jill has $100,000 of gross income from her hair salon, with $70,000 being fees and $30,000 being tips. Her business deductions are $20,000. Her tip deduction is $25,000.
Arianna has $65,000 of gross income from her photography business, with $45,000 being fees and $20,000 being tips. Her business deductions are $50,000K. Her tip deduction is $15,000 ($75,000 - $60,000).

Looking for a tax “tip” to get the most out of tip income? Contact a team member for strategies that can work for you.

Tax Tip #269

Tue, 14 Oct 2025 12:50:52 GMT

One Big Beautiful Bill - Child Tax Credit

Beginning with tax year 2025 filing, the Child Tax Credit (CTC) increases to $2,200 per qualifying child under age 17 (up from $2,000). It will be adjusted annually for inflation starting in 2026. The refundable portion is $1,700 for 2025 and will also adjust for inflation moving forward.

The modified adjusted gross income (MAGI) thresholds for the phaseout of the CTC remain unchanged and permanent at:

$200,000 for single and head of household
$400,000 for married filing jointly

Beginning in 2025, you must include valid Social Security numbers (SSNs) for both the child and the taxpayer claiming the credit. For joint filers, at least one spouse must have an SSN to qualify. Qualifying children age 17 and over still qualify for a $500 tax credit. A child born in 2025 will receive a $1,000 government deposit into the new Trump account (see Tax Tip #257 for more info).

Are you a parent who wants to know more about the potential child-related tax benefits available? Reach out to a team member for assistance.

Tax Tip #268

Tue, 07 Oct 2025 13:14:38 GMT

Catch-Up Contributions

SECURE 2.0 made changes that required Retirement Plan participants with prior-year FICA wages (Box 3 of Form W2) over $145,000 (adjusted for inflation) to make age-based catch-up contributions on a Roth basis only. Plans could allow a higher catch-up limit for Retirement Plan participants who attain age 60 through 63 during the calendar year.

Notes:

Retirement Plans may include a “deemed” Roth election for impacted employees and must allow for an effective opportunity to elect out of making catch-up contributions.

Retirement Plans that do not allow for Roth contributions may not offer catch-up contributions for employees who make over the $145,000 threshold.

Retirement Plans are not required to offer the higher catch-up for ages 60 to 63, but if they do they may not limit catch-up contributions only to those employees.

If you’re at this magical age and fortunate enough to work for a company that offers catch-up contributions, feel free to reach out to a team member for guidance on what makes the most sense for your situation.

Tax Tip #267

Tue, 30 Sep 2025 13:01:05 GMT

Qualified Business Income

The qualified business income (QBI) deduction allows eligible business owners to deduct up to 20% of the QBI from their total income. It applies to pass-through entities, sole proprietors, and single-member LLCs. Originally scheduled to expire after 2025, this deduction has now been made permanent as part of One Big Beautiful Bill (OBBB), with improvements starting in 2026. The 2025 income threshold for single is $197,300 and phases out at $247,300, with MFJ being $394,600 and $494,600, respectively.

Starting in 2026, the upper income threshold increases from $50,000 to $75,000 for single and $100,000 to $150,000 for MFJ. The phaseout amount of $247,300 will increase to $272,300.

In addition, there is a new minimum QBI deduction of $400 for taxpayers earning at least $1,000 in QBI.

Some examples:

If a taxpayer with QBI of $1,000 receives a $200 deduction in 2025, that deduction will be $400 in 2026.

Brian and Nicole file a joint return. They have $200,000 of QBI and are in the 24% federal tax bracket. Without the QBI deduction, federal tax is $48,000 ($200K × 24%). With the QBI deduction, federal tax is $38,400 ($200K × 80% x 24%). Their tax savings equals $9,600.

There are multiple strategies to receive the full benefit of the QBI deduction. To take advantage of these in the upcoming tax year, or if you have questions about OBBB, reach out to a team member.

Tax Tip #266

Tue, 23 Sep 2025 12:55:58 GMT

NJ Angel Tax Credit

Beginning in 2026, NJ is increasing the Angel Investor Tax Credit which rewards investors who make qualified investments in emerging technology businesses.

To qualify, the prospective investment must:

Have less than 150 employees
At least 75% of which working in NJ
Be in the computing, biotechnology, IT, life sciences, medical devices, communications, energy or electronic devices industries

The base credit 35% and an extra 5% credit if the company is located in an opportunity zone, woman- or minority-owned, or a qualified venture fund.

There is a $500 application fee for investment amouts of $50,000 or less and $2,500 for investments of more than $50,000 but less than $500,000.

Example: A biotechnology company in an opportunity zone with 10 employees, 9 of which are working in NJ invests $90,000.

$90K * 40% = $36K – $2,500 = $33,500 savings.

For more information about this tax credit, reach out to a team member.

Tax Tip #265

Tue, 16 Sep 2025 12:52:33 GMT

NJ Property Transfer Fees

NJ imposes a Realty Transfer Fee (RTF) on the seller of real property when recording a deed for the sale. The RTF is usually calculated based on the amount of consideration recited in the deed.

Rates vary depending on the sale price:

More than $1 million and up to $2 million — 1 percent
More than $2 million and up to $2.5 million — 2 percent
More than $2.5 million and up to $3M — 2.5 percent
More than $3 million and up to $3.5 million — 3 percent
More than $3.5 million — 3.5 percent

For example, a seller sells NJ property for $2.9 million. The cost of home plus improvements is $1 million. RTF is $72,500 (2.9 million * 2.5%. The taxable gain is $1,827,500 (2.9 million -72,500 -1 million).

Tax Tip #264

Tue, 09 Sep 2025 13:18:34 GMT

Annual Report Filing for Business Owners

To keep a business current with the state, an annual report must be submitted. If the deadline is missed, the business may face penalties and late fees and could lose its good standing. It may even face administrative dissolution, and reinstatement can be costly. Goldstein & Loggia can file an annual report for a client — regardless of the state the business is located in — to help avoid those consequences.

If you are unsure whether your business is current with annual report filings or would like Goldstein & Loggia to handle the filing on your behalf, reach out to a member of our team for assistance.

Tax Tip #263

Tue, 02 Sep 2025 13:00:57 GMT

Feds Green Light Electronic Payments

Beginning with the 2025 tax year, the check will not be in the mail as the IRS will no longer accept paper checks for payments nor will it issue paper checks for refunds. Effective September 30, 2025, all payments to and from the government must be made electronically. Accepted payment methods include direct deposit, debit or credit card, and other secure digital payment platforms.

To make electronic payments, taxpayers must create individual accounts with the IRS and be prepared to provide:

Email address
US-based phone number
Social security number or individual taxpayer identification number
Government-issued ID (driver's license, state ID or passport)

Using a smartphone is also recommended for faster identity verification.

To help Goldstein & Loggia update your information, please upload your bank account and routing numbers to your secure client portal , or contact a team member directly to provide this information.

Tax Tip #262

Tue, 26 Aug 2025 13:08:39 GMT

OT to Pay Off Through 2028

For years 2025 through 2028, there is a new deduction for qualified overtime pay — hours worked beyond 40 hours a week. Single filers can deduct up to $12,500, and for those married filing jointly (MFJ), $25,000 can be deducted. The deduction phases out starting at an AGI of $150,000 for single filers and $300,000 for MFJ filers.

Examples:

Alexis, single, received $9,000 of overtime in 2025 and has an AGI of $123,915. The full $9,000 is exempt from income tax.

Lexi, single, received $19,000 of overtime in 2025 and has an AGI of $102,999. Only $12,500 is exempt from income tax.

Gloria, MFJ, received $20,000 of overtime in 2025 and has an AGI of $346,000. None of the overtime is exempt from income tax.

Have questions about the Big Beautiful Bill? Contact a team memberfor more information.

Tax Tip #261

Wed, 20 Aug 2025 12:59:33 GMT

Full Deductions Not a Sure Thing in 2026

Prior to the Big Beautiful Bill, gambling losses were limited to gambling winnings.

Example 1: If a taxpayer wins $900 but lose $1,000, the taxpayer can claim losses of $900. However, if the taxpayer cannot itemize and takes the standard deduction, then the taxpayer pays tax on the winnings with no offset from any losses.

Example 2:If a taxpayer wins $900 and loses $1,000, the taxpayer can claim losses of $900. If the itemized deductions, which includes gambling losses, are greater than the standard deduction, the taxpayer pays no tax on the $900 of winnings.

Starting in 2026 under the Big Beautiful Bill BBB, losses are limited to 90 percent of winnings.

Example 3: If a taxpayer wins $900 but loses $1,000, the taxpayer can claim losses of $810. However, if standard deduction is greater than itemized deductions, there is no benefit from the losses, and the taxpayer pays tax on the $900 of winnings.

Two items to note — NJ will still permit 100 percent offset. The rules for professional gamblers differ from what is described in this tip.

Have questions about the Big Beautiful Bill? Contact a team member for more information.

Tax Tip #260

Tue, 12 Aug 2025 13:04:54 GMT

New Deduction for Seniors

Individuals age 65 or older can now claim a temporary tax deduction of $6,000. For married couples filing jointly, each spouse 65 or older can claim the deduction.

This senior deduction is reduced by 6% for the adjusted gross income that exceeds $75,000 for single filers or $150,000 for married filing joint taxpayers.

What does this mean in dollars? Assuming a 22% federal tax bracket, a single taxpayer age 65 or older with a total income of $75,000 could save approximately $1,320.

This deduction begins in 2025 and expires in 2028.

Have questions about the Big Beautiful Bill? Contact a team member for more information.

Tax Tip #259

Tue, 05 Aug 2025 12:59:01 GMT

Clean Energy Incentives

Considering a clean energy upgrade? Better hurry! The Big Beautiful Bill terminates some incentives, so if you are considering an upgrade or improvement, act now to take advantage of available tax benefits.

The bill will be phasing out the following federal clean energy tax credits:

Previously-owned clean vehicle credit - ends after Sept. 30, 2025

Clean vehicle credit - ends for vehicles acquired after Sept. 30, 2025

Qualified commercial clean vehicle credit - ends after Sept. 30, 2025

Alternative fuel vehicle refueling credit - ends after June 30, 2026

Energy-efficient home improvement credit - ends after Dec. 31, 2025

Residential clean energy credit - ends for costs incurred after Dec. 31, 2025

New energy-efficient home credit - ends after June 30, 2026

Energy-efficient commercial buildings deduction (Sec. 179D) - ends for properties where construction begins after June 30, 2026

Tax Tip #258

Tue, 29 Jul 2025 12:58:44 GMT

Deducting Charitable Donations

Charitable donations are just one of the allowable deductions when itemizing on your tax return. Approximately 15% of taxpayers itemize instead of taking the standard deduction. The remaining 85% do not receive a federal tax benefit for charitable donations.

Starting in 2026 under the Big Beautiful Bill, taxpayers who do not itemize can deduct $1,000 (single) or $2,000 (MFJ) for certain charitable deductions.

For example, a single taxpayer who takes the standard deduction and donates $900 to charity can deduct the full $900. However, if the filer donates $1,900 to a qualifying charity, this taxpayer’s deduction will be capped at $1,000.

Have questions about the Big Beautiful Bill? Contact a team member for more information.

Tax Tip #257

Tue, 22 Jul 2025 15:12:06 GMT

Savings Opportunity Trumps Standard Brokerage Accounts, But 529s Still #1

Under the new legislation, parents of U.S. citizens born between December 31, 2024 and January 1, 2029 could receive a $1,000 government deposit into a new type of child savings account—with no income limits. Parents may contribute up to $5,000/year (inflation-adjusted after 2027), and funds grow tax-deferred. Withdrawals after age 18 can be used for college, a first home, or starting a business. These accounts function like IRAs (not Roth IRAs) for the exclusive benefit of individuals under 18.

Contributions can only be made in calendar years before the beneficiary turns 18. The accounts are eligible for contributions, which will not be included in the employee’s income. Distributions are taxed at long-term capital gains rates if used for qualifying purposes, otherwise, distributions are taxed at ordinary income and subject to 10% penalty.

Beneficiaries may withdraw half the account at age 18 for qualifying expenses, with the rest to be withdrawn at age 25. Any remaining balance becomes taxable at age 31, and nonqualified withdrawals are taxed as income plus a 10 percent penalty.

While more tax-efficient than a standard brokerage account due to gain deferral, these accounts are less favorable than 529 plans, which allow tax-free withdrawals for qualified education expenses.

Have questions about the Big Beautiful Bill? Contact a team member for more information.

Tax Tip #256

Tue, 15 Jul 2025 13:04:17 GMT

Interest on Domestic Auto Purchases

For taxable years 2025 through 2028, taxpayers can claim up to $10,000 in interest paid on loans for new, American-made passenger vehicles—no itemizing required.

Key details include:

Income phaseouts begin at $100,000 (single filers) and $200,000 (married filing jointly).
The vehicle must be new and final-assembled in the US, excluding most vehicles made by Honda, Hyundai, Nissan or Toyota.
The vehicle must have a gross vehicle weight under 14,000 lbs.
Eligible vehicle types include cars, minivans, SUVs, pickup trucks, vans and motorcycles. Conversely, ATVs, trailers and campers are not eligible.
You must report the VIN on your tax return.

If you plan to finance an eligible vehicle in 2025, be sure to provide the VIN with your 2025 tax documents in early 2026 to receive this benefit.

Have questions about the Big Beautiful Bill? Contact a team member for more information.

Tax Tip #255

Tue, 08 Jul 2025 13:02:21 GMT

SALT Cap Increased with Phaseout for High Earners

The $10,000 cap on State & Local Tax (SALT) deductions has been raised to $40,000 for most taxpayers. The benefit phases out for households with adjusted gross income (AGI) exceeding $500,000. In 2026, the thresholds would increase by 1% or to $40,400 for households with income under $505,000. The thresholds would continue to increase by 1% each year through 2029, after which the SALT limit would be permanently reduced to $10,000.

Have questions about the Big Beautiful Bill? Contact a team member for more information.

Tax Tip #254

Tue, 01 Jul 2025 13:05:53 GMT

US Expats Tax Rules

When it comes to income tax, living abroad doesn’t mean you are off the hook. As an expatriate — a US citizen living outside of the country — you are still required to file a US income tax return and report worldwide income.

The bad news? When filing as an expat, there are many rules to be aware of, and noncompliance with some of the tax rules — such as failure to report a foreign bank account — can carry penalties of $10,000 or more.

Now for the good news: There are strategies to minimize double taxation, such as utilizing the foreign earned income exclusion, the foreign housing exclusion or deduction or the foreign tax credit.

Not all CPAs have the expertise to assist expat clients, but Goldstein & Loggia does. Know an expat who needs tax help? Reach out to a member of our team.

Tax Tip #253

Tue, 24 Jun 2025 12:59:29 GMT

Exit Strategies for Business Owners

A successful business exit strategy requires careful planning well in advance of retirement or any other reason for an ownership transition.

Some common strategies include:

Buy-sell agreement
Life or disability insurance
Key person life insurance
Gifting
Employee Stock Ownership Plan (ESOP)
Obtaining a business valuation

If you’re thinking of selling your business and want a better understanding of the amount of cash that will remain in your pocket after the sale/transition and paying taxes, reach out to a Goldstein & Loggia team member for more information.

Tax Tip #252

Wed, 18 Jun 2025 13:53:00 GMT

Solar Panels Tax Credit

Thinking about installing solar panels? Here’s what you need to know about the tax benefits.

Federal Tax Credit:

The credit is equal to 30% of the total applicable cost through 2032.
This credit applies to the primary home and possibly a secondary home.
Purchasing or financing allows the 30% credit in the year placed in service.
If leased, you are not eligible for a tax credit.
The tax credit is nonrefundable, meaning it can reduce your tax liability, but won’t result in a refund.

On the state level, incentives vary. For a summary of available programs and rebates, click here .

Questions about solar panels and how the tax benefits can help you? Contact a Goldstein & Loggia team member for more information.

Tax Tip #251

Tue, 10 Jun 2025 13:00:24 GMT

NY Tax Credit for 2025

NY tax law creates a one-time inflation refund personal income tax credit for the 2025 tax year for taxpayers who were full-year residents in 2023, had income in that year below a certain threshold, and were not claimed as a dependent by another taxpayer in that year.

Taxpayers who filed 2023 resident tax returns as married filing jointly or qualifying surviving spouse will receive a credit of:

$300 if their NY adjusted gross income (AGI) was more than $150,000 but less than $300,000
$400 if their NY AGI was $150,000 or less.

Taxpayers who filed 2023 resident tax returns as single, married filing separately, or head of household will receive a credit of:

$150 if their NY AGI was more than $75,000 but less than $150,000
$200 if their NY AGI was $75,000 or less.

If the credit is included in gross income for federal income tax purposes, it’s not subject to NYS or local income tax.

Tax Tip #250

Tue, 03 Jun 2025 12:58:28 GMT

Qualifying Medical Deductions

Today’s tax quiz: Which of the following is an allowable medical deduction for tax purposes:

A) Owning a service animal, such as a guide dog

B) Installing an elevator in a home for a person with mobility issues

C) Building a swimming pool for a person who suffers from arthritis

D) Hiring a specialized tutor to treat a child with dyslexia

E) All the above

F) None of the above

The correct answer is E. However, this does NOT imply that every taxpayer will receive a tax benefit. The Internal Revenue Code is complex and while taxpayers were able to receive a tax benefit for options A through D above, that does not always mean that every taxpayer will.

Think you have a situation that might qualify for a tax deduction? Reach out to a team member for assistance.

Tax Tip #249

Tue, 27 May 2025 13:02:21 GMT

Marketplace Health Insurance

If you have health insurance through the Marketplace, it is important that you provide Goldstein & Loggia with Form 1095-A, Health Insurance Marketplace Statement, when submitting your tax documents. This information is included on your tax return, and failure to include it will lead to an IRS notice. Form 1095-A is available by January 31 of the following year and can be downloaded from your HealthCare.gov account .

To find Form 1095-A for tax year 2024:

Log in to HealthCare.gov
Navigate to “Your Existing Applications”
Select your 2024 application (not the 2025 application)
Select “Tax Forms”
Download all available 1095-A forms

If you have trouble locating your 1095-A online, contact the Marketplace Call Center at 800-318-2596 for assistance.

Tax Tip #248

Tue, 20 May 2025 13:00:37 GMT

Deductibility of a Company Event

Karina owns a business and hosts a barbecue for her team in her backyard, serving food and beverages, including alcohol. When the business tax return is filed, what portion of the expenses is deductible?

A. Nothing, since it was on personal premises

B. Everything is deductible but limited to 50%

C. Everything is 100% deductible

D. Food & non-alcoholic beverages are 50% deductible & no deduction for the alcohol

E. Food & non-alcoholic beverages are 100% deductible & no deduction for the alcohol

The correct answer is C — the entire cost of the food and all beverages are 100% deductible.

Under certain conditions, business-related meal and entertainment expenses may be fully deductible. In this scenario, because the barbecue was held for the benefit of the employees (not Karina personally) and did not include highly compensated employees, the expenses are fully deductible.

To substantiate the deduction, Karina should maintain records detailing the business purpose of the event, a list of attendees and receipts for the food and beverages.

Tax Tip #247

Tue, 13 May 2025 12:54:56 GMT

Residential Energy Credits

Many maufacturers advertise certain products as energy savers. While that may be true, it doesn’t necessarily mean the product qualifies for a federal tax credit.

To determine what qualifies, start by visiting Energy Star’s website, which offers a searchable product finder that lists the items eligible for the credit. The site also provides details on the percentage of savings and the cap, if any.

When providing tax documents that include an energy-efficient purchase, be sure to provide a printout from the Energy Star site confirming the product’s eligibility.

You can find the Energy Star Rebate Finder here .

Tax Tip #246

Tue, 06 May 2025 13:01:23 GMT

Scholarship Taxation

As a general rule, scholarships used to pay for qualified education expenses are not subject to tax. However, if the scholarship amount exceeds the amount reported on the Form 1098-T tuition statement, the excess could be taxable. The scholarship can remain tax-free if the excess is used for other qualifying expenses such as books and supplies. If the excess is used for non-qualifying expenses such as room and board, it then becomes taxable. Grants are treated similarly.

Tax Tip #245

Tue, 29 Apr 2025 13:14:48 GMT

What Will Your Social Security Payout Be?

Whether you choose to wait until full retirement age or start receiving Social Security benefits earlier, you can estimate your future benefits by creating and logging into your personal “my Social Security” account on the SSA website .

Tax Tip #244

Tue, 22 Apr 2025 12:59:23 GMT

Gambling Quiz

Jill likes to go to Atlantic City (AC) to gamble. Jill is not a professional gambler but due to her frequency of visiting AC, she receives perks such as vouchers for free meals or drinks, complimentary overnight stays, and tickets to attend shows at the local comedy club. The total value of all the perks Jill received from the casino is $5,000.

For the year, Jill had gambling winnings of $9,000. Jill owns a home and her taxes, mortgage interest, and donations provides a greater benefit than the standard deduction. Jill also had gambling losses of $15,000 for the year.

How much can Jill deduct in gambling losses for the year on her tax return?

A) 0

B) 9,000

C) 9,000 with 6,000 of losses carried over to the following over

D) 14,000

E) 14,000 with 1,000 of losses carried over to the following over

F) 15,000

G) 20,000

Answer: if you guessed D then consider heading to AC to continue riding your hot streak!

The comps are considered gains from the gambling activity and are treated as gambling winnings for purposes of reporting the income and determining how much of the gambling losses will be allowed as an itemized deduction. Gambling losses are deductible up to gambling winnings. Excess losses are lost.

Tax Tip #243

Tue, 15 Apr 2025 12:58:36 GMT

Where’s My Refund?

With tax season officially wrapped up (excluding extensions), one of the most common questions we hear from clients is, “Where’s my refund?” Both the IRS and state tax departments offer online tools to track the status of your refund. Just remember, you’ll need to provide certain tax and personal details to access this information.

Below are the websites for the federal, New Jersey, New York or Pennsylvania refunds.

IRS

For any other state, this link should do the trick.

Tax Tip #242

Tue, 08 Apr 2025 12:35:36 GMT

Owners Of A Solo 401K and/or SEP-IRA May Have An Informational Only Filing Requirement

A one-participant plan must file an annual Form 5500-EZ if its total assets exceed $250,000 at the end of the year. There is no tax due — it is an informational only filing.

The penalties for noncompliance are steep: $250 a day, up to a maximum penalty of $150,000 per plan year for not filing the return by the 7/31 due date which for calendar year plans.

Have a SEP-IRA or Solo 401K plan and need assistance? Contact a Goldstein & Loggia team member today.

Tax Tip #241

Tue, 01 Apr 2025 12:31:27 GMT

Moving to a Different State?

No Problem for the G&L Team!

Leaving the NJ/NY area? While there are many things to take care of when relocating, like registering to vote in your new state, finding a new CPA doesn’t have to be one of them. Goldstein & Loggia has the expertise and ability to file taxes in most states.

Thanks to the CPA Mobility initiative, a CPA can prepare tax returns in any state. You can legally work with a CPA in another state to handle both your state and federal tax returns. In today’s digital age, especially post-Covid, technology makes it easy to communicate remotely with your CPA no matter where you or they are located. What truly matters is the relationship you have with your CPA and their in-depth knowledge of your tax needs.

Tax Tip #240

Tue, 25 Mar 2025 13:06:12 GMT

Red Flag #4

Question: Can you name a business in which the IRS requires revenue to be reported BUT prohibits deductions from being claimed?

Answer: Operating a marijuana business. There is one exception. The cost of the marijuana itself is deductible. However, the IRS is closely monitoring legal marijuana companies for improper deductions on their returns. During audits, agents often disallow these deductions, and courts consistently uphold the IRS's stance. Some states, including NJ, NY, CA, PA and MA, have chosen to decouple from the IRS rule, allowing certain additional business-related deductions.

Tax Tip #239

Tue, 18 Mar 2025 12:35:17 GMT

Tax Credit for NY Retail Owners

New York is providing business owners with a commercial security tax credit. For taxable years between January 1, 2024 and January 1, 2026, qualified taxpayers may claim a credit of $3,000 for each retail location located in New York State. To be eligible for the credit, a business must:

Have 50 or fewer employees
Operate one or more physical retail locations open to the public.
Incur costs related to protection against retail theft of goods through retail theft prevention measures such as security officers, cameras, lighting, locks and alarms. Costs must exceed $4,000 for businesses with 25 or fewer employees or $6,000 for businesses with more than 25 employees.
Obtain a certificate of tax credit from the Division of Criminal Justice Services and attach proof of receipt to the tax return.

Tax Tip #238

Tue, 11 Mar 2025 13:35:01 GMT

NJ & NY Child Tax Credit

NJ residents can claim up to $1,000 per child under the age of five by the end of the tax year if taxable income is $80,000 or less. Married filing separately (MFS) status does not qualify. If income is $30,000 or less, then the credit is the full $1,000. The credit phases out as the income increases from $30,000 to $80,000.

Similarly, full-year residents of NY could receive a credit equal to 33 percent of the federal child tax credit, or $100 per qualifying child, whichever is greater. Taxpayers who do not claim the federal credit can claim $100 for each child. The child must be under the age of 17 by the end of the year. The income limits to qualify are $110,000 for married filing jointly, $75,000 for single, and $55,000 for MFS.

Other states that offer child tax credits include: AZ, CA, CO, ID, MA, MD, ME, MN, NM, OK, OR, UT, VT and DC.

Tax Tip #237

Tue, 04 Mar 2025 14:14:32 GMT

Standard Mileage Rates for 2025

As of January 1, the standard mileage rates for the use of cars, vans, pickups or panel trucks is now:

70 cents per mile driven for business use. This is an increase of 3 cents from 2024.
21 cents per mile driven for medical purposes and moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
14 cents per mile driven in service of charitable organizations, unchanged from 2024.

Taxpayers can elect to calculate the actual costs of using their vehicle rather than using the standard mileage rates.

Additional figures for taxpayers calculating deductible vehicle expenses in 2025 include:

Depreciation under the mileage rate — 33 cents per mile.
The maximum cost for calculating allowances under the Fixed and Variable Rate plan is $61,200 for cars, trucks and vans.
The maximum fair market value for employer-provided vehicles first available for personal use in 2025 is $61,200.

Due to the Tax Cuts and Jobs Act, unreimbursed employee travel expenses cannot be deducted during 2018-2025, including through the business standard mileage rate.

If you have any questions, feel free to reach out to a team member for more information.

Tax Tip #236

Tue, 25 Feb 2025 13:58:59 GMT

BOI Reporting Update

For companies that have not yet filed, beneficial ownership information (BOI) reporting is back in effect. The new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025.

Reporting companies that were previously given a deadline later than the March 21, 2025 now must file their initial BOI report by that later deadline. (For example, if a company's reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow that deadline and not the March deadline.)

Those who meet the definition of a beneficial owner will be required to upload one of the following documents: US passport, driver’s license, state government identification document. Civil penalties of up to $591 per day can be imposed for noncompliance, while criminal penalties can mean up to two years imprisonment and fines of up to $10,000.

Exemptions to the filing requirements include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

To file your BOI, reach out to a team member for assistance, or file online .

Tax Tip #235

Tue, 18 Feb 2025 14:02:45 GMT

Married Filing Separately: When It May Make Sense

A common question from recently married couples: Should we file jointly?

From a tax perspective, filing joint tax returns generally results in the lowest tax bill for married couples, but when could it make sense to file separately?

One example would be when one spouse has large medical expenses. Medical expenses are deductible only to the extent that they exceed 7.5 percent of adjusted gross income (AGI). If one spouse has significantly lower AGI when filing separately, it may increase the deduction.

There may be reasons filing separately is better even if the tax cost is higher, such as if one spouse has an income-sensitive repayment plan for student loans.

Which is more advantageous for your situation? Contact a team member to find out.

Tax Tip #234

Tue, 11 Feb 2025 13:59:41 GMT

Social Security Benefit Increase in 2025

If you are receiving Social Security benefits, you may be happy to know that there is a 2.5 percent increase in benefits in 2025 compared to 2024.

Why 2.5 percent? This is the cost of living (COLA) adjustment that the Social Security Administration (SSA) determined was needed. However, this is down from 3.2 percent last year and 8.7 percent in 2023.

Up to 85 percent of social security benefits are taxable for a single income over $25,000 or married filing jointly (MFJ) taxpayers with an income over $32,000.

Example: MFJ taxpayers with an income of $100,000 in the 22% federal income tax bracket received $20,000 in Social Security benefits in 2024. In 2025, this amount will increase to $20,500.

After taxes, a total of $406 of the $500 increase remains, and $94 goes to Uncle Sam ($20,500 x .85 x .22).

Here’s some good news — NY and NJ are among many states that do not tax Social Security benefits.

Tax Tip #233

Tue, 04 Feb 2025 14:03:02 GMT

NJ Combines Senior Freeze & ANCHOR into One Filing

Applying for property tax relief just got easier for NJ seniors.

Residents aged 65 or older and disabled homeowners or mobile homeowners will be able to apply for three state property tax relief programs – Senior Freeze, ANCHOR, and the forthcoming StayNJ – by filling out a single application known as the PAS-1 Form.

Most other homeowners and renters who typically receive ANCHOR benefits can still expect to receive an ANCHOR benefit confirmation letter this summer confirming their automatic eligibility for that program, while other eligible residents may receive an ANCHOR application mailer inviting them to apply.

The benefits will begin to be distributed in July 2025, and the deadline to complete the combined application is October 31, 2025.

In late 2025, the Division of Taxation will send letters to PAS-1 combined application filers outlining the property tax relief benefit amounts calculated for each program.

Some changes to the two programs on the PAS-1 combined application:

Senior Freeze Recipients: The income eligibility standards have changed. Applicant’s total annual income must have been $168,268 or less in 2024, and $163,050 or less in 2023. Taxpayers no longer need to include proof of property taxes paid with their application.
ANCHOR Homeowner Recipients: Homeowners are no longer required to have an identification number and PIN to file for benefits.

The application will be available online in mid-February. Applicants also have the option to file by paper.

If you have any questions, reach out to a team member for more information.

Tax Tip #232

Thu, 30 Jan 2025 22:47:13 GMT

Relief for Victims of Federally Declared Disasters

Individuals can deduct federally declared disaster losses in excess of a $500 threshold on their personal tax returns. This applies to losses incurred between 2021 and 2024. If a qualifying loss was not claimed, an amended tax return can be filed. If the loss pertains to 2021, the amended tax return may need to be filed by 4/15/2025 to claim a refund.

Visit the FEMA website for a list of IRS-declared federal disaster areas.

Tax Tip #231

Tue, 21 Jan 2025 14:20:57 GMT

Identify Protection PIN

Did you know taxpayers can obtain an Identity Protection Personal Identification Number (IP PIN) for the 2025 tax season to provide protection against tax-related identity theft?

This six-digit number is known only to the taxpayer and the IRS. The IRS uses this number to confirm the taxpayer's identity when they file their federal tax return. Using an IP PIN prevents someone other than the taxpayer from using the taxpayer's SSN or ITIN to file a return.

To request an IP PIN, create or log in to your online account at IRS.gov and verify your identity. Once verified, taxpayers need to click on the profile tab to request their IP PIN. Once received, the taxpayer must use it when filing their federal tax return for the current calendar year and any previous years filed during that same period. Taxpayers can also use the "Get an IP PIN" tool on IRS.gov after verifying their identity.

Please be sure to provide your PIN to the member of the G&L team who works on your tax return.

Tax Tip #230

Tue, 14 Jan 2025 13:59:55 GMT

Dissolving a Business

The decision has been made that it is time to dissolve a business. What needs to be done? Have your CPA file a final year tax return and then move on to something else, right? Wrong.

While a final year tax return is generally required, there are several critical steps that need to be taken to ensure tax and legal compliance. Legally dissolving the business with the state of formation is extremely important to eliminate liability issues.

There are several other considerations as well. Some potential issues include what actions are needed for the employer retirement plan and if there are bulk sale laws to comply with, just to name a few.

Goldstein & Loggia has extensive knowledge in dissolving businesses so reach out to a member who can answer your questions and assist with the compliance issues.

Tax Tip #229

Tue, 07 Jan 2025 14:07:40 GMT

How Much is Your Time Worth When Volunteering for Charity?

The IRS does not allow a charitable deduction for volunteering your services, even if you can easily put a dollar amount on your time.

So if, as a CPA, you usually charge $390 per hour and use that time to help a qualified charitable organization, you're allowed a deduction of $0 — that's not a typo.

However, there is a 14-cent charitable mileage rate. Drive 100 miles round-trip to volunteer for a charitable organization and that is a $14 tax deduction IF you itemize. Moreover, IF you are in the top federal tax bracket of 37 percent, the tax savings is approximately $5 — perhaps enough to cover that cup of coffee purchased on the way to the organization.

Tax Tip #228

Tue, 31 Dec 2024 13:55:01 GMT

RMD Changes in 2025

As of last year, taxpayers who inherited an IRA from someone who passed away after 2019 and who was already taking required minimum distributions (RMDs) at the time of the death were allowed to choose not to take distributions based on their own life expectancy.

Beginning in 2025, these beneficiaries will need to follow RMD rules as outlined in the 2002 regulations for ten years following the death of the original beneficiary. This means that instead of the annual distributions he or she was previously taking, life expectancy distrubtions must be taking for for the first nine years after the original IRA owner's death. By the end of the tenth year, the entire remaining balance in the IRA must be fully distributed.

Tax Tip #227

Tue, 24 Dec 2024 14:01:19 GMT

2024 RMDs: Don’t Miss This Deadline

If you’re subject to required minimum distributions (RMDs), you must take your 2024 RMD by December 31 to avoid penalties. RMDs are mandatory withdrawals from retirement plans such as 401(k)s, IRAs, SIMPLE IRAs and SEPs. Roth accounts aren’t subject to RMDs during the owners’ lifetimes. RMDs are taxable income subject to ordinary-income tax (not long-term capital gains) rates.

RMDs begin at age 73 and imposed a penalty of either 25 or 10 percent.

Tax Tip #226

Wed, 18 Dec 2024 13:57:12 GMT

1099 Nonemployee Compensation Reporting

Businesses, business owners and payments to certain individuals require a 1099 to be issued and filed with the IRS & in some states.

Some key points to know:

Payments of $600 or more to non-employee individuals, partnerships, physicians and all attorneys are reportable on Form 1099-NEC.
Payments to corporations are typically not reported, unless to an attorney.
The recipient should complete a Form W9 in order to complete Form 1099. The W9 form can be found on the IRS website.
College athletes who receive Name, Imagine and Likeness (NIL) income will also owe self-employment tax on net earnings.
Penalties: Range from $60 to $330 per return or statement (per 1099).
Form 1099 needs to be provided to the recipient by 1/31.

If you have questions, please reach out to a team member for assistance.

Tax Tip #225

Tue, 10 Dec 2024 14:00:35 GMT

Capital Losses

As a general rule, a capital loss exists when a security is sold for less than its purchase price. Realized capital losses can be netted against capital gains in the same year. If the losses are greater than the gains, a maximum capital loss of $3,000 can be deducted in that current year from other types of income on the individual’s income tax return. The excess is carried forward to the following year.

Question: When do capital loss carryforwards expire?

Answer: When the individual expires.

Tax Tip #224

Tue, 03 Dec 2024 14:02:30 GMT

FAFSA & Taxes

Parents, if you have kids in college, it’s that time again — time to complete the dreaded Free Application For Federal Student Aid. FAFSA requires information from the parent’s tax return, but what if the parents are not current with their tax return filings?

A student can still submit the FAFSA form with their own information and skip the parent questions. However, without the parental tax information, the student’s aid index will not be calculated and the student may only be eligible for a Direct Unsubsidized Loan.

Are you the parent of a college student and behind on your tax filings? Contact a team member who can help you get those tax returns filed.

Tax Tip #223

Tue, 26 Nov 2024 13:54:02 GMT

Retirement Contributions for Those 60-63

Effective for the 2025 tax year, active 401(k) participants aged 60 through 63 can contribute the greater of $10,000 or 150 percent of the 2024 catch-up contribution limit that is indexed for inflation.

In 2025, the total limit for 401(k) contributions for those aged 60 to 63 is $10,000. An account holder can take advantage of this additional catch-up contribution if they reach the age of 60 but are not yet older than the age of 63 by the end of the calendar year.

Employees aged 50 and older can make catch-up contributions up to $7,500 for 2024. Contribution caps for 2025 have yet to be announced.

Tax Tip #222

Tue, 19 Nov 2024 14:59:43 GMT

IRS Fresh Start Program

To qualify for the Fresh Start Program (FSP), taxpayer must owe no more than $50,000 in combined back taxes, interest and penalties and be current on all federal tax filings. Small business owners with up to $25,000 in payroll taxes may also qualify. There are no income requirements.

Criteria to qualify:
Filed all required tax returns for the previous 3 years
Pay taxes owed within 6 years
Made all required estimated tax payments for the current year
Not involved in any tax evasion or fraud activities

Benefits of the IRS FSP include:

Prevention of tax liens being filed against a taxpayer
In some cases, removal of a tax lien that has already been placed
Reduction in penalties and interest on penalties
Payment Flexibility — extended time frames without severe penalties
No requirement to disclose income or assets to the IRS

In trouble with the IRS & looking for a fresh start? Contact a team member for assistance.

Tax Tip #221

Tue, 12 Nov 2024 13:59:08 GMT

Minimum Wage to Rise in 2025

It's going to be a happy new year for some NJ employees, as the state minimum wage is set to increase beginning on January 1. Hourly wages will rise to:

$15.49 for large employers;
$14.53 for small (fewer than 6 employees) or seasonal businesses;
$18.49 for direct care staff of long-term health facilities.

If you are an employer in NJ, be sure to post the latest version of NJ’s Wage & Hour Law Abstract in a conspicuous area of the workplace, but remember to check back before year-end for the most up-to-date signage from the state.

Tax Tip #220

Tue, 05 Nov 2024 15:44:51 GMT

Year-End Tax Planning - Action Required

2024 is quickly coming to an end, and as you know, the team from Goldstein & Loggia likes to be proactive in tax planning with our clients.

If you are interested in this analysis, then please provide your most recent paystub in order for us to run a tax projection, assuming you are an employee. The paystub(s) can be sent by pdf/email, fax or the client portal. After receiving your information and running the tax projection, you will be contacted via phone or email. Please indicate if you get paid weekly, bi-weekly, bi-monthly, or monthly (if your paystub does not indicate this).

If you are a business owner rather than an employee, please provide a year-to-date business Profit & Loss statement.

If there is other information that you would like to provide which will help to make this a more accurate projection (ex: capital gains & losses), please do so.

We will then work on tax planning ideas to help improve your tax situation as much as possible.

Also, if you have moved since your 2023 tax return was filed, then please provide your new address & the date you moved if you haven’t already done so.

In addition, if you had any new events this year that you feel will impact your tax return (such as purchasing a home, getting married or having a baby), please let us know so that we can plan accordingly.

PLEASE NOTE THAT THERE IS A FEE FOR THIS SERVICE.

If you have questions, please do not hesitate to call or email. A team member would be happy to discuss with you at your convenience any tax strategies that fit your situation. There is still time to implement most tax strategies to minimize your 2024 tax liability.

Tax Tip #219

Tue, 29 Oct 2024 13:05:41 GMT

Tax Impact of Earning Over $168,600 in 2025

In 2025, individual taxable earnings up to $176,100 will be subject to Social Security tax, an increase of $7,500 from 2024.

As a result, employees earning this amount or more will pay an additional $465 into Social Security compared to 2024.

Employers will also contribute the same amount. Self-employed individuals with net income at or above this level in 2025 will pay $930 more.

Tax Tip #218

Tue, 22 Oct 2024 13:07:17 GMT

Main Street Acquisition Support Grant

The Main Street Acquisition Support Grant offers up to $50,000 to reimburse an eligible NJ small business for closing costs related to an NJ commercial property that the business purchased to operate from.

To qualify, the closing must have taken place after 10/1/2024, and the grant application date must be no later than one year from date of closing. A nonrefundable fee of $500 is due at time of application approval.

The property must remain occupied by the grantee for a minimum of five years, but applicants are permited to lease a portion of the purchased property to a third party. Small businesses must occupy at least 1,000 square feet of total usable square footage of the building.

Profit or non-profit entities are both eligible, and only new purchases qualify for the grant.

Want to apply? Visit njeda.gov

If you have questions or would like assistance in applying, please reach out to a Goldstein & Loggia team member.

Tax Tip #217

Tue, 15 Oct 2024 13:06:59 GMT

Tax on Capital Gains

A young married couple domiciled in Florida earns $54,000 and has no other income or deductions. Their federal tax liability is approximately $3,000. A few years ago, the couple invested in Bitcoin and sold it in 2024 for a $40,000 gain.

Q: What is the couples federal tax liability?

• A) $3,000 — the couple doesn’t report the Bitcoin gain thinking the government will never know

• B) $3,000 — the couple does report the Bitcoin gain

• C) $9,000 ($40,000 x 15% capital gains tax)

• D) It depends (always a good answer when you do not know the answer)

The answer is A, B and D, because you can make the case for both A & B. Answer A, but the couple now extends the statute of limitations from 3 years to 6 years (see Tax Tip 88); answer B because IRS code states that if your income is under a certain threshold (in 2024 for MFJ, that is approximately $94,000), then capital gains are not taxed.

Tax Tip #88

Tue, 15 Oct 2024 13:04:34 GMT

Statute of Limitations

Concerned that the IRS will audit you? Concerned that the IRS will figure out the money you won when you hit on the score from the Super Bowl on the box that you had & you conveniently forgot to mention this to your CPA when your tax return was prepared? Want to know how long the IRS has to audit you before you are in the clear?

Normal rules: IRS has 3 years to audit an individual income tax return. 2021 tax return was filed on 4/4/2022. IRS has until 4/15/2025 to audit the tax return.

Unless the tax return omitted more than 25% of gross income from the tax return. When this is the case, the 3-year statute of limitation (SOL) extends to 6 years.

Example: Single Taxpayer earned a salary of $80K. This taxpayer was the one who hit on the score in the box game from the Super Bowl and won 25K! Statute of limitations is 6 years for the IRS to audit this tax return since 25K is more than 25% of 80K (80K*25%=20K).

What if no tax return has been filed? The statute of limitations does not begin until a tax return is filed.

State treatment: while states like NY, NJ, CT, PA, GA, NC have the 3-year general rule, some states use 4 years such as CA.

Tax Tip #216

Tue, 08 Oct 2024 13:02:03 GMT

Retirement Plan Options for NJ Employees

NJ employees will now have the ability to save for a secure retirement through the launch of RetireReady NJ, a state-administered retirement savings program that aims to reach workers who do not have access to private-employer retirement plans.

Businesses in the state with 25 or more employees that have been in business for two years or more and do not currently offer a qualified retirement plan will be required to register with the program. Employees will be given the opportunity to begin saving for retirement through payroll deductions into a Roth or Traditional IRA. Self-employed individuals will also be able to save directly with RetireReady NJ. There is no cost for employers to participate in the program.

Alternatively, the employer can offer a company-sponsored plan. While an employee will be automatically enrolled in this program, the employee can opt out & reenroll at a later time.

Tax Tip #215

Wed, 02 Oct 2024 13:02:13 GMT

Married Filing Separately

The standard deduction for taxpayers filing separately is approximately $14,000. If one spouse has deductions of only $1,000, that spouse would benefit from taking the standard deduction since it is greater than itemizing. If the other spouse has deductions of $23,000, that spouse would benefit from itemizing.

However, the IRS states that if spouses file separate returns and one itemizes, the other spouse must also itemize. In this case, the spouse who would benefit by approximately $13,000 from taking the standard deduction would be forced to itemize. Examples of itemized deductions are donations to charity, mortgage interest, medical expenses, real estate taxes and state income taxes.

Planning on filing separately for this year? Reach out to a Goldstein & Loggia team member to plan for this situation and avoid an unexpected tax liability come next April 15th.

Tax Tip #214

Tue, 24 Sep 2024 13:15:58 GMT

Short-Term Rentals

A rental property that produces a taxable loss is usually not deductible unless it produces rental income or passive income from other activities. If the rental property is turned into a short-term rental, then a taxable loss should be tax deductible.

Qualifications:

The average period of customer use is seven days or less; or
The average period of customer use is 30 days or less and significant personal services are provided by the property owner.

Interested in converting your rental property into a short-term rental? Reach out to a team member for assistance.

Tax Tip #213

Tue, 17 Sep 2024 13:00:45 GMT

Debt Cancellation

The rule of thumb is that cancelled debt is considered taxable income. However, there are exceptions to every rule.

Some of these exceptions are:

Taxpayers who are insolvent (liabilities are greater than the fair market value of their assets)
Student loan indebtedness (through 2025)
Up to $750K of forgiven home mortgage debt on a principal residence
Bankruptcy

If any of these exceptions apply to you, contact our team to see how it can impact your taxable income.

Tax Tip #212

Tue, 10 Sep 2024 13:09:26 GMT

Student Loan Debt Relief

Did you know that student loan debt in the U.S. is currently approximately $1.753 trillion? This is more than the total national credit card debt, which is approximately $1.142 trillion.

Did you also know that when students repay their student loans, employers can treat those repayments as retirement contributions for purposes of an employer match? Employers can contribute whatever their matching rate is into a tax favored retirement account as if the employee contributed the loan payment amount, even though the employee was actually using the money to pay off student loans.

If you are (unfortunately) part of the $1.753 trillion pool, ask your employer if this benefit is offered.

Tax Tip #211

Tue, 03 Sep 2024 12:56:46 GMT

Red Flag #3

The IRS is on the hunt for taxpayers who sell, receive, trade, or otherwise deal in Bitcoin or other virtual currency or digital assets. Not reporting the sale of virtual currency, if it is large enough, could extend the time the IRS has to audit a tax return from the standard statute of limitations of 3 years to 6 years (refer to Tax Tip #88).

To combat the nonreporting in this area, the new IRS tax form 1099-DA will be provided to taxpayers in 2026 for calendar year 2025 to report digital asset sales. Calendar year 2024 will be the last year for taxpayers to self-report virtual currency transactions.

Tax Tip #88

Thu, 29 Aug 2024 17:23:02 GMT

Statute of Limitations

Normal rules: IRS has 3 years to audit an individual income tax return. 2021 tax return was filed on 4/4/2022. IRS has until 4/15/2025 to audit the tax return.

Unless the tax return omitted more than 25% of gross income from the tax return. When this is the case, the 3-year statute of limitation (SOL) extends to 6 years.

What if no tax return has been filed? The statute of limitations does not begin until a tax return is filed.

State treatment: while states like NY, NJ, CT, PA, GA, NC have the 3-year general rule, some states use 4 years such as CA.

Tax Tip #210

Tue, 27 Aug 2024 13:03:37 GMT

ANCHOR: NJ Property Tax Relief

The Affordable NJ Communities for Homeowners and Renters (ANCHOR) program is back for year three, beginning 8/19/24.

The division will mail ANCHOR benefit confirmation letters to notify homeowners and renters that their applications will be filed automatically. If the personal information listed in the letter (name, mailing address and banking information if benefit was distributed via direct deposit) has changed since their last ANCHOR payment, taxpayers will need to file new applications by 9/15/24. Payments will be issued on a rolling basis beginning in November. The deadline to file an application is 11/30/24.

Homeowners must have owned and occuppied their NJ residence on 10/1/21, have paid 2021 property taxes on that home, and have had a gross income no greater than $250,000. The NJ gross income threshold for renters is $150,000.

To apply, have line 29 of your 2021 NJ tax return and state-issued identification ready and visit anchor.nj.gov . Questions regarding the program? Call NJ at 609-826-4282 or 888-238-1233.

For more information, refer to Tax Tip #156 or contact a member of our team.

Tax Tip #209

Tue, 20 Aug 2024 13:02:56 GMT

Penalties for Late Filing

A taxpayer owns 100 percent of an S Corporation, 50 percent of a partnership with the spouse owning the other 50 percent. They have not filed the S Corporation, partnership or their personal tax returns in a timely manner. They are aware that they do not owe tax on their personal tax return, and S Corporations and partnerships do not pay tax on the federal level (with very few exceptions).

When the taxpayer files these 3 tax returns where no money is due, what penalty does the IRS charge when the tax returns are finally filed?

A. No tax due, no penalties for any of the 3

B. Penalty for the S Corporation and the partnership only

C. Penalties for all 3

D. Penalty only for the individual tax return

When an S Corporation or partnership is filed late, the penalty is $235 for each month late multiplied by the number of shareholders or partners of the business, for up to 12 months. There is no penalty when an individual tax return is filed late if there is no tax due.

If you answered B, congratulations — you got an A on this tax quiz.

Tax Tip #208

Tue, 13 Aug 2024 13:07:12 GMT

Child Tax Credit for NY Residents

If you are a NY resident with a child/children and want to find out if you’ll receive any money from the state, just check line 63 of your 2023 NY state tax return. If the amount is $100 or more, then go to line 19 of your NY tax return and compare it to the table below:

To calculate the payment, have your 2023 NY tax return available and click HERE .

Tax Tip #207

Tue, 06 Aug 2024 13:04:36 GMT

Congratulations to Those Receiving an 83(b) Election

A Section 83(b) election is a provision in the Internal Revenue Code that allows taxpayers who receive some sort of stock options to elect and include the fair market value (FMV) of the property at the time it was granted as taxable income in the year of receipt. The election allows taxpayers who receive equity compensation to pay taxes on the FMV at the time of granting, rather than at the time of stock vesting.

Why pay tax now? Belief. Belief that the options will increase in value which means less tax is paid.

Example: 100 shares are awarded at $.001 per share. Taxpayer makes the 83(b) election and has $1 of ordinary income on his current year tax return. Assuming the shares increase a few years later to $10 per share and the taxpayer sells the shares, there will be a long-term capital gain of $999.

Section 83(b) elections must be submitted to the IRS within 30 days after issuance, so do not hesitate to reach out to a Goldstein & Loggia team member with any questions before time elapses on a potential tax savings opportunity.

Tax Tip #206

Tue, 30 Jul 2024 13:04:14 GMT

Rolling Over an Employer Retirement Plan

Rolling over a retirement plan such as a 401(k) plan from a former employer to an IRA should be a tax-free transaction. However, if not done correctly, it can not only be taxable but subject to a 10% penalty depending on age (which for IRS purposes is under 59.5 years old). This can happen when the employer issues the former employee a check for the vested funds, which then needs to be transferred into an IRA within 60 days but does not happen. Avoid the potential blunder and request a direct trustee-to-trustee transfer from the 401(k) plan to the IRA and there will be no headaches to deal with.

Contact a team member if you have more questions about a retirement plan rollover.

Tax Tip #205

Tue, 23 Jul 2024 13:00:05 GMT

Determining Filing Status the Year of Divorce

New Year’s Eve is the magic date. If a married couple is officially divorced on or before December 31, then assuming neither got remarried during the same year, filing status options are single or head of household.

Example: A married couple named Al and Peggy have two kids under 17. They get divorced on September 9, 2023. The kids remain with Peggy. With few exceptions, Al would file as single and Peggy would file as head of household for 2023. The fact that they were married for a little over 8 months during the year has no impact since they were not married on December 31.

Have divorce-related tax questions? Ask a Goldstein & Loggia team member for assistance.

Tax Tip #204

Tue, 16 Jul 2024 13:06:03 GMT

Scams & Phishing

The IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. This does not stop scammers from attempting to obtain personal information and money. Below is an example of a form sent to a Goldstein & Loggia client, which turned out to be a scam:

Upon first look, it appears to be a typical IRS tax form. However, not everything is as it seems. Receive something “phishy” and not sure if it is legit? Contact a team member for help.

Have you been a victim of identity theft? See Tax Tip #53 for more information.

Tax Tip #203

Tue, 09 Jul 2024 13:21:37 GMT

PA Annual Reports

Own a company doing business in PA? Beginning in 2025, PA will have an annual report filing requirement. The fee for most businesses is $7.

Corporations need to file by 6/30/2025, while partnerships, LLC, LLP, and LP deadlines are 9/30/2025. Any other entity needs to file by 12/31 of each year.

Need assistance with your PA annual report filing? Reach out to a Goldstein & Loggia team member today.

Tax Tip #53

Mon, 08 Jul 2024 15:00:25 GMT

Identity Theft & Taxes

Most individuals are aware to contact the 3 credit bureaus when experiencing credit fraud. Place a free, one-year fraud alert by contacting one of the three credit bureaus. That company must tell the other two.

Experian.com/help

888-397-3742

TransUnion.com/credit-help

888-909-8872

Equifax.com/personal/credit-report-services

800-685-1111

From a tax standpoint, the following should be done with the IRS:

Complete IRS Form 14039 (Identity Theft Affidavit) https://www.irs.gov/pub/irs-pdf/f14039.pdf to alert the IRS that there is a potential tax-related identity theft issue or call 800-908-4490. For additional information, see IRS Publication 5027, Identity Theft Information for Taxpayer, which can be found at irs.gov.

Below are the forms for a few states:

NJ Form IDT-100: https://www.state.nj.us/treasury/taxation/pdf/Identity_Theft_Form.pdf
NY DTF-275: https://www.tax.ny.gov/pdf/current_forms/misc/dtf275_fill_in.pdf
CA FTB 3552: https://www.ftb.ca.gov/forms/misc/3552.pdf
NC NC-TA/IT: https://eservices.dor.nc.gov/nctait/nctaitForm.jsp
PA REV-1196: https://www.revenue.pa.gov/FormsandPublications/otherforms/Documents/rev-1196.pdf
CT: call 855-842-1441

If there is a state that is not listed above that is needed, feel free to reach out to a team member for assistance.

Tax Tip #202

Tue, 02 Jul 2024 14:01:12 GMT

NJ RISE

In response to states like NY & DE that impose the “convenience of the employer” rule, the New Jersey Economic Development Authority (NJEDA) board approved a countermeasure with its NJ Reassigning In-State Employees (NJ RISE) program. This program incentivizes businesses to relocate NJ residents working out-of-state back to NJ.

NJ RISE targets businesses principally located outside of NJ and has NJ resident employees assigned to work in states that adhere to the “convenience of employer” rule for income taxation. In such cases, the income of these employees, even when working from home in NJ, gets taxed by the state of the employer’s location.

With NJ RISE, eligible businesses can receive grants equal to the amount of NJ gross income tax withholdings of the reassigned resident employees during a tax year, capped at $500,000 per business.

To be eligible to apply for a grant, a business must principally be located in another state, have more than 25 full-time employees, and apply to NJEDA on or before July 1, 2028.

In awarding the grants, the NJEDA could require eligible businesses to make certain capital investments or provide compensation increases to the reassigned employees.

Have more questions about NJ RISE grants? Contact a Goldstein & Loggia team member for assistance.

Tax Tip #201

Tue, 25 Jun 2024 12:57:41 GMT

Tax Rate Lesson

What is the effective tax rate? What is the marginal tax rate?

A. Average tax rate (total tax / taxable income)

B. Tax rate imposed on the last dollar of income earned

C. All of the above

D. None of the above

E. Regardless of the answer, I pay TOO much in taxes

Effective tax rate is A, marginal tax rate is B, and if you guessed D, you get an F on this test.

Tax Tip #200

Tue, 18 Jun 2024 13:01:22 GMT

Why Choose Direct Deposit

Question: If someone offers you $1,000 that you can receive within 21 days or within 6 to 8 weeks, which would you choose?

Well, these are the options the IRS offers for tax refunds. A federal tax return that shows a refund can either be directly deposited into the taxpayer’s bank account, or it can be mailed to the taxpayer. On average, one takes 6 to 8 weeks and the other within 21 days. You can figure out which is which.

Tired of waiting for your tax refund? Provide Goldstein & Loggia with your bank account and routing number and a team member will update your tax return so the wait time is reduced the next time you have a tax refund.

Tax Tip #199

Tue, 11 Jun 2024 13:06:26 GMT

Use Tax

What is use tax? Basically, it is sales tax that a consumer avoided paying on an item subject to sales tax. Use tax is owed by residents and businesses that buy products out of state, online, or via mail paying no sales tax, and then bring the product to their home state, assuming the state has a sales tax.

NJ has a sales tax. When a consumer purchases a taxable item or service in NJ, the seller collects NJ sales tax on the purchase. If the consumer purchases the same item from a company located in another state and does not pay sales tax in that state, then the consumer may have to pay use tax in their home state.

Example: A NJ resident travels to DE to purchase $10,000 of furniture for their NJ home. DE is one of five states that does not impose a sales tax (AK, MT, NH and OR are the others). Since there was no sales tax on this purchase, the NJ resident should include use tax on their personal tax return for $662 ($10,000 x 6.625 NJ sales tax rate).

Have use tax questions? Contact a Goldstein & Loggia team member for assistance.

Tax Tip #198

Tue, 04 Jun 2024 12:59:26 GMT

Payment Plans for NJ

If you need a payment plan for taxes owed to NJ, here some key points to know:

A payment plan can be requested for any unpaid amount.
The plan must include all unpaid balances.
The monthly payment must be at least $25.
Standard plans may be approved up to 60 months.
Plans beyond 60 months are subject to additional requirements and submission of a financial statement for approval may be required.
All plans are subject to approval.
Interest will continue to be added to the unpaid balance at a rate of 8.5 percent (prime) + 3 percent — totaling 11.5 percent — compared to the current IRS rate of 8 percent.
The balance due is subject to set-off programs, which allow NJ to apply any refunds to pay off debts owed.
Questions regarding payment plans can be emailed to PaymentPlanUnit@treas.nj.gov .
The payment plan request form can be found HERE .

Need help with a NJ payment plan? Contact a Goldstein & Loggia team member for assistance.

Tax Tip #197

Tue, 28 May 2024 13:09:15 GMT

Marijuana & Taxes

It’s time for a Q&A with G&L.

Question : Is marijuana/cannabis permitted as a medical deduction for federal tax purposes, assuming it is used for medical reasons?

Answer : The amount paid for federally illegal controlled substances such as marijuana/cannabis is not permitted as a medical deduction. However, some states have legalized the use of cannabis. Therefore, in the states that permit medical deductions on their tax returns, it is possible a tax deduction is allowed for cannabis use.

Want to know more about a particular state? Contact a Goldstein & Loggia team member for assistance.

Tax Tip #196

Tue, 21 May 2024 13:03:57 GMT

What You Might Have in Common with Caitlin Clark

Today’s quiz: What do approximately half of working Americans (according to marketwatch.com) have in common with basketball star Caitlin Clark?

Answer: They have “side hustles” to supplement their income.

In most cases, the full-time job earns more than the side gig. However, that is not the case for Miss Clark. Her WNBA salary is $76,000, but her side gig is $3.5 million (she signed an eight-year $28 million deal with Nike). One easy tax savings opportunity for Miss Clark is to contribute $69,000 to a pre-tax retirement plan. There are other plans that allow her to contribute even more. For the average American’s side gig income, this will more than suffice. If you have a side hustle like Miss Clark and want to take advantage of contributing to a retirement plan, contact a Goldstein & Loggia team member for assistance.

Tax Tip #195

Tue, 14 May 2024 13:13:01 GMT

Claiming Rental Losses

What is Donald Trump known for? Ok, that is a loaded question. From a tax standpoint, he is known as a real estate professional. Why? The IRS allows rental losses for real estate professionals. Otherwise, those losses most likely provide no immediate tax benefit. An exception is for a taxpayer who actively participates in the rental property and has Adjusted Gross Income (AGI) of less than $150,000. In such cases, a loss of up to $25,000 could then be deductible.

Want to be aggressive only to (most likely) lose if audited by the IRS? Just have AGI of over $150,000 and claim real estate professional status — which states that the taxpayer is spending more than 750 hours each year materially participating in the rental property — when that is not the case (there are other tests besides the number of hours). When the IRS sends that audit notice that is then sent to Goldstein & Loggia to deal with…well, this is where the fun begins.

Tax Tip #194

Tue, 07 May 2024 13:05:55 GMT

Owe Money to the IRS?

Taxpayers who cannot pay the full amount owed on a tax bill are encouraged to pay as much as possible.

Most taxpayers can set up a monthly payment plan or installment agreement that gives them more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the agreement.

When the amount owed is $50,000 or less, the process is relatively simple. Go to IRS.gov to complete Form 9465 , Installment Agreement Request, or apply online for a payment plan.

When more than $50,000 is owed, the process is more complex — but not to worry. Reach out to a Goldstein & Loggia team member for assistance.

Tax Tip #193

Tue, 30 Apr 2024 13:21:51 GMT

2024 Depreciation Limits for Business Vehicles

For vehicles placed in service in 2024, depreciation limits are $20,400 for year one, $19,800 for year two, $11,900 for year three and $7,160 for each year after that. This includes passenger cars as well as SUVs, trucks and vans if their gross vehicle weight (GVW) is 6,000 pounds or less.

New or used vehicles may be eligible for a full write-off, known as Section 179 expensing. However, a reduced Sec. 179 limit ($30,500 for 2024) applies to vehicles (typically SUVs) with GVWs of more than 6,000 pounds but no more than 14,000 pounds. Bonus depreciation is also an option, which permits 60 percent of the cost to be deducted.

If a vehicle is used for both business and personal purposes, depreciation must be allocated between deductible business use and nondeductible personal use. The depreciation limit is reduced if the business use is less than 100 percent. If business use is 50 percent or less, bonus depreciation or Sec. 179 expensing is not an option.

Considering purchasing or leasing a vehicle and want to know the tax benefit for doing so? Reach out to a member of our team.

Tax Tip #192

Tue, 23 Apr 2024 13:05:17 GMT

Red Flag #1

Every now and then the Mega Millions hits one billion dollars. The odds of winning that jackpot are microscopic. Want to know how to increase those odds? So does every member of the Goldstein & Loggia team. However, the G&L team can help you increase your chances of being audited by the IRS. Here is an example of how to do that.

Taxpayer has a fulltime job with earnings in the six figures. Taxpayer earns $3,000 on a 1099 for some side work. Taxpayer deducts business related expenses of $3,500. The IRS likes to pick this type of tax return for audit. Why? They usually win, stating that this is not a business to make a profit, but a hobby. The taxpayer is not satisfied reporting a loss for one year and reports a loss three years in a row. This increases the taxpayer’s chances of being audited as the rules presume that the taxpayer is running a business to make a profit if there is a profit in three out of every five years. The burden of proof is on the taxpayer to prove this is a business and not a hobby. If the taxpayer loses, all the expenses could be disallowed and reclassified as an itemized deduction, which is a problem since these deductions have been eliminated by the tax law changes of 2018.

Rather not increase the odds of being audited? Reach out to a member of our team.

Tax Tip #191

Tue, 16 Apr 2024 13:04:48 GMT

Where Is My Refund?

Now that tax season has finally come to a close (excluding extensions), a common question from our clients is: “Where is my refund?” The IRS and the tax departments of each state maintain websites to track taxpayers’ refunds. Keep in mind that certain tax and personal information must be entered in order to retrieve the status of a refund.

Below are the websites for the IRS, NJ, NY & PA.

IRS

For any other state, this link should do the trick.

Tax Tip #190

Tue, 09 Apr 2024 12:41:21 GMT

GoFundMe Donations

With a very small exception, donations made to GoFundMe do not meet the rules of Section 501 of the Internal Revenue Code. They are therefore considered personal gifts and are not payments that qualify for tax deductions.

The exception is a donation made to GoFundMe charity fundraisers.

Bonus tip on donations — with the presidential election coming up in November, political contributions are also not deductible.

Tax Tip #189

Tue, 02 Apr 2024 12:39:50 GMT

Alimony

The Tax Cuts and Jobs Act (TCJA) changed the taxation of alimony. For any divorce or separation instrument executed after 12/31/18, TCJA repealed the deduction for alimony payments as well as the inclusion of alimony payments received.

This does not imply that all states follow the change made by the TCJA. Among the states that still tax alimony received and permit a deduction for alimony paid are: NJ, NY, CA and AR.

Tax Tip #188

Tue, 26 Mar 2024 12:43:08 GMT

IRS Enhances “Where’s My Refund?” Tool

The IRS-enhanced “Where’s My Refund?” tool provides confirmation of receiving a federal tax return, approval of the tax refund and issuing date of the approved tax refund. Information for returns from tax years 2021 to 2023 is currently available on the site. There are also notifications indicating whether the IRS needs additional information.

To use the “Where’s My Refund?” tool, taxpayers must enter their SSN or ITIN, filing status & the exact whole dollar amount of their expected refund from the original tax return.

Once the IRS acknowledges receipt of a return, refund status information is typically available within the following time frames:

24 hours after receipt of a taxpayer's e-filed tax year 2023 return.
3 to 4 days after receipt of an e-filed tax year 2022 or 2021 return.
4 weeks after mailing a paper return.

IRS representatives can only research the status of a refund if:

21 days or more have passed since a return was filed electronically.
6 weeks or more have passed since a return was mailed.
“Where's My Refund?” instructs the taxpayer to contact the IRS.

Status and refund information for amended tax returns is also available using this tool.

Have a refund? Click here to check the status.

Tax Tip #187

Tue, 19 Mar 2024 12:59:05 GMT

Tax Rules for Travel Consisting of Business & Personal

Self-employed individuals can travel out of town within the USA and deduct travel, lodging & meals. What happens if you travel for one week, in which 4 days are business and 3 days are pleasure? The cost of meals & lodging incurred during the business days are deductible.

Quiz: How much of the travel – say the plane fare in this example — is deductible?

A. All

B. 4/7

C. 3/7

D. None

Quiz #2: How much of the travel is deductible if 4 days are pleasure and 3 days are business?

For the former, the answer is A and for the latter, the answer is D.

Want to plan prior to traveling to maximize the tax benefit? Reach out to a team member to see how Goldstein & Loggia can help.

Tax Tip #186

Tue, 12 Mar 2024 13:21:26 GMT

Day Traders

Thinking of giving up your day job to become a day trader for 2024? Better hurry!

An election needs to be made by 4/15/2024 for the IRS to recognize day trader status & the tax benefits that come with it.

To be engaged in business as a trader in securities, you must meet all the following conditions:

Profit from daily market movements in the prices of securities and not from capital appreciation;
Have substantial activity;
Carry on the activity with continuity and regularity.

One of the many advantages of being a day trader is if there is a net capital loss of more than 3K for the year. As an investor, the loss is limited to 3K and the remainder is carried over to the following year. As a day trader, the loss is deductible in full in the year of the loss.

Have day trader-related questions? Reach out to a team member.

Tax Tip #185

Tue, 05 Mar 2024 14:13:47 GMT

RMD: Begin at What Age for a Beneficiary?

If the person died after 12/31/2019:

Birth Year Age RMD Begins for Bene

1950 or earlier 72

1951 - 1959 73

1960 or later 75

If the person died before 12/31/2019, the designated beneficiary (bene) can use the old stretch IRA rules unless the bene life expectancy needs to be updated & adjusted to reflect the new IRS actuarial tables starting in 2022. If the designated bene dies before the entire IRA account is distributed, the successor bene is subject to the 10-year rule. Under the stretch IRA rules, the bene took distributions based on the bene’s life expectancy.

Tax Tip #183

Tue, 27 Feb 2024 14:23:13 GMT

Best Option When You Can’t Pay Taxes in Full

Today’s quiz: Taxpayer owes 10K to the IRS & 5K to the state (let’s say NJ), but only has 7K in available funds to use to pay the tax liability. Which is the best option:

A. Pay 7K to the IRS

B. Pay 3,500 to the IRS & 3,500 to the state

C. Pay 5K to the state & 2K to the IRS

D. Go to Vegas & gamble the 7K & hope to win 8K to cover the tax liability

If you said D, well, good luck with that. The answer, as with many tax-related questions, is it depends . If the state in question is NJ, NY, CO, DC, GA, IA, KY, LA, MD, ME, RI, VA, WI or WV the answer is C. The interest rate for all these states is 10% or higher where the Federal interest rate is “only” 8% currently.

However, if the state is CA, ID, IN, MT, NE or UT, the answer is A since these states have an interest rate less than the current Federal rate.

Does this situation pertain to you? Need help applying for a payment plan or installment agreement with the IRS or the state? Reach out to a team member to see how Goldstein & Loggia can help.

Tax Tip #183

Tue, 20 Feb 2024 14:22:46 GMT

Do You Have a Will?

The main purpose of a will is to disburse property to heirs after one’s death. If there is no will, disbursements will be made according to state law, which might not be what the deceased would have wanted.

There are two other equally important aspects of a will:

Naming the executor to manage and settle your estate. If you do not name someone, the court appoints an administrator, who might not be who you would choose.
Naming a legal guardian for minor children or dependents with special needs. If you don't appoint a guardian, the state appoints one for you.

The current estate tax threshold is approximately $13 million for an individual. This does NOT imply that people with assets less than this threshold do not need a will.

Because a will is a legal document, the courts are reluctant to overturn any provisions within it. Therefore, it's crucial that your will be well-written and properly executed under your state's laws. It's also important to keep your will up to date. A will provides peace of mind for your most precious assets — your children — for a relatively low cost. The goal of this tip is for those who do not have a will to add this task to your never-ending “to do” list.

Tax Tip #182

Tue, 13 Feb 2024 14:42:00 GMT

Reporting Foreign Bank Accounts

Any US person with a foreign account balance of $10,000 or more at any point during the year must file the FBAR form. The threshold is an aggregate amount. For example, if there is $4,000 in one account and $7,000 in another, an FBAR filing is required.

FBAR also applies to those who have signing authority over an overseas account, which is the authority of an individual to control the disposition of money, funds or other assets held in a financial account by direct communication to the financial institution.

In addition to cash accounts, you must also report:

Foreign stock or securities held in a financial account at a foreign financial institution
Financial accounts held at a foreign branch of a US bank
Foreign mutual funds
Foreign-issued life insurance or annuity contract with a cash value

For those whose lack of filing was non-willful, the fine can be $10k per violation. If it is determined that the filing was purposely avoided, the fine can be $100k or 50% of the balance of the account at the time of the violation, whichever is greater.

Individual tax return Form 1040 asks if an FBAR exists, even if the total value is under $10k. Be sure to inform Goldstein & Loggia if this applies to you.

Tax Tip #181

Tue, 06 Feb 2024 17:33:16 GMT

Guaranteeing Super Bowl Money Without Paying Tax — Legally

With Super Bowl LVIII upon us, it’s time to have a little fun mixing taxes and sports. Going on 55 years since my team guaranteed a Super Bowl victory, I am here to guarantee how you can pocket big time money from the Super Bowl and not pay tax. This year’s Super Bowl is being played in Las Vegas. For those who own a home near the stadium, renting it out can earn big time money. It was reported that Rihanna spent $500k to rent a person’s home at last year’s Super Bowl in Arizona. The IRS has a rule that if a taxpayer rents their home for 14 days or less per year, the money received is not subject to tax.

For those who live near MetLife stadium in East Rutherford, NJ, the NFL chose this location to host the Super Bowl as many times as my NY Jets have won the Super Bowl — once — back in 2014. The odds of the NFL granting another Super Bowl to MetLife stadium is approximately the same as getting to see my team win the Super Bowl in my lifetime.

Tax Tip #180

Tue, 30 Jan 2024 14:02:44 GMT

Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is available for employers with new hires. This credit aims to assist targeted groups who have consistently faced significant barriers to employment.

Groups include:

Qualified IV-A recipients
Qualified veterans
Qualified ex-felons
Designated community residents
Vocational rehabilitation referral
Summer youth employee
Qualified Supplemental Nutrition Assistance Program recipients
Supplemental Security Income recipients
Long-Term Family Assistance recipients
Qualified Long-Term Unemployment recipients (unemployed for no less than 27 consecutive weeks)

Benefits include:

If the employee works for at least 120 hours but less than 400 hours during the first year of employment the employer is eligible to receive a credit equal to 25% of the employee’s qualified wages up to a maximum credit of $6,000.
If the employee works for at least 400 hours during the first year of employment the employer is eligible to receive a credit equal to 40% of the employee’s qualified wages up to a maximum credit of $6,000.

Employers who hire from any of the targeted groups, must obtain certification from the state agency within 28 days of employment which will ensure eligibility and ultimate success of the WOTC.

This credit is currently set to expire on December 31, 2025.

Tax Tip #179

Tue, 23 Jan 2024 14:22:02 GMT

Are You Eligible for NJ Senior Freeze Property Tax Reimbursement?

(We think you might be!)

The Senior Freeze is a NJ property tax reimbursement program due on 10/31 each year for all eligible applicants. Individuals who meet the annual income limit, age or disability requirement, and residency requirements can have some of their paid property taxes refunded.

Starting with the 2023 filing season (due 10/31/24), NJ has made eligibility significantly more accessible:

Annual Income: (Limits for 2023 & 2022 both must be met)
2023 Limit: $150,000 or less
2022 Limit: $99,735 or less

Applicants must be 65 or older as of 12/31/22 to be eligible for the 2023 filing season OR receiving federal social security disability payments from 12/31/22 to 12/31/23

Must have owned and lived in the same NJ home for 3 consecutive years. (The 10-year NJ residency requirement has been eliminated as of the 2023 filing season)

Need assistance? If you are not already currently enrolled in the Senior Freeze Program and would like our assistance in filing or determining your eligibility, please reach out to a team member. For additional information, refer to tax tip #162.

Tax Tip #178

Tue, 16 Jan 2024 14:00:58 GMT

NJ Small Business Improvement Grant

The New Jersey Small Business Improvement Grant provides reimbursement for costs associated with making building capital improvements or purchasing new furniture, fixtures, and equipment (FFE). Eligible businesses may receive reimbursements of up to 50% of total project costs incurred up to $50,000. Landlords and home-based businesses are not eligible.

To be eligible, applicants must:

Rent or own and operate from facility
Meet the Small Business Administration’s definition of a Small Business (fewer than 500 employees)
Provide a current tax clearance certificate prior to approval
Be in good standing with NJ Department of Labor and Department of Environmental Protection
Certify at time of application that they are not in default of any other EDA or state assistance
Certify at time of application that they are willing to pay wages that are the greater of $15/hour or 120% of minimum wage rate
Remain in the location for at least 2 years for grants up to $25K, or at least 4 years for grant awards beyond that amount.

Improvement projects must meet the following eligibility requirements:

Interior or exterior building improvements or purchase and/or installation of FFE
Total project cost must be at least $5K
Work must have been completed on or after March 9, 2020, and within the 2 years prior to the application date. Example, for an application submitted 12/20/2023, the project must have been completed between 12/21/2021 and 12/20/2023
Projects with total costs over $50K are subject to Green Building Standards for lighting and/or mechanical work
Projects utilizing contractors with 4 or more employees may be subject to Affirmative Action requirements

An approval fee of $100 also applies.

If you have questions or would like assistance, please reach out to a team member.

Tax Tip #177

Tue, 09 Jan 2024 14:05:55 GMT

Student Loan Debt Forgiveness

If your student loan debt was forgiven, is it considered taxable income? The rule of thumb is the Internal Revenue Code considers debt forgiveness taxable income. However, the American Rescue Plan Act provided an exception: Student loan debt forgiveness is NOT taxable from 2021 through 2025.

If you are one of the three million or so people to have this debt erased, congratulations.

Tax Tip #176

Tue, 02 Jan 2024 14:54:53 GMT

Standard Mileage Rates for 2024

As of January 1, the standard mileage rates for the use of cars, vans, pickups or panel trucks is now:

67 cents per mile driven for business use, up 1.5 cents from the rate for 2023;
21 cents per mile driven for medical, down 1 cent from the rate for 2023; and
14 cents per mile driven in service of charitable organizations; unchanged from 2023.

What does this mean for tax savings? Example: A taxpayer who drives 10K miles in 2023 and is in the 24 percent federal tax bracket. Tax savings is approximately $1,608 (10K x .67 x .24).

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, the exception being only for members of the Armed Forces.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. In subsequent years, they can choose to use either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Additionally, taxpayers who are not employees and incur overnight travel may be eligible for the IRS per diem rates deduction.

If you have any questions or would like assistance, feel free to reach out to a team member.

Tax Tip #175

Tue, 26 Dec 2023 14:14:49 GMT

1099 Nonemployee Compensation Reporting

Business owners, payments to certain individuals and businesses require a 1099 to be issued and filed with the IRS & in some states. The following are key points to know:

Payments of $600 or more to individuals (not employees), partnerships (LLCs & LLPs), physicians and all attorneys are reportable on Form 1099-NEC
Payments to corporations are typically not reported (unless to an attorney)
The recipient should complete a Form W9 in order to complete Form 1099. The W9 form can be found on the IRS website
Due dates: 1099s need to be provided to the recipient by 1/31
Penalties: Range from $50 to $270 per return or statement (per 1099)

If you have questions or would like assistance, please reach out to a team member.

Tax Tip #174

Tue, 19 Dec 2023 14:00:24 GMT

Is Disability Income Taxable?

Is disability income taxable? Yes and no. The answer to this question depends on who is paying for the insurance.

If the employer pays for the disability insurance, then the disability benefits received by the employee is considered ordinary income included in the employee’s wages.

If the employee pays for disability insurance, then the disability benefits paid to the employee will not be considered taxable income.

If you have questions or would like assistance, please reach out to a team member.

Tax Tip #173

Tue, 12 Dec 2023 14:48:59 GMT

IRS to Provide COVID-19 Related Tax Credit

The IRS is providing another COVID-19-related tax credit.

Qualifications:

• Self-employed/independent contractors & active members of a partnership/LLC who have income subject to self-employed tax

• Those who missed work due to COVID-19 illness, quarantine or family care absences

• Time period: 4/1/2020 through 9/30/2021

The maximum amount of the credit: $5,110 for qualified sick leave and $12,000 for qualified family leave.

The due date for the refundable tax credit pertaining to tax year 2020 is 4/15/2024.

If you believe this credit applies to you, don’t hesitate to reach out to a team member.

Tax Tip #172

Ralph@agcpa.net (Ralph Loggia) — Tue, 05 Dec 2023 14:12:08 GMT

Establishing an Online IRS Account as a Sole Proprietor

If you are a sole proprietor with an employer identification number (EIN), there are many benefits to establishing an online IRS account.

For example, sole proprietors with EINs can:

• Use a business tax account.

• View name and address on file.

• Give others in the company access to the account.

• Request a tax check to see if the business is compliant.

• Access business tax transcripts.

• View outstanding balances and schedule and track payments.

• View letters and notices.

To create a new account, click HERE and then click the “Create account or sign in” button. Be sure to have your photo ID available to verify identity.

Please note, most of these features will be available in 2024.

Tax Tip #118

Tue, 28 Nov 2023 18:51:00 GMT

What to do if Form 1099-K Payment Card and Third Party Network Transactions is Received for 2022

Taxpayers earning income from selling goods and/or providing services will most likely receive Form 1099-K, Payment Card and Third-Party Network Transactions, for payment card transactions and third-party network transactions of more than $600 for the year. An example of a company that will send this form is PayPal.

The American Rescue Plan Act of 2021 (ARPA) lowered the reporting threshold for third-party networks that process payments for those doing business. Prior to 2022, Form 1099-K was issued only if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000. Now a single transaction exceeding $600 can trigger a 1099-K.

Taxpayers must report all income on their tax return unless it is excluded by law. Money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.

Action Point: If this form is received, when providing tax documents for the preparation of the 2022 tax return, indicate if this is an amount that is subject to tax or if this is money received that should be excluded from taxable income. If all or some of the reported amount is subject to taxable income, then keep in mind that business related expenses could be deducted as well to help lower the amount of income that is subject to tax.

Tax Tip #171

Tue, 28 Nov 2023 14:05:42 GMT

Reporting for Form 1099-K, Payment Card and Third-Party Network Transactions for 2023

The IRS announced another delay of the new $600 Form 1099-K reporting threshold for third-party settlement organizations for calendar year 2023.

Reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

The IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan.

Reporting requirements do not apply to personal transactions such as birthday or holiday gifts, sharing the cost of a car ride or meals, or paying a family member or another for a household bill. These payments are not taxable and should not be reported on Form 1099-K.

However, the casual sale of goods and services, including selling used personal items like clothing, furniture, baseball cards & other household items for a loss could generate a Form 1099-K for many people, even if the seller has no tax liability from those sales.

For more information on Form 1099-K, refer to tax tip #118.

Tax Tip #170

Tue, 21 Nov 2023 14:47:36 GMT

It’s Possible to Pay $0 on Capital Gains

Did you know that for federal purposes, the gain from a sale of a security held long-term (over one year) may not be taxed if all the stars align?

If taxable income — excluding long-term gains or dividends — doesn’t exceed $44,625 (Single), $59,750 (Head Of Household), or $89,250 (Married Filing Jointly), the federal tax rate on qualified dividends and/or profits from the sale of assets held for the long term remains at 0% until these threshold amounts are exceeded.

Potential pitfalls: This tax strategy may lead to an increase in the taxation of social security benefits and as well as state income tax.

Tax Tip #169

Tue, 14 Nov 2023 17:27:57 GMT

College Savings Plan

Have lots of money with kids/grandkids under 18??? Contribute to a college savings plan also known as a 529 plan. 529 is the Internal Revenue Code Section. Up to $85,000 in contributions can be sheltered from gift tax per beneficiary in 2023 & $170K if your spouse agrees. This would be treated as gifting $17K (or $34K) to that beneficiary in 2023 and in each of the next four years (2024-2027). An informational only gift tax return would need to be filed.

Parents/Grandparents that pay tuition directly to a school doesn’t count against the 17K gift tax exclusion.

Some positives: some states provide a tax deduction for the contribution made to the 529 plan, even NJ (see Tax Tip #48) & tax free growth assuming that funds are used for education.

Some negatives: the value of the 529 account can have a negative impact when completing the FAFSA application for federal student aid although the impact is minimal & some fees charged by the state plan are high.

Starting next year, distributions from grandparent owned 529 plans will no longer need to be reported for FAFSA.

Tax Tip #168

Tue, 07 Nov 2023 15:41:03 GMT

Year End Tax Planning - Action Required

2023 is quickly coming to an end and as you know, the team from Goldstein & Loggia likes to be proactive in tax planning with our clients.

If you are interested in this analysis then please provide your most recent paystub in order for us to run a tax projection, assuming you are an employee. The paystub(s) can be sent by pdf/email, fax or the client portal. After receiving your information and running the tax projection, you will be contacted via phone or email. Please indicate if you get paid weekly, bi-weekly, bi-monthly, or monthly (if your paystub does not indicate this).

If you are a business owner rather than an employee, please provide a year to date business Profit & Loss statement.

If there is other information that you would like to provide which will help to make this a more accurate projection (ex: capital gains & losses), please do so.

We will then work on tax planning ideas to help improve your tax situation as much as possible.

Also, if you have moved since your 2022 tax return was filed, then please provide your new address & the date you moved if you haven’t already done so.

In addition, if you had any new events this year that you feel will impact your tax return (such as purchasing a home, getting married, or having a baby), please let us know so that we can plan accordingly.

PLEASE NOTE THAT THERE IS A FEE FOR THIS SERVICE.

Tax Tip #167

Tue, 31 Oct 2023 13:28:56 GMT

Student Loan Interest Not Forgiven? Here is A Way to Reduce That Debt & It Doesn’t Cost A Penny

Employers that offer qualified educational assistance programs can pay down up to $5,250 of an employee’s college loans each year through 2025.

Payments are excluded from workers’ wages for tax purposes. The employer receives a tax deduction & saves on social security tax.

The employer needs to have an accountable plan that must be in writing and cannot discriminate in favor of highly compensated employees.

Have student loans? Ask your employer if this employee benefit plan is in place.

Tax Tip #166

Tue, 24 Oct 2023 13:09:45 GMT

Inherited IRA

A 10 year rule now applies to many beneficiaries of inherited IRAs. Most non-spouse beneficiaries who inherited IRAs on or after Jan. 1, 2020, must empty the account within 10 years of the account owner’s death.

Inherited IRAs are generally subject to required minimum distributions (RMD). Rules vary when the beneficiary qualifies as an “eligible designated beneficiary” (EDB) (e.g., surviving spouses, minor children under the age of 21, disabled individuals, and individuals who are chronically ill including special needs trust or an individual not more than 10 years younger than the decedent). These EDBs may stretch RMDs over their lifetime.

If the beneficiary is not EDB, the account balance must be distributed within 10 years for the individuals.

If the decedent was already receiving RMDs, the beneficiary will be required to continue taking RMD each year, except certain spousal transfers.

Penalties

Penalties on failed RMD’s starting in 2023: either 10% or 25% (down from 50%).

The IRS delayed the rules governing inherited IRA RMDs to 2024 & will waive penalties for RMDs missed in 2023 from IRAs inherited in 2022, where the deceased owner was already subject to RMDs. (With previous IRS relief, penalties are waived for missed RMDs from specific IRAs inherited in 2020, 2021, and 2022.)

Tax Tip #164

Tue, 17 Oct 2023 13:11:37 GMT

Reverse Mortgages

The downside to taking a reverse mortgage:

Incurring a Large Amount of Interest Debt. Reverse mortgages are rising-debt loans in that the interest is added to the monthly loan balance. Because it is not paid currently, the total interest owed increases greatly over time as the interest compounds.

Fewer Assets for Heirs. If you want to pass your home to your children or other heirs, the reverse mortgage is not a good choice because the lender could get most of the equity when the home is sold, leaving fewer assets for your heirs.

High Costs Up Front.

Adjustable vs. Fixed Interest Rates. Interest Rates are adjustable annually or monthly and tied to a financial index, sometimes with limits on how far the rate can go up or down. Reverse mortgages with interest rates that adjust monthly have no limit.

That being said, if you’re 62 years of age or older, own & live in the home and are house-rich but cash-poor, a reverse mortgage loan allows you to convert part of the equity in your home into cash - without having to sell your home.

Reverse mortgages operate like traditional mortgages, only in reverse. Rather than paying your lender each month, the lender pays you.

Borrowers can usually choose to receive monthly payments, a lump sum, a line of credit, or some combination of these.

A reverse mortgage is repaid when you pass away or sell the home.

The proceeds of a reverse mortgage generally are tax-free, and interest on reverse mortgages is not deductible until the debt is paid off.

Tax Tip #163

Tue, 10 Oct 2023 13:00:57 GMT

Deducting Travel & Meals for Business Purposes

Taxpayers who travel away from home for business purposes can deduct per diem rates for travel and meals provided by the IRS. Based on the Tax Cuts and Job Act, this benefit has been suspended for employees but is available for employers to reimburse their employees and for independent contractors, business owners and sole proprietors. A taxpayer may claim actual allowable expenses if higher than the per diem rates based on adequate records or other sufficient evidence for proper substantiation.

Believe this applies to you and want to know more, reach out to a team member.

Tax Tip #162

Tue, 03 Oct 2023 14:57:33 GMT

Senior Freeze NJ Property Tax Reimbursement Program

Senior Freeze reimburses qualifying seniors and disabled individuals for increases in property taxes on their principal residences.

The deadline for filing senior freeze reimbursement applications is October 31, 2023.

For the first time, applications for this program may be filed online at njportal.com/taxation/ptr .

The Senior Freeze program is designed to relieve the burden of increasing property taxes for qualified applicants by establishing a base year of eligibility, “freezing” the property tax and comparing that base with any subsequent year. The difference is then refunded by the State annually. To qualify for the reimbursement, taxpayers must meet all the eligibility requirements for each year from the base year through the current application year. Eligibility must be continuous, otherwise a new base year must be established.

Residents must meet the following eligibility requirements:

• 65 or older on 12/31/2021.

• Received Social Security benefits on or before 12/31/2021.

• Lived in NJ continuously since 12/31/2011, or earlier, as either a homeowner or renter.

• Owned and lived in their home, since 12/31/2018, or earlier.

• Paid property taxes on time in 2021 and 2022.

• Meet income requirements:

• 2021 - $94,178 or less; and

• 2022 - $99,735 or less

Applications for the current 2022 Senior Freeze program were mailed in February to the last address from which taxpayers filed. Anyone who did not receive a booklet should call 800-882-6597.

The Division of Taxation began issuing payments on 7/10 & will continue to do so on an ongoing basis as applications are received. Applicants can check the status/amount of their Senior Freeze reimbursement at www20.state.nj.us/TYTR_PTR_INQ/servlet/common/PTRLogin

Tax Tip #161

Tue, 26 Sep 2023 14:27:41 GMT

Beneficial Ownership Information

Beneficial Ownership information is a new reporting requirement for most small businesses starting in 2024.

Due date for filing for businesses formed prior to 2024 is 1/1/2025.

Who is exempt: Business with gross receipts in 2023 of more than 5M & more than 20 full time US employees. Exempt organizations are also exempt from filing.

Those who meet the definition of a beneficial owner will be required to upload one of the fol¬lowing documents: US passport, driver’s license, state government identification document.

Penalties for noncompliance: up to $500 per day or a $10K penalty.

Filing of the form will be online at fincen.gov which is currently unavailable.

Tax Tip #160

Tue, 19 Sep 2023 13:46:16 GMT

Interest Paid On A Balance Due

The last tip was about penalties. Now it is time to understand the amount of interest that needs to be paid when there is a balance due after the 4/15 tax deadline on an individual income tax return. For Federal purposes, the interest rate is the current Federal Short-Term Rate (5%) + 3% for a total of 8%. Example: Taxpayer files an extension with the IRS on 4/15/2023 & owes $1K but does not pay the balance due. The tax return is filed on 9/9/2023. The taxpayer owes 1K + a penalty + interest of $28.59 per this online calculator.

https://www.irscalculators.com/interest-calculator

NJ’s current interest rate is 11.25%. NY is 9.5%. Tax planning tip: For a NY or NJ taxpayer, if money is due to both the state and the IRS and the funds are not available to pay both in full, pay the state off first since the interest rate is higher. Interested in another state:

Tax Tip #159

Tue, 12 Sep 2023 13:04:04 GMT

The Failure to Pay Penalty

The failure to pay penalty is issued when the tax liability is not timely paid. This penalty is 0.5% of your unpaid tax per month, up to 25% of your total tax bill. There’s interest on top of the penalty itself that builds until the tax is paid.

Example: Taxpayer files an extension with the IRS on 4/15/2023 & owes $1K but does not pay the balance due. Tax return is filed on 9/9/2023. The taxpayer owes tax of 1K + a penalty of $25 + interest.

The $25 penalty calculation is: .005 * 5 months * $1,000 = $25.

If this was the actual penalty amount assessed by the IRS, then the amount should be paid. However, what if there were a few zero’s added to the end of that amount. Then it might make sense to look into penalty relief, if applicable. If this is the case, reach out to a team member. There are options available that the G&L team members are aware of which might apply to have the penalty abated.

Tax Tip #158

Tue, 05 Sep 2023 13:15:52 GMT

Some States Provide A Tax Break For Renters

Many are aware that mortgage interest is tax deductible. Well Renters can also benefit from some sort of tax break depending on their state of residence.

The following states provide some sort of tax benefits for renters: NJ, CA, CO, CT, DC, HI, IN, IA, ME, MD, MA, MI, MN, MT, ND, PA, VT,WI.

Some of these states provide a benefit only for seniors. Some only for low-income taxpayers. 18% of the amount paid in rent is the deduction that NJ provides up to 15K. If Goldstein & Loggia prepares your tax return in one of these states, then provide the rent that was paid for the year when providing the rest of your tax documents and a team member working on your return will claim the qualifying rent tax benefits.

Tax Tip #157

Wed, 30 Aug 2023 14:36:50 GMT

The Saving on a Valuable Education (SAVE) Plan

The SAVE plan is an income-driven repayment (IDR) plan that calculates payments based on a borrower’s income and family size —not their loan balance– and forgives remaining balances after a certain number of years. The SAVE plan will prevent balances from growing because of unpaid interest. Borrowers can sign up at StudentAid.gov/save

Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans.

Bring many borrowers’ loan payments to $0 per month. A borrower’s monthly payment amount is based on their discretionary income—defined under the SAVE plan as the difference between their adjusted gross income (AGI) and 225% of the U.S. Department of Health and Human Services Poverty Guideline amount for their family size. This means a single borrower who makes about $15 an hour will not have to make any monthly payments. Borrowers earning above that amount would save around $1,000 a year on their payments compared to other IDR plans.

Ensure that borrowers never see their balance grow as long as they keep up with their required payments. The Department of Education will stop charging any monthly interest not covered by the borrowers payment on the SAVE plan. As a result, borrows who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. For example, if a borrower has $50 in interest that accumulates each month and their payment is $30 per month under the new SAVE plan, the remaining $20 would not be charged as long as they make their $30 monthly payment.

Provide early forgiveness for low-balance borrowers. IDR plans require all borrowers, even those who only attended school for a single term, to repay their loans for at least 20 or 25 years before receiving forgiveness of any outstanding balance. Under the SAVE plan, borrowers whose original principal balances were $12,000 or less will receive forgiveness after 120 payments (10 years). For each additional $1,000 borrowed above that level, the plan adds and additional 12 payments (1 year of payments) for up to a maximum of 20 or 25 years. For example, if a borrower’s original principal balance is $14,000, they will see forgiveness after 12 years. Payments made previously (before 2024) and those made going forward will count toward these maximum forgiveness timeframes.

Borrowers who are already on the REPAYE (Revised Pay-As-You Earn) plan will be automatically enrolled in the SAVE plan and see their payments automatically adjust with no action on their part.

Tax Tip #148

Thu, 24 Aug 2023 20:22:38 GMT

Tax Return Filed, Now What?

Current tax return completed, taxpayer potential reaction: Thank goodness, see you next year!

While that is an understandable reaction, just a couple things to keep in mind.

• Refund? Status can be checked online (tax tip #138 Where is my refund?)

• Forget to report something? File an amended tax return

• Next year quarterly estimates could be included to consider paying (tax tip #146 What are Estimated Payments?)

• Looking to decrease paper documents? Could be time to shred some records (tax tip #13 Keeping Tax Records & #14 Record Retention Guidelines)

Looking for one of the tips refenced above? Reach out to a team member for more information

Tax Tip #149

Thu, 24 Aug 2023 20:06:47 GMT

The Supreme Court Is Taking on a Tax Case—Is this Beneficial to You?

The Supreme Court does NOT take many tax cases. They are taking on one involving the Internal Revenue Code Section 965 Transition Tax from the tax law changes of 2018. This is a tax on untaxed foreign earnings of a foreign corporation as if those earnings had been repatriated to the US.

If an individual paid this tax and if the statue of limitations is still open and if the Supreme Court rules this tax as unconstitutional, then there is an opportunity to receive a refund on the tax paid.

In order to do so, a “Protective Claim” statement needs to be filed.

Think this may apply? Please reach out to a team member who can assist.

Tax Tip #108

Tue, 22 Aug 2023 21:24:53 GMT

What Is The NJ ANCHOR Program?

The NJ Division of Taxation has replaced the Homestead Benefit Program with the new Affordable NJ Communities for Homeowners and Renters (ANCHOR) program and instructions are being mailed out to eligible residents.

Homeowners with incomes up to $150,000 will receive $1,500 in relief; homeowners with in-comes more than $150,000 and not more than $250,000 will receive $1,000 in relief and renters with incomes up to $150,000 will receive $450 in relief.

To be eligible for this year’s benefit, homeowners and renters must have occupied their primary residence on October 1, 2019, and file or be exempt from NJ income taxes.

Payments will be issued in the form of checks or direct deposits and sent no later than May 2023 to allow time for application processing and validation. Payments will not be subject to federal or state income tax.

Eligible homeowners can apply online:

https://www1.state.nj.us/TYTR_Saver/jsp/common/HBWelcome.jsp

By phone (877-658-2972), or via paper application, which can be downloaded online and re-turned by mail. Renters can apply online or download the application from the Division of Taxation’s website and return by mail (no phone option for tenants).

The deadline for filing is December 30, 2022.

Tax Tip #156

Tue, 22 Aug 2023 21:21:53 GMT

NJ ANCHOR is Back

The NJ Affordable NJ Communities for Homeowners & Renters (ANCHOR) is back for year 2. Unlike 2022, for 2023 it is possible nothing needs to be done in order to receive the real estate tax or renter rebate. If the bank account information used for the NJ ANCHOR has not changed from last year to this year, then the eligible rebate amount should be received by 11/1/2023. If the bank account information needs to be updated, then log on to

https://www1.state.nj.us/TYTR_Saver/jsp/common/HBWelcome.jsp & a PIN & ID# is needed which is provided by mail (for homeowners only, not renters) & must be completed by 9/30/2023.

The benefit is based on information from 2020.

For those who did not receive the NJ ANCHOR rebate in the prior year, the deadline for ap¬plying is 12/29/2023.

Homeowners can also file by phone 877-658-2972.

Qualifications: Renters: 2020 NJ Gross Income < $150K & Homeowners < $250K

Maximum Benefit: Homeowners: $1,500 but for senior citizens over age 65, $1,750 & $450 for renters but for senior citizens over age 65, $700.

Homeowners can file a paper application:

https://www.state.nj.us/treasury/taxation/pdf/anchor/anchor-h.pdf

Renters can file a paper application:

https://www.state.nj.us/treasury/taxation/pdf/anchor/anchor-t.pdf

To check the status of the ANCHOR benefit:

https://www1.state.nj.us/TYTR_Saver/jsp/common/HRInquiry.jsp

For more information refer to Tax Tip #108.

Tax Tip #155

Tue, 15 Aug 2023 16:40:58 GMT

NJ Residents Working From Home For A NY Employer & Vice Versa

Do you live in NJ & work from home for a NY employer?

Do you live in NY & work form home for a NJ employer?

If you are in one of these situations, do you know which state is permitted to tax your income?

Perhaps both, but that would not be fair, would it?

Perhaps you have heard of this - who said taxes are fair?

NY has what is known as the “convenience of the employer” rule which NJ has now imple-mented. The NY rule states that a nonresident (NJ) needs to be working from home out of necessity rather than convenience in order to be subject to NJ tax rather than NY tax.

NJ’s Law which mirrors the NY law is retroactive to 1/1/2023. If you believe you are in one of these situations and are not sure if you are paying taxes to the proper state and want to be proactive before NY or NJ sends that dreaded notice, then feel free to reach out to a team member.

Tax Tip #154

Wed, 09 Aug 2023 21:48:42 GMT

Updated Employment Eligibility Verification Form I-9

Employers who hire employees to be paid wages must have the newly hired employee complete the revised I-9 Form dated 8/1/2023 issued by the Department of Homeland Security. Employers retain & store the form for 3 years after the date of hire or for 1 year after employment is terminated, whichever is later.

The Form & instructions can be found here:

https://www.uscis.gov/sites/default/files/document/forms/i-9instr.pdf

https://www.uscis.gov/sites/default/files/document/forms/i-9.pdf

Tax Tip #153

Tue, 01 Aug 2023 21:32:28 GMT

Calling the IRS

Received a notice or have a tax matter to discuss with the IRS? The following information is needed before calling the IRS:

· Date of births and SSNs of those named on the tax return

· Have a copy of the most recent tax return filed along with a copy of the tax return in question

· Know the filing status listed on the tax return (single, married etc.)

· The IRS notice or letter received, if applicable

Once the IRS can verify your identity, then your question(s) will be addressed.

Intimidated by the big bad IRS? No worries, G&L can prepare a Power of Attorney Form and once you sign and return the form (wet signature required), a team member can call and speak to the IRS on your behalf and handle almost any issue.

Tax Tip #152

Tue, 25 Jul 2023 13:19:23 GMT

Dependent Care Expenses

Have young kids? Since it is summer time, good chance the kids are in day camp. Did you know this may qualify you for a tax credit?

What to know:

• Child needs to be under age 13

• Married? Both spouses need to have earned income

• Overnight camp is excluded from this benefit

• If employer offers per-tax benefits for dependent care expenses, take advantage as this normally provides a better tax savings then claiming the credit on the tax return. Up to 5K can be withheld pre-tax from wages.

Interested in finding out which provides a better tax savings, the employer provided pre-tax benefit or the direct credit taken on the return?

Tax Tip #151

Tue, 25 Jul 2023 13:17:24 GMT

EE Bonds

Applying the bonds towards higher education such as tuition-related expenses avoids having to pay tax on the interest accrued by the bond. However, the interest is taxable when applying the bonds for student loans. Regardless of what the bonds are used for, the interest is not taxed at the state level. The bonds earn interest for up to 30 years. Interested in knowing how much interest a EE bond has accrued? The following site provides that information: https://treasurydirect.gov/BC/SBCPrice

Tax Tip #150

Ralph@agcpa.net (Ralph Loggia) — Fri, 14 Jul 2023 14:31:24 GMT

When Can “Young People” Withdraw $$$ From a Retirement Plan Without Being Subject to a Penalty?

Withdrawals from a retirement plan prior to turning 59.5 years old is subject to a 10% penalty unless there is an exception.

Some of the exceptions include:

· Up to 22K withdrawn per federally declared disaster

· Medical Expenses

· Taking substantially equal payments for the longer of 5 years or until the recipient turns 59.5 years old.

· People having a baby or adopting can take up to 5K

· Up to 10K withdrawn from an IRA for “first-time” home buyers

· Distribution from IRA used for the cost of higher education

· Purchase health insurance from an IRA if unemployed

Tax Tip #119

Wed, 07 Dec 2022 18:44:20 GMT

An Opportunity to Pay More Tax in 2022 Might Be a Smart Move

In what has been called a bear market for 2022, with income down, consider converting all or some of your traditional IRA to a Roth IRA before 2022 ends. The conversion causes additional 2022 income which increases the tax liability but if taxable income is lower than “normal”, it is something that could make sense. The benefit is, assuming the qualifications are met, when the money is withdrawn from the Roth IRA, there is no tax to pay on the distribution. With a traditional IRA, a distribution is included in taxable income.

This is known as reverse tax planning. However, before the conversion, reach out to a team member to discuss in more detail to determine if this makes sense.