Happy Halloween!

Dear Client,

We hope you are excited for the start of the holiday season!

For business owners and taxpayers, this is the time of year for tax planning.

The year is almost over and most business owners have enough of their financial information for 2024 to schedule tax planning. Now is the time to consider your financial needs and make final year end decisions in order to reduce your tax liability.

BOI reporting is new this year and it must be completed prior to 12/31/24 for companies established before 1/1/24. Companies created in 2024 are required to file within 90 days of creation and companies created in 2025 will only have 30 days to file. Late filing penalties are $500 per day. 

In 2025 the Tax Cuts and Job Act (TCJA) will sunset. Taxpayers who have children, even grown children, currently have an estate plan, make annual or lifetime gifts, or simply have a high net worth need to take steps as soon as possible to take advantage of current gifting limits and estate tax exclusions.

How can tax planning with a CPA help?

• Calculate current year income, tax brackets, and the benefits of spending down before Dec 31
• Recommend retirement plans and other benefits for your business, calculate tax implications of your contributions
• Help determine whether to provide employee bonuses and appropriate amounts
• Consider Roth conversions, recommend amount to convert, calculate relevant tax estimates
• Estimate your expected balance due on April 15, 2025 
• Calculate state PTE payments due Dec 31
• Refer you to an estate planning attorney and discuss how the TCJA Sunset will affect you

What can you do independently?

• Look at your paystub; verify you have maxed out your retirement, HSA, FSA, and other benefits
• Make donations to charitable organizations; including donations paid directly from your IRA if you are over age 70 ½ 
• Take advantage of federal tax credits for things like energy efficient home improvements, electric vehicles and child care
• Take advantage of Missouri tax credits for donations to eligible organizations 
• Schedule an appointment with an attorney who specializes in estate planning and is familiar with the 2025 TCJA sunset
• Make sure to schedule your Required Minimum distributions if you have an inherited IRA or are over age 72

Special note to small business owners: This is the third year Kansas and Missouri taxes can be deducted by qualified small businesses and credited to the owner’s tax return to cover your related state tax liability. In order to qualify for a 2024 deduction PTE payments must be made before December 31. We recommend payments for businesses that had a profitable year 2024. If you would like us to calculate this for you, we need to hear from you prior to November 30. Sole proprietors are excluded from this deduction; if you currently file Schedule C, contact us to discuss whether to change your entity status in order to deduct state taxes going forward.

Tax planning is an important service and can be an effective way to reduce your tax obligation. However, it is a separate service from tax preparation; frequently it is a more valuable service than preparing the return. All tax planning appointments will be charged at the hourly rate of the person working with you; the minimum fee is $275.

We appreciate you choosing the CPAs and advisors at LSCV for your tax and accounting needs.

Sincerely,

The LSCV Team