Gerrid E. Kendrix CPA

08/11/2025

ONE BIG BEAUTIFUL BILL ACT OF 2025 - HOW WILL IT AFFECT YOU?

On July 4, 2025 the President signed the new 2025 Tax Bill, known as the One Big Beautiful Bill Act or OBBB. There are tons of rumors going around about what changes and what doesn’t, but here is the correct information that will affect you and most Americans.

Deductions, Brackets and Rates
Tax rates did not increase or decrease from 2025. I know what you have read, but they are the same in 2025 that they were in 2024, and that includes capital gains rates.

Tax brackets increased slightly, meaning that you can make a bit more money this year without going into a new bracket.

There are two types of deductions: the standard deduction (which did increase by about $3,000 for a married couple from 2024); and itemized deductions. All Americans are allowed the standard deduction, which for 2025 is $15,750 if single and $31,500 if married. If you are able to come up with more than that from a short list of itemized deductions, you are allowed to deduct more than the standard deduction. There are five main categories of allowable itemized deductions:

1. Medical deductions which did not change from 2024, and need to be pretty large in order to deduct them;

2. Taxes, which increased to a maximum deduction of $$40,000 in 2025 vs. $10,000 in 2024. This category includes property tax and state and local income tax paid;

3. Interest paid on your home mortgage, which is unchanged from 2024;

4. Charitable contributions, which are unchanged from 2024

5. Miscellaneous itemized deductions, which are also unchanged from 2024, the only significant one is gambling losses.
There is a new deduction for seniors which allows an additional deduction of $6,000 for each filer that has reached age 65 by December 31, 2025 ($12,000 if both 65), in addition to the normal small additional senior deduction. The bad news is that Social Security is still taxable if the deduction is not enough to offset it, and the deduction phases out for seniors making more than $75,000 for a single filer or $150,000 for a joint filer.

Car Loan Interest Deduction
There is also a new deduction this year for car loan interest if you bought a new (not used) car in 2025 (and 2026-2028) if it was assembled in the US. This deduction phases out starting at $100,000 of income if single, and $200,000 if filing jointly. This amount is deductible in addition to the standard deduction, so you don’t need to itemize.

Tip Deduction
For those folks whose W-2 reflects tip income, or who self-report tip income, they can deduct the lesser of the tip income from their W-2’s or $25,000. This deduction phases out starting at $150,000 of income if single, and $300,000 if filing jointly. This amount is deductible in addition to the standard deduction, so you don’t need to itemize.

Overtime Deduction
For those folks whose W-2 reflects overtime pay income they can deduct the lesser of the overtime income from their individual W-2’s or $12,500 each. This deduction phases out starting at $150,000 of income if single, and $300,000 if filing jointly. This amount is deductible in addition to the standard deduction, so you don’t need to itemize.

Tax Credits
The credit for children reported as dependents on your returns increases from $2,000 to $2,200.

The credit for an electric car ends on September 30, 2025, and the credits for insulation, storm windows, doors, furnaces, water heaters, solar power, geothermal energy and wind energy systems end on December 31, 2025.

There are a number of individual changes that go into effect in 2026, but this short summary addresses 2025 individual tax changes.

(Courtesy of Tax Speaker)

04/13/2025

I know it’s close to April 15 and there’s probably not much humor around tax filing, but I saw this one earlier and thought I’d share it… made me laugh.

Client: “Well, I heard from a guy at the gym who knows a tax guy—he said I don’t have to report cash income if it’s under $10,000.”

Accountant (without looking up):
“Wow. Did he also mention that unicorns are real and the IRS runs on the honor system?”

Client: “No, seriously—he said it’s a common loophole.”

Accountant:
“If by ‘common loophole’ you mean felony, then yes… it’s extremely common.”

Client: “You’re telling me he was wrong?”

Accountant:
“I’m telling you if this tax guru lifts weights and gives legal advice between sets of bench press… you may want to get a second opinion that involves pants, a CPA license, and a door

03/21/2025

Recent findings in the IT department in the IRS...

The IRS processes approximately the same number of transactions as a mid-sized bank that has 100-200 employees and an operating budget of $20 million. The IT department of the IRS has approximately 8000 employees with a budget of $3.5 billion. In addition, 80% of that budget goes to contractors.

This is NUTS!!!

02/08/2025

Retroactive to 2024 Tax Deduction Ideas

1. Make a deductible IRA contribution (tests apply) of up to $7,000 per person($8,000 if over 49) by April 15, 2025 for 2024 and deduct for 2024.

• Individuals in a Federally declared Disaster Area will likely have an even later date allowed for deposits. Check at www.FEMA.gov
2. For folks with qualified health savings plans, make a health savings account deposit of up to $4,150 single or $8,300 for family coverage by April 15, 2025 for 2024 and deduct for 2024.

3. If self employed, establish and fund a SEP-IRA for 2024 by the extended due date of your tax return and deposit the lesser of $69,000 or 25% of income.

4. Some states allow a deduction through April 15,2025 for 2024 contributions to 529 plans. There is no federal tax deduction for this however.

5. Small business owners may deduct home office expenses from 2024 if they have a place in their home that is used regularly and exclusively for business using either an actual expense allocation or the IRS safe harbor amount.

6. Fund a 2024 Roth IRA for kids with earned income. There is no requirement to deposit the maximum, so even $100 works. This starts the 5-year clock for kids at a very early age.

7. Similarly, open a 529 Plan for yourself, spouse, child or grandchild to start the 15 year tax-free Roth conversion clock now.

8. Don’t forget 2024 elections made with the filing of the return in 2025:
1. 10T Home Equity Debt election
2. Sec. 266 real estate tax election
3. Installment sale treatment on real property
4. Small business $2,500 de minimis expense provision

(Courtesy of Tax Speaker)

12/04/2024

All numbers below come from the Congressional Budget Office using fiscal year ended Sept. 30, 2024, amounts

Federal tax receipts in 2024 were $4.92 trillion dollars, counting payroll tax, individual and corporate income tax and other sources.

Federal tax payments were $6.75 trillion (a $1.83 trillion deficit) which, based on a US population of 337 million people means a shortfall of $5,430 for every American, which was borrowed by the Federal government from many sources.

Cash outflows in 2024 were as follows according to the US CBO:

Medicare and Medicaid $1,490 billion
Social Security $1,450 billion
Interest on borrowings $949 billion
Defense $849 billion
Veterans benefits $139 billion
Transportation $128 billion
Education and social services $117 billion
Income security $105 billion
Everything else $1,523 billion

We are not budget experts; we just want to provide valid information for the upcoming year. President elect Trump has promised to protect Social Security and Medicare benefits, but it would appear that everything else may be on the table. No matter what political position you take, the nearly $2 trillion dollar deficit from 2024 cannot continue, particularly for a country already spending 19% of revenues on interest payments alone!

There is discussion to reduce the number of Federal employees. About 2.3 million people work for the US government, not counting the military. There are about 68 million people enrolled in Medicare and 72 million enrolled in Medicaid. There are about 73 million people receiving retirement, disability, supplemental security or survivor benefits from the Social Security Administration each month according to the CBO.

What would you cut?


(Courtesy of Tax Speaker)

11/08/2024

Here is a video tax tip from the IRS:

Tax Resources for Members of the Military English

Subscribe today: The IRS YouTube channels provide short, informative videos on various tax related topics.
• youtube.com/
• youtube.com/
• youtube.com/

08/22/2024

FROM TAX SPEAKER:

Update on BOI reporting under Corporate Transparency Act

On Friday March 1, 2024, the U.S. District Court for the District of Alabama declared the Corporate Transparency Act (CTA) unconstitutional. In the case of National Small Business Association v. Yellen (Case No. 5:22-cv-01448) [1], initiated by the National Small Business United, the challenge was against the CTA's mandate for small businesses to disclose their beneficial owners to FinCen. On Monday March 4 FinCen announced they would not enforce the BOI against the plaintiffs, a 65,000 member association, and the original business that brought the suit.

On Monday March 11, 2024 FinCEN appealed the ruling, which will probably go to the Supreme Court, so this is a temporary filing requirement suspension until a final appeal is exhausted. Although some are saying that the case will be thrown out and that everyone still needs to file, here is a direct quote from the Judge in the case: “The Defendants, along with any other agency or employee acting on behalf of the United States, are PERMANENTLY ENJOINED from enforcing the Corporate Transparency Act against the Plaintiffs," Burke wrote in a separate final judgment.

FinCen says the only people exempted from filing under this ruling are those businesses who were members of NSBA prior to the lawsuit. Several other states and groups are also suing FinCen over this, but nothing final has happened yet.

So, what is a business to do now? It appears that the safest treatment for a new business formed after 12/31/2023 is that they should file the form within 90 days of formation. For a business in existence prior to 1/1/2024 we would suggest, as we did in last year’s seminars, that they wait to file the form until late November 2024 when perhaps we will know the final outcome. For existing businesses, the form is not due until 12/31/2024 anyway.

07/24/2024

This could be a major punch to the economy if these items are allowed to expire! I have MANY clients who would be negatively affected by the qualified business income deduction. This is a HUGE benefit to small businesses.

Unless Congress acts, the vast majority of Americans will see higher, more complicated taxes beginning in 2026 as major provisions from the Tax Cuts and Jobs Act (TCJA) of 2017 expire.

Read more: https://hubs.ly/Q02HtZLB0

04/01/2024

Hope this helps!

The has made updates to the ‘Where’s My Refund?’ tool, including:
• Refund status messages in plain language
• Seamless access on mobile devices and with the IRS2Go app
• Notifications if the IRS needs additional information for your refund

Visit irs.gov/wheres-my-refund

01/25/2024

Get ready to file in 2024: What’s new and what to consider

WASHINGTON — The Internal Revenue Service today urged taxpayers to take important actions now to help them file their 2023 federal income tax return next year.
This is the second in a series of reminders to help taxpayers get ready for the upcoming filing season. The Get ready page on IRS.gov outlines steps taxpayers can take now to make filing easier in 2024.
Here’s what’s new and what to consider before filing next year.
IRS Online Account enhancements
Taxpayers and Individual Taxpayer Identification Number (ITIN) holders can now access their Online Account and view, approve and electronically sign power of attorney and tax information authorizations from their tax professional.
With an Online Account, individuals can also:
• View their tax owed and payment history and schedule payments.
• Request tax transcripts.
• View or apply for payment plans.
• See digital copies of some IRS notices.
• View key data from their most recently filed tax return, including adjusted gross income.
• Validate bank accounts and save multiple accounts, eliminating the need to re-enter bank account information every time they make a payment.
Avoid refund delays and understand refund timing
Many different factors can affect the timing of a refund after the IRS receives a tax return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a 2023 federal tax refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer to process if IRS systems detect a possible error, the return is missing information or there is suspected identity theft or fraud.
Also, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before mid-February. The law requires the IRS to hold the entire refund – not just the portion associated with the EITC or ACTC. The IRS expects most EITC and ACTC related refunds to be available in taxpayer bank accounts or on debit cards by Feb. 27, 2024, if the taxpayer chose direct deposit and there are no other issues with the tax return.
Last quarterly payment for 2023 is due on Jan. 16, 2024
Taxpayers may need to consider estimated or additional tax payments due to non-wage income from unemployment, self-employment, annuity income or even digital assets. The Tax Withholding Estimator on IRS.gov can help wage earners determine if there’s a need to consider an additional tax payment to avoid an unexpected tax bill when they file.
Gather 2023 tax documents
Taxpayers should develop a record keeping system − electronic or paper − that keeps important information in one place. This includes year-end income documents like Forms W-2 from employers, Forms 1099 from banks or other payers, Forms 1099-K from third party payment networks, Forms 1099-NEC for nonemployee compensation, Forms 1099-MISC for miscellaneous income or Forms 1099-INT for interest paid, as well as records documenting all digital asset transactions.
When they have all their documentation, taxpayers are in the best position to file an accurate return and avoid processing or refund delays.
1099-K reporting threshold delayed
Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the IRS delayed the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.
As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.
Given the complexity of the new provision and the large number of individual taxpayers affected, 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 (ARP).
It is important for taxpayers to understand why they received a Form 1099-K, then use the form and their other records to help figure and report their correct income on their tax return. It is also important for taxpayers to know what to do if they received a Form 1099-K but shouldn’t have.
There's no change to the taxability of income. All income, including from part-time work, side jobs or the sale of goods is still taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K, a Form 1099-NEC, Form 1099-MISC or any other information return.
Understand energy related credits
Taxpayers who bought a vehicle in 2023 should review the changes under the Inflation Reduction Act of 2022 to see if they qualify for the credits for new electric vehicles purchased in 2022 or before or the new clean vehicles purchased in 2023 or after. To claim either credit, taxpayers will need to provide the vehicle’s VIN and file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, with their tax return.
If taxpayers made energy improvements to their home, tax credits are available for a portion of qualifying expenses. The Inflation Reduction Act of 2022 expanded the credit amounts and types of qualifying expenses. To claim the credit, taxpayers need to file Form 5695, Residential Energy Credits, Part II, with their tax return.
Speed tax refunds with direct deposit
Filing electronically and choosing direct deposit is the fastest way for taxpayers to get their tax refund. Direct deposit gives individuals access to their refund faster than a paper check.
Those without a bank account can learn how to open an account at an FDIC insured bank or through the national Credit Union Locator tool. Veterans should see the Veterans Benefits Banking Program for access to financial services at participating banks.
Prepaid debit cards or mobile apps may allow direct deposit of tax refunds. The prepaid debit cards or mobile apps must have routing and account numbers associated with them to enter on the tax return. Check with the mobile app provider or financial institution to confirm which numbers to use.

01/14/2024

Do you need to check your withholding to make sure your taxes are being withheld correctly? Here is a handy tool!

Find tax withholding information for employees, employers and foreign persons. The withholding calculator can help you figure the right amount of withholdings.

01/03/2024

JUST MAKING SURE YOU ARE AWARE OF THE MANDATED FILING OF FORMS W-2 WITH THE STATE OF OKLAHOMA.

You may submit your 2023 Oklahoma W-2/W-3 annual withholding and wage reconciliation via OkTAP beginning January 1, 2024. Your reconciliation is due January 31, 2024.

You must electronically submit an annual income tax withholding and wage reconciliation using the filing center. We do not accept paper reconciliations. To access the filing center, login to OkTAP via tax.ok.gov and select More.

We may impose a penalty in an amount not to exceed $1,000.00 if you do not submit your reconciliation, as mandated by 68 Oklahoma Statutes Section 2385.3.