Silverman & Associates

08/04/2025

Hello all, just a little insight into some credits going away.

Goodbye to the various energy-related credits from the Inflation Reduction Act. Most notably, the clean vehicle credit has been repealed for vehicles acquired after September 30, 2025. So, if you are looking to purchase a clean energy vehicle, try to do before September 30. Make sure to ask the dealer if the auto still qualifies.

Also, the residential clean energy credit will no longer be available for expenditures made and installed after this year.

More info to follow.

07/28/2025

Below are brief descriptions of new provisions from the One Big Beautiful Bill Act, signed into law on July 4, 2025, as Public Law 119-21, that go into effect for 2025.

“No Tax on Tips”

New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.
“Qualified tips” are voluntary cash or charged tips received from customers or through tip sharing.
Maximum annual deduction is $25,000; for self-employed, deduction may not exceed individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Self-employed individuals in a Specified Service Trade or Business (SSTB) under section 199A are not eligible. Employees whose employer is in an SSTB also are not eligible.
Taxpayers must:
include their Social Security Number on the return and
file jointly if married, to claim the deduction.
Reporting: Employers and other payors must file information returns with the IRS (or SSA) and furnish statements to taxpayers showing certain cash tips received and the occupation of the tip recipient.
Guidance: By October 2, 2025, the IRS must publish a list of occupations that “customarily and regularly” received tips on or before December 31, 2024.
The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and payors subject to the new reporting requirements.
“No Tax on Overtime”

New deduction: Effective for 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay – such as the “half” portion of “time-and-a-half” compensation -- that is required by the Fair Labor Standards Act (FLSA) and that is reported on a
Form W-2, Form 1099, or other specified statement furnished to the individual.
Maximum annual deduction is $12,500 ($25,000 for joint filers).
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Taxpayers must:
include their Social Security Number on the return and
file jointly if married, to claim the deduction.
Reporting: Employers and other payors are required to file information returns with the IRS (or SSA) and furnish statements to taxpayers showing the total amount of qualified overtime compensation paid during the year.
Guidance: The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and other payors subject to the new reporting requirements.
“No Tax on Car Loan Interest”

New deduction: Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
Maximum annual deduction is $10,000.
Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
Qualified interest: To qualify for the deduction, the interest must be paid on a loan that is:
originated after December 31, 2024,
used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),
for a personal use vehicle (not for business or commercial use) and
secured by a lien on the vehicle.
If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.

Qualified vehicle: A qualified vehicle is a car, minivan, van, SUV, pick-up truck or motorcycle, with a gross vehicle weight rating of less than 14,000 pounds, and that has undergone final assembly in the United States.
Final assembly in the United States: The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer's premises. Alternatively, taxpayers may rely on the vehicle’s plant of manufacture as reported in the vehicle identification number (VIN) to determine whether a vehicle has undergone final assembly in the United States.
The VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA) provides plant of manufacture information. Taxpayers can follow the instructions on that website to determine if the vehicle’s plant of manufacture was located in the United States.
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
The taxpayer must include the Vehicle Identification Number (VIN) of the qualified vehicle on the tax return for any year in which the deduction is claimed.
Reporting: Lenders or other recipients of qualified interest must file information returns with the IRS and furnish statements to taxpayers showing the total amount of interest received during the taxable year.
Guidance: The IRS will provide transition relief for tax year 2025 for interest recipients subject to the new reporting requirements.
Deduction for Seniors

New deduction: Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law.
The $6,000 senior deduction is per eligible individual (i.e., $12,000 total for a married couple where both spouses qualify).
Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).
Qualifying taxpayers: To qualify for the additional deduction, a taxpayer must attain age 65 on or before the last day of the taxable year.
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Taxpayers must:
include the Social Security Number of the qualifying individual(s) on the return, and
file jointly if married, to claim the deduction.

11/30/2022

http://ow.ly/uFCr50LQhxk

Tax Tip 2022-183, November 30, 2022 — Wading through a pile of statements, receipts and other financial documents when it’s time to prepare a tax return can be frustrating for people who haven’t managed their records. By knowing what they need to keep and how long to keep it, people can develo...

05/18/2022

Getting married? Consider this -

Wedding planning checklist: cake, rings, flowers … tax forms?

The summer wedding season is fast approaching. Wedding planning is often overwhelming but figuring out how marriage will affect a couple’s tax situation doesn’t have to be. Here are a few things couples should think about as they prepare for the big day.

Name and address changes
People who change their name after marriage should report it to the Social Security Administration as soon as possible. The name on a person's tax return must match what is on file at the SSA. If it doesn't, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. It is available on SSA.gov, by calling 800-772-1213 or at a local SSA office.

If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, people should send the IRS Form 8822, Change of Address. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or their local post office.

Double-check withholding
After getting married, couples should consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee's Withholding Allowance within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax. They can use the Tax Withholding Estimator on IRS.gov to help complete a new Form W-4. Taxpayers should review Publication 505, Tax Withholding and Estimated Tax for more information.

Filing status
Married people can choose to file their federal income taxes jointly or separately each year. For most couples, filing jointly makes the most sense, but each couple should review their own situation. If a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

04/22/2022

Anxious to know when you’re going to get your refund? You can start checking on the status 24 hours after you have e-filed your tax return at https://www.irs.gov/refund.

Get information about tax refunds and track the status of your e-file or paper tax return.

02/23/2022

Hello all! posting an important tax tip from the IRS with regard to divorced/separated parents and the economic payments ( the $1400 stimulus check) and advanced child tax credit. Make sure to let us know if you are on alternate schedules with claiming dependents.

Issue Number: COVID Tax Tip 2022-29
Tips for parents who share custody or alternate tax benefits

Some parents who have a legal agreement with their child’s other parent about who claims the child on their taxes may have some questions this tax season about the child tax credit and the 2021 recovery rebate credit. Here’s what people in this situation need to know before filing their 2021 federal tax return.

Economic Impact Payments and the Recovery Rebate Credit
The third Economic Impact Payment was an advance payment of the 2021 recovery rebate credit. The IRS used taxpayers’ 2020 or 2019 tax information to determine eligibility and amounts. Here’s what this means for people who share a qualifying dependent:

• If an eligible taxpayer did not receive a third-round Economic Impact Payment for a qualifying dependent they will claim on their 2021 tax return, they can claim the 2021 recovery rebate credit, regardless of any Economic Impact Payment the other parent received.

• If a taxpayer received a third-round Economic Impact Payment for a dependent they won’t claim on their 2021 tax return, they are not required to pay back all or part of the Economic Impact Payment if, based on the information reported on their 2021 tax returns, they should have received less.

Child Tax Credit
The IRS determined who received 2021 advance child tax credit payments based on the information on taxpayers’ 2020 tax returns, or their 2019 return if the IRS hadn’t processed the 2020 return. In other words, the parent who claimed the Child Tax Credit for a qualifying child on their 2020 return would have received the advance child tax credit payments in 2021. Here’s what that means for these parents:

• Families who knew they would not claim a child on their 2021 return had the option to unenroll from receiving monthly payments by using the Child Tax Credit Update Portal at IRS.gov. People who did not unenroll and received monthly payments during 2021 for a child they won’t claim on their 2021 tax return could have to repay those payments when they file. They may be excused from repaying some or all of the excess amount if they qualify for repayment protection.

• An eligible parent who did not receive advance payments for a qualifying child will be able to claim the full amount of the child tax credit for that child on a 2021 tax return even if the other parent received advance child tax credit payments.

Get the correct information to file an accurate return
Taxpayers who received these advance credits in 2021 need to compare the total amount they received with the amount they’re eligible to claim. Individuals can view the total amount of their payments through their individual Online Account. If spouses received joint payments, each of them will need to sign into their own account to retrieve their separate amounts.

01/26/2022

For everyone who had gotten the advanced child tax credit, please use this link from the IRS to check your amounts. Word came out today that the letters - 6419 - that were sent, may not be accurate.
You may have to create an account. Wonderful IRS!

Check if you're enrolled, manage your payment information and unenroll from advance payments of the 2021 Child Tax Credit.

01/21/2022

To everyone who has been receiving or replying to correspondence from the IRS, please be patient. We understand the frustration but the IRS is very backlogged. We received this notification today:
The IRS is still dealing with a backlog of millions of tax returns, including 6 million unprocessed original individual returns (Forms 1040), 2.3 million unprocessed amended individual returns (Forms 1040-X), more than 2 million unprocessed employer’s quarterly tax returns (Forms 941 and 941-X), and about 5 million pieces of taxpayer correspondence as of late December, according to National Taxpayer Advocate Erin Collins in her report to Congress last week. On Wednesday, she warned in a blog post of delays with processing Form 2848, Power of Attorney and Declaration or Representative, and Form 8821, Tax Information Authorization.

01/12/2022

Hey all! This is important and will help your return get processed faster.
Please watch out for Snail mail from the IRS. Taxpayers should pay attention if they receive one or both of the following letters. Letter 6419 details the child tax credits you’ve gotten, and letter 6475 details whether you got the third stimulus payment. Both can help your accountant determine whether you are owed more or were paid too much and might have to give money back to Uncle Sam.

01/11/2022

Tax Season starting!!!! IRS open season for electronic filing begins January 24. Email or drop off your paperwork as soon as possible to avoid IRS delays.

11/16/2021

11/16/2021

Tax Tip from IRS
Issue Number: COVID Tax Tip 2021-169
Teachers can deduct out-of-pocket classroom expenses including COVID-19 protective items

Fall is here and another school year is in full swing. Many teachers are already dipping into their own pockets to buy classroom supplies that will help set their students up for success. Doing this all year long can add up fast. Fortunately, eligible educators may be able to offset qualified expenses they paid in 2021 when they file their tax return in 2022.

Educators who work in schools may qualify to deduct up to $250 of unreimbursed expenses. That amount goes up to $500 if two qualified educators are married and file a joint return. However, neither spouse can deduct more than $250 of their qualified expenses when they file their federal tax return.

Taxpayers qualify for this deduction if they:

Teach any grade from kindergarten through twelfth grade.
Are a teacher, instructor, counselor, principal or aide.
Work at least 900 hours during the school year.
Work in a school that provides elementary or secondary education.
Qualified expenses include:

Professional development courses.
Books.
Supplies.
Computer equipment including related software and services.
Supplementary materials.
Athletic supplies only for health and physical education
Personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of coronavirus.
Expenses for COVID-19 protective items. These items include, but are not limited to:

Face masks.
Disinfectant for use against COVID-19.
Hand soap.
Hand sanitizer.
Disposable gloves.
Tape, paint or chalk to guide social distancing.
Physical barriers, such as clear plexiglass.
Air purifiers.
Other items recommended by the Centers for Disease Control and Prevention to be used for the prevention of the spread of COVID-19.
This deduction is for unreimbursed expenses paid or incurred during the tax year. Taxpayers should keep records, such as receipts, and other documents that support the deduction with other tax documents. Eligible taxpayers will claim the deduction on Form 1040, Form 1040-SR, or Form 1040-NR.