Scott's Tax Service

Scott's Tax Service Taxes done right! Electronic filing! Professional preparation at reasonable prices. Enrolled Agent with past IRS experience.

01/21/2026

New this year is the exclusion of overtime premium from taxable income. Your W-2 form should provide information about the amount of this premium income, because not all of the overtime income can be used to reduce your taxable income. Only the premium portion is eligible for this tax break. Review you year end paystub and compare to the value indicated on the W-2 and if you don't understand, discuss with your employer. It may be a good idea to provide both the W-2 and the year end paystub to you tax preparer as a method to substantiate the reduction to taxable income.

If you purchased a new vehicle in 2025 and financed this vehicle, the interest paid on the loan may also help reduce taxable income. One of the requirements is that the vehicle is a product of the United States, so you should research where production occurred based upon the VIN #, so before seeing your tax preparer, secure further information to confirm the vehicle meets the requirements.

01/10/2026

Tax time is rapidly approaching and the calendar year is now closed. The IRS has announced they will begin processing returns about January 26th. Are you getting ready for the annual task? Scott's Tax Service is ready and available to assist.

With the many changes already approved you may have questions, so please feel free to contact us if you would like some answers as I would be glad to help. One item not previously discussed is the new deduction for vehicle interest, available even if you do not itemize. There are limitations, but if you purchased a vehicle in 2025 and financed the unpaid balance you should receive an information return from the loan institution. Make certain that you provide the information return to your preparer to assist in generating the questions necessary to determine your qualification for the new deduction.

12/31/2025

It is New Years Eve and I thought I would provide some additional information concerning the new deduction for overtime (O/T) earnings that has been reported in the news media recently. Yes, it is true that indeed O/T earnings will receive preferential tax treatment effective for 2025 returns. However there has been very little information on how such a deduction is computed.

First the law (and IRS interpretation) indicated that only the premium portion of the income is eligible for the deduction and there are other limits even after that. Most individuals receiving O/T income receive time & a half for O/T income, thus the total O/T income as reported on pay stubs would need to be divided by 3 to determine the premium portion eligible for deduction. Employers will be reporting O/T income on the form W-2, so each individual should review and determine how the employer arrived at such a value along with the accuracy of the value reported.

Some individuals receive double time instead of time and a half, therefore the computation would change. What about someone who has a mixture of both rates? Will the employer have the data necessary to properly compute the value, since the law changed part way thru the year? Remember that some states have laws that vary the way O/T compensation is computed. Most O/T is paid for over 40 hours per week, but some is paid for over 8 hours per day, thus state law where you live or work can change the computation of O/T income. Employers (or employment contracts) dictate also how some O/T is computed. You may need to understand these variances to determine if the reported value is accurate.

Take the time to discuss with your preparer any questions you may have to verify you get the maximum deduction you are entitled to take.

12/12/2025

Have you heard about the deduction for charitable contribution without itemizing? Yes, this is real, however it is not effective until 2026. Therefore if you are planning on a donation at year end, perhaps you should delay it until after January 1st if you cannot itemize in 2025. In 2026, you will be able to take a deduction of up to $ 1,000 without having to itemize. There are other rules, so you should discuss with your preparer before making a decision.

11/21/2025

We are nearing the end of the calendar year and once again there are tax changes to be aware of.

One concern to employees is the change in tax treatment of overtime earnings for 2025. Are you aware of what your overtime earnings amount to for the year? You probably should review your check stubs for the year and summarize the overtime earnings as this will allow you to determine if the W-2 form reported amount is accurate once you receive the form. If the amount does not appear appropriate, discuss with your employer.

Another issue if you receive tips, they may be tax free this year. Your employer will report this amount, but you should review to verify the accuracy of the reported value.

Make certain that your tax preparer is aware of either of these types of income, so that they receive tax free treatment, if entitled. There are qualifications, so not all overtime or tip income will receive tax free treatment.

09/10/2025

The big, beautiful tax bill, passed on July 4, 2025 has a multitude of provisions included that will directly effect many taxpayers in 2025 and in the future. Some of the highlights include the applicability of tax breaks for tipped workers and overtime earners along with increased deductions for seniors. Some provisions are permanent, like the extension of existing tax brackets that were to sunset, while other provisions are only temporary, like the additional senior tax deduction.

If you have questions, remember you need to reach out to your tax professional NOW, so that planning opportunities are not lost for this 2025 year.

01/04/2025

Tax time is upon us, hear are some tips that may be beneficial.

1) Organize your tax support documents, as this will help make certain that you have all pertinent data. Normally income documents are received by the end of January, however investment reports are sometimes not available until March.

2) Make a list of qualified expenditures that may be tax beneficial, such as totals for charitable contributions, totals for medical expenses including health insurance costs.

3) For those with self employment, remember I will need mileage readings for both beginning and end of year, along with a total business mileage to secure the best possible reduction to business income.

4) For homeowners, please provide a copy of both Summer & Winter tax bills, as data on such bills will be necessary to determine if you qualify for any type of homestead property tax credit. For renters, I will need to know the rent actually paid for the year along with the name & address of the landowner. Yes, sometimes renters also qualify for homestead property tax credit.

5) Remember each taxpayer is different, so if you bought a home, vehicle, RV or boat, such purchase may have tax benefits, so make certain you inform me. Also, certain expenditures for your home may also qualify for tax benefits, so don't forget to mention them.

If you have any questions, please contact me to discuss before assuming all documents needed are ready. I am happy to answer your questions, because it will make the tax preparation more accurate and complete.

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