J. Heath & Co., LLC

10/20/2025

Taxpayers involved in a dispute with the IRS may want to consider using one of the IRS’s alternative dispute resolution (ADR) mediation programs. These programs can help taxpayers efficiently resolve tax issues with the IRS. Taxpayers for whom mediation can be a good option include those who don’t have many disputed issues or who’re seeking an early resolution to issues under audit. Mediation doesn’t replace the audit or collection processes. The IRS’s Independent Office of Appeals has five ADR programs: Fast Track Settlement, Fast Track Mediation Collection, Post Appeals Mediation, the Rapid Appeals Process and Early Referral.

10/17/2025

If you’re considering guaranteeing a loan to your closely held corporation, it’s crucial to understand the tax consequences. Acting as a guarantor, endorser or indemnitor means if the business defaults, you could be responsible for repaying the loan. If the business does default, and you make good on the obligation, the payment of principal or interest generally results in either a business or a nonbusiness bad debt deduction. If it’s a business bad debt it can be totally or partly worthless, and it’s deductible against ordinary income. If it’s a nonbusiness bad debt, it’s deductible as a short-term capital loss (subject to certain limits).

10/17/2025

The cutoff date for purchasing or leasing a new electric vehicle (EV) to take advantage of the $7,500 EV tax credit was Sept. 30, 2025. But General Motors (GM) and Ford have found a workaround to extend the credit into the fourth quarter. In a nutshell, GM and Ford had their financing arms make down payments on EVs before Oct. 1. According to the IRS, the credit remains available when an EV is “placed in service” after Sept. 30 if a payment was made on or before that date. The payments made by the financing arms fulfill this requirement. Important caveat: Customers must lease the EVs, not purchase them. The customers don’t claim the credit, but their lease payments are reduced to reflect it.

10/16/2025

Taxpayers who owe more taxes than they can pay have options, which include payment plans, but compliance is key. If repayment will take more than 180 days, a taxpayer may seek an installment agreement with the IRS. Interest and penalties still apply. To qualify for an agreement, the taxpayer must be current with estimated tax payments and must substantiate their expenses and income. One taxpayer requested an installment plan with proposed monthly payments of $5,000, asserting that his expenses exceeded his income. The U.S. Tax Court found that he failed to prove his stated expenses and wasn’t current on his estimated payments. His request for an installment plan was denied. (TC Memo 2025-98)

10/16/2025

Beginning in 2025, individuals age 65 or older generally can claim a new “senior” deduction of $6,000 under the One Big Beautiful Bill Act (OBBBA). But if your 2025 modified adjusted gross income (MAGI) exceeds $75,000 ($150,000 if you’re a married joint filer), a MAGI-based phaseout will reduce (or may even eliminate) the deduction. If you’re at risk of the senior deduction phaseout, you can take steps before year end to reduce your MAGI and maximize your deduction. For example, harvest capital losses in taxable brokerage accounts to offset capital gains that would otherwise increase your MAGI.

10/15/2025

The “high-low” per diem method is a simplified way to reimburse employees who travel for your business vs. tracking actual business travel expenses. The IRS announced the 2025–2026 high-low per diem rates that became effective Oct. 1, 2025. The per diem rate for high-cost areas in the continental U.S. is now $319. For other areas, the per diem rate is $225. High-cost rates are available only part of the year in certain areas. If eligible, you can use these rates to reimburse employee expenses for lodging, meals and incidentals when traveling.

10/15/2025

One tax provision made permanent by the One Big Beautiful Bill Act (OBBBA) is the availability of the Low-Income Housing Tax Credit (LIHTC). According to the U.S. Dept. of Housing and Urban Development, this credit is “the most important resource for creating affordable housing in the United States today.” The OBBBA permanently increased 9% LIHTC allocations by 12%, beginning in 2026. In addition, the OBBBA permanently reduced the LIHTC bond test requirement from 50% to 25%. These two provisions are expected to encourage developers to build and rehab more rental housing units for low-income Americans.

10/14/2025

The Anti-Money Laundering Regulations for Residential Real Estate Transfers Rule (RRE Rule) was first published in 2024 and is intended to help fight money laundering. It requires real estate professionals to report certain information to the Financial Crimes Enforcement Network (FinCEN) and was originally scheduled to become effective Dec. 1, 2025. But on Sept. 30, FinCEN announced that compliance requirements will be postponed until March 1, 2026. This decision was made to provide those affected (mainly professionals involved in real estate closings and settlements) more time to comply with the RRE Rule and to help ensure the rule is tailored to the sector.

10/14/2025

Investors willing to make long-term investments in economically distressed communities have a tax incentive for doing so: the Qualified Opportunity Zone (QOZ) program. It allows investors to defer the tax (and potentially ultimately reduce it) on recognized capital gains by reinvesting those gains in Qualified Opportunity Funds (QOFs) that, in turn, invest in QOZs. The IRS has issued guidance on two QOZ program-related provisions of the One Big Beautiful Bill Act: the definition of “rural area” and the application of the substantial improvement threshold for certain improvements to property in a QOZ located entirely in a rural area. For more information:

IR-2025-96, Sept. 30, 2025 — The Department of the Treasury and the Internal Revenue Service today issued guidance on Qualified Opportunity Zone investments in rural areas as provided for under the One, Big, Beautiful Bill.

10/13/2025

IRS guidance is now available for the new tax deduction for workers who earn tips. The proposed regulations identify eight categories of jobs that qualify for the tip deduction. They include food service and hospitality workers, gambling dealers, home maintenance workers, golf caddies, and many others. “Qualified tips” are tips paid in cash or a cash equivalent, received from customers or through a tip-sharing pool. Tips must be paid voluntarily, rather than by negotiation or through a service charge. For 2025–2028, the annual maximum that an eligible taxpayer can deduct is $25,000, whether or not they itemize. There are also income limits. Here’s more: https://bit.ly/46vt4a3

10/13/2025

With increasing attention on tariffs, confusion is also rising. Consumer Affairs, a nongovernment consumer advocacy group, warns that scammers are seeking to exploit the confusion. They contact consumers by email or social media ads, urging them to sign up for tariff relief benefits such as gift cards or digital payments. To sign up, those targeted are directed to sites that mimic legitimate companies and require consumers to provide personal data. Another tariff-related scam claims that packages you ordered are being held until you pay fees or fines. To stay safe, avoid links that appear suspicious. If you spot a scam, report it to the Federal Trade Commission here: https://bit.ly/48BNqAT

10/10/2025

Based on a recent survey of U.S. employers who offer health insurance to employees, consulting firm Mercer reports that 2026 health insurance costs are likely to rise steeply. Employers estimate an average 9% increase in costs if they don’t alter their insurance plans. This could mean higher out-of-pocket costs for covered employees. One way to manage such costs is with a Health Savings Account (HSA). If your employer offers one, in 2026 you can contribute up to $4,400 (individuals) or $8,750 (families) and an additional $1,000 if you’re age 55 or older, via pre-tax payroll deductions. You can then use your tax-advantaged HSA to pay eligible medical costs not covered by insurance.