Taxdrill - Tax Preparation Services

02/06/2026

New Tax Bill (2025)
The new tax bill was signed into law on July 4, 2025. This is a major tax law change that extends many benefits from the 2017 Tax Cuts and Jobs Act, while adding new deductions and incentives for specific groups of taxpayers (seniors, tipped workers, overtime recipients, etc.). It offers opportunities for both individuals and small business owners, but also introduces complexity (phaseouts, caps, sunset rules).

Your 2024 tax return is not impacted. These changes apply starting with your 2025 return.

This FAQ will be updated with more information about the impact on TaxAct 2025 as details are finalized. Some key changes include:
No Tax on Tips
Allows an above-the-line deduction for tips for eligible taxpayers. See the FAQ "No Tax on Tips" - Qualified Tips and the New Tax Bill for details.
No Tax on Overtime Pay
Allows an above-the-line deduction for overtime pay for eligible taxpayers. See the FAQ "No Tax on Overtime" - Qualified Overtime and the New Tax Bill for details.
SALT Deduction Cap Increase
Temporarily raises the SALT cap to $40,000 for married couples earning up to $500,000, with a cap of $10,000 for AGI above $500,000. See Increased SALT Limit (2025) for details.
Extra Deduction for Seniors
Seniors (65+) are eligible to claim an additional deduction of $6,000. This deduction phases out for AGI over $75,000 (single) or $150,000 (married filing jointly). See Enhanced Senior Deduction (2025) for details.
Child Tax Credit Increased
CTC increased to $2,200 per qualifying child. With the refundable portion increased to $1,700. See Enhanced Child Tax Credit (2025) for details.
Car Loan Interest Deduction
Claim up to $10,000 per year for qualified vehicle loan interest. See “No Tax on Car Loan Interest” - Vehicle Loan Interest and the New Tax Bill for details.
TCJA Extensions
OB3 extends some parts of the 2017 Tax Cuts and Jobs Act (TCJA) beyond 2025, including keeping the higher standard deduction levels in place, maintaining updated tax brackets, and eliminating personal exemptions.
1099-K Reporting Thresholds
For 2025, Form 1099-K will only be issued if both the amount reported exceeds $20,000 and there are more than 200 transactions per year.
Related Links
Refund Disbursement: Paper Check (new guidelines for 2025 returns)
IRS preliminary information

NOTE: This new tax bill was signed into law on July 4, 2025. The One Big Beautiful Bill Act (OBBB or OB3) is now also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used, but they refer to the same set of tax changes.

08/06/2024

Claim for Refund and Request for Abatement
Understanding the Terms

Before we dive into the specifics, let's clarify what these terms mean:

Claim for Refund: This is a formal request to the government for a repayment of taxes, fees, or other amounts that were overpaid.
Request for Abatement: This is a formal request to reduce or eliminate penalties or interest applied to a tax account.
Common Reasons for Filing a Claim for Refund and Request for Abatement

Typically, taxpayers file these claims due to:

Overpayment of taxes: This could be due to mathematical errors, incorrect deductions, or changes in tax laws.
Erroneous penalties or interest: These may have been assessed incorrectly or without proper justification.
Changes in circumstances: Life events like marriage, divorce, or the birth of a child can affect tax obligations.
How to File a Claim for Refund and Request for Abatement

The process usually involves completing a specific form provided by the relevant tax authority. In the United States, for federal taxes, this is typically Form 843.

Key Information to Include:

Taxpayer identification number: Social Security number or employer identification number.
Tax period: The specific year(s) involved in the claim.
Amount of refund or abatement requested: Clearly specify the dollar amount.
Explanation of the claim: Provide detailed reasons for requesting a refund or abatement, including supporting documentation.
Important Considerations:

Time limits: There are specific deadlines for filing these claims.
Supporting documentation: Gather all relevant records, receipts, and tax returns.
Accuracy: Ensure all information provided is correct and complete.
Professional help: If the claim is complex, consider consulting a tax professional.
Example: Claim for Refund Due to Overpaid Estimated Taxes

If you overpaid your estimated taxes for the year, you can file a Form 843 to claim a refund of the excess amount. You would need to provide information about your total estimated tax payments, the amount withheld from your wages, and your final tax liability for the year.

Would you like to discuss a specific situation?

Please provide details about the type of tax you're dealing with (federal, state, local), the reason for the claim, and any relevant documents or information you have.

I can help guide you through the process and provide more specific advice.

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07/12/2024

You don't necessarily need a business visa to hold meetings with clients in Florida if you're a non-US citizen and your company is incorporated here. However, it can get a bit nuanced depending on your specific situation.

Here's a breakdown:

Meetings as company representative: If you're coming to the US as a representative of your Florida-incorporated company, you might be covered under a visa category like B-1 (business visitor). This allows for meetings, consultations, and negotiations on behalf of your company.

Activities restricted by B-1: You cannot directly engage in sales under a B-1 visa. So, closing deals or taking orders might require a different visa type.

Consulting an immigration attorney: It's always best to consult with an immigration attorney to determine the exact visa requirements for your situation. They can advise on the most suitable visa based on the nature of your meetings and company activities.

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04/09/2024

IR-2019-158, September 24, 2019

If all the safe harbor requirements are met, an interest in rental real estate will be treated as a single trade or business for purposes of the section 199A deduction. If an interest in real estate fails to satisfy all the requirements of the safe harbor, it may still be treated as a trade or business for purposes of the section 199A deduction if it otherwise meets the definition of a trade or business in the section 199A regulations.

This safe harbor is available for taxpayers who seek to claim the section 199A deduction with respect to a "rental real estate enterprise." Solely for purposes of this safe harbor, a rental real estate enterprise is defined as an interest in real property held to generate rental or lease income. It may consist of an interest in a single property or interests in multiple properties. The taxpayer or a relevant passthrough entity (RPE) relying on this revenue procedure must hold each interest directly or through an entity disregarded as an entity separate from its owner, such as a limited liability company with a single member.

The following requirements must be met by taxpayers or RPEs to qualify for this safe harbor:

Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise.
For rental real estate enterprises that have been in existence less than four years, 250 or more hours of rental services are performed per year. For other rental real estate enterprises, 250 or more hours of rental services are performed in at least three of the past five years.
The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: hours of all services performed; description of all services performed; dates on which such services were performed; and who performed the services.
The taxpayer or RPE attaches a statement to the return filed for the tax year(s) the safe harbor is relied upon.

02/23/2024

If your business receives more than $10,000 in cash during a single transaction or related transactions, you are required to report it to the IRS using Form 8300. Here’s what you need to do:

Who Must File Form 8300?
Any person engaged in a trade or business who receives more than $10,000 in cash in a single transaction or related transactions must file Form 8300.
This includes individuals, companies, corporations, partnerships, associations, trusts, and estates.
For example, dealers in jewelry, furniture, boats, aircraft, automobiles, pawnbrokers, attorneys, real estate brokers, insurance companies, and travel agencies typically need to file this form.
What Transactions Count as Cash?
Cash includes coins and currency of the United States or any foreign country.
It also includes cash equivalents such as cashier’s checks, bank drafts, traveler’s checks, or money orders with a face amount of $10,000 or less.
If someone tries to avoid the reporting requirement by using money orders or cashier’s checks under $10,000 in combination with other forms of cash for a single transaction exceeding $10,000, it is still considered cash for Form 8300 reporting purposes.
Designated Reporting Transactions:
A designated reporting transaction includes the retail sale of tangible personal property suited for personal use, expected to last at least one year, and with a sales price over $10,000.
Examples include sales of automobiles, jewelry, mobile homes, and furniture.
It also covers the sale of collectibles (e.g., art, rugs, antiques, metals, stamps, coins) and travel and entertainment transactions if the total price for the same trip or event exceeds $10,000.
Reporting the Transaction:
Within 15 days of receiving the cash, complete Form 8300.
Disclose the identity of both parties involved and describe the nature of the transaction.
You can file the form electronically using FinCEN’s BSA E-Filing System or mail it to the address provided in the instructions.
Remember to keep accurate records and comply with the reporting requirements to ensure proper documentation of the cash transfer between your businesses12.

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02/23/2024

If your business received more than $10,000 in cash during a single transaction or related transactions, you are required to report it to the IRS using Form 8300. However, if the cash payment you received is not required to be reported on Form 8300, but you subsequently transferred that cash to another company you own, here’s what you need to consider:

Form 8300 Reporting:
If the initial cash payment met the reporting threshold, you should have filed Form 8300 within 15 days of receiving the cash.
This form discloses the identity of both parties involved and describes the nature of the transaction.
However, if the original payment did not trigger the Form 8300 reporting requirement, you don’t need to file it for that specific transaction.
Internal Recordkeeping:
Even if you don’t file Form 8300, maintain accurate records of the cash transaction within your business.
Document details such as the date, amount, source, and purpose of the cash received.
Keep records of the subsequent transfer to your other company, including the date, amount, and purpose of the transfer.
Business Accounting:
Reflect the cash transfer in your business’s accounting records.
Ensure that both the initial receipt of cash and the subsequent transfer are properly recorded.
Consult with your accountant or financial advisor to ensure compliance with tax regulations.
Tax Implications for the Other Company:
Consider the tax implications for the other company that received the transferred cash.
Depending on the nature of the transfer (e.g., loan, investment, operating funds), the other company may need to account for it appropriately in their financial statements and tax filings.
Remember that while Form 8300 is specifically for reporting large cash transactions, maintaining accurate internal records and proper accounting practices are essential for overall financial compliance and transparency within your business12.

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01/10/2024

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06/24/2023

06/24/2023

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04/13/2023

How to Pay Yourself in a Florida Limited Liability Company
Business Blog, Business Formation, LLC

So, you’ve finally formed your limited liability company down here in Florida – congratulations! However, unless you’re a secret billionaire, then chances are that you’re still going to need some form of income. Here’s how you can pay yourself through your newly formed LLC. We’ve presented several options so that you can decide on what’s best for you and the needs of your business. Feel free to reach out to us if you need help reaching your decision.
Earning Wages as an Employee

The first of your options is to pay yourself like any other employee at your limited liability company. This provides a consistent stream of income, as your compensation is paid out in regular paychecks instead of infrequent lump sums. The IRS considers this to be an operating expense like any other employee wages deducted from the limited liability company’s profits.

When paying yourself as an employee, you need to file IRS Form W-4 to determine how much payroll is deducted from each paycheck that you receive. The limited liability company will pay you just like any other W-2 employee, including the necessary income and employment taxes. You still need to pay income tax on those wages, too.

It’s also important to keep in mind that you must take an active role in business operations in order to pay yourself as an employee of the limited liability company. In other words, you can’t just be an owner soaking up that sweet, passive income – you’ll need to have actual responsibilities and job duties. On top of that, the wage that you are paying yourself must be considered “reasonable” by the IRS. This means that your salary must be within the norms of your industry. It’s perfectly legal to grant bonuses to LLC Members who are also employees of the business. However, you must ensure that you stay within reasonable bounds.

Something else to remember: if the limited liability company has more than one Member and all Members share equal responsibility for the business, then you will need to either pay a salary to all the Members or none at all.
Receiving Distributions from the LLC’s Profits

Another option available to Florida limited liability company owners is to take the distributions directly from the LLC’s profits at the end of each year. Each Member receives distributions based upon their ownership percentage. In other words, if you’re the sole Member, you get to take home the full share. However, if you hold 70% ownership and another Member holds 30%, then the profits are divided the same way.

Income taxes are applied to the distributions made for Single Member LLCs when using this method. You’ll also report your limited liability company’s profits and losses by filing Schedule C (also known as IRS Form 1040) along with your own personal tax return. Multi-Member LLCs are treated as partnerships. In that case, each Member will file their own report of their share of the profits, which they will then pay income tax on. The LLC reports its division of profits to the IRS by filing Form 1065.

If a single, yearly payment won’t suffice, then you can stagger the payments based on the expected end-year profits. These payments are deducted from the total actual profit at the end of the year. For example, if you wanted monthly distributions, you would divide the total profits by twelve to find your payout.

One more thing – you don’t have to make the choice between taking a salary or end-of-year distributions. Members collecting paychecks are still entitled to distributions.
Working as an Independent Contractor for the LLC

Another avenue open to you is to hire yourself as an independent contractor for your Florida limited liability company. Unfortunately, this method has fewer perks and advantages to it when compared to other options. If you do decide to be an independent contractor for your LLC, then you will file IRS Form W-9 with your business which will then file IRS Form 1099-MISC at year’s end. It is worth noting, however, that this leaves you responsible for paying your own self-employment taxes.

Taking Nothing at All

Your final option is to take none of these options at all. There is no requirement for an LLC to pay its Members. It’s perfectly acceptable to leave your business’s coffers untouched so that they can grow. This doesn’t mean that you won’t have to pay income tax on profits earned. Instead, those profits pass on to your personal tax return.

When launching a business, it’s crucial that you have a solid foundation that will encourage growth. As a firm of entrepreneurs ourselves, we know how to start businesses off the right way. Hiring an attorney reduces the chance that your company will run into trouble down the line. We work hard to equip you with the information and documents that you need for success. For assistance with starting your business or growing the one that you already have, visit our Service Page or contact us by calling (954)696-2732

Image Source: Ramone Walker