Dependable Bookkeeping and Tax LLC

01/08/2026

I AM NOT AN ATTORNEY IN THE STATE OF NEVADA. I AM NOT AUTHORIZED TO GIVE LEGAL ADVICE OR LEGAL REPRESENTATION. I MAY NOT ACCEPT FEES FOR GIVING LEGAL ADVICE OR LEGAL REPRESENTATION.

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01/01/2026

Deduction for Interest on Car Loans

The One Big Beautiful Bill allows for the deduction of interest on NEW car purchases.
* The final assembly of the vehicle must have occurred in the United States.
* The vehicle must have been purchased for personal use.
* There is a $10,000 cap on the interest.
* This new tax benefit applies to both taxpayers who take the standard deduction and those who itemize deductions.

For more information please give us a call.

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07/27/2025

What You Need to Know: The IRS’s New Rules on Taxing Tips

Starting with the 2025 tax year (filed in 2026), tipped workers in eligible occupations will benefit from a new above-the-line federal tax deduction under the No Tax on Tips Act, part of the One Big Beautiful Bill Act signed into law on July 4, 2025.

💵 Who Qualifies—and How Much?
• Eligible occupations include jobs that customarily and regularly receive tips, such as servers, bartenders, delivery drivers, hairstylists, nail techs, and other personal service roles.
• You may deduct up to $25,000 of tip income per year (up to 2028), provided your MAGI is under $150,000 (single) or $300,000 (joint).
• Higher earners—those classified as highly compensated (e.g., $160,000+)—may be ineligible depending on final guidance.

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🧩 How It Works
• Retroactive: Applies to tips earned starting January 1, 2025, with deductions claimable through 2028.
• Above-the-line: Reduces your AGI, meaning you don’t need to itemize to benefit.
• Qualified tips include cash, credit/debit card tips, and tip share from coworkers—but not mandatory service charges.
• Employers must report tip income on Form W 2 (boxes 1, 5, and 7) and withhold/pay associated payroll taxes; this deduction only affects your federal income tax, not F**A or state/local taxes.

__________ Employer and Payroll Changes
• Payroll systems must separate and report qualified tip income properly; employers should meet IRS reporting deadlines and deposit payroll taxes accordingly.
• Clients and HR teams should anticipate revised W 4 guidance and ensure accurate withholding for the remainder of 2025.________________________________________
⚠️ Considerations & Criticisms
• Critics warn the deduction may not aid the lowest earners—many of whom already owe no federal tax—and could prompt lower base wages or underreported tips.
• Final IRS guidance—including the list of qualifying occupations—is expected by October 2025.
• State and local tax laws may not follow federal rules, so verify whether your jurisdiction adjusts its tax treatment of tips.
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🔮 What to Expect Next
• October 2025: IRS releases official guidance on eligible occupations and how to claim deductions on Forms W 2 and 1040.
• 2026 tax season: First year workers can claim the deduction on 2025 returns.

12/12/2024

IR-2024-187, July 15, 2024 — The IRS issued a consumer alert today following bad advice circulating on social media about a non-existent “Self Employment Tax Credit” that’s misleading taxpayers into filing false claims.

09/15/2024

From the IRS Website.

"Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. Explore your rights and our obligations to protect them.

The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Right to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System"

If you do not think the IRS is honoring your rights, please give us a call.

12/21/2022

Before toasting the new year, taxpayers should review this to-do list
Whether they plan to stay up to greet the new year or go to bed early, taxpayers can get ready for 2023 by reviewing these common end-of-year tasks. People can always visit IRS’ Get Ready webpage for info on filing their tax return. Here are a few things they should keep on their radar.

Check Individual Taxpayer Identification Number:
The IRS issues ITINs to people who are required to have a U.S. taxpayer identification number but who don’t have, and are not eligible to obtain, a Social Security number. If ITIN was not included on a federal tax return at least once for tax years 2019, 2020 and 2021, the ITIN will expire on December 31, 2022.

Individuals only need to renew an ITIN if it has expired and is needed on a federal tax return.

Find information about retirement plans:
IRS.gov has end-of-year tax information about retirement plans. This includes resources for individuals about retirement planning, contributions and withdrawals.

Contribute salary deferral:
Taxpayers can make a salary deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. Taxpayers should make sure their total salary deferral contributions do not exceed the $20,500 limit for 2022.

Donate to charity:
Taxpayers must make any donation to a tax-exempt organization they want to deduct on their 2022 return by December 31. Most charitable cash donations qualify for the deduction. However, there are some exceptions. Cash contributions include those made by check, credit card or debit card as well as unreimbursed out-of-pocket expenses in connection with volunteer services to a qualifying charitable organization.

IRA owners age 70½ or over have the option to transfer up to $100,000 to charity tax-free each year. These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to give to charity before the end of the year. For those who are at least 72, QCDs count toward the IRA owner's required minimum distribution for the year.

Get banked and set up direct deposit:
Direct deposit gives taxpayers 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.

Connect with the IRS:
Taxpayers can use social media to get the latest tax and filing tips from the IRS. The IRS shares information on things like tax changes, scam alerts, initiatives, tax products and taxpayer services. These social media tools are available in different languages, including English, Spanish and American Sign Language.

Think about tax refunds:
The fastest way taxpayers can get a tax refund is by filing electronically and choosing direct deposit, but no one should ever plan to get a refund by a certain date. This is especially true for those who want to use their refund to make major purchases or pay bills.

09/14/2022

Got a letter or notice from the IRS? Here are the next steps.

When the IRS needs to ask a question about a taxpayer’s tax return, notify them about a change to their account, or request a payment, the agency often mails a letter or notice to the taxpayer. Getting mail from the IRS is not a cause for panic but, it should not be ignored either.

When an IRS letter or notice arrives in the mail, here’s what taxpayers should do:

Read the letter carefully. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. A notice may reference changes to a taxpayer's account, taxes owed, a payment request or a specific issue on a tax return. Taking timely action could minimize additional interest and penalty charges.

Review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records. Typically, a taxpayer will only need to take action or contact the IRS if they don’t agree with the information, if the IRS requested additional information, or if they have a balance due.

Take any requested action, including making a payment. The IRS and authorized private debt collection agencies do send letters by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action or submit a payment.

Reply only if instructed to do so. Taxpayers don’t need to reply to a notice unless specifically told to do so. There is usually no need to call the IRS. If a taxpayer does need to call the IRS, they should use the number in the upper right-hand corner of the notice and have a copy of their tax return and letter.

Let the IRS know of a disputed notice. If a taxpayer doesn't agree with the IRS, they should mail a letter explaining why they dispute the notice. They should send it to the address on the contact stub included with the notice. The taxpayer should include information and documents for the IRS to review when considering the dispute.

Keep the letter or notice for their records. Taxpayers should keep notices or letters they receive from the IRS. These include adjustment notices when an action is taken on the taxpayer's account. Taxpayers should keep records for three years from the date they filed the tax return.

Watch for scams. The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure whether they owe money to the IRS can view their tax account information on IRS.gov.

If they are asking for a payment and you do not think you owe, please contact Dependable Bookkeeping and Tax, LLC.

01/31/2022

EARNED INCOME TAX CREDIT

More people without children now qualify for the Earned Income Tax Credit (EITC), the federal government’s largest refundable tax credit for low- to moderate-income families.

In addition, families can use pre-pandemic income levels to qualify if it results in a larger credit. Enacted in 1975, EITC is regarded as one of the government’s largest antipoverty programs helping millions of American families every year. The IRS and partners nationwide urge people to check to see if they qualify for this important credit, and urge people who don’t normally file a tax return to review whether they qualify for EITC and other valuable credits like the Child Tax Credit or the Recovery Rebate Credit, also referred to as stimulus payments.

“There are important changes to EITC that will help this credit reach more hard-working families this year,” said IRS Commissioner Chuck Rettig. “We urge people potentially eligible for this valuable credit to review the guidelines; many people each year overlook this and leave money on the table. On this EITC Awareness Day, we want to make sure everyone who qualifies for the credit knows about it and has the information they need to get it.”
Taxpayers can ensure they’re getting all the credits and deductions for which they qualify, including EITC, by filing their taxes electronically. The IRS also reminds taxpayers that the quickest way to get a tax refund is by filing an accurate tax return electronically and choosing direct deposit for their refund. Tax software, tax professionals and other options can help people see if they qualify for the EITC.

What’s new?
Childless EITC expanded for 2021
For 2021 only, more childless workers and couples can qualify for the EITC, and the maximum credit is nearly tripled for these taxpayers. For the first time, the credit is now available to both younger workers and senior citizens.

For 2021, the EITC is generally available to filers without qualifying children who are at least 19 years old with earned income below $21,430; $27,380 for spouses filing a joint return. The maximum EITC for filers with no qualifying children is $1,502, up from $538 in 2020. There are also special exceptions for people who are 18 years old and were formerly in foster care or are experiencing homelessness. Full-time students under age 24 don't qualify. There is no upper age limit for claiming the credit if taxpayers have earned income. In the past, the EITC for those with no dependents was only available to people ages 25 to 64.

Income from 2019
Another change for 2021 allows individuals to figure the EITC using their 2019 earned income if it was higher than their 2021 earned income. To qualify for the EITC, people must have earned income through employment or other sources, so this option may help workers get a larger credit if they earned less in 2021 or received unemployment income instead of their regular wages. See the instructions for Form 1040 (.pdf), line 27 c.

Phase out and credit limits
For 2021, the amount of the credit has been increased and the phaseout income limits at which taxpayers can claim the credit have been expanded. For instance, the maximum EITC for a married couple filing jointly with three or more children is $6,728 and the upper-income level for that same family is $57,414. In 2020, the maximum EITC for a family in that situation was $6,660 and the upper-income level was $56,844.

Taxpayers should also note that any Economic Impact Payments or Child Tax Credit payments received are not taxable or counted as income for purposes of claiming the EITC.

2021 and beyond
New law changes expand the EITC for 2021 and future years. These changes include:

• More workers and working families who also have investment income can get the credit. Starting in 2021, the amount of investment income they can receive and still be eligible for the EITC increases to $10,000. In 2020, the limit was $3,650. After 2021, the $10,000 limit is indexed for inflation.

• Married but separated spouses can choose to be treated as not married for EITC purposes. To qualify, the spouse claiming the credit cannot file jointly with the other spouse, must have a qualifying child living with them for more than half the year and either:

o Do not have the same principal residence as the other spouse for at least the last six months out of the year.
o Are legally separated according to their state law under a written separation agreement or a decree of separate maintenance and not live in the same household as their spouse at the end of the tax year for which the EITC is being claimed.
- Taxpayers should file Schedule EIC (Form 1040) and check the box showing them as married filing separately with a qualifying child.
- In the past, married taxpayers had to file with their spouse to claim the EITC.

• Single people and couples with children who have Social Security numbers can claim the credit, even if their children do not have SSNs. In this instance, they would get the smaller credit available to childless workers. In the past, these filers didn't qualify for the credit.

o Taxpayers should file Schedule EIC (Form 1040) if they have a qualifying child. If they have at least one child who meets the conditions to be their qualifying child for purposes of claiming the EITC, they should complete and attach Schedule EIC to their Form 1040 or 1040-SR even if that child doesn't have a valid SSN. For more information, including how to complete Schedule EIC if your qualifying child doesn't have a valid SSN, see the instructions for Form 1040, line 27a, and Schedule EIC.

Vital refund boost
The EITC is the federal government’s largest refundable federal income tax credit for low- to moderate-income workers. For those who qualify, and if the credit is larger than the amount of tax they owe, they will receive a refund for the difference. While the majority of those eligible claim the EITC every year, IRS estimates that one of five eligible taxpayers do not claim the credit.
Nationwide last year, almost 25 million eligible workers and families received over $60 billion in EITC allowing for the payment of necessities, housing, and educational training, with an average EITC nationwide of $2,411. For 2021, the EITC is worth as much as $6,728 for a family with three or more children or up to $1,502 for taxpayers who do not have a qualifying child.

Look for EITC Refunds by early March if no issues with tax return
By law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the Additional Child Tax Credit (ACTC). The IRS must hold the entire refund − even the portion not associated with the EITC or ACTC and the Recovery Rebate Credit if applicable. This helps ensure taxpayers receive the refund they deserve and gives the agency more time to detect and prevent errors and fraud.

'Where’s My Refund?' on IRS.gov and the IRS2Go app will be updated with projected deposit dates for most early EITC/ACTC refund filers by Feb. 19. Therefore, EITC/ACTC filers will not see an update to their refund status for several days after Feb. 15. Due to weekends and other factors, the IRS expects most EITC or ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if they choose direct deposit and there are no other issues with their tax return.

Workers who can claim the EITC
Workers at risk for overlooking this important credit include taxpayers:
• Without children, including those workers who are at least 19 years old and older than 64
• Living in non-traditional families, such as a grandparent raising a grandchild
• Whose earnings declined or whose marital or parental status changed
• With limited English language skills
• Who are members of the armed forces
• Living in rural areas
• Who are Native Americans
• With disabilities or who provide care for a disabled dependent

How to claim the EITC
To get the EITC, workers must file a tax return and claim the credit. Eligible taxpayers should claim the credit even if their earnings were below the income requirement to file a tax return.

Those eligible for the EITC have these options:

• Find a trusted tax professional. The IRS also reminds taxpayers that a trusted tax professional can prepare their tax return and provide helpful information and advice. EITC recipients should be careful not to be duped by an unscrupulous return preparer.

• Free File on IRS.gov. Free brand-name tax software is available that leads taxpayers through a question-and-answer format to help prepare the tax return and claim credits and deductions if they’re eligible. Free File also provides online versions of IRS paper forms, an option called Free File Fillable Forms, best suited for taxpayers comfortable preparing their own returns.

The IRS reminds taxpayers to be sure they have valid Social Security numbers for themselves, their spouse if filing a joint return, and for each qualifying child claimed for the EITC. The SSNs must be issued before the due date of the return, including extensions. There are special rules for those in the military or those out of the country.

01/26/2022

How a taxpayer’s filing status affects their tax return

A taxpayer’s filing status tells the IRS about them and their tax situation. This is just one reason taxpayers should familiarize themselves with each option and know their correct filing status. The IRS Interactive Tax Assistant can help them determine their filing status.

A taxpayer's filing status typically depends on whether they are considered unmarried or married on Dec. 31, which determines their filing status for that entire year.

More than one filing status may apply in certain situations. If this is the case, taxpayers can usually choose the filing status that allows them to owe the least amount of tax.

When preparing and filing a tax return, filing status determines:

• If the taxpayer is required to file a federal tax return
• If they should file a return to receive a refund
• Their standard deduction amount
• If they can claim certain tax credits
• The amount of tax they owe

Here are the five filing statuses:

• Single. Normally, this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law.
• Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. If one spouse died in 2021, the surviving spouse can use married filing jointly as their filing status for 2021 if they otherwise qualify to use that status.
• Married filing separately. Married couples can choose to file separate tax returns. This may benefit taxpayers who want to be responsible only for their own tax or if it results in less tax than filing a joint return.
• Head of household. Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year.
• Qualifying widow or widower with dependent child. This status may apply to a taxpayer filing a 2021 tax return if their spouse died in 2019 or 2020, and they didn't remarry before the end of 2021 and have a dependent child. Other conditions also apply.

01/24/2022

Common tax return mistakes that can cost taxpayers

Tax laws are complicated but the most common tax return errors are surprising simple. Many mistakes can be avoided by carefully reviewing your return after it has been prepared.

Using a reputable tax preparer can also help avoid errors.

• Filing too early. While taxpayers should not file late, they also should not file prematurely. People who don’t wait to file before they receive all the proper tax reporting documents risk making a mistake that may lead to a processing delay.

• Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.

• Misspelled names. Likewise, a name listed on a tax return should match the name on that person's Social Security card.

• Entering information inaccurately. Wages, dividends, bank interest, and other income received and that was reported on an information return should be entered carefully. This includes any information needed to calculated credits and deductions.

• Incorrect filing status. Some taxpayers choose the wrong filing status. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status especially if more than one filing status applies.

• Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.

The IRS urges all taxpayers to file electronically and choose direct deposit to get their refund faster.