Tax Tips from Rick….. December 2025

As 2025 comes to an end, it is the beginning of the 2025 Income Tax filing season.  We are in the office completing the required IRS training requirements, to keep up on the ever-changing tax codes.  The Trump Big Beautiful Bill of 2025 made 87 changes to the IRS tax codes and added dozens of NEW tax forms. The software companies are working on making all the changes to the software, and we are in the process of updating all our forms and restocking our supplies for another very busy tax season. Last year, we had to turn away many persons looking to get their taxes completed and we anticipate another busy year, turning away possible new clients, so make sure you make your appointment early – don’t wait until the final weeks. With the increases in our software costs, additional training of our staff with the new tax codes, and the anticipated extra time to complete

Federal Income Tax:

•  Tax filing deadline is Tuesday  April 15^th, 2026

• Other important dates:          

a.  January 15^th:  4^th Quarter 2025 Individual Estimated Payment Due        

b.  January 31^st :  Businesses – issue 1099s, W-2s and file W-3 and 1099-NECs

c.  March 17^th :  Partnership and S Corp 2025  Tax Returns are Due

d.   April 15^th:   IRA  & HAS Contribution deadline for 2025

e.  April  15^th, June 15^th, Sept 15^th, & Jan 15^th, 2026 Estimated Payment Due.

f. Employees who work for TIPS,  Report Tip Income (if you make more than        $20 in a month) to your employer by 10^th day of following month.

·      Changes to 1099-K reporting

        Changes are in store for Third-Party Settlement Organizations (TPSO’s), such as credit cards providers and mobile payment services (like PayPal, Venmo, etc). The new 2025 reporting threshold associated with Form 1099-K, form Payment Card Companies and TPSO’s require those organizations to report on the IRS Form 1099-K if the number of transactions are 200 or greater and the dollar amount is $20,000 or more.         There is no threshold amount that must be met to receive a Form 1099-K due to a payment received through a payment card transaction or the  state may have a lower threshold. A payment card includes credit cards, debit cards, and store-value cards (including gift cards). So, you may receive a 1099-K for amounts less than the thresholds mentioned above.

          The 1099-K reports the total dollar amount of Payment Transactions.  It does not include adjustment for fees, credits, refunds, shipping costs, personal transactions or cash equivalents or discounts. Taxpayers can deduct those items from the gross amount when completing their tax returns.  If you were 73 by the end of 2025 – you must take a required Minimum Distribution (RMD) from your Retirement Accounts (IRA’s ,401(k)’s , etc.) even if you are still working.

Make sure you check with your financial advisors to see if you are required to take the RMD and how much you need to take out. If you missed your first RMD by the 12/31/2025 deadline, you can elect to take out your RMD by 4/1/2026 – but then you must take out two (2) RMD in 20026

·      Educators Expense DeductionThe tax deduction for educators with classroom expenses remains at $300, but starting in 2026, educators can deduct All their classroom expenses on Schedule A or take the $300 expense above-the-line (which ever works the best).

· Make Payment to the IRS Directly Electronically.  You can now pay federal stimated tax payments, pay a balance due from a current or past due income tax return Totally Free at www.irs.gov/directpay .

·Standard Mileage Rates for 2025 & 2026The standard mileage rates apply for business miles, medical, charitable and moving expenses (for military personnel only). 

      Business miles:  $0.70     Medical/Moving  $0.21      Charitable: $0.14

·Social Security beneficiaries will receive a Cost-of-Living Adjustment of 2.8% in 2026 and Medicare Part B premiums will increase for most to $202.90 a month for most persons.

·Up to $2,500 of Student Loan Interest is deductible: If your income is below $100,000 for an individual ($200,000 for joint filers).

· REMINDER:  If you receive any correspondence letter from the IRS or State Taxing Authority, Please bring the complete letter to our office to review AS SOON AS POSSIBLE.

·Federal Tax Updates: Considerable Federal tax updates for 2025 tax returns filed in 2026 due to Trumps One Big Beautiful Bill signed into law in July 2025.

· Have a child under age 17?  Dependent Children under age 17 may qualify for the Child Tax Credit of $2,200. Dependents over 17 yrs can receive $500 tax credit.Reminders:   1. If you have a child born in 2025, we need a copy of their social security card.

 2. If you are the Non-Custodial Parent, we need the completed IRS form 8332 from      the custodial parent allowing you to claim the child or copy of court document. 3. We need “Proof of Residency”. A letter/document from the Childs’ school, doctor,      landlord, health insurance document, childcare provider, social services that shows      your child’s name and your home address.

Wisconsin  Income Tax:

·      2025 NEW Retirement Income Subtraction: If you are 67 yrs old by 12/31/2025 you may subtract $24,000 from eligible retirement income, $48,000 if married filing joint and both spouses are 67 yrs old. Retirement Income must be “taxable Retirement Income” and if you claim this subtraction, you can NOT claim Any Wisconsin Tax Credits for that taxable year.

·      Wisconsin Has NOT Adopted “No Tax on Tips”; “No Tax on Overtime”; “No Tax on New Car Loan Interest” or “Federal Deduction for Seniors”

·      Increased Child and Dependent Care Credit: The 2023 Wis.Act 101 has increased the credit from 50% to 100% of allowable federal credit for 2024.  The maximum qualifying expenses increase to $10,000 for one child and $20,000 for two or more qualifying dependents.  That increase the maximum credit is now up to $7,000.  A new tax form WI-2441 is used to determine the credit.

·      All Charitable Contributions go on federal Schedule A (same aa federal)

·      Investment Income limits for Earned Income Credits increases to $11,900  (same as federal) .EIC is only available for Married Filing Joint (MFJ) filers and under specific requirements, MFS.

·      If Student Loan Forgiveness takes effect – the total amount forgiven is taxable Wisconsin income.(Non-taxable on federal income taxes).

·      Wisconsin is asking for taxpayer’s email addresses (both spouse’s) if they wish to receive all Wisconsin Tax correspondence from Wisconsin Department of Revenue.

·      Effective in 2023 – Capital Loss deduction increases to $3,000 per year (up from the current $500).

·      Edvest or Tomorrow Scholar 529 Plans can subtract a maximum of $5,130 per student, $2,560 MFS or divorced parent.

·      Tuition and Fee Expenses increase to $7,649 per student

·      If IRS adjusts any tax return, you MUST notify WDR within 180 days of any adjustment that effects your Wisconsin Return.