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Don’t Let the AMT Catch You Off Guard
Are you subject to the alternative minimum tax (AMT)? In general, this tax applies if your “tentative minimum tax” exceeds your regular income tax liability. Significant long-term capital gains and dividend income or recently exercised incentive stock options can trigger the AMT. Although the 2025 tax legislation, commonly known as the One Big Beautiful Bill Act, makes higher AMT exemptions permanent, it phases them out twice as fast beginning in 2026.
Also, the legislation quadrupled the limit for the state and local tax deduction, which isn’t deductible for AMT purposes. So that item may become an AMT Achilles’ heel for more taxpayers. If you’re concerned about the AMT, contact the office. Good planning may help you avoid it.
2025 IRA Contribution Deadline Is Coming Up
It’s not too late to boost your IRA for 2025. You have until April 15, 2026, to make contributions for the 2025 tax year. This deadline applies to both traditional and Roth IRAs and includes catch-up contributions for eligible individuals.
You must indicate that the contribution is for the 2025 tax year, not 2026. This is important because contributions made from January 1 through April 15 can be designated for either the prior year or the current year. Contact the office if you have questions about IRA contributions or need assistance filing your 2025 return.
Understand the Tax Details When Starting a Business
If you’re thinking about starting a business, make sure you understand your federal tax responsibilities before opening your doors. IRS Publication 583, Starting a Business and Keeping Records, covers the basics. Your business structure (such as a sole proprietorship, partnership, limited liability company or corporation) determines which forms you must file and which taxes apply, including income, self-employment, employment and excise taxes.
You may also need an Employer Identification Number for tax purposes, and you should be aware of your recordkeeping requirements. Starting a business is exciting, and getting the tax details right is important. Contact the office for assistance.
