by Stephen Reed | Accounting News, News, Newsletter, Tax, Tax Planning, Tax Planning - Individual, Tax Preparation - Individual
Tax season 2025 is here, and staying on top of important deadlines is essential for avoiding late fees and penalties. Knowing key dates like the federal income tax filing deadline, quarterly estimated tax payment due dates, and extensions can help you stay organized and stress-free. Read on as we go over these deadlines and provide tips to ensure your tax filing process goes smoothly.
When Are Taxes Due in 2025?
Federal income tax returns for the 2025 tax season are due by Tuesday, April 15, 2025. The extended deadline for U.S. taxpayers residing overseas to file and pay is June 16, 2025. The IRS determines the timeliness of your electronic return based on the date and time it is transmitted in your local time zone. For those filing paper returns, the IRS considers the submission on time if it is correctly addressed, includes sufficient postage, and is postmarked by the deadline.
E-filers must submit their returns no later than 11:59 p.m. local time to meet the deadline. Certain groups, including members of the military and individuals impacted by natural disasters, may qualify for automatic filing extensions. Always verify eligibility for extensions and meet filing requirements to avoid penalties.
Tax Refunds
According to the IRS, taxpayers who file electronically and opt for direct deposit can typically expect to receive their tax refund within 21 days of filing. However, if you submit a paper tax return, the processing time is significantly longer, with refunds often taking four weeks or more to arrive. Choosing e-filing and direct deposit is the fastest and most efficient way to get your refund quickly.
Penalties for Failing to File on Time
Failing to file your federal tax return by the deadline can result in a penalty of 5% per month on any unpaid taxes, up to a maximum of 24% of the outstanding balance. However, if you file your return but do not pay the full amount owed or have been granted an extension, you will generally incur a lower penalty of 0.5% per month on the unpaid taxes. Filing on time and paying as much as possible by the due date is crucial to minimize penalties and interest.
Tax Extension Deadline
Filing an extension by April 15, 2025, will extend your filing deadline to October 15, 2025. While an extension provides extra time to file your tax return, it does not extend the deadline to pay any taxes owed. The IRS requires you to pay the full amount—or a reasonable estimate—by the original due date of April 15, 2025. Failing to pay by this date will result in interest charges and penalties that continue to accrue until your outstanding balance is fully paid. To avoid additional costs, ensure you meet the payment deadline even if filing later.
Deadlines for W-2 and 1099 Forms
Employers must send W-2 forms by Jan. 31. Freelancers, independent contractors, and individuals earning income from non-traditional sources should expect a 1099 tax form by February 15. If you earn self-employment income or have side gigs, ensure you check for 1099 forms to accurately report your earnings and avoid potential tax issues.
Due Dates for Quarterly Taxes
If you earn income not subject to withholding taxes, such as from self-employment or freelance work, you’re generally required to make estimated tax payments to the IRS. These payments can be made quarterly or as a single annualized payment. The annualized payment is due by April 15, while the quarterly deadlines are as follows:
- First payment: April 15, 2025
- Second payment: June 16, 2025 (adjusted since June 15 is a Sunday)
- Third payment: September 15, 2025
- Fourth payment: January 15, 2026
Staying on top of these deadlines helps avoid interest charges and penalties for underpayment.
by Stephen Reed | Accounting News, News, Newsletter, Tax, Tax Planning
After Donald Trump’s win in November, taxpayers are wondering how a second Trump term could reshape U.S. tax policy. Trump’s first term saw sweeping changes under the Tax Cuts and Jobs Act (TCJA) of 2017. With key provisions of that legislation set to expire in 2025, Trump’s proposals offer a glimpse of his tax priorities. From significant individual tax cuts to business-friendly policies, here’s what you need to know.
The Expiration of the 2017 Tax Cuts
The TCJA lowered tax rates across the board, nearly doubling the standard deduction—which eliminated the need for itemized deductions—and capping the state and local tax (SALT) deduction at $10,000. These changes contributed to lower tax bills for many Americans. However, the individual tax cuts were temporary and are set to expire at the end of 2025 unless Congress acts to extend them.
If re-elected, Trump has indicated that extending or making these provisions permanent would be a top priority. Without an extension, taxpayers could see higher marginal tax rates, a reduced standard deduction, and the return of personal exemptions.
Removing the $10,000 SALT Deduction Cap
The SALT deduction, which allows taxpayers to deduct state and local taxes on their federal tax returns, became a testy issue after the TCJA imposed a $10,000 cap. This change particularly affected residents in high-tax states like New York, California, and New Jersey.
Trump has proposed removing the cap, a move that would benefit taxpayers in those states while potentially increasing the federal deficit. Critics argue that eliminating the cap would disproportionately benefit higher-income households, but supporters see it as a necessary adjustment to provide relief to middle- and upper-income earners in high-tax areas. Steven Moore, a senior economic advisor to Trump, recently floated the idea of doubling the cap to $20,000 as a potential compromise.
Eliminating Taxes on Social Security and Tip Income
Currently, up to 85% of Social Security benefits can be taxable, depending on your income level. Trump’s tax plan consists of eliminating these taxes, which would provide retirees with additional financial security. Trump has also floated the idea of eliminating taxes on tips, which would increase take-home pay and simplify tax compliance for hospitality and service industry workers. However, this proposal has sparked discussion over the potential impact on tax revenue and fairness in the tax code.
Reducing the Corporate Tax Rate
The TCJA decreased the corporate tax rate from 35% to 21%, which rendered the U.S. more competitive globally. Trump has suggested lowering the rate even more, potentially to 15%. Those in favor of this plan say that it could spur economic growth and encourage domestic investment, while critics are concerned about increasing the federal deficit.
Trump’s Tariffs
Trump has been clear on his stance on tariffs. During his first term, Trump imposed tariffs on various goods, particularly from China. Tariffs are not taxes in the traditional sense, but they can indirectly affect taxpayers by increasing the cost of goods and services. Businesses often pass these costs onto consumers, so households, particularly those in middle- and lower-income brackets, could feel the strain of tariffs.
by Stephen Reed | Healthcare, Industry - Healthcare, News, Newsletter
Independent healthcare practices face a range of challenges in managing payments and maximizing revenue, but recent developments in patient expectations and legislation provide fresh challenges and opportunities. Here’s how independent practices can leverage these changes effectively.
E/M Guideline Updates
Just this year, the Centers for Medicare & Medicaid Services (CMS) aligned its evaluation and management (E/M) coding guidelines with the changes adopted by the American Medical Association (AMA). This shift allows providers to bill for previously overlooked activities related to patient care, such as time spent reviewing patient records, consulting with other providers, and coordinating care.
This is a game-changer for independent practices. By optimizing E/M coding while adhering to the updated guidelines, practices can increase revenue and improve operational efficiency.
Practices will want to train staff on the new E/M coding guidelines to ensure compliance using tools like electronic health record (EHR) systems to streamline documentation.
Remote Patient Monitoring
Remote patient monitoring (RPM) enables providers to track patients’ health data remotely, allowing for early intervention and better chronic disease management. Beyond telehealth, incorporating remote patient monitoring tools for conditions like diabetes and hypertension can support patients in staying on course. Research indicates that patients who use monitoring devices consistently track health metrics. Moreover, the provider can better catch changes in a patient’s condition because data is automated, which means any changes necessitating scheduling an in-person appointment or adjusting medications could be noticed sooner.
By integrating RPM into practice operations, healthcare providers can reduce hospital readmissions, improve patient satisfaction, and qualify for additional reimbursements under Medicare and other payer programs.
Surprise Billing Legislation
It’s worth noting that the No Surprises Act, effective since 2022, protects patients from unexpected out-of-network bills. This includes emergency services and ancillary care provided by out-of-network providers at in-network facilities. While this primarily applies to hospital services, compliance from independent practices is vital to avoid penalties and maintain patient trust.
Independent healthcare practices can overcome payment challenges by staying ahead of industry changes. By leveraging updated E/M coding guidelines, adopting remote patient monitoring, and ensuring compliance with surprise billing legislation, providers can deliver exceptional patient care while maximizing revenue to secure their financial future.
by Stephen Reed | Accounting News, News, Newsletter, Retirement, Retirement Savings, Tax Planning - Individual
Required Minimum Distributions (RMDs) are mandatory withdrawals from certain retirement accounts. They can significantly impact your tax burden and overall financial well-being. In 2024, changes introduced by the Secure 2.0 Act have increased the minimum age for RMDs, potentially leading to the highest RMDs in history. Here’s what retirees need to know about these new regulations and how they will affect your retirement strategy.
What Are Required Minimum Distributions (RMDs)?
RMDs are the minimum amounts that retirees must withdraw annually from tax-deferred retirement accounts such as 401(k)s, traditional IRAs, and 403(b)s once they reach a certain age. These distributions are designed to ensure that retirees eventually pay taxes on the funds they have been deferring throughout their working lives.
The Secure 2.0 Act Raised RMD Age
When the Secure 2.0 Act was passed in 2022, the age at which retirees must begin taking RMDs was raised from 72 to 73, granting more flexibility and time for retirement savings to grow. This change applies to retirees turning 73 in 2024 and beyond, offering an additional year of tax deferral before RMDs are required.
However, this delay could result in more significant distributions when retirees finally begin taking RMDs, especially if their accounts continue to grow. (Retirees who turn 73 in 2024 must take their first RMD by April 1, 2025.) Larger account balances combined with higher RMD percentages as retirees age could result in retirees facing the largest RMDs ever, especially with stock market gains in recent years.
Why 2024 RMDs Could Be the Highest Ever
The combination of tax-deferred growth, the higher RMD age, and inflation adjustments could make 2024 a challenging year for retirees facing their first RMDs. Because retirees must withdraw a specific percentage of their account balance, individuals with growing portfolios may end up withdrawing and facing taxes on larger amounts. This can push some retirees into higher tax brackets, which could lead to a reduction in overall retirement income.
Key Factors for Retirees to Consider
As you approach your RMD age, there are several important factors to keep in mind that can significantly impact your tax planning. Understanding these key points will help you make informed decisions and avoid common pitfalls related to RMDs.
- RMDs Are Taxed as Ordinary Income
When you take an RMD, it is taxed as ordinary income, meaning it is added to your other taxable income for the year. This can impact your tax liability, particularly if your RMD pushes you into a higher tax bracket. Careful tax planning is essential to minimize the impact of RMDs on your overall income.
- Failure to Meet RMD Deadlines Could Result in Financial Penalties
One of the most critical things retirees need to remember is that failure to take RMDs by the required deadline (typically December 31) can result in significant penalties. The current penalty for missing an RMD is 25% of the amount that should have been withdrawn. This penalty can often be reduced to 10% if the missed RMD is corrected within two years, but it’s still a costly mistake you’ll want to avoid.
- There’s No Escaping RMDs
Once you reach the RMD age, you must take these distributions from your tax-deferred accounts. Even if you don’t need the money, you are required by law to withdraw the minimum amount. Failure to do so will result in penalties, and delaying the withdrawal will not eliminate the tax liability.
For retirees who don’t need the extra income, reinvesting the distribution into a taxable account may be a good option to keep the money working for you, but the taxes will still need to be paid.
- RMDs Are Not Required in Roth IRAs
A strategy to possibly minimize the impact of RMDs is to utilize a Roth IRA. Unlike traditional IRAs or 401(k)s, Roth IRAs do not require RMDs during the account holder’s lifetime. Since contributions to Roth IRAs are made with after-tax dollars, the growth and withdrawals from these accounts are tax-free, providing more flexibility in retirement income planning. The one caveat to this applies to inherited Roth IRAs. If you’re the benefactor of someone else’s Roth IRA, you must take RMDs.
by Stephen Reed | Industry - Retail & Distribution, News, Newsletter, Retail & Distribution
Effective positioning is crucial for brands seeking to connect with their target audiences and drive sales. But what exactly is positioning, and why does it matter? This article will explore the fundamentals of positioning and practical steps for retailers to develop a compelling positioning strategy.
What is Positioning?
Positioning refers to how a brand is perceived in the minds of consumers compared to its competitors. It involves crafting a unique identity that resonates with your target audience, highlighting your brand’s distinct benefits and values. Effective positioning differentiates a retailer in a crowded market, making it easier for consumers to choose your products over others.
Why is Positioning Important?
- Consumer Connection: Strong positioning helps retailers build emotional connections with consumers. When a brand speaks directly to its audience’s needs and desires, it fosters loyalty and trust.
- Competitive Advantage: Effective positioning sets a retailer apart from competitors. It clarifies what makes the brand unique and why consumers should choose it.
- Guided Messaging: A well-defined position informs all marketing efforts, from advertising to social media, ensuring consistency in messaging that resonates in a timely way with your target audience. It provides clarity on what you do and why your audience should choose you over competitors.
Starting with Positioning: Focus on Customers
To develop a successful positioning strategy, retailers must begin with a deep understanding of their customers. Here are the steps to developing a winning positioning strategy:
Market Research
Conduct thorough market research to gather insights about your target audience. Utilize surveys, interviews, and focus groups to identify demographics, preferences, pain points, and buying behaviors. Online tools like Google Analytics and social media insights can also provide valuable data.
Competitive Analysis
Evaluate your competitors to understand their positioning strategies. Identify their strengths and weaknesses, and analyze how they communicate with their audiences. This competitive analysis will help pinpoint gaps in the market that your brand can fill.
Develop Positioning and Messaging
Now it’s time to start developing your positioning statement. This should articulate your brand’s unique value proposition and the key benefits you offer. Consider using a format like:
“For [target audience], [brand name] is the [category] that [unique benefit] because [reason to believe].”
For example, “For eco-conscious shoppers, Green Harvest Market is the online store that provides organic, sustainably sourced products because we partner directly with local farmers.”
In addition to the positioning statement, create messaging that reinforces this position across all channels. Use language that resonates with your audience and aligns with their values.
Test Your Positioning
After developing your positioning and messaging, you’ll need to test their effectiveness. This can be done through A/B testing on advertisements (two versions of an ad are compared to see which one performs better), website content, and social media posts. Monitor engagement metrics such as click-through rates, conversion rates, and customer feedback to determine if your positioning is resonating.
Ongoing Evaluation and Adjustment
Positioning is not a one-time effort. Continuously evaluate how well your positioning aligns with market changes and consumer preferences. Regularly solicit feedback through customer surveys and monitor industry trends to make necessary adjustments.
