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We welcomed 2025 with enthusiasm, but what the first quarter really calls for is strategy! In real estate, the playbook focuses on “Location, Location, Location!” When it comes to taxes though, it’s all about “Preparation, Preparation, Preparation!” The winning strategy centers around preparing EARLY!
And, as your accounting coaches, ahem partners, we want you to be stress-free this tax season, so following are helpful reminders:
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- Be Early: If you haven’t already, assemble tax items.
- Be Thorough: Review W2s, and loan and tax documents.
- Be Digital: Most items are shared via pdf or portals.
- Be Patient: Please have grace with yourself and our team.
- Be Organized: Use the tools on our site’s Resources Page.
- Review prior year returns via your Client Portal.
- Look at the Tax Organizer and note what’s needed.
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And, so should you! As your financial planning and accounting partner, we take our responsibility to keep your personal information and banking data secure seriously.
That’s why we continue to regularly update the technology platforms and software programs we use, and train our team to ensure a seamless experience for you.
Look, IRS Commissioner Danny Werfel said himself that “the IRS strongly urges the use of direct deposit. It’s the fastest and safest way for us to get taxpayers their refunds.”
With that in mind, we strongly recommend that you share banking data, rather than documents, for direct deposits of refunds, and that you use your secure client portal on GSM.biz to access past tax federal and state transcripts.
If you have any questions about your client portal and the digital resources available to you on our website, please contact Laura Hunter.
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Take the Following
Steps NOW
to Reduce
Your ‘24
Tax Bill
>>>>>
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- Make a deductible IRA contribution (tests apply) of up to $7k per person ($8k, if over 49 yrs.-old) by April 15, 2025 for ’24 and deduct for ‘24.
- For individuals with qualified HSAs, make a HSA deposit up to $4,150 as an individual, or up to $8,300 for family coverage, by April 15, 2025 for ’24, and deduct for ‘24.
- If self-employed, establish and fund a SEP-IRA for ‘24 by the extended due date of your tax return and deposit the lesser of $69k, or 25% of income.
- Small business owners may deduct home office expenses from ‘24 if they have a place in their home that is used regularly and exclusively for business using either an actual expense allocation or the IRS safe harbor amount.
- Fund a ‘24 Roth IRA for children with earned income. There is no requirement to deposit a maximum, so even $100 works. This starts the 5-year clock for children at a very early age.
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It’s Never Been Easier: Submitting Your Tax Documents
As you know, digital copies of your documents can be securely, quickly and easily uploaded to your Client Portal 24/7— right from the comfort of your home or office!
However, hardcopies can also be deposited through our front door mail slot at any time, or dropped-off in-person during business hours, Mon.-Fri., 8 a.m.-5 p.m.
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Communication and collaboration are at the heart of our firm’s approach to building and fostering longstanding relationships with you, our clients. That said, over the past year, many of you have shared your interest in and need for additional services.
Well, message received! We’re pleased to announce that we’ve expanded our professional offerings to now include the following services.
- Fractional CFO Expertise
- Forecasting
- Budget to Actual
- Financial Analysis
- EBITDA and more!
To learn more about our new services and how they can benefit you and your goals, please contact Sonya Pappas.
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Q: What is the gift tax?
A: As explained by the IRS, the gift tax is a tax on the transfer of property or money by one individual to another while receiving nothing, or less than full value, in return. And, due to annual and lifetime limits, few people will owe it.
Q: Do my children have to report a cash gift from me?
A: Each year, the IRS sets the annual gift tax exclusion, which allows a taxpayer to gift a certain amount ($19,000 in ‘25) per recipient, tax-free, without using-up any of your lifetime gift and estate tax exemption ($13.99 million in ‘25).
For married couples, the total lifetime gift tax exemption is $27.98 million, which means that you can gift $38,000 each year, per recipient, beginning next year.
Also note, that not only are these assets removed from your taxable estate, but their future appreciation will also avoid gift and estate taxes.
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Q: What about gifting money to a spouse who is not a U.S. citizen?
A: Gifts to a non-U.S. citizen spouse are limited. In ‘25, the first $190k of gifts to a spouse who is a non-U.S. citizen will not be included in the total amount of taxable gifts.
However, spouses who are both U.S. citizens may transfer unlimited amounts to each other without incurring any gift tax. Any assets in excess of the couple’s combined estate tax exemption ($27.98 million in ‘25) will be taxed at the death of the surviving spouse. Transferring assets to the survivor only defers the tax that the IRS will eventually collect.
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Q: What if I gift an amount above the annual gift tax exclusion?
A: Then, a portion of your lifetime gift tax exemption ($13.99 million in ‘25) will be used. The gift and estate tax exemption are linked, which means that this use of your gift tax exemption will reduce the amount you may bestow upon death (estate) as tax-free. And, the following year, you will need to submit a gift tax return by April 15th.
Q: Will I owe federal estate taxes?
A: Not unless your combined spousal assets exceed $26 million; or individually $13 million!
As an individual, if your estate is valued over $13.99 million, you should be working with your accountant and estate lawyer to ensure you have maximized the options for reducing taxes and that you understand how your wealth can be distributed.
If you have additional questions regarding gift and estate taxes, please contact Gus Pappas.
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