Holly C. Roundtree CPA, PLLC

The IRS has issued the 2025 cents-per-mile rates that can be used to calculate tax-deductible vehicle operating costs. Effective Jan. 1, 2025, the standard mileage rate for the business use of a car, van, pickup truck or panel truck is 70 cents per mile. (This is up from 67 cents per mile for 2024.) The 2025 rate for medical or eligible moving purposes is 21 cents per mile (unchanged from 2024). For charitable driving, the 2025 rate is 14 cents per mile (unchanged from 2024). These rates apply to gasoline and diesel-powered vehicles and to electric and hybrid-electric automobiles. To protect your deduction, don’t forget to keep detailed mileage records. Contact us with questions.

The Charitable Giving Coalition (CGC) has formally asked the U.S. House Ways and Means Committee and Senate Finance Committee to pass the bipartisan Charitable Act. The Tax Cuts and Jobs Act made many taxpayers ineligible to deduct charitable contributions because they must itemize to claim the deduction. The result: widespread declines in donations to charity in recent years. The Charitable Act would allow a deduction for non-itemizers, enabling taxpayers to deduct up to one-third of the value of the current standard deduction (roughly $4,600 for individuals). According to the CGC, the bill enjoys broad support throughout the charitable sector and in both chambers of Congress.

Is disability income taxable? Generally, income you receive for disability through an employer-paid accident or health insurance plan must be included on your tax return. An exclusion exists if certain payments are for personal injury or sickness. A married couple received disability income from the husband’s retirement plan and were sent a Form 1099-R for the amount. No exclusion applied, yet they didn’t report the income on their federal tax return, claiming the amount wasn’t taxable. The U.S. Tax Court found that the payments were taxable. Due to a prior ruling against the couple, the court warned them that penalties could apply if they persisted with the same arguments. (TC Memo 2024-27)

The IRS has issued final regulations that modify the definition of a “coverage month” for purposes of calculating the premium tax credit (PTC). The credit helps eligible individuals cover their premiums for health insurance purchased through the Health Insurance Marketplace. The regs clarify that a month qualifies as a coverage month if the amount of the premium paid (including advance premium tax credits) is enough to prevent the termination of a person’s health insurance coverage. The final regs adopt the proposed regs issued last September. The IRS will issue a revised Form 1095-A, Health Insurance Marketplace Statement, to reflect the final regs. Contact us with questions about the PTC.

ALERT: There has been another federal court ruling regarding the beneficial ownership information (BOI) reporting requirements. Many companies are once again required to file BOI reports with the Financial Crimes Enforcement Network (FinCEN). Companies created or registered before Jan. 1, 2024, now have until Jan. 13, 2025, to file their initial BOI reports. Previously, a court issued a nationwide preliminary injunction on the requirement to file by Jan. 1. But on Dec. 23, the 5th U.S. Circuit Court of Appeals lifted the injunction. There are some exceptions to the Jan. 13 deadline. Contact us for assistance. For more information from FinCEN: https://bit.ly/4gtKeZb

Are you buying a home with someone you aren’t married to? If so, the IRS says that you may each be entitled to deduct the portion of the mortgage interest and real property tax you pay. This is true even if only one of you receives a Form 1098, Mortgage Interest Statement, from the lender and/or a property tax statement from the local taxing authority. However, certain conditions must be met. For example, the house must be the principal residence for both of you. You also must both be legally obligated to pay the expenses and you must have paid them during the year. Contact us with your questions, or get more information in the sixth answer here: https://bit.ly/42dfoOg