As we approach the end of the year, we’re writing with some exciting news about our firm and to help you prepare for the upcoming tax season.

First, after 43 wonderful years in our current location, we are thrilled to announce that we are moving! Our new, modern office is just a few miles away and is designed to help us serve you more efficiently in a comfortable, accessible space.

Exciting News! We will be moving to this address in the New Year. We will let you know our move-in date so you know where your tax appointment will be.  Look for that update in the New Year, as we expect to move in before the end of the month, January 2026.

5360 S 1900 W Ste B2

Roy, UT 84067

Our new office is located just north of Harmons in the Roy shopping center. We look forward to welcoming you to our new space soon!

Navigating Year-End 2025 & A Look Ahead to 2026

This is a crucial time for tax planning. The end of 2025 offers opportunities to improve your tax situation, and significant changes are on the horizon for 2026, primarily due to new legislation.

Please note: This information is for educational purposes and should not be considered as accounting, legal, insurance, or investment advice. Tax laws are subject to change, so please consult a professional for the latest guidance.

Key Tax Changes for 2025

Here are some of the most important updates for the 2025 tax year.

Standard Deductions

The standard deduction amounts have increased for 2025:

Single: $15,750

Married Filing Jointly: $31,500

Head of Household: $23,250

Additional Deduction (Over 65 or Blind): An additional $1,600 per person ($2,000 for single or head-of-household filers).

New Deduction for Seniors: For 2025-2028, individuals aged 65 and older may receive an additional $6,000 deduction per person ($12,000 for married couples). This benefit begins to phase out for individuals with a Modified Adjusted Gross Income (MAGI) between $75,000 and $175,000 (and between $150,000 and $250,000 for married couples).

Itemized Deductions

State and Local Tax (SALT) Deduction: The cap on the SALT deduction will increase from $10,000 to $40,000. This amount is scheduled to increase by 1% annually through 2029. However, for high earners with income over $500,000, the deduction will be phased out, potentially down to $10,000.

2025 Tax Brackets

Inflationary adjustments mean more of your income may be taxed at lower rates.

For Single Filers:

10% on income up to $11,925

12% on income over $11,925

22% on income over $48,475

24% on income over $103,350

32% on income over $197,300

35% on income over $250,525

37% on income over $626,350

For Married Filing Jointly:

10% on income up to $23,850

12% on income over $23,850

22% on income over $96,950

24% on income over $206,700

32% on income over $394,600

35% on income over $501,050

37% on income over $751,600

For Head of Household Filers:

10% on income up to $17,000

12% on income over $17,000

22% on income over $64,850

24% on income over $103,350

32% on income over $197,300

35% on income over $250,500

37% on income over $626,350

New & Expiring Deductions/Credits

Qualified Overtime Pay Deduction: A new deduction for overtime compensation up to $12,500 ($25,000 for joint filers) is available. This phases out for those with a MAGI over $150,000 ($300,000 for joint filers).

Qualified Tips Deduction: A deduction for tips received by workers in the food and beauty industries, limited to $25,000. This also has income phase-outs.

Passenger Vehicle Loan Interest Deduction: A deduction for interest on new, U.S.-assembled personal vehicles, capped at $10,000. Income and vehicle price limits apply.

Energy Credits Termination: The new and previously owned clean vehicle credits will expire for vehicles acquired after September 30, 2025. All other energy credits expire after December 31, 2025.

Child Tax Credit: The credit increases to $2,200 per child and will be adjusted for inflation in future years.

Child Care Credit: The percentages for this credit have increased. Additionally, the maximum contribution to dependent care flexible spending accounts has risen from $5,000 to $7,500.

A Look Ahead: Key Tax Changes for 2026

Several changes are scheduled to take effect in the 2026 tax year.

Charitable Contributions: A new “above-the-line” deduction of $1,000 for individuals and $2,000 for joint filers will be available, meaning you won’t have to itemize to claim it. For those who do itemize, a new 0.5% AGI floor will be introduced. For example, if your AGI is $200,000, the first $1,000 of your charitable donations will not be deductible.

Home Mortgage Insurance: The deduction for treating mortgage insurance premiums as interest is set to be reinstated.

Educator Expenses: This deduction can be claimed as an itemized deduction or as an above-the-line deduction up to $300 (adjusted for inflation).

Gambling Losses: The deduction for gambling losses will be limited to 90% of the losses incurred during the year.

Saver’s Credit: The contribution limit used to calculate this credit will increase from $2,000 to $2,100.

End-of-Year Tax Strategies for 2025

Here are a few strategies to consider before December 31st:

Charitable Donations: If you itemize, consider making donations before year-end. “Bunching” donations (making multiple years’ worth of donations in one year) can also be an effective strategy.

Flexible Spending Accounts (FSAs): Be sure to use the funds in your medical and child care FSAs before they expire.

Capital Gains and Losses: Consider selling underperforming stocks to offset capital gains. Be mindful of the “wash sale” rule if you plan to repurchase similar stocks.

Retirement Planning:

IRAs: You have until the tax filing deadline to contribute up to $7,000 ($8,000 if you’re over 50) for the 2025 tax year.

401(k)s: Maximize your contributions, especially if your employer offers a matching program.

Updates for Business Owners

Mileage Rate: The business mileage reimbursement rate for 2025 is 70 cents per mile.

Bonus Depreciation: This is scheduled to increase back to 100% for 2026.

Employee Meals: The deduction for meals provided to employees for the employer’s convenience will be eliminated after 2025.

We understand that navigating these changes can be complex. Our goal is to help you understand how these updates will affect your financial situation and to assist you in making the most of available tax-saving opportunities.

We sincerely appreciate your continued trust and loyalty and are excited about this new chapter for our firm. Please feel free to reach out with any questions.

Sincerely,

Rich McKay

McKay Tax & Accounting

801-731-1857

RMcKay@McKayTax.com

5360 S 1900 W Ste B2

Roy, UT 84067