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

Below you will find your 2022 Tax Updates. Feel free to contact me if you have any questions.

2022 Standard Deductions

In 2022 Standard Deductions and Credits will return to the previous levels. The new 2022 standard deductions are $12,950 for single, $19,400 for the Head of Household, and $25,900 for those filing as Married/Jointly.

Child Tax Credit

The Child Tax Credit goes back to $2,000 (from 2021s 3,000 and 3,600) for dependents under 17 and $500 for dependents over 16. The higher tax credit for 17-year-old dependents from 2021 expired for 2022.

Child Care Credit

The Child Care Credit has changed. The Child Care Credit for 2021 had limits of 8,000 for one dependent and 16,000 for two dependents. For 2022, the Child Care Credit will go back to 3,000 for one dependent and 6,000 for two dependents.

Notable Business Changes

Business meals will remain 100% for 2022 but will return to 50% in 2023.

2022 Business miles reimbursements were 58.5 cents/mile until July 1. After July 1, business miles change to 62.5 cents/mile.

Year-End Tax Planning

Here are a few things to think about for year-end tax planning.

Charitable Donations

If you plan to itemize and need to make a trip to the DI or Salvation Army, do so before December 31. Be sure to get a receipt. Write down each item and the value of each item directly on your receipt.

Some taxpayers strategize by bunching charitable deductions in one year — meaning they itemize one year and take the standard deduction the following year. To do this, you would wait to pay your 2022 charity or make 2022 donations for the year you choose to itemize. Instead, make your donations in January 2023 and make any additional 2023 donations by December 31, 2023, to include your donations in one itemized year. In this example, you will get twice the deduction in one year (2023 as the itemized year) and take the standard deduction in 2022. You’ll want to choose the year that best serves your need for deductions.

You could also do this with other itemized deductions. For example, you can do this with medical expenses if you can group medical services into one year to maximize deduction value.

Flex-Spending Accounts

This time of the year is when employees must specify how much salary they will set aside in Flex Spending Accounts (section 125) for medical and child care expenses.

Using flex funds to pay for medical and child care expenses saves federal and state taxes and an additional 7.65% in FICA and Medicare taxes.

Be sure to estimate medical and child care expenses low.

Stock Sales

If you have underperforming stocks that you wouldn’t mind unloading, now is the time to offset any capital gains. Selling stocks at a loss can offset your capital gains for profitable stock sales throughout the year.

If you have a capital loss at the end of the year, you can carry that loss for later years and even write off up to $3,000 against your regular income for the year.

Choose what low-performing stocks you sell wisely. Wash sale rules don’t allow you to buy back into the same stock at a similar amount as your original sale for 31 days.

Retirement Planning

IRAs

Depending on your income, you can get a deduction for an IRA contribution in 2022. This deduction can be up to $6,000 if you are under 50 and $7,000 if you are over 50. Your IRA deduction will count even if you wait until Tuesday, April 18, 2023 (Tax Filing Day).

If you are required to take a 2022 minimum distribution from your IRA account, you can make that distribution payable to the charity of your choice tax-free if donated by December 31, 2022.

Roth IRAs

One of the best options out there for retirement planning is IRAs.

If your income for contributing to a Roth is over $125,000 for filing as Single or Head of Household or $198,000 for filing as joint married. Additionally, you do not have any other traditional IRAs. In that case, you can convert a non-deductible IRA to a Roth IRA with little or no tax due.

401(k) and Roth 401(k)

Usually, your employer will match all or part of your 401(k) contributions. Their matching contribution is essentially free money! To take advantage of this in tax planning, enroll in your company’s 401(k) and contribute up to the matching point.

Retirement Distributions

Please call me for the answers to your questions about early distributions from a retirement fund or planning your retirement. A simple phone call may save thousands of dollars in additional taxes and penalties.

That’s all the updates for the 2022 tax filing year!

Feel free to call me anytime for answers to your tax questions (including major events) at no additional cost.

Look for your appointment confirmation and questionnaire to arrive in the mail by January 5 or sooner.

Happy Holidays and have a wonderful New Year!

Sincerely,

Rich McKay

801-731-1857

RMcKay@McKayTax.com

This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, insurance, or investment advice. Any tax advice in this email reflects our professional judgment based on our understanding of the facts provided to us and on current tax law. Tax law is subject to change. Subsequent changes in the facts provided to us, the law, or its interpretation may affect this advice. We are not responsible for updating our advice for subsequent changes in the law or its interpretation. Please immediately contact the sender if you have received this message in error.

Year End Tax Letter 2021

2022 Standard Deduction Guidelines

The new 2021 standard deductions are $12,950 single, $19,400 for the Head of Household, and $25,900 for those filing as Married/Jointly. The Child Tax Credit is the same as 2020 at $2,000 for dependents under 17 and $500 for dependents over 16.

Here are a few things to think about for year-end tax planning:

Charitable Donations

If you think that you will itemize and you need to make a trip to the DI or Salvation Army do so before December 31st. Be sure to get a receipt and write the items and value of each item on the
receipts. Some taxpayers strategize by bunching charitable deductions in one year. This means they itemize one year and take the standard deduction the next year. To do this you would wait to pay
your 2021 charity or make 2021 donations. Instead, make your donations in January 2022 and make any additional 2022 donations by December 31, 2022, to include your donations in one year. This will give you twice the deduction in one year and allow you to take the standard deduction on your off year. You could also do this with other itemized deductions, such as medical expenses if you can manage them into a specific calendar year. Without itemization, you can deduct a maximum of $600 Married and $300 Single if you gave it to a qualifying charity.

IRA Deduction

Depending on your income, you may be able to get a deduction for an IRA contribution for 2021 and 2022 of up to $6,000 (or $7,000 if you are over 50 years old). Your IRA deduction will count even if you wait until tax filing day in 2022 (Monday, April 18, 2022). If you are over 70½ years old and choose to take a 2021 distribution from your IRA account, you can make that distribution payable to the charity of your choice tax-free.

Stock Sales

If you have a few underperforming stocks that you wouldn't mind unloading, now is the time. If you have them, you can sell your stocks at a loss to offset any capital gains you may have for profitable stock sales throughout the year. If you end up with a capital loss, you can carry that loss for later years and even write off up to $3,000 against your normal income for the year.

Flex-Spending Accounts

This time of the year is when employees must specify how much salary they will set aside in Flex Spending Accounts (section 125) for medical and child care expenses. Using flex funds to pay for medical and child care expenses save federal and state taxes but also saves an additional 7.65% in FICA and Medicare taxes. Be sure to estimate medical and child care expenses low. Extra money left in your Flex Spending Accounts at the end of the year is
lost.

Retirement

Please call me for the answers to your questions about early distributions from a retirement fund or planning your retirement. A simple phone call may save thousands of dollars in additional taxes and penalties.

 

 

As always feel free to call me anytime for answers to your tax questions (including major events) at no additional cost. Look for your appointment confirmation and questionnaire to come in the
mail by January 5th or sooner.

Have a Merry Christmas and Happy New Year!

Most of the COVID-related tax changes were related to the extension of your 2019 tax year filing. However, there are some tax strategies that are still available until the end of the year.  

COVID-19 Tax Strategies Still Available:

 

• 2020 401k and IRA distributions up to $100,000 can be taken penalty-free and you can pay the regular tax over three years or have it nontaxable if you make a re-contribution (“put it back”) within three years rather than the normal 60 days.  
• Minimum retirement account distribution (taxpayers over 70½ years of age) can be ignored for 2020.  
• If you did not get a stimulus 2020 check and qualified based on your 2020 tax return there is a reconciliation in the 2020 tax return that could give you more money.

2020 Standard Deduction Guidelines:

The new 2020 standard deductions are $12,400 single, $18,650 for the Head of Household, and $24,800 for those filing as Married/Jointly.  The Child Tax Credit remains the same at $2,000 for dependents under 17 and $500 for dependents over 16.

Here are a few things to think about for year-end tax planning:

 Charitable Donations

If you think that you will itemize and you need to make a trip to the DI or Salvation Army do so before December 31st. Be sure to get a receipt and write the items and value of each item on the receipts.  

Some taxpayers strategize by bunching charitable deductions in one year. This means they itemize one year and take the standard deduction the next year.  To do this you would wait to pay your 2020 charity or make 2020 donations.  Instead, make your donations in January 2021 and make any additional 2021 donations by December 31, 2021, to include your donations in one year. This will give you twice the deduction in one year and allow you to take the standard deduction on your off year.  

You could also do this with other itemized deductions, such as medical expenses if you can manage them into a specific calendar year.  

Without itemization, you can deduct a maximum of $300 if you gave it to a qualifying charity.

IRA Deduction

Depending on your income, you may be able to get a deduction for an IRA contribution for 2020 of up to $6,000 (or $7,000 if you are over 50 years old). Your IRA deduction will count even if you wait until tax filing day in 2021 (Thursday, April 15, 2021).  

If you are over 70½ years old and choose to take a 2020 distribution from your IRA account, you can make that distribution payable to the charity of your choice tax-free. 

Stock Sales

If you have a few underperforming stocks that you wouldn’t mind unloading, now is the time. If you have them, you can sell your stocks at a loss to offset any capital gains you may have for profitable stock sales throughout the year. If you end up with a capital loss, you can carry that loss for later years and even write off up to   $3,000 against your normal income for the year.

Flex-Spending Accounts

This time of the year is when employees must specify how much salary they will set aside in Flex Spending Accounts (section 125) for medical and child care expenses.  

Using flex funds to pay for medical and child care expenses save federal and state taxes but also saves an additional 7.65% in FICA and Medicare taxes.  Be sure to estimate medical and child care expenses low. Extra money left in your Flex Spending Accounts at the end of the year is lost.

Retirement

Please call me for the answers to your questions about early distributions from a retirement fund or planning your retirement. A simple phone call may save thousands of dollars in additional taxes and penalties. 

As always feel free to call me anytime for answers to your tax questions (including major events) at no additional cost.  Look for your appointment confirmation and questionnaire to come in the mail by January 5th or sooner. 

Have a Merry Christmas and Happy New Year!

Sincerely

Rich McKay

801-731-1857

RMcKay@McKayTax.com

 

Can you believe it is that time of year again!  I’ve comprised a list of the tax forms and their due dates for 2020.  On the left, you’ll find the form type and on the right, you’ll see the date the form needs to be filed for the 2019 tax season.

We know that can be confusing, so let’s reiterate that: These are 2020 dates for 2019 tax forms regarding the 2019 tax year.

As always, if you have any questions feel free to jump over to our Contact page and reach out to us.

Tax Form	2020 Filing Due Date (for Tax Year 2019)
Form W-2 & certain 1099-Misc (electronic or mail)	January 31st
Form 1065 – Partnerships	March 16th
Form 1120-S – S Corporations	March 16th
Form 1040 – Individuals	April 15th
FinCEN 114 – FBAR (will be allowed to extend)	April 15th
Form 1041 – Trusts and Estates	April 15th
Form 1120 – C Corporations	April 15th
Form 990 series – Tax Exempt Organizations	May 15th
Form 5500 series – Employee Benefit Plan	July 31st
Form 1065 Extended Return	September 15th
Form 1120-S Extended Return	September 15th
Form 1041 Extended Return	September 30th
Form 1120 Extended Return	October 15th
Form 1040 Extended Return	October 15th
FinCEN 114 (Extended with Form 1040)	October 15th
Form 5500 series – Employee Benefit Plan Extended Return	October 15th
Form 990 series – Tax Exempt Organization Extended Return	November 16th

 

IRS official tax dates you need to stay on top of your taxes.

2019 Federal Legal Holidays

• January 1 – New Year’s Day
• January 21 – Martin Luther King Jr.’s Birthday
• February 18 – Washington’s Birthday
• April 16 – District of Columbia Emancipation Day
• May 27 – Memorial Day
• July 4 – Independence Day
• September 2 – Labor Day
• October 14 – Columbus Day
• November 11 – Veterans’ Day
• November 28 – Thanksgiving Day
• December 25 – Christmas Day

2019 E-File Dates

• January 28 – First day to e-file and first IRS acknowledgements of e-filed returns
• April 15 – Last day to e-file timely returns and extension requests
• April 21 – Last day to retransmit rejected timely filed returns and extensions
• June 17 – Last day to e-file timely extension request for overseas taxpayers
• October 15 – Last day to e-file returns that received 6-month extension
• October 22 – Last day to retransmit rejected late or extension returns

Important 2019 Tax Dates

• January 10 – Report tips of $20 or more to employer
• January 15 – Make last 2018 estimated tax payment
• February 11 – Report tips of $20 or more to employer
• March 11 – Report tips of $20 or more to employer
• April 10 – Report tips of $20 or more to employer
• April 15 – Due date to file calendar year 2018 tax returns or request an automatic 6-month extension of time to file. Pay any tax that is due, even if you file a 6-month extension of time to file.
• April 15 – First 2019 estimated tax payment due
• May 10 – Report tips of $20 or more to employer
• June 10 – Report tips of $20 or more to employer
• June 17 – Second 2018 estimated tax payment due
• July 10 – Report tips of $20 or more to employer
• August 102– Report tips of $20 or more to employer
• September 10 – Report tips of $20 or more to employer
• September 16 – Third 2018 estimated tax payment due
• October 10 – Report tips of $20 or more to employer
• October 15 – Final due date to file calendar year 2017 tax returns for taxpayers who received a 6-month extension
• November 12 – Report tips of $20 or more to employer
• December 10 – Report tips of $20 or more to employer

Hi Business Clients!

I’ve pieced together all of the forms and calculators you should need to be ready for filing your 2018 business taxes.

The attached Corporate and LLC guidelines and other various forms are to help keep your corporation valid with the state and the federal government in addition to tax planning.   If you do not have a corporate book (Corporation) we can tell you where to obtain one.

Continue reading →

It’s that time of year again!  Tax season.

We talked a little bit about this in last year’s newsletter.  But here is a reminder —

The Tax Cuts and Jobs Act of 2017 brought on the biggest changes in tax law history.  Overall, new deductions have been added and some old, common deductions have been completely repealed.

Below, I will highlight some of the big changes for the 2018 tax year — both for Individuals and for Businesses. Please give me a call if you have questions.

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We have a list of important dates from now through the end of the year whether you’re an individual, an employee, or a business!  Be sure to add these important dates to your calendar.

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