Tax

Summer is in full swing—and while it’s a season for weddings, travel, home upgrades, and side gigs, many of these activities also come with tax implications. A little awareness now can mean a smoother tax season later. Here are some ways your summer fun might affect your next tax return:

Just Married? Make It Tax Official

If you recently tied the knot, congrats! A few quick updates now can prevent tax-time hassles:

• Report name changes to the Social Security Administration.

• Moved? File IRS Form 8822 and update your address with USPS and your employer.

Summer Day Camp = Possible Tax Credit

Sending your kids to summer day camp? You may be eligible for the Child and Dependent Care Credit.

Traveling for Business? Keep Your Records Tight

• Keep detailed records of dates, purpose, and expenses.

• Only the business portion of the trip is deductible—vacation days don’t count.

Part-Time or Gig Work? File Even If You Don’t Owe

Summer jobs, side hustles, and freelance gigs may not always result in a big tax bill—but you could still be owed a refund. File to claim it!

Earning via payment apps? You might get a 1099-K.

Learn more at the IRS Gig Economy Tax Center (https://www.irs.gov/businesses/gig-economy-tax-center).

Home Upgrades That Can Lower Your Tax Bill

• Up to $3,200 in Energy Efficient Home Improvement Credits for eligible items like windows, doors, HVAC, or water heaters.

• Residential Clean Energy Credits for solar panels, battery storage, geothermal, and more.

• Check eligibility at the IRS Home Energy Tax Credits page (https://www.irs.gov/credits-deductions/home-energy-tax-credits) and save your receipts.

Pro Tip: Document Now, Relax Later

Whether it’s a new address, a summer job, or a solar panel install—keep records! A bit of tracking now can lead to bigger refunds or smaller headaches next tax season.

If you have questions about how your summer activities could affect your taxes, we’re here to help. Reach out anytime!

Congress has officially passed the One Big Beautiful Bill, a sweeping package that reshapes U.S. tax law, locks in most of the 2017 Tax Cuts and Jobs Act (TCJA), and introduces major new individual and business tax provisions starting in 2025. It also impacts student loans, Pell Grants, the debt ceiling, and more.

Whether you're a tipped worker, a small business owner, or a tax strategist, this bill will likely affect you. Let’s break it all down.

🧾 What’s Changing — and When

🔹 For Individuals:

🔄 Starting Tax Year 2025 (filed in 2026):

1. No federal tax on tips and overtime

⤷ Up to $25,000 of tip income and $12,500 (single) / $25,000 (joint) of overtime pay is tax-free through 2028, with income phaseouts.

2. Senior deduction: $6,000 per qualifying senior (2025–2028), phases out at $75,000 AGI.

3. Child Tax Credit increased to $2,200 starting in 2026, indexed for inflation.

4. Adoption credit becomes partially refundable.

5. Standard deduction boost:

• $31,500 (joint)

• $23,625 (head of household)

• $15,750 (single) — all inflation-adjusted after 2025.

6. SALT deduction cap increases to $40,000 in 2025, rising 1% annually through 2029; phases out above $500,000 AGI, drops back to $10,000 after.

7. EV auto loan interest deduction: Up to $10,000 on U.S.-assembled vehicles, 2025–2028, phased out at $100k/$200k AGI.

8. Above-the-line charitable deduction: $1,000 ($2,000 joint) permanently.

9. 0.5% floor on itemized charitable deductions.

10. Trump Savings Accounts for children: details still pending, but expected 2025–2028.

11. IRA phaseouts and other thresholds adjust for inflation.

12. AMT exemption increases and remains indexed to inflation (but AMT phaseout thresholds revert to 2018 levels).

13. Earned Income Tax Credit - The maximum credit for filing jointly as a married couple and claiming three or more qualifying dependents amounts to $8,046 in 2025, with the credit completely phased out at $68,675 of adjusted gross income (AGI). If you are a Single filer with no dependents, you can receive a maximum credit of $649 with your phaseout beginning at $19,104 of AGI.

14. EV credit ends September 30, 2025.

🔄 From 2026 Forward (Permanent unless otherwise noted):

15. TCJA tax brackets locked in (10%, 12%, 22%, 24%, etc.) with additional 1-year inflation adjustment for lower brackets.

16. No personal exemptions (permanently repealed).

17. Increased standard deductions (indexed for inflation)

18. Increased Child Tax Credit (indexed for inflation)

19. $750,000 principal limit mortgage interest cap stays permanent.

20. Cap on itemized deductions limited to 35 cents per dollar for top bracket filers.

21. Itemized deductions eliminated or limited:

• Personal casualty losses

• Miscellaneous deductions (except teacher expenses)

• Moving expenses (except for military/intel)

22. Estate and lifetime gift tax exemption raised permanently to $15M single / $30M joint, indexed.

🔹 For Businesses:

🔄 Starting Tax Year 2025:

1. Bonus depreciation: 100% restored permanently.

2. R&D expensing: Immediate write-off restored permanently.

⤷ Small businesses can retroactively expense R&D back to 12/31/21.

3. EBITDA-based interest deduction limit returns permanently.

4. Section 179: Expensing cap expands to $2.5M (phased out at $4M+), inflation-adjusted.

5. 100% expensing for qualifying structures built between 1/19/25 and 1/19/29, in service by 1/1/31.

🔄 From 2026 Forward (Permanent unless otherwise noted):

6. QBI deduction (Section 199A) stays — 20% for pass-throughs, with expanded eligibility and a $400 minimum deduction.

7. 1099-K threshold raised to $10,000 — fewer gig workers will receive the form.

8. New 1% deduction floor on corporate charitable contributions.

💡 Green Tax Credit Changes:

1. EV & residential energy credits repealed after 2025.

2. Clean hydrogen, building efficiency, and solar/wind credits phased out or narrowed by 2027.

3. Clean fuel credit (45Z) extended to 2030 and expanded.

4. New FEOC (Foreign Entity of Concern) restrictions apply to multiple energy credits.

🌐 International Tax Reform

1. GILTI renamed to Net CFC Tested Income (NCTI), taxed at 12.6%–14%.

2. FDII renamed to Foreign-Derived Deduction Eligible Income (FDDEI), taxed at 14%.

3. BEAT rate raised to 10.5%.

4. Indirect expense allocations removed, and foreign tax creditability rises to 90%.

📌 What Didn’t Change

1. Inflation adjustments to brackets and deductions remain automatic.

2. IRA contribution limits unchanged for 2025.

3. AMT structure still protects middle-income households.

4. No changes to payroll tax or Social Security contributions.

📅 Smart Planning Moves You Can Make Now

Individuals:

1. Tipped workers: Adjust W-4s to reflect tax-free tips in 2025.

2. High-income households: Time SALT payments strategically.

3. Seniors: Stack medical expenses in 2025 to pair with the $6,000 deduction.

4. EV buyers: Buy before September 30, 2025 to claim the final EV credit.

Businesses:

1. CapEx ahead: Plan large purchases for 2025 to use 100% bonus depreciation.

2. Manufacturers: Design facility expansions to qualify for temporary 100% structure expensing.

3. R&D-heavy startups: Retroactively claim past R&D expenses starting immediately.

4. 1099-K reporters: Update internal systems for new $10k reporting threshold.

❓ Frequently Asked Questions

1. Does the tip/overtime exclusion last forever?

No, it expires after 2028 unless extended.

2. Is the SALT cap removed?

No — just temporarily raised and phased out for high earners.

3. Can I still claim an EV credit in 2025?

Yes, but only if the car is placed in service by 9/30/25.

4. What about student loans?

Pell Grant and student loan reforms are included, but details are still being finalized.

5. Is this all permanent?

Many changes are permanent — but some, like the senior deduction and clean-tech deductions, are time-limited.

🛠️ What’s Next

1. The IRS and Treasury will issue guidance over the next 6–12 months. Expect:

2. New instructions for tip reporting and payroll withholding

3. Updated Schedule A guidance (esp. for SALT and charitable floors)

4. Revised depreciation schedules and Form 4562

5. Changes to FAFSA and student aid rules by 2026

🧠 JUJU Accounting Has Your Back

✨ Custom Projections: Let us model what OBBB means for your tax situation.

📞 Strategy Sessions: Schedule a 30-min call with Juju to plan 2025 deductions or restructure your entity.

🚀 Bottom Line

The One Big Beautiful Bill brings major tax opportunities for both individuals and businesses — but also introduces new limits, complexities, and planning deadlines. The earlier you start, the more you can save.

Let’s make sure you're ready.

Hey friends,

Ever get an envelope from the IRS and feel your heart drop a little? You're not alone. But don’t panic — most IRS letters are routine and don’t mean you’re in trouble. Here’s a quick guide on what to do if the IRS sends you mail.

Why the IRS Might Be Writing to You

The IRS usually sends notices or letters for one of these reasons:

• They have a question about your tax return.

• They made a change to your tax account.

• They’re requesting more information.

• They’re notifying you of a balance due or a correction.

Here’s What to Do:

• 1 Read It Carefully:
  Each notice addresses a specific issue and outlines the steps you should take. The faster you act, the more you can reduce penalties or interest if anything’s owed.

• 2 Review the Details:
  If the letter says your return was changed or corrected, compare it with your copy. If it makes sense, just keep a note with your records. If not, see #5 below.

• 3 Take Action (If Needed):
  If the letter asks for payment or documents, follow the instructions. You can also see many IRS letters by logging into your IRS Online Account. Payment plans are available if needed.

• 4 Only Reply If They Ask You To:
  Most notices don’t require a response. But if the letter says to reply — do it. If you need to call, use the number in the top right corner of the letter and have your tax return handy.

• 5 Don’t Ignore Mistakes:
  If something seems off, you can dispute it. Follow the instructions in the notice and send the IRS any documents that support your case.

• 6 Save That Letter!
  Keep any IRS notice you receive for at least 3 years. These are important records, especially if your tax return is ever audited or adjusted again.

Watch for Scams

The IRS will never contact you first via:

• Text

• Social media

• Email

Legit IRS contact almost always starts with snail mail. If you’re not sure if a letter is real, log into your IRS account or reach out to us — we’re happy to help double-check.

Need help reviewing an IRS letter?

JUJU Accounting has your back. We can help you figure out what it means and what to do next — so you don’t lose sleep over a piece of paper.

Love, Taxes, and the IRS – Here's What You Need to Know

Under certain circumstances, you can claim your boyfriend or girlfriend as a dependent on your tax return. If you're financially supporting your partner, the IRS might allow you to claim them for a tax benefit.

1 They lived with you all year.

Your partner must live in your home for the entire year, excluding temporary absences.

2 You provided over half of their support.

This includes basic needs such as food, housing, medical expenses, and transportation.

3 They made under $5,050 in gross income (2024).

Earnings over this threshold usually disqualify them unless it's tax-exempt income.

4 You’re not married.

If you're legally married, the dependent rule no longer applies.

5 No one else is claiming them.

Your partner cannot be claimed by someone else, such as their parent.

6 They meet the residency requirement.

They must be a U.S. citizen, national, or resident of the U.S., Canada, or Mexico.

What You Get:

If you meet all these requirements, you may be able to claim them as a “qualifying relative” and qualify for benefits like Head of Household status.

Note:

You won’t receive the Child Tax Credit for your partner, but you may qualify for other deductions. Keep documentation of shared expenses and income limits in case the IRS requests it.

Bottom Line:

If your partner depends on you financially, don’t overlook a potential tax break.

Even though the April 15 tax deadline has passed, it's not too late to take action if you couldn’t pay your tax bill in full. The IRS has several flexible payment options designed to help you catch up without unnecessary stress.

1. Online Payment Plans: Fast, Easy, and Available to Most 💻💸

Short-Term Payment Plan

• For balances under $100,000

• Gives you up to 180 days to pay in full

• Can be set up online in minutes

Long-Term Payment Plan

• For balances under $50,000

• Pay monthly for up to 10 years 🗓️

• Choose Direct Debit to automate payments and reduce the risk of default

Heads-up: Interest and penalties will continue to add up until the balance is paid

Apply through the IRS Online Payment Agreement Tool and get an instant decision—no phone calls, no paperwork! ✨

2. Can’t Qualify for a Payment Plan? Consider These Alternatives 🤔

Offer in Compromise

If your financial situation is serious, you may qualify to settle your tax debt for less than what you owe. Use the Offer in Compromise Pre-Qualifier to check eligibility. ✔️

Temporary Delay of Collection

If you’re facing financial hardship, the IRS may pause collections until your situation improves. Note: Interest and penalties will still accrue. ⏸️

3. Penalty Relief Might Be an Option 🛟

If you tried to comply with tax laws but couldn’t due to circumstances beyond your control, you may qualify for penalty relief. This could reduce or remove failure-to-file or failure-to-pay penalties.

4. Watch Out for Scams 🚨

The IRS will never call, text, or DM you asking for immediate payment.

Legit IRS communication comes by mail with clear instructions and options.

Not sure if you owe anything? Check securely with your IRS Online Account. 🔐

5. Estimated Tax Payment Reminder 🚨

Reminder: 2025 second quarter estimated tax payment (April 1–May 31) is due today, June 16, 2025.

Feel free to use our Estimated Tax Payment Checklist to see if you need to make a payment.

Need More Info? 📚

• Tax Topic 202: IRS Tax Payment Options

• Topic No. 653: Notices, Bills, Penalties, and Interest

• Visit IRS.gov for official tools and guidance

P.S. If you're unsure which option is right for you, or you’d like help navigating IRS tools, don’t hesitate to reach out. 

If you're a U.S. citizen or resident alien living or working abroad, the IRS wants you to know: your 2024 federal income tax return is due by Monday, June 16, 2025. This special deadline applies to expats, dual citizens, and military personnel stationed outside the U.S.

✈️ Who Gets the June 16 Deadline?

You're automatically granted this two-month extension from the usual April 15 deadline if either of the following applies:

• Your tax home and main place of business are outside the U.S. and Puerto Rico.

• You’re serving in the military or naval forces on duty outside the U.S. and Puerto Rico.

To use the extension, simply attach a statement to your tax return explaining which condition applies.

⏳ Need More Time?

You can request an additional extension to October 15, 2025, but remember:

An extension to file is not an extension to pay.

Interest applies to any tax owed after April 15, 2025.

File an extension online through IRS.gov or submit Form 4868 by mail if needed. Businesses use Form 7004.

💳 Making Payments from Abroad

You’ve got options—even without a U.S. bank account:

• IRS Direct Pay

• IRS Online Account

• EFTPS

• Foreign Wire Transfer (via Foreign Electronic Payments)

• Debit/credit card or digital wallet (note: fees may apply)

📅 Special Situations & Longer Extensions

• Military in combat zones: You may qualify for longer extensions automatically. See IRS Publication 3.

• Taxpayers affected by the Israel conflict: You may have until September 30, 2025, to file and pay. This includes taxpayers in Israel, Gaza, or the West Bank impacted since October 7, 2023.

💼 Don’t Miss Out on Tax Breaks

By filing, expats may qualify for:

• Foreign Earned Income Exclusion

• Foreign Tax Credit

Details in Publication 54.

🏦 Foreign Bank Accounts: Time to Report

If you had more than $10,000 in foreign financial accounts at any time in 2024, you must file:

FinCEN Form 114 (FBAR) by April 15, 2025 (automatic extension to October 15 available).

Form 8938 with your tax return if your foreign financial assets exceed reporting thresholds.

🌍 Global Income = U.S. Taxable

Yes, you still have to report:

• Worldwide income

• Foreign interest, dividends, and trusts

Include Schedule B with your return and disclose where your accounts are located.

💵 Report in U.S. Dollars

All income, deductions, and payments must be reported in USD, using the December 31, 2024 exchange rate. Use any posted rate consistently.

🛂 Renounced Citizenship or Green Card in 2024?

You’ll need to file a dual-status return. See Publication 519 for guidance.

Final Reminder:

Don’t miss the June 16 deadline—it’s not just about filing, it’s about protecting your eligibility for key credits and avoiding unnecessary penalties or interest.

Need help navigating your expat taxes? Feel free to reach out—we’re here for U.S. taxpayers around the globe. 🌍💼

If you (or a dependent) are in college, grad school, or pursuing a certificate program, you might qualify for one of two major education tax credits—but the rules can be tricky. Let’s clear it all up so you don’t leave money on the table!

1. American Opportunity Tax Credit (AOTC)

Up to $2,500 per student

• Covers 100% of the first $2,000 + 25% of the next $2,000 in qualified expenses.

• 40% refundable—you can get up to $1,000 back, even with no tax owed.

• Applies to the first 4 years of college.

• Covers tuition, fees, and required books/supplies/equipment—even if not bought from the school!

• Must be pursuing a degree or certificate and enrolled at least half-time.

 Income Limits (2024–2025):

• Phased out if your MAGI is over $80,000–$90,000 (single) or $160,000–$180,000 (MFJ).

2. Lifetime Learning Credit (LLC)

Up to $2,000 per tax return

• Equals 20% of up to $10,000 in eligible expenses.

• Great for grad school, part-time study, or career development.

• No limit on how many years you can claim it!

• Covers tuition and fees—but books/supplies count only if paid directly to the school.

• No degree requirement, and no half-time enrollment needed.

 Same Income Limits as AOTC:

• Phased out at $80,000–$90,000 (single) / $160,000–$180,000 (MFJ).

3. What’s a Qualified Education Expense?

Eligible for AOTC:

• Tuition

• Fees

• Books, supplies, and equipment required for enrollment (even if purchased off-campus)

• Lab kits or special tools (if required)

Eligible for LLC:

• Tuition

• Fees

• Books/supplies/equipment only if paid directly to the school

 Not Covered by Either Credit:

• Room and board

• Insurance

• Transportation

• Sports or fitness fees (unless required by the course)

4. One Credit Per Student Rule

• You can’t claim both AOTC and LLC for the same student in the same year.

• You can claim AOTC for one student and LLC for another (e.g., your child and yourself).

5. Don’t Forget These Essentials

• You’ll need Form 1098-T from the school to claim either credit.

• Scholarships and grants reduce your qualified expenses. (Example: If tuition is $10,000 and you get a $4,000 scholarship, only $6,000 qualifies.)

• K–12 expenses don’t count—these are for postsecondary education only.

Real Talk from JUJU

If you're paying for school—or helping someone else who is—these credits can put serious cash back in your pocket. But they each have specific rules, and small mistakes can cost you. So keep receipts, double-check your 1098-T, and make sure you're not accidentally claiming ineligible expenses.

Got questions about your situation? Need help filing or planning ahead? You know where to find me.