Hi,
As we step into the new year, here are some important tax deadlines, deductions, and credits to keep in mind this January:
Key Deadline
- February 2, 2026: Employers (including those with household employees like nannies) must issue W2s for employees and 1099s for contractors for work done in 2025.
Tax Deductions and Credits
- Cost Segregation Study for Real Estate Investors and Owners: If you own rental and/or self-rental, commercial or residential properties, this strategy can significantly increase your depreciation deductions, potentially resulting in major tax savings.
- January is the best month to develop financial strategy for the upcoming year. We would highly suggest considering limiting the tax burden on interest earnings through a US Treasury bond or a municipal bond ladder strategy. A simple laddered bond strategy reduces taxes on interest earned from your business or personal cash. It might be worth taking a second look into shifting your non-qualified dividends (generally REITs and MLPs) to your tax-deferred account. High earners should try to make sure they hold mostly qualified companies versus holding non-qualified companies in their taxable trading accounts to save 17% or more on tax!
- R&D Tax Credit: If your business engaged in research and development in 2025, you may qualify for this highly advantageous credit, even as a start-up!
- Electric and Plug-in Hybrid Vehicle Credit: Up to $7,500 is available for qualifying vehicles purchased before September 30, 2025. Ensure your vehicle meets the updated eligibility criteria.
- Energy-Efficient Home Upgrades: Expanded credits are available for installing solar panels, energy-efficient windows, HVAC systems, and insulation.
- 529-to-Roth IRA Rollovers: You can now roll over unused 529 education savings funds into a Roth IRA for the same beneficiary (subject to specific limits).
- Self-Employed Health Insurance Deduction: If you’re self-employed and pay for health insurance out of pocket, ensure you claim this deduction.
- SEP IRA Contributions: For freelancers or self-employed individuals with net income, this remains one of the largest deductions available. The contribution limit for 2025 is $70,000. Now there is an option to contribute to SEP Roth IRA!
Other Notes
- Crypto Trading: If you engaged in crypto trading in 2025, prepare your Form 8949 as soon as possible to meet IRS requirements. NEW Form 1099-DA will be issued by the trading platforms to comply with the IRS regulations to report your trading activity. Starting 2026 tax year 1099-DA will include crypto basis reporting.
- S-Corp Payroll Compliance: If your S-Corp showed a profit in 2025 but did not run payroll, this issue needs immediate attention to avoid IRS penalties.
- Bookkeeping: For business or freelance income, ensure your records are clean and accurate to avoid last-minute headaches and to harvest maximum allowable expenses.
- IRS Refunds: Refunds expire after three years. If you are owed a refund from 2022, you must file before April 2026 to claim it.
Plan Ahead
If you plan to use our services for 2025 taxes, book your spot early. This ensures we can get started right away giving us enough time to go meticulously through all of your documents, so this is off your plate as soon as possible, even if some information arrives in February.
Let’s hop on a quick 10-15 minute call to see how we can help or reach out to book a consultation to discuss your unique situation! Please contact us by early next week to make sure we secure a spot before the tax season heats up.
We’re here to help you!
—
George Dimov CPA
(833) 829-1120 toll free
