Taxes are often the dreaded aspect on the flipside of the financial coin, opposite income. As the 2025 tax season approaches, entrepreneurs and business owners face a dynamic landscape shaped by recent policy changes and economic shifts. The more you know, the more proactive you can be in how you approach these aspects in your own situation.
Megan Schwan, founder at Sidekick Accounting Services, is helping clients get through tax time so they can focus on what they do best. She believes that “Finances are at the core of every business. It is necessary to keep them healthy and strong so that small problems now don’t become big disasters later.” This is why she believes in being proactive and provides custom business accounting packages to fit every stage of your financial journey, a perfect sidekick for busy entrepreneurs.
Here are some key tips to navigate this changing environment effectively, consider focusing on the following key areas:
- Understanding Recent Tax Law Changes
Recent legislative actions have introduced modifications that could impact your tax planning:
- Inflation Reduction Act Credits: Incentives for clean energy investments, such as rebates for electric vehicles and energy-efficient installations, are available.
- Child Tax Credits: The child tax credit offers up to $2,000 per child, and the child and dependent care tax credit is worth up to $6,000.
- Medical Expense Deductions: Medical expenses exceeding 7.5% of adjusted gross income can be deducted.
- State and Local Tax (SALT) Deductions: Deductions for state and local taxes are capped at $10,000.
- Educational Credits: Credits such as the American Opportunity Tax Credit and Lifetime Learning Credit are available.
- Navigating Economic Policy Uncertainty
Recent policy decisions have introduced elements of uncertainty that may affect business operations:
- Trade Policies: Tariffs on imports from countries like Canada, Mexico, and China have led to market volatility, impacting supply chains and cost structures.
- Immigration Enforcement: Stricter immigration policies may affect labor availability, particularly in industries reliant on immigrant workers.
- Regulatory Changes: Reductions in federal agency activities could alter compliance requirements and available support programs.
IN A TEXT BOX in middle OR end of article before final paragraph, add this
“For over a decade, I’ve worked with thousands of business owners and one thing remains true, in order to be a successful and sustainable business, you have to be proactive. Proactive with your money management, proactive with strategic reinvestment, proactive with your profit, and proactive with your taxes. Waiting until tax time to review your anticipated liability and financial position is just too late. As technology evolves this is becoming an even greater non-negotiable, we have to get proactive now.”
-Megan Schwan, Owner of Sidekick Accounting Services
- Leveraging Technology for Tax Compliance
The integration of technology into tax processes can enhance accuracy and efficiency:
- AI-Driven Tools: Utilizing AI-powered accounting software can streamline bookkeeping, ensure accurate tax filings, and assist in real-time expense tracking.
- IRS Monitoring: The IRS employs advanced technologies to identify discrepancies, making precise record-keeping and reporting essential to avoid audits.
- Adapting to Changes in Digital Commerce
E-commerce businesses must stay informed about evolving regulations:
- De Minimis Tax Exemptions: Recent executive orders have altered duty-free shipment thresholds, affecting international sales and import strategies.
- Digital Payment Reporting: New IRS rules for 1099-K reporting impact entrepreneurs using platforms like PayPal, Venmo, and Stripe, requiring meticulous tracking of transactions.
- Preparing for Potential Tax Law Expirations
Certain provisions from previous tax reforms are set to expire, which could influence future tax planning:
- Tax Cuts and Jobs Act (TCJA) Provisions: Several benefits under the TCJA are scheduled to sunset, potentially affecting deductions and tax rates.
- Estate and Gift Tax Exemptions: Adjustments to exclusion amounts may impact estate planning strategies.
For Optimal Success, Stay Informed
Don’t be overwhelmed, as it’s likely that not all these issues will impact each person or business. The variety of this list shows the importance though of staying informed and being proactive; awareness is essential in this evolving tax landscape. What you don’t know could unfortunately cost you a lot when it comes to taxes for your business not to mention for your own personal taxes. Consider these tips and remember, you don’t need to be an expert in everything; it’s usually wise to consult a professional for guidance on what will be beneficial for you.
However, this should give you some insights into what changes could impact your bottom line, and additional verbiage and vocabulary to formulate questions to ask or to have a more focused conversation when choosing the right professionals. Tax and accounting professionals who stay up to date can provide personalized guidance to navigate these complexities effectively.
Learn more at: https://www.sidekick-accounting.com/
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