Tax Tips and Updates from the March Coffee Connections Meeting at Woody's Classic Grill

We had a great outcome at our March Coffee Connections meeting hosted at Woody's Classic Grill. Many members and business owners were in attendance. Esmeralda Vasquez of E. Vasquez & Associates provided an update on important information that applies to filing your taxes for 2024.

Below is the info provided:

1099-K Reporting Threshold Changes

• 2024: $5,000

• 2025: $2,500

• 2026: $600

SECURE Act 2.0 & Self-Employment Retirement Plans

SEP (Simplified Employee Pension) Plans

• Maximum contribution: 25% of employee compensation or $69,000 (2024)

SIMPLE (Savings Incentive Match Plan for Employees)

• Contribution Limits:

  • 2024: $16,000 (for those 50+)

  • 2025: $16,500 (for those 50+)

401(k) Plans

• Employee Deferral Limits:

  • 2024: $23,000

  • 2025: $23,500

• Catch-up Contribution Limits:

  • Ages 50-59: $7,500 (2024 & 2025)

  • Ages 60-63: $11,250 (2025)

Schedule C Update

On Schedule C (Profit or Loss from Business), Box "B", ensure you are using the current IRS business code instead of 999999, as the IRS is now enforcing proper classification.

Business Meal & Expense Deductions (2024)

The 100% deduction for meals has expired, and deductions have reverted to pre-2021 levels:

• Business Meals (Restaurant): 50%

• Business Travel Meals: 50%

• Employer-Provided Breakroom Snacks: 50%

• Entertainment Expenses: 0%

• Meals During Entertainment: 50%

• Personal Meals: 0%

• Company Picnics & Holiday Parties: 100%

• Publicly Available Food & Drink: 100%

Travel Meals: Must be incurred at least 15 miles away from your primary business location.

Bonus Depreciation Phaseout

• 2022: 100%

• 2023: 80%

• 2024: 60%

• 2025: 40%

• 2026: 20%

• 2027: 0%

Eligible property includes:

• Machinery, computers, equipment, furniture

• Depreciable property with a recovery period of 20 years or less

• Certain improvements to business property

• Both new and used property (original use not required)

Tax Filing Deadlines for 2024 Returns (Filed in 2025)

Individual Tax Returns (Forms 1040 & 1040NR)

• Original Deadline: April 15, 2025

• Extended Deadline: October 15, 2025

Partnerships (Form 1065)

• Original Deadline: March 17, 2025

• Extended Deadline: September 15, 2025

Trust & Estate Tax Returns (Form 1041)

• Original Deadline: April 15, 2025

• Extended Deadline: October 3, 2025

C-Corporation Tax Returns (Form 1120)

• Original Deadline: April 15, 2025

• Extended Deadline: October 15, 2025

S-Corporation Tax Returns (Form 1120S)

• Original Deadline: March 17, 2025

• Extended Deadline: September 16, 2025

Foreign Bank Account Reports (FinCEN Form 114)

• Original Deadline: April 15, 2025

• Extended Deadline: October 15, 2025

20% Deduction for Pass-through Qualified Businesses (Section 199A)

Eligible businesses include:

• Sole Proprietorships, Partnerships, S-Corps, Real Estate Investment Trusts (REITs), Qualified Cooperatives

• Deduction is available whether you itemize or take the standard deduction

• Cannot exceed 20% of taxable income over net capital gains

• Specified Service Trades or Businesses (SSTBs) (e.g., health, law, consulting, finance, athletics, accounting) have limitations on QBI deductions

FinCEN Beneficial Ownership Reporting (BOI) – Mandate Suspended

Business Mileage Deduction for 2024

• IRS Standard Mileage Rate: TBD (pending IRS update)

• Ensure all business-related miles are properly tracked for deduction purposes

Additionally, if you’d like to share with the Chamber, I will be participating in an exclusive panel discussion next week:

Exclusive Panel Discussion: The Power of Goal-Setting & Bookkeeping Date: Thursday, March 13, 2025 Time: 5:00 PM - 6:30 PM PT Location: Loma Linda Branch, 25701 Barton Road, Loma Linda, CA 92354

Featured Speakers: Jonathan Escobar (Community Manager) Esmeralda Vasquez (Guest Expert, E. Vasquez & Associates)

What You’ll Learn: How bookkeeping can streamline your business operations Strategies to improve cash flow management The power of goal-setting for long-term success

Limited Seating – RSVP by March 12: RSVP Here

If you have any questions or are looking for a tax person, don't hesitate to reach out to Esmeralda.