FAQs About Business and Income Taxes

It’s been an interesting year with important tax changes that will impact you. Here are some of the changes and issues you need to know about.

Filing Deadline: The due date for filing your 2025 personal tax returns is April 15, 2026.

One Big, Beautiful Bill Act (OBBBA): OBBBA was signed into law on July 4, 2025, and contains numerous tax law changes, many of which apply starting with the 2025 tax year. Additionally, OBBBA made permanent many tax provisions that were set to expire at the end of 2025, including lower tax rates, the higher Child Tax Credit, and limitations to certain itemized deductions, among others.

State and local (SALT) deduction: OBBBA increases the limit on the amount of state income and property taxes that are deductible on your federal income tax return from $10,000 to $40,000 for many taxpayers. The increased SALT deduction for most taxpayers can mean the difference between using the standard deduction or itemizing deductions. Even if you have been using the standard deduction for the last few years, please be sure to provide the full amount of mortgage interest, charitable contributions, medical expenses, and state and local taxes so we can maximize your deductions.

Clean vehicle credits: At the start of 2025, three separate tax credits were available for the purchase of clean vehicles: a credit for new vehicles, a credit for previously owned vehicles, and a credit for business vehicles. These credits were originally set to expire many years from now, but OBBBA eliminated all three credits for vehicles acquired after September 30, 2025. If you purchased a clean vehicle in 2025, your credit is highly dependent on when you purchased the vehicle, among other limitations.

New deductions: OBBBA creates some new deductions starting with the 2025 tax year, including a new $6,000 personal exemption deduction for taxpayers age 65 and older and special deductions for tips, overtime compensation, and certain car loan interest. There are new reporting requirements starting next year in order to claim some of these deductions, but those requirements are eased for 2025. If you think you may be eligible for these deductions, then let’s discuss them as early as possible so we can make sure we have all the information we need.

IRS eliminating paper checks: Paper refund checks for individual taxpayers were phased out beginning on September 30, 2025. Also, any payments made to the IRS after this date are required to be electronic. If you make Estimated Payments, please make sure that your 4th payment (Due January 15, 2026) is made online, even though we may have provided paper vouchers to you. For instructions on how to make payments online to the IRS and FTB, see our website FAQ below.

Property transactions: Did you sell any real estate this year? Be sure to provide copies of the Closing Disclosure Form (Closing Statement), and California Form 593 - Real Estate Withholding Tax Statement. We need these documents to properly prepare your return. If you can get them to us as early as possible, we can make sure we have everything we need and make sure that any state withholding documentation is correct.

1099s and K-1s: If you received 1099s or K-1s from investments in 2025, we may extend your return in case these documents are corrected after the original filing deadline. We are seeing increasing numbers of corrected information returns, which require taxpayers to amend their original tax returns to reflect the corrected amounts. In some cases, the amounts are vastly different and can create additional costs in amending the tax returns and potential penalty problems.

New 1099-DA and 1098-VLI: The IRS has created two new forms that you may receive this spring: Form 1099-DA, which reports gains and losses from the sale of digital assets, and Form 1098-VLI, which reports interest you pay on car loans that are eligible for the new car loan interest deduction. You can expect to receive Form 1099-DA similar to your regular brokerage statements, except that the 1099-DA is issued by digital asset brokers. You can expect to receive Form 1098-VLI if you financed the purchase of an eligible vehicle after December 31, 2024.

Foreign accounts: We must report overseas assets owned by businesses as well as individuals. The reporting requirements are increasing, and the penalties for failure to report continue to be harsh. Not all foreign holdings must be reported. If, for example, you hold stock in a foreign company through a U.S. broker, those holdings do not have to be separately reported. However, if you hold any other types of foreign assets, including bank accounts and securities accounts, please let us know. If you have any doubt as to whether any of your assets are foreign, please discuss those assets with us. Again, this year we will need information on a business’s foreign holdings as well.

Please take extra care in preparing your organizer and documentation so we can identify available tax benefits and protect you from increased audit activity and penalties.

An IP PIN is an Identity Protection Personal Identification Number issued by the IRS to help reduce the amount of identity theft. It prevents someone else from filing using your Social Security number or individual taxpayer identification number (ITIN). We have seen an increase in ID theft and recommend that our clients get a PIN from the IRS to prevent the danger and the considerable hassle of ID theft. To get a PIN:

1. Online (fastest) Go to irs.gov > Get an identity protection PIN. Each spouse must request their own PIN.
2. By mail: You can also submit Form 15227, and they will call you to verify your identity
3. In person: Schedule an appointment at a local Taxpayer Assistance Center.

For more information, please call us or see irs.gov and search “Get an IP PIN”.

If you have quick questions, feel free to call or email us. For more in-depth discussions, please schedule an appointment outside of tax season. During our busiest months (February – April), appointments are limited to 20-30 minutes and restricted to tax matters only.

Most questions and appointments are provided at no charge. If a situation requires a fee, we will notify you in advance so there are no surprises.

At this time, we are not accepting new clients. If you need tax preparation, you may file a tax extension yourself using Form 4868. Please feel free to contact us after May 2026 to see if we are accepting new clients at that time.

As of September 30, 2025, a new law requires IRS payments to be made electronically. Payments can be made directly from a bank account at no cost or by credit card for a fee. Here is how:

For personal income tax payments: (Direct Pay)

• Go to irs.gov > MAKE A PAYMENT > DIRECT PAY WITH BANK ACCOUNT > PAY INDIVIDUAL TAX > MAKE A PAYMENT >
• REASON FOR PAYMENT:
  • Amended Return
  • Balance Due
  • Estimated Tax
  • Extension
  • Etc.
• APPLY PAYMENT TO (depends on entry above, usually Income Tax Form 1040 or 1040-ES. Sometimes it fills automatically).
• TAX PERIOD FOR PAYMENT (enter the tax year for which you are paying: usually prior year if paying a balance due on a tax return, or current year if paying estimated taxes).
• CONTINUE
• VERIFY IDENTITY: Enter a recent tax year so they can verify some information against their records > Filing status > Name of PRIMARY taxpayer (not spouse) > SS# > Date of Birth > Address > etc
• Enter your bank information, etc.

For business income tax payments: Either use Direct Pay or EFTPS (Electronic Federal Tax Payment System:

Using Direct Pay:

• Go to irs.gov > MAKE A PAYMENT > DIRECT PAY WITH BANK ACCOUNT > PAY BUSINESS TAX > MAKE A PAYMENT
• REASON FOR PAYMENT:
  • Balance due on return or notice
  • Estimated Tax
  • Extension
  • Etc.
• APPLY PAYMENT TO: depends on business type. Usually: Form 1120, 1065, or 990
• TAX PERIOD FOR PAYMENT: (Enter the tax year for which you are paying) > CONTINUE
• Enter your title, business name, bank information, etc.

Using EFTPS:

• Enroll at EFTPS.gov > Enter contact, bank, and other information. They will mail you a PIN in 5-7 days. Use the PIN to finish enrollment.
• Go to irs.gov > Pay through EFTPS > EFTPS > Make a payment.

For Trust payments:

• To pay online, you must use EFTPS; Direct Pay is not allowed. See above for steps.
• Automatic withdrawal from a bank account may also be set up through the tax return.

As of right now, you may pay by check or online. We recommend paying online so that you get confirmation of payment (No wondering if the check got lost in the mail). Pay under the Taxpayer’s SS#, not the Spouse's. Can be paid by credit card, but a fee will be charged.

For personal income tax payments:

1. 1. Go to ftb.ca.gov > PAY or MAKE A PAYMENT > BANK ACCOUNT > WEB PAY PERSONAL

1. 1. Enter the PRIMARY Taxpayer’s SS# and last name > LOGIN

1. 1. Enter the Taxpayer’s address > CONTINUE

1. 1. Select a payment Type:

1. 1. Estimated Tax Payment (for estimated tax payments 540-ES)

1. 1. Bill Payment
      • • Tax Return Payment (for balance due from tax return)
      • • Amended Tax Return Payment
      • • Extension Payment (Form 3519)
      • • Etc.

1. 1. Enter TAX YEAR (enter the tax year for which you are paying: usually prior year if paying a balance due on a tax return, or current year if paying estimated taxes).

1. 1. Enter PAYMENT AMOUNT and PAYMENT DATE

1. 1. Is this a joint tax payment? YES (if married filing a joint return) or NO > If married, enter SPOUSE information & SS#

1. 1. Enter bank information (routing number / account number / checking or savings)

For Business income tax payments:

1. 1. Go to ftb.ca.gov > PAY or MAKE A PAYMENT > BANK ACCOUNT > WEB PAY BUSINESS

1. 1. Enter ENTITY TYPE (Corporation, LLC, or Partnership) (Corporations include Exempt Orgs)

1. 1. Enter ENTITY ID# (state ID number, not federal) > Enter contact person info

1. 1. Select the correct tax form you filed or will file to ensure proper posting of your payment:
      • • Corporations: Form 100, 100S, 100W, or 100X
      • • Exempt Orgs with business tax return: Form 109
      • • Exempt Orgs: Form 199
      • • LLCs: Form 568
      • • Partnerships: Form 565

1. 1. Select payment type: Depends on which tax form you filed. If you need help, please ask.

1. 1. Enter PERIOD: Enter dates of fiscal year for which you are paying (usually prior year if paying a balance due on a tax return, or current year if paying estimated taxes).

1. 1. Enter PAYMENT AMOUNT and PAYMENT DATE

1. 1. Enter bank information, etc.

A 1099-K is used to report income to the IRS from companies such as credit card companies, eBay, Amazon, VRBO, AirBnb, and apps like Venmo and PayPal. It may or may not be taxable, depending on the situation.

The OBBBA passed in July 2025 increased the reporting threshold to $20,000 and more than 200 transactions for Tax Year 2025. For example, if you sell items on eBay and exceed both thresholds, then Ebay is required to issue a 1099-K to both you and the IRS.

Not all income reported on a 1099-K is taxable, so please provide the form to us so we can determine how it applies to your specific situation.

We encourage all clients to create an account on IRS.gov and FTB.ca.gov to access their tax information. It is a great way to find out exactly how much government payments you received, allows you to print out an official list of your estimated payments made, and much more.

It is important to report accurate amounts on your tax return so that you do not receive a letter from the IRS or FTB, which is a hassle for you, and delays the processing of your return.

See instructions on the IRS and FTB websites for how to create the accounts, and feel free to call us if you have any trouble.