Hey everyone! Today I had a client ask about the new law regarding no taxes on overtime pay, and I thought it would be good to share my response with everyone here. Whether you have some employees and have been wondering how this would affect you and them, or if you receive W2 income and want to hear about it from that perspective, it's good info to know! This new tax bill (OBBTB) they passed this year made changes to the taxation of overtime wages. These changes benefit the employee when they file their personal tax returns next year, and they don't impact employers financially in any direct way. However, in order for the employees to be able to claim the tax credit, we need to make sure that we're correctly tracking the overtime hours each payrun. This means that when you, as the employer, report hours to your payroll provider, or record them for your own records, any overtime (for this purpose, that means any hours over 40 hours in one week, not per day) you want to split out how many hours are regular, and how many are overtime. This should be recorded in the payroll reports, so that at the end of the year, the W2 can be adjusted so it shows the "qualified overtime" figure separately from "regular wages". In 2026, it's expected that all the major payroll service providers will have updated their systems to generate W2s with the Qualified Overtime automatically split out and shown separately, but for 2025, the employer will want to work closely with their accountant or payroll provider to make sure that 's done. Short story - if the "Qualified Overtime" wages aren't shown separately on the W2 form, the employee will probably not be able to claim the tax credit! Things to note for the employees: 1) Qualified Overtime is payment for hours over 40 in one week; 2) The credit is taken on the personal tax return next year; paycheck withholdings won't be changed this year; 3) There is a cap on the credit at $12,500 for single filers, and $25,000 for married filing jointly.

Hey there! Have you been thinking you'd like to know more about being an accountant or a tax preparer? Watch my quick video below, about one of my biggest reasons WHY this is the perfect career for me, and see if it strikes a chord for you, too! Then message me, and let's talk!

Hello, I am wondering how to manage my 401k. Do I roll it over now, into my existing retirement account, before I file? Or after?

THE APPEALS COURT HAS OVERTURNED THE INJUNCTION AGAINST BOI REPORTING!! THIS MEANS that business owners are AGAIN REQUIRED TO FILE BY DECEMBER 31st!! In surprising news this afternoon, the Fifth Circuit Court of Appeals OVERTURNED the injunction that had created a nationwide stay against the Beneficial Ownership Interest reporting requirements enacted under the Corporate Transparency Act. While it is within the realm of possibility that further legal action could again change this requirement before the year's end, it is unlikely. At this point, it is the legal requirement for businesses to file this information with FINCEN - the Financial Crimes Enforcement Network. This can be done through the FINCEN website at: https://boiefiling.fincen.gov/ OR - we can assist you with that e-filing, for as low as $99 per filing entity (per business). Here are the Top 3 Questions we are hearing today about the BOI reporting requirement: 1. Exactly what date are they using for the "date your business started"? The date that you filed paperwork with your state's Secretary of State - maybe Articles of Organization for an LLC, or a DBA (Doing Business As) name would count as the start date. 2. Are nonprofits required to file this BOI report? IF YOUR NONPROFIT already has received approval from the IRS, then it DOES NOT need to file the BOI report. However, if your nonprofit's application to the IRS for tax-exempt status is STILL PENDING (or not yet applied, like if you are just getting started) THEN YOU DO NEED TO FILE THE BOI BY DEC 31st. 3. If I am going to start my new business in January, how long do I have to file the BOI report? Filing deadlines will tighten up EVEN MORE in 2025. Businesses opened (filed with their state) on or after Jan 1, 2025 will only have 30 CALENDAR DAYS to complete their filing with FINCEN. Remember, Those are not business days. You set up your entity with your state on Jan 1st, and you must have your BOI filing completed by Jan 31st.