Better Quality Tax

04/16/2026

Another year in the books. Thank you to all of my customers. I truly appreciate your business and friendship. With wonderful reviews written from a Missouri customer and sweet treats from a Tennessee customer. Life is good.

01/11/2026

Updated postmark rules are redefining what we think of as “on time.” This could have big implications for year-end givers and for taxpayers at tax time.

01/03/2026

The Treasury and IRS have released new guidance on the car loan interest deduction created under the One Big Beautiful Bill. This new benefit allows taxpayers to deduct interest paid on qualified vehicle loans taken out after December 31, 2024, as long as the vehicle is new, made in America, and purchased for personal use. The deduction applies whether you take the standard deduction or itemize, and it is capped at ten thousand dollars per year. It applies to tax years beginning after December 31, 2024, and before January 1, 2029.

The IRS also issued transitional guidance for lenders who must report car loan interest beginning in 2025. A qualified passenger vehicle includes cars, SUVs, vans, pick‑ups, minivans, and motorcycles under fourteen thousand pounds that were the final assembly was in the United States. For 2025, lenders will be treated as meeting their reporting obligations if they make the total amount of interest received available to the borrower through an online portal, a monthly statement, an annual statement, or another similar method. So be looking for this information.

12/09/2025

The Working Families Tax Cuts allows a Trump Account to be established on behalf of every eligible child by a parent or guardian, as long as the child doesn’t turn 18 before the end of the calendar year in which the account is established. Contributions to Trump Accounts can’t be made before July 4, 2026.

The federal government will make a one-time $1,000 contribution to the Trump Account of each eligible child. The child must be U.S. citizen born between Jan. 1, 2025, and Dec. 31, 2028.

An employer may contribute to a Trump Account of the employee or the employee’s dependent up to $2,500 per year. Any employer contribution counts against the $5,000 annual limit. But contribution will not count toward the employee’s taxable income.

12/09/2025

If you worked overtime this year, save your paystubs, not just your W-2.
The IRS is not updating the W-2 for 2025 to show your overtime hours or the premium you earned. It all just gets lumped into Box 1 like nothing happened for 2025 (for 2026 tax returns filed in 2027 and onward, the W-2 is revised). Your W-2 for this year just reports it as generic wages. No hours. No premium. No breakdown. Nothing.

Only the "half" in time and a half is eligible for the deduction.
Here’s an example:
If you make $20/hr., then:
Regular pay = $20/hr.
OT pay = $30/hr. (time-and-a-half)
Regular portion = $20 - THIS PART IS TAXABLE, EVEN IF OVER 40
OT “premium” = $10 - THIS IS THE ONLY PART ELIGIBLE TO BE DEDUCTED ON YOUR TAX RETURN

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07/15/2025

Now we get into the Nitty Gritty of the OT. PLEASE READ

No Tax on Overtime

New deduction: Effective for 2025 through 2028, individuals who receive qualified compensation may deduct the pay that exceeds their regular rate of pay – such as the “half” portion of “time-and-a-half” compensation -- that is required by the Fair Labor Standards Act (FLSA) and that is reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.

Maximum annual deduction is $12,500 ($25,000 for joint filers).

Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.

Taxpayers must:

include their Social Security Number on the return and

file jointly if married, to claim the deduction.

Reporting: Employers and other payors are required to file information returns with the IRS (or SSA) and furnish statements to taxpayers showing the total amount of qualified overtime compensation paid during the year.

Guidance: The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and other payors subject to the new reporting requirements.

07/11/2025

OVERTIME
So many are interested in this particular topic. I do not have anything in black and white yet. But from all the talk about the bill, this is my understanding at this moment.
Workers can deduct up to 12,500.00(Single) or up to 25,000.00(MFJ) in overtime pay for tax years 2025 through 2028. This deduction will be an above the line, meaning it will reduce the taxable income directly. However, the deduction phases out for individuals earning more than 150,000(single) or 300,000.00(Married filing Jointly). I am unsure how the amount for the deduction will be relayed to the preparer at this time.
If you have any other questions about this item, feel free to contact me.

07/05/2025

The "One Big Beautiful Bill" has been signed. I will be making several small posts over the next few weeks on the new laws that will be going into effect.
For all of you that have OT or Tips, you will still have taxes taken from your checks. That will not change. So do not get upset with your employer. I soon as I get more information on this, I will let you know for sure. If you like you can send me an email.

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04/17/2025

04/16/2025

I would like to extend my gratitude to both returning and new clients. This tax season has been highly successful. Anticipating future changes, I will strive to keep you informed through updates on this page and my website, betterqualitytax.org. Your feedback on this season is greatly appreciated, and you are welcome to post or send me a direct message.

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02/21/2025

To everyone out there, there is so much going on in the media about money being refunded to taxpayers from these audits. At this point, this has not been done, and there is no timeline for this to happen. It is all talk at this point. As far as possible delays in refunds due to the layoff/firings, no one who works with the refund division has been laid off or fired. So, there are no delays at this point.