Castle Court Tax

01/20/2026

As of today, as far as I know, the IRS will no longer mail out refund checks. To get your refund you will need an account that has a routing number and account number.

01/16/2026

If your employer does not give you paperwork that sorts out the overtime payments it is likely we can but will need your final paycheck stub for 2025.

IF YOU HAD OVERTIME OR TIPS DURING THE YEAR, THESE TWO DEDUCTONS WILL HELP SAVE ON YOUR TAX LIABILITY. BEFORE YOU BRING IN YOUR TAXES, DETERMINE HOW MUCH OVERTIME YOU WERE PAID OR HOW MUCH YOU RECEIVED IN TIPS. WE CAN HELP WITH THE FINAL CALCULATIONS.

Overtime pay: The new "no tax on overtime" rule allows you to deduct the premium portion (the extra half) from your federal income tax, not the whole amount.

This amount is calculated one of two ways
1. Find Your Regular Hourly Rate

This is your standard pay per hour (e.g., $20/hour).

2. Calculate Your Overtime Rate

Multiply your regular rate by 1.5 (e.g., $20 x 1.5 = $30/hour).

3. Determine Your Overtime Premium (The Deductible Portion)

Method 1 (Premium): Subtract your regular rate from your overtime rate (e.g., $30 - $20 = $10 extra per hour).
Method 2 (For Time-and-a-Half): Divide your total overtime earnings by 3 (e.g., if you earned $150 in OT, $150 / 3 = $50 deductible).

4. Understand How it's Taxed

Federal Income Tax (New Deduction): For tax years 2025-2028, you can claim a special deduction for the overtime premium (the extra $10 in the example above) on your tax return (Form 1040).
Regular Withholding: The entire overtime amount (e.g., the full $30/hour for all OT hours) is still added to your regular pay for Social Security, Medicare, and state taxes, and is subject to your normal tax bracket.

No Tax On Tips: This deduction reduces your Adjusted Gross Income (AGI), potentially making you eligible for other credits or deductions, but remember to report all tips to your employer monthly and keep detailed personal logs
1. Determine Your Total Qualified Tips

Voluntary Tips: Add up all cash and credit card tips you received, including shared tips (tip pooling).
Exclude Mandatory Charges: Do NOT include automatic gratuities or service charges for large parties, as these aren't voluntary tips, note Forbes.
Use Your Records: Use your W-2 (Box 7 for Social Security tips) and any tips you reported on Form 4070 (tips to employer) or Form 4137 (unreported tips).

2. Apply the $25,000 Limit

Maximum Deduction: Your total deductible tip amount cannot exceed $25,000 for the year, even if you earned more.
Earned Amount: If your total qualified tips are less than $25,000, you can only deduct the actual amount you earned.

3. Calculate Your Deduction

Total Qualified Tips (from Step 1) - Mandatory Charges (if any) = Your Deductible Amount (up to $25,000).
Example: If you earned $20,000 in tips and reported $4,000 on Form 4137, your total is $24,000, which is fully deductible as it's under the $25,000 cap.

4. Claim the Deduction on Your Tax Return

Enter this calculated amount as an "Additional Deduction" on the relevant line (like line 13b on Form 1040, or in your tax software) for the 2025 tax year

12/26/2025

Update: Some of these provisions do not apply until 2026 tax year. I have noted below what i currently understand.

This document will list some of the most critical changes for the coming tax season.

THERE ARE NOW 7 TAX BRACKETS
10, 12, 22, 24, 32, 35, and 37
Most of you will fall in the 10%, 12% or 22% brackets

STANDARD DEDUCTION 2025
Single $15,750 plus $6,000 if you are 65 or older
Married Filing Joint $31,500 Plus $6,000 each per 65 or older
Head of Household $23,625 plus $6,000 if 65 or older
2026 Taxpayers can deduct up to $1,000 in cash, check, credit card contributions ($2,000 MFJ)
Educator Deduction $300

ITEMIZED DEDUCTIONS (you should consider bringing itemized costs this year as there are some new items and other items have increased)(Keep in mind, even with these changes, most of us will still be better off with the Standard Deduction Rates)
(INCREASE) 2025 State and Local Tax has increased from $10,000 to as much as $40,000
(NEW) 2026 Primary and Secondary Home Mortgage Interest
(NEW) 2026 Primary and Secondary Home Mortgage Insurance Premiums
(SAME) Charitable Contributions cash, check, credit card, and or property
(NEW) 2025 Auto Loan Interest Deduction upto $10,000 for a New US Assembled car, van, SUV, picup truck or motorcycle and treated as a motor vehicle for purposes of title II of the Clean Air Act
(SAME) Losses as relates to Federally Declared Disaster Relief area
(NEW) 2026 Educator Deduction above the Standard $300. K-12 teacher, instructor, counselor, sports admin or coach, principal, or aide where the educator is in the school for at least 900 hours during the year. Non-reimbursed books, supplies, material, pc, or other material and supplies
(DECREASE) Gambling Losses limited to total winnings with a 90% limitation on losses
(CHANGE) 2026 Moving Expenses Only Armed Services or Intelligence Community as a result of re-assignment
(SAME) Medical Expenses above 7.5% of your Adjusted Gross Income

BOTH STANDARD AND ITEMIZED DEDUCTIONS
(NEW) 2025 Deduction for Qualified Tips up to $25,000 as reported by the employer to the payee
(NEW) 2025 Deduction for Overtime Pay $12,500 ($25,000 MFJ) as reported by the employer to the payee

OTHER CHANGES
2025 Child Tax Credit $2,200 for children under 17, $500 for other qualifying dependents
2026 Trump Accounts Similar to IRA but designed for children with a withdrawal age of 18

THANKS
TONY

12/15/2025

This document will list some of the most critical changes for the coming tax season.

THERE ARE NOW 7 TAX BRACKETS
10, 12, 22, 24, 32, 35, and 37
Most of you will fall in the 10%, 12% or 22% brackets

STANDARD DEDUCTION
Single $15,750 plus $6,000 if you are 65 or older
Married Filing Joint $31,500 Plus $6,000 each per 65 or older
Head of Household $23,625 plus $6,000 if 65 or older
Taxpayers can deduct up to $1,000 in cash, check, credit card contributions ($2,000 MFJ)
Educator Deduction $300

ITEMIZED DEDUCTIONS (you should consider bringing itemized costs this year as there are some new items and other items have increased)(Keep in mind, even with these changes, most of us will still be better off with the Standard Deduction Rates)
(INCREASE) State and Local Tax has increased from $10,000 to as much as $40,000
(NEW) Primary and Secondary Home Mortgage Interest
(NEW) Primary and Secondary Home Mortgage Insurance Premiums
(SAME) Charitable Contributions cash, check, credit card, and or property
(NEW) Auto Loan Interest Deduction upto $10,000 for a New US Assembled car, van, SUV, pickup truck or motorcycle and treated as a motor vehicle for purposes of title II of the Clean Air Act
(SAME) Losses as relates to Federally Declared Disaster Relief area
(NEW) Educator Deduction above the Standard $300. K-12 teacher, instructor, counselor, sports admin or coach, principal, or aide where the educator is in the school for at least 900 hours during the year. Non-reimbursed books, supplies, material, pc, or other material and supplies
(DECREASE) Gambling Losses limited to total winnings with a 90% limitation on losses
(CHANGE) Moving Expenses Only Armed Services or Intelligence Community as a result of re-assignment
(SAME) Medical Expenses above 7.5% of your Adjusted Gross Income

BOTH STANDARD AND ITEMIZED DEDUCTIONS
(NEW) Deduction for Qualified Tips up to $25,000 as reported by the employer to the payee
(NEW) Deduction for Overtime Pay $12,500 ($25,000 MFJ) as reported by the employer to the payee

OTHER CHANGES
Child Tax Credit $2,200 for children under 17, $500 for other qualifying dependents
Trump Accounts Similar to IRA but designed for children with a withdrawal age of 18

THANKS
TONY

09/03/2025

On August 14, 2025, the U.S. Department of the Treasury announced that the federal government will stop issuing paper checks ( including tax refunds, SS, retirement, etc) for most federal payments on September 30, 2025.
If you are one of the few people who still receives a federal benefit check, it’s time to switch to an electronic payment method.
No action is required for the vast majority of Americans who already receive federal benefit payments electronically.

If you are still receiving a paper check for Social Security, Veterans benefits, or any other federal benefit, enroll in direct deposit using one of the following options
1. Call the federal agency that issues your check and follow their instructions OR
2. Enroll online at
GoDirect.gov OR
3. Call the electronic payment solution center at
800-967-8657

If you do not have a bank account for electronic payments you can open an account at any bank of your choosing or you can get an account at,
FDIC : GetBanked or MyCreditUnion.gov

You can also sign up for a Direct Express® Debit Mastercard®. Direct Express® is a Treasury-sponsored debit card where you can receive your monthly benefit payments electronically. Individuals without a bank account can sign up by calling the Payment Solution Center at 800-967-6857 or by contacting their paying agency directly.

Always beware of government impersonation scams. Before responding to a request, check it out and, verify it by contacting the agency using a website or phone number you know is real. If you’re unsure, ask a trusted source, like your bank, a friend or family
member for help.

MyCreditUnion.gov is a financial education resource focused on the non-profit credit union industry from the National Credit Union Administration to help you manage and protect your money.

08/05/2025

Let’s be clear. The Big Beautiful Bill DOES NOT eliminate taxes on your social security. O’Saben, of the National Association of Tax Professionals, said he's frustrated by how the senior bonus deduction is being marketed. He heard a news story on the radio that implied that Social Security benefits were no longer taxable and he found himself yelling at the radio while driving.
"There is no provision making Social Security benefits tax-free," O'Saben said.
Some people drawing Social Security benefits will get an increase in their standard deduction. Some people will not. If your Social Security was taxable in 2024 chances are it will be taxable again in 2025. A maximum of $6,000 per person will be added to your standard deduction if you qualify. The tax cut is an enhanced deduction for taxpayers aged 65 and older. That's it. The law doesn't eliminate the risk that some will pay taxes on their Social Security benefits. There are lots of rules but in general the temporary increased deduction starts phasing out for individuals that make over $75,000 and $150,000 for couples.

05/04/2025

Release Date: 4/8/25
Treasury Ordered to Cease Issuing
and Accepting Paper Checks
Cross References
• https://www.whitehouse.gov/fact-sheets/
Phasing out paper checks. On March 25, 2025, President Donald J. Trump signed an
Executive Order to modernize how the government handles money, switching from
old-fashioned paper-based payments to fast, secure electronic payments.
• The Order mandates that, effective September 30, 2025, the federal government will
cease issuing paper checks for all disbursements, including intragovernmental pay-
ments, benefits, vendor payments, and tax refunds.
• All executive departments and agencies must transition to modern, electronic funds
transfer (EFT) methods like direct deposit, debit/credit card payments, digital wallets,
and real-time transfers.
• Payments made to the federal government, such as fees, fines, loans, and taxes, must
also be processed electronically where permissible under existing law.
• Treasury will phase out physical lockbox services and expedite electronic collection of
federal receipts.
• A comprehensive public awareness campaign will be launched to inform federal pay-
ment recipients of the shift to electronic options and offer guidance on setting up digital
payments.
• Exceptions will be made for people without banking or electronic payment access, cer-
tain emergency payments, certain law enforcement activities, and other special cases
qualifying for an exception under the Order or other existing law.
• This Executive Order does not establish a Central Bank Digital Currency (CBDC).

05/04/2025

FinCEN Removes BOI Reporting
for U.S. Companies
Cross References
• fincen.gov/news
Consistent with the U.S. Department of the Treasury’s March 2, 2025 announcement, the
Financial Crimes Enforcement Network (FinCEN) is issuing an interim final rule that
removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
In that interim final rule, FinCEN revises the definition of “reporting company” in its
implementing regulations to mean only those entities that are formed under the law of
a foreign country and that have registered to do business in any U.S. state or tribal ju-
risdiction by the filing of a document with a secretary of state or similar office (formerly
known as “foreign reporting companies”). FinCEN also exempts entities previously
known as “domestic reporting companies” from BOI reporting requirements.
Thus, through this interim final rule, all entities created in the United States—including
those previously known as “domestic reporting companies”—and their beneficial own-
ers will be exempt from the requirement to report BOI to FinCEN. Foreign entities that
meet the new definition of a “reporting company” and do not qualify for an exemption
from the reporting requirements must report their BOI to FinCEN under new deadlines,
detailed below. These foreign entities, however, will not be required to report any U.S.
persons as beneficial owners, and U.S. persons will not be required to report BOI with
respect to any such entity for which they are a beneficial owner.
Upon the publication of the interim final rule, the following deadlines apply for foreign
entities that are reporting companies.
• Reporting companies registered to do business in the United States before the date of
publication of the interim final rate must file BOI reports no later than 30 days from
that date.
• Reporting companies registered to do business in the United States on or after the date
of publication of the interim final rate have 30 calendar days to file an initial BOI report
after receiving notice that their registration is effective.
FinCEN is accepting comments on this interim final rule and intends to finalize the rule
this year.
News

05/04/2025

SSA Gets Rid of its No Phone Policy
Cross References
• ssa.gov/news/press/releases
After complaints from the public, Congress, advocates, and others, the Social Security
Administration (SSA) has eliminated its no phone policy.
On March 18, 2025, the Social Security Administration (SSA) announced it would no lon-
ger allow identity verification over the phone. Applicants signing up for Social Security
benefits would either have to set up and use their personal “my Social Security” account,
which requires online identity proofing, or visit a local Social Security office to prove
their identity in person.
On March 26, 2025, SSA updated its policy to allow individuals applying for Social Secu-
rity Disability Insurance (SSDI), Medicare, or Supplemental Security Income (SSI) who
cannot use a personal “my Social Security” account to complete their claim entirely over
the telephone without the need to come into a local SSA office.
On April 12, 2025, SSA eliminated its no phone policy. Beginning April 14, 2025, SSA will
allow individuals to complete all claim types via telephone.
The April 12, 2025 announcement states it is implementing enhanced fraud prevention
tools for claims over the telephone. The enhanced technology enables SSA to identify
suspicious activity in telephone claims by analyzing patterns and anomalies within a
person’s account. If irregularities are detected, the individual will be asked to complete
in-person identity proofing to continue processing their claim. The announcement does
not provide specifics or examples of what patterns or anomalies will require an applicant
to prove his or her identity in person.
News

Listing of press releases from the Social Security Press Office.

04/17/2025

Yes it is true that the IRS has extended KY to November 3 with automatic extensions. That only relieves you from late filing fees. If you owe it does not stop the underpayment penalties and interest. If you owe the more it will cost. Just so you know.

01/23/2025

I am looking forward to seeing you this year. For those that don’t know, I accept cash, checks, credit/debit cards, Apple Pay, etc. I do not hold your fee out of your refund as I find this process at this time to be a bit too expensive. There have not been any substantive changes to tax law for this year other than increased standard deductions and similar annual adjustments. In 2024, for some reason, significant numbers of people across the country waited until the last minute to try and schedule appointments. This creates a real issue for the majority of tax offices. I would encourage you to go ahead and make your appointment as soon as your information is ready. Standard items are: current Id or drivers license, IRS identity protection pin if you have one, W2s, 1099R retirement (state, federal, Ira, 401k, etc), 1099DIV dividends, 1099MISC income, 1099NEC income, 1099INT interest, 1099SSA for social security, 1098T for college students, 1099 HSA health savings accounts, investment portfolio, farm income and expense, small business income and expense. Perhaps review your documents from last year and see if you have everything.

01/20/2025

Castle Court Tax is open for business. Call 502-532-0034 to set up your appointment.