Bruce Downs CPA

05/16/2026

Because IRA and HSA contributions for 2025 could be made by April 15, 2026 (just over a month ago), the custodian of those accounts may indicate to you that a Form 5498 for 2025 is now available to you.

Likely we received the information on that form from you previously, but still it is a good idea to forward us a copy or upload to your account in our LINK portal link.intuit.com .

04/15/2026

Today is the last day to make a Traditional or Roth IRA contribution and have it count toward 2025. For guidance on how you would benefit please contact us and/or your financial advisor... don't let this opportunity slip away. Be sure to designate the payment as for 2025.

In fact while you are it, if you have the funds available, you can make your 2026 contribution at the same time. Note that the maximum is now $7,500 for 2026 or $8,600 if you are 50 or older.

Finally, today is also the last day to make a contribution to a Health Savings Account and have it count toward 2025... in our opinion the best tax/retirement strategy available. Contact your company's Human Resource Department or directly to your health insurance carrier to find out if your insurance is HSA-eligible.

Feel free to contact us for more information about this "hidden" tax savings tool. And don't forget to pay taxes online today per the "Betty Crocker" instructions posted yesterday.

Also, for those of you in Alabama, you can pay state taxes online by 4:00 today and meet the deadline (The IRS lets you go until 11:59 pm tonight to pay Federal taxes.) Go to https://myalabamataxes.alabama.gov/tap/LogOff/?Ended=1 and click on Make a Payment. Have a copy of your 2024 Alabama tax return in front of you. To verify it is you, it will ask for your Alabama adjusted gross income which is on line 10.

04/14/2026

Both the balance due on your 2025 tax return and if applicable, the 2026 first quarter estimated payment are due tomorrow, April 15th. If you are extending your return, you should pay the amount of tax you are expected to owe.

Note that mail is now postmarked the day it is processed not necessarily the day that the post office receives it. To avoid costly penalties, we encourage all to make those payments online.

Here is how to make a payment of the Federal balance due on your 2025 tax return:

Go to https://directpay.irs.gov/directpay/payment?execution=e1s1 For Apply Payment to…choose Form 1040 – Income Tax from the dropdown menu. Then for Reason for Payment choose the top choice Balance Due. For Tax period for Payment type 2025 and then press CONTINUE.

On the next screen it first asks you for Tax Year for Verification, choose 2024 . Then enter your information as shown on the 2024 tax return (if married, enter info for the one listed first on the return). The remainder is just completing more of your information including bank account.

Here is how to make a payment of the 2026 Federal first quarter estimated tax payment:

Go to https://directpay.irs.gov/directpay/payment?execution=e1s1 For Apply Payment to…choose Form 1040 – Income Tax from the dropdown menu. Then for Reason for Payment choose Estimated Tax For Tax period for Payment type 2026 and then press CONTINUE.

On the next screen it first asks you for Tax Year for Verification, choose 2024 . Then enter your information as shown on the 2024 tax return (if married, enter info for the one listed first on the return). The remainder is just completing more of your information including bank account.

Finally, here is how to make a extension payment for your 2025 return:

Go to https://directpay.irs.gov/directpay/payment?execution=e1s1 – For Apply Payment to…choose Form 1040 – Income Tax from the dropdown menu. Then for Reason for Payment choose Extension. For Tax period for Payment type 2025 and you will be on your way.

On the next screen it first asks you for Tax Year for Verification, choose 2024 . Then enter your information as shown on the 2024 tax return (if married, enter info for the one listed first on the return). The remainder is just completing more of your information including bank account

03/18/2026

Will you be age 50 or older and have a 401(k), 403(b) or 457(b) plan as an employee? If you make the allowable additional catch up contributions up to $8,000 (if age 50-59 or 64 and older) or $11,250 if ages 60-63) .....there is a new rule for 2026.

If you made over $150,000 in 2025 (Box 3 of your 2025 W-2) then all of your catch up contributions must be Roth....pre-tax is no longer an option for them. Your regular contribution up to $24,500 can still be pre-tax, however.

Sole proprietors are exempt from this "Rothification" of their own catch up contributions to their 401(k) plan.

02/25/2026

If you are associated with a trust or an estate that has accumulated income in 2025 that has not been distributed (maybe it received a retirement distribution), with the 65-day rule, it can still distribute the income by March 6 and have it count toward 2025…avoiding those high estate and trust income tax rates.

Undistributed income of a trust or estate is taxed at a whopping 35% when it surpasses just $11,450.....and between 37% and 40.8% when it is over $15,650.. If distributed then the income will be taxed at your regular individual rates which for most is much lower.

For more information, contact us at (205) 879-8080 ext. 106. March 6 is just 9 days away!

02/06/2026

Here is the LowDowns on Taxes newsletter that includes the 2025 Tax Organizer sent to our clients this afternoon.

Email from Bruce Downs, CPA Volume 45 2018 - 2026 THE LOWDOWNS ON TAXES Welcome to our newsletter, The LowDowns on Taxes. This issue includes the Tax Organizer that will guide you through accumulating

02/05/2026

If you have used our free secure Link portal in the past, to get back into it go to link.intuit.com

If you want to be invited for the first time to use Link to start uploading your tax information, email [email protected] . You will then be sent an invitation.

01/14/2026

This is the LowDowns on Taxes newsletter released tonight Email link

Email from Bruce Downs, CPA Volume 44 2018 - 2026 THE LOWDOWNS ON TAXES Welcome to our newsletter, The LowDowns on Taxes. We will focus on some of the tips posted to our page that you may hav

01/08/2026

The new tax law means we now will need extra paperwork to claim deductions for overtime pay, tips and personal car loan interest. What you need to provide depends on your situation in 2025:

1. If you have a salary job and earned overtime...we need your final pay stub for the year. Why? Your 2025 W-2 may not show how much of your pay was overtime,

2. If you have a salary job and received cash (or cash-like) tips in a qualifying job...we need your W-2, plus Form 4070 (or something similar) that shows the tips you reported to your employer. We also need your Treasury Tipped Occupation Code from the official listhttps://home.treasury.gov/system/files/136/Tipped-Occupations-Detailed-8-27-2025.pdf .

3. If you are self-employed and received cash (or cash-like) tips in a qualifying job...we need a copy of Form 1099-MISC, 1099-NEC, or 1099-K.

For 2025, tips don’t have to be listed separately on those 3 forms, so you must also have a log of tips you received. We also need your Treasury Tipped Occupation Code from the official list.https://home.treasury.gov/system/files/136/Tipped-Occupations-Detailed-8-27-2025.pdf

4. If you financed a new vehicle purchase for personal use in 2025 (this includes motorcycles)... we need Form 1098-VLI or a statement from the lender showing how much interest you paid in 2025 and
the Vehicle Identification Number (VIN).

For the interest to be deductible the vehicle must have had its final assembly in the United States. Enter the VIN here to get your answer. https://vpic.nhtsa.dot.gov/decoder/

The new deductions for overtime pay, tips and personal auto loan interest have maximum allowable amounts and also could be further limited by how much income you have for the year. We will determine the allowable deductions when preparing your return.

NHTSA’s VIN decoder allows you to query a particular vehicle’s VIN to identify specific information encoded in the number.

01/02/2026

Now is the time to consider making your 2026 Roth IRA contributions. You will get a full year of earnings that will not be taxed as opposed to losing out on the year's tax-free income by delaying the payment until late 2026 or even up to the allowable date of April 15, 2027.

Four points to remember about Roth IRAs:

1. The IRS changed the maximum contribution to a Roth (or traditiona) IRA for 2026 to $7,500 or $8,600 if age 50 or older. Double those amounts for married couples filing jointly, depositing into their own Roth IRA accounts.

2. For unmarried taxpayers, the maximum contribution phases out between $153,000 and $168,000 of adjusted gross income.....for married taxpayers filing jointly between $242,000 and $252,000.

What happens if you follow our advice in the first paragraph, making your Roth IRA contribution now... and then unexpectedly end up with adjusted gross income over the amounts in #2 above. You do have options including withdrawing the Roth IRA contribution and associated earnings before your tax return is due (including extensions) with minimal tax consequences.

3. If you are single and your adjusted gross income exceeds $153,000, there is a way to possibly bypass the limitation through a technique called "Backdoor Roth IRA". The same option is available for married couples filing jointly who may want to avoid the phaseout For further details, please contact your financial advisor or Barry at (205) 879-8080 Ext 106.

4. Finally, you must have a total of wage and self-employment income that is at least the amount you (and your spouse, if applicable) deposit into your Roth IRA(s) for the year.

Here are a few examples to illustrate the above 4 points:

a. If you are unmarried and your adjusted gross income is $185,000, then you will not be eligible to contribute directly to a Roth IRA for 2026. However, you may be eligible to contribute indirectly through the "Backdoor Roth IRA" process. (see #2 and #3 above)

b. If you are age 67 married filing jointly and you have wages from a part-time job of $10,000 while your spouse does not work, the total you and your spouse could contribute combined to each of your Roth IRAs is the $10,000 (see #4 above )...with no more than $8,600 to one of them (see #1 above).

If in this example it was a single 18-year old who earned $4,900 of wages in a summer job, he or she could put up to the $4,900 in a Roth IRA. This is where a parent or grandparent instead could step in and make a gift through a contribution to that Roth IRA up to that $4,900. (Be sure to first check to see if your Section 529 education plan contribution limit has been met for the year, as that might be a better option.)

Bottom line, now is the best time to look into contributing to a Roth IRA for 2026. Also, if you haven't yet contributed to a Roth IRA for 2025, you have until April 15, 2026 to do so...just 3 1/2 months away.