Furillo and Pfautz Management Inc

12/18/2025

Here are last-minute 2025 tax moves to do before 12/31/2025 relating to OBBBA.

Goal: Optimize deductions and credits for 2025 tax returns filed in 2026.

Scope: Federal only — not state specific

1) Homeowners and high-tax state residents

Pay attention to the new SALT cap and phaseout.

For 2025, itemizers can deduct up to $40,000 of state and local taxes, but the expanded $40,000 SALT cap begins phasing out around $500,000 MAGI and is fully eliminated shortly thereafter. Above this income range, taxpayers lose the expanded cap and revert to the standard pre-OBBBA limit.

Do before 12/31/25
If you are under $500k MAGI, consider paying any property tax that is actually assessed and due in December 2025 so it counts on your 2025 return. This can help you itemize in 2025 and take the standard deduction in 2026.
If you are near $500k MAGI, avoid accidentally pushing income higher in December if it will shrink or erase your SALT benefit. A year-end bonus, Roth conversion, or large capital gain can move you into the phaseout zone.
Charitable MAGI “save-zone” move, done before year end if your household is hovering near $500,000 MAGI, strategic charitable giving can drop MAGI below that line and preserve the full $40,000 SALT deduction. The swing can be worth tens of thousands in federal tax savings. This must be executed before 12/31/2025 to count for 2025.
Common high-impact options:
Large cash gift to a public charity in 2025.
Donor-advised fund (DAF) funding in 2025, with grants paid out later.
Gift of appreciated stock or ETFs held more than one year to avoid capital gains and get a fair-market-value deduction.
Qualified Charitable Distribution (QCD) from an IRA if you are 70½ or older. This reduces AGI directly.
Charitable financing / leveraged charity.

2) Families with kids or other dependents

Capture the larger Child Tax Credit. OBBBA raises the Child Tax Credit to $2,200 per qualifying child for 2025 and keeps the $200k single / $400k joint phaseouts.

Do before 12/31/25
Make sure each qualifying child has a work-eligible Social Security number, and at least one parent on a joint return has an SSN. This is required starting in 2025. If a baby or adopted child is missing an SSN, apply right away.
If you support a dependent who is not a qualifying child (college student, elderly parent), confirm dependency rules so you can claim the $500 Other Dependent Credit.

3) Working Americans

OBBBA created three above-the-line deductions that you only get if the income is properly tracked in 2025. Deduction for reported tips…deduct up to $25,000 of qualified, reported tips in 2025. Phases out above MAGI $150k single / $300k joint.

Do before 12/31/25
Report all tips to your employer so they show on your W-2, or keep a detailed tip log. Unreported tips do not qualify.
No Tax on Overtime: Deduct the overtime premium portion up to $12,500 single / $25,000 joint in 2025. Same phaseout levels as tips.
Save year-end paystubs that show overtime separately in case W-2 reporting is imperfect.
No Tax on Car Loan Interest: Deduct up to $10,000 of interest on a new, personal-use vehicle loan originated after 12/31/24. Vehicle must be new and have final assembly in the U.S. Phaseout above MAGI $100k single / $200k joint. VIN must be reported on the return.
If buying a car in December, confirm it is new, financed, personal use, and U.S. final assembly. Keep the purchase contract, VIN, and lender interest schedule.

4) Seniors (age 65+)

OBBBA adds a $6,000 additional deduction per qualifying senior for 2025, on top of the regular senior add-on. Phases out above MAGI $75k single / $150k joint.

Do before 12/31/25
If close to the MAGI phaseout, delay income where possible (bonus timing, extra IRA withdrawals) to stay under the threshold.

5) Energy and vehicle credits that end in 2025

OBBBA accelerated sunset dates:
EV credits end for vehicles acquired after 9/30/2025.
Home energy credits end for improvements and solar placed in service after 12/31/2025.
If you want solar, battery storage, efficient windows, HVAC, insulation, or similar upgrades, get the project completed and placed in service by 12/31/25. Keep invoices, proof of payment, and manufacturer certifications. If you missed the EV 9/30/25 cutoff, assume no federal EV credit for a late-2025 purchase.

6) Small business owners who file Schedule C or receive K-1s

Bonus depreciation is back. 100% bonus depreciation applies to qualified property placed in service after Jan 19, 2025.

Do before 12/31/25
If you need equipment anyway, placing it in service by year-end can create a large 2025 deduction.
Confirm it is actually in service, not just ordered or delivered.
QBI deduction is permanent
Not a year-end move, but it changes planning assumptions. Make sure your advisor evaluates wage and basis limits if your income is high.

7) Gig and side-hustle paperwork check

1099-K forms only arrive if you exceed both $20,000 and 200 transactions. You might not get a form, but income is still taxable.

Do before 12/31/25

Download platform year-to-date summaries now so nothing is missed

03/10/2023

BOOKKEEPER vs ACCOUNTANT

The difference between a bookkeeper and an accountant is....

A Bookkeeper
- Records transactions
- Manages debits and credits
- Produces invoices
- Handles payroll
- Maintain balance ledgers and accounts

An accountant
- Prepares and adjusts entries
- Prepares financial statements
- Analyses costs
- Completes tax returns
- Analyses the impacts of financial actions

Bookkeeping focuses on recording and organising financial data. Accounting is the interpretation and presentation of that data to business owners and investors.

03/09/2023

Did you know.....

➡️You do not need an EIN to file gig, freelance, contract, or business income and expenses on Schedule C.

➡️Independent Contractors/ Freelancers/ Sole Proprietorships/ LLC - will file a Schedule C with your businesses income and expenses and attached that to their personal return. (Same filing deadline as personal tax return)

➡️Corporations with default tax ID (CCorp) - you will file a form 1120 for your business. Your business will issue you a W2, 1099 DIV, or a 1099 from the business that you will then file with your personal tax return. (Filing Deadline is in April)

➡️Businesses taxed as an S Corp - you will file a form 1120S for your business (informational form). Your business will issue each shareholder a K-1. Then you will also receive a W2 or 1099 for wages from the business that you will also file with your personal tax return. (Filing deadline is in March)

➡️Partnerships (Business with multiple owners) - you will file a Form 1065 for all income and expenses for the business that will then create a K1 for each business owner that will need to be filed with your personal tax return. (Filing deadline is in March)

Please note that certain forms that you may need to file on top of these forms are contingent on your industry and portfolio.

For example:
➡️Schedule E is for passive income: Long Term Rentals, S Corp, Trusts etc..

➡️Schedule F is for farming and agriculture

➡️Truck Drivers don’t claim miles they claim fuel (not form 4136)

➡️Available Credits (Work opportunity credit, Clean vehicle credit, solar energy credit, electric vehicle credit, etc)

➡️Schedule H is for (update) Households that have household employees only (the employer files schedule H ONLY)

➡️Employee vs Independent Contractor (https://www.irs.gov/businesses/small-businesses-self-employed/know-who-youre-hiring-independent-contractor-self-employed-vs-employee)

Employee:
- is issued a W2 (taxes, SS, Medicare, etc is withheld)
- you dictate what, when, and how they do it
- you provide everything

Independent Contractor:
- issued a 1099 (nothing withheld)
- they dictate what, when, and how they do it
- they provide what they need

➡️ Schedules: https://www.irs.gov/forms-pubs/schedules-for-form-1040

Know Who You're Hiring - Independent Contractor (Self-employed) vs. Employee

03/08/2023

Business expense vs Business asset

An expense is a necessary cost that a business incurs to operate. It could either be items or services that a company purchases to run the business.

Unlike assets, expenses do not offer long-term benefits to the business, as the organisation consumes them immediately.

Expenses are deducted from total revenue before in order to calculate total profit or loss.

Here are a few examples of common business expenses:

• Payroll
• Contractors
• Rent and utilities
• Bank fees and interest
• Insurance
• Fuel and car maintenance
• Equipment rental
• Office supplies
• Membership fees and subscription dues
• Employee meals and travel allowances
• Legal fees
• Repairs & maintenance

An asset refers to any resource that adds value to a business in the future.

For example, cash reserves are an asset to a business, as that business can use the cash to pay for inventory and other materials in the future.

Similarly, a car registered under a business is an asset as it helps transport people and items used for business.

Assets offer either a short-term or long-term benefit to the business, depending on their nature. For example, business property is a long-term asset as it provides benefits for the business over the years.

Perishable inventory is a short-term asset, as these must be used before their expiry date.

Here are a few examples of common business assets:

• Cash
• Accounts receivable
• Short-term investments
• Accrued revenues and receivables
• Inventory and supplies
• Long-term investments
• Prepaid expenses
• Land and buildings
• Equipment and machinery
• Vehicles
• Furniture and fixtures
• Accumulated depreciation

If you do your own bookkeeping, it is important to note that while expenses will be coded to their relevant expense account on the profit & loss statement; assets will be coded to an appropriate asset account on the balance sheet.

Generally speaking, a proportion of the asset's value is then deducted as a depreciation expense each year.

💬 Should you have any queries, don't hesitate to get in touch, and don't forget to save this post for future reference!