Tax Changes: 2025

 IRS Releases 2025 Standard Mileage Rates

The IRS has released the 2025 optional standard mileage rates used in calculating the deductible costs of operating a vehicle for business, charitable, medical or moving purposes. The rates apply to electric and hybrid-electric vehicles as well as vehicles powered by gasoline and diesel fuel. Beginning Jan. 1, 2025, the standard rate for the use of a car, van, pickup truck or panel truck will be:

  • 70 cents per mile driven for business use, up 3 cents from 2024
  • 21 cents per mile driven for medical purposes or for moves by qualified active-duty members of the armed forces, unchanged from last year
  • 14 cents per mile driven in service of charitable organizations, the rate is set by statute and unchanged from 2024

Premium Tax Credit Regulations Finalized

The IRS and Treasury Department have issued final regulations amending the definition of “coverage month” and amending certain other rules in existing income tax regulations addressing the computation of an individual's premium tax credit. The regulations apply to tax years beginning after Jan. 1, 2025, for taxpayers who may be eligible for the premium tax credit to enroll themselves or a family member in individual health insurance coverage through a health care exchange.

The coverage month amendment generally provides that, for the purposes of calculating the premium tax credit, a month may qualify as a coverage month for an individual if the amount of premium paid is sufficient to avoid terminating the individual's coverage for the month. This includes advance payments of the premium tax credit.

The final regulations also amend the existing regulations related to the enrollment premiums used in computing the taxpayer's monthly premium tax credit if a portion of the monthly premium for a coverage month is unpaid. Lastly, the finalized regulations clarify when an individual is considered to be ineligible for coverage under a state's basic health program.


Relief for Failure to Provide Payee Statements

The IRS is offering additional penalty relief to partnerships that don't furnish Forms 8308, Report of a Sale or Exchange of Certain Partnership Interests, to a transferee or transferor in specified 2024 partnership exchanges by the later of Jan. 31, 2025, or 30 days after the partnership is notified of the §751(a) exchange. Specifically, the relief applies to partnerships with unrealized receivables or inventory items described in §751(a) that don't furnish Part IV of Form 8308 to the transferor and transferee in a §751(a) exchange.

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New Federal Law taking effect: Filing requirement for BOI (Beneficial Ownership Information) with FinCEN

 

Beneficial Ownership Information (“BOI”) reporting is a new federal law requirement estimated to impact more than 30 million businesses as soon as January 1, 2024. In general, any entity, domestic or foreign, created by filing a document with a secretary of state (or equivalent state office) will be required to file a BOI report. Unlike a lot of government requirements, BOI reporting targets small businesses.

If you are a small business owner, there is a likelihood that your business is subject to BOI reporting. BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), another agency of the Department of Treasury. Penalties for willful noncompliance may result in criminal and civil penalties of $500 per day and up to $10,000 with up to two years of jail time. That’s why we care.

Entities subject to BOI reporting requirements, called “reporting companies,” must file reports identifying (1) the beneficial owners of the entity, and, in some instances, (2) the individuals who have applied with specified governmental authorities to form the entity or register it to do business (“company applicants”).

For more information, click here. 



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