Articles From Lumsden McCormick

Self-employment tax combines Social Security and Medicare taxes, with a 15.3% rate applied to the first $168,600 of net income in 2024. Future inflation adjustments will likely increase the tax burden, making strategies like restructuring as an S corporation a potential way to reduce costs. Understanding SE tax calculations and exploring tax-saving options can help self-employed individuals manage their financial obligations effectively.

The Corporate Transparency Act created new reporting requirements with the Financial Crimes Enforcement Network (FinCEN) related to Beneficial Owners of LLCs, Corporations, or other similar entities formed under state law.  These requirements have not been well communicated by the authorities, so we are reaching out to ensure you are aware of the changes.  

The IRS has released the annual inflation adjustments for the 2025 tax year, which will affect taxpayers when they file their returns in 2026 including notable changes.

Proper documentation is essential for deducting charitable donations on your taxes. Cash donations require bank records or written communication from the charity, while noncash donations have additional requirements based on the donation amount, including receipts, written acknowledgments, and qualified appraisals for larger donations. Ensuring compliance with these rules helps secure your deductions and avoid issues with the IRS.

Learn how to maintain strong internal controls to prevent fraud during peak seasons. Key measures include segregating accounting duties, supervising cash handling, and being vigilant about gift card security to protect your nonprofit’s revenues and holiday spirit.

Lumsden McCormick presents a highlight summary of the significant cost-of-living adjustments (COLA) effective for 2025.

Spousal property rights, including the "elective share," are governed by state law and can significantly impact estate plans. Strategies such as transferring assets to a revocable trust may help mitigate the effect of these rights, but laws vary by state, making professional guidance essential for effective planning.

With potential budget challenges in 2025, nonprofits should evaluate program effectiveness to ensure resources are used efficiently. Gathering stakeholder feedback, using data-driven metrics, and reallocating funds to successful initiatives can help maximize impact and reduce waste. Regular program reviews can keep operations lean and responsive to evolving community needs.

The Tax Cuts and Jobs Act requires businesses to amortize rather than immediately deduct R&E expenses, resulting in higher tax bills and reduced cash flow for many manufacturers. To offset this impact, companies can leverage tools like the research tax credit, cost segregation studies for accelerated depreciation, and reclassification of certain expenses. Congress may revisit this issue in 2025, potentially restoring immediate expensing for R&E costs.

As a business owner, understanding which travel expenses are tax-deductible can significantly impact your bottom line. This guide covers the essentials of deducting travel costs, from transportation and lodging to meals and tips, ensuring you stay compliant and maximize your tax savings. Proper recordkeeping and knowledge of your tax home are crucial for claiming these deductions.