Tax Articles

The OBBBA creates new Code Section 174A, which allows taxpayers to fully deduct domestic research costs in the year paid or incurred (the 174A deduction method), effective for tax years beginning after December 31, 2024. Taxpayers also have the option of electing to capitalize domestic research costs and amortize the amounts beginning with the month in which the taxpayer first realizes benefits from the expenses, with a 60-month minimum (the 174A amortization method). 

Charitable donations can provide tax benefits, but only if they meet strict IRS substantiation requirements. Cash and noncash gifts require specific documentation, and higher-value contributions may involve additional forms or appraisals. Starting in 2026, new rules under the OBBB introduce a universal deduction, making strategic planning essential.

The IRS has released the 2025–2026  per diem rates for business travel, effective October 1, 2025. These rates simplify expense reimbursements by providing fixed daily amounts for lodging, meals, and incidentals based on whether the destination is a high-cost or low-cost area. Switching to the per diem method can save time, reduce paperwork, and ensure compliance for your business.

Beneficiary designations can override your will or trust, potentially disrupting your estate plan and causing unintended consequences. By naming both primary and contingent beneficiaries, updating them as life changes, and considering government benefit implications, you can ensure your assets are distributed according to your wishes and avoid unnecessary legal or financial complications.

Thinking about guaranteeing a loan for your closely held corporation? Learn the tax implications, including business vs. nonbusiness bad debt deductions, and how to minimize risk. 

OBBB panel discussion held on September 25, 2025, with experts from Lumsden McCormick and Bond, Schoeneck & King.

An Irrevocable Life Insurance Trust (ILIT) can help keep life insurance proceeds out of your taxable estate, reducing potential estate tax liability. By transferring ownership of a policy to an ILIT or having the trust purchase a new policy, you ensure the death benefit passes tax-free to beneficiaries. While ILITs offer significant advantages for high-net-worth individuals, they come with complexities such as gift tax considerations and loss of control, making professional guidance essential.

Intrafamily loans can be a flexible way to transfer wealth, support major purchases, and preserve family assets while offering tax advantages—when structured correctly. To avoid IRS reclassification as a gift, these loans must follow strict formalities, including charging interest at the applicable federal rate and documenting repayment terms. While financially beneficial, they carry emotional risks, so careful planning and professional guidance are essential.

Businesses that accept large cash payments have strict IRS reporting obligations. Transactions over $10,000 must be reported using Form 8300, and failure to comply can lead to steep penalties. Understanding what counts as cash, electronic filing rules, and proper recordkeeping is essential to stay compliant and avoid costly mistakes.

A quiet trust, also known as a silent trust, is an estate planning tool that keeps beneficiaries unaware of the trust’s existence until a specified age or milestone. While it can preserve motivation and protect heirs from external pressures, it may also lead to missed opportunities or resentment. For some families, an incentive trust, which rewards responsible behavior may offer a more balanced approach.