The U.S. House of Representatives recently passed a sweeping tax and spending measure, dubbed “The One, Big, Beautiful Bill.” It includes significant tax implications for electric vehicle (EV) buyers and homeowners. Specifically, the bill eliminates federal tax credits after December 31, 2025, for clean vehicles and certain energy-efficient home improvements.

If you’ve been considering purchasing an EV or upgrading your home’s energy efficiency, you may want to act soon to take advantage of the current incentives before they potentially disappear. Here are the details of what could change under the proposed legislation, now being considered by the Senate.

Clean Vehicle Tax Credits

The House bill would eliminate the following new and used clean vehicle tax credits after 2025, with a limited exception:

Credits for new clean vehicles (Section 30D). Under the Inflation Reduction Act, buyers of new qualifying clean vehicles can receive up to $7,500 in nonrefundable tax credits, based on specific mineral sourcing and battery component requirements. Vehicles that meet only one of these criteria still qualify for a $3,750 credit. Clean vehicles include EVs, hydrogen fuel cell cars and plug-in hybrids. Under current law, this credit is available through 2032.

Additional eligibility rules include:

• The vehicle must be for personal use (not resale), 
• It must be used primarily in the United States, and
• Final assembly of the vehicle must occur in North America.

The manufacturer suggested retail price (MSRP) can’t exceed $80,000 for vans, sport utility vehicles and pickup trucks, or $55,000 for other vehicles. The MSRP for this purpose isn’t necessarily the price you pay. It includes manufacturer-installed options, accessories and trim but excludes destination fees.

In addition, a taxpayer must meet modified adjusted gross income (MAGI) caps of $300,000 for joint filers, $225,000 for heads of households and $150,000 for all other filers.

Credits for used clean vehicles (Section 25E). Buyers of used clean vehicles may qualify for a credit of 30% of the sale price, up to $4,000. To be eligible for the credit:

• The sale price must be under $25,000, and
• The vehicle must be at least two model years old and meet battery requirements.

There’s also an income limit for used clean vehicles, but it’s lower than the limits for new vehicles. For used vehicles, the MAGI cap is $150,000 for married joint filers, $112,500 for heads of households and $75,000 for others.

Both credits are nonrefundable and can’t be carried forward unless claimed as a general business credit. Taxpayers can transfer the credit to a dealer to reduce the purchase price or claim it when filing their tax returns. Only two dealer transfer elections are allowed per year. IRS Form 8936 is required when either claiming the EV credit or transferring it to a dealer.

Important: The House bill provides an exception for small-volume manufacturers, allowingvehicles from manufacturers that have sold fewer than 200,000 qualifying clean vehicles to retain eligibility for the current credits through 2026.

The Energy Efficient Home Improvement Credit

In addition, the House bill would eliminate energy-efficient home improvement credits for upgrades such as qualified windows and exterior doors after 2025.If these provisions are enacted, 2025 may be your final chance to offset some of the cost of high-efficiency home improvements through tax savings.

Under current law, homeowners can claim the Section 25C Energy Efficient Home Improvement Credit for up to 30% of the cost of eligible improvements each year through 2032. The annual limits are:

• Up to $600 for exterior windows and skylights, and
• Up to $500 total for exterior doors (limited to $250 per door).

These upgrades must meet Energy Star certification requirements.

Key Takeaways

With these credits potentially on the chopping block, it may be a good time to purchase an EV or make energy-efficient home upgrades — especially if you were already planning to make these investments. Be sure to retain purchase receipts and certifications for eligible upgrades.Potential legislative changes add to the complexity of navigating tax credits. Although the House bill retains these green tax credits through year end, the Senate could make changes in its bill (which would then have to pass in the House before being signed into law). Contact your tax advisor to help you understand the eligibility requirements for these credits and claim them while they’re still available. Also visit the IRS website for more information about clean vehicle tax credits and the Energy Efficient Home Improvement Credit.

Many people graduate college with significant amounts of student loan debt. The average amount borrowed by 2022-23 bachelor’s degree recipients who took out loans to pay for college is approximately $29,300, according to the College Board’s “Trends in Student Aid 2024 report.”

The burden of student loan repayment can force young adults to delay major life milestones, such as purchasing a home, starting a family and saving for retirement. In addition, defaulting on student loans can harm a borrower’s credit rating and result in garnishment of wages.

Moreover, the implications of student loan debt often extend to family members. While students may independently qualify for federal student loans without a co-signer, most private loans require a creditworthy co-signer — typically a parent — who becomes equally responsible for repayment. Some lenders offer a co-signer release option after a certain number of on-time payments. However, this isn’t guaranteed. It depends on the lender’s policies and the borrower’s income level and credit score at the time of release.

If your family is struggling to afford higher education costs, you’re not alone. Here are eight tips to help you get a handle on student loans and set your student on the path toward financial independence.

1. Do Your Homework

Decisions made before and during college can significantly affect your final debt tally. When choosing a school, consider it an investment decision, not an emotional one. Compare the total costs of each school on your list, including:

• Tuition and fees,
• Room and board, and
• Books, supplies and equipment.

Many parents experience sticker shock when they add up the full cost of attending college. Fortunately, you probably won’t have to pay sticker price if you work with the college’s financial aid department. After you’re accepted into a school and complete the requisite forms, you should receive a financial assistance package that states the amount and type of financial aid offered. 

Also evaluate each school’s job placement rates and average starting salaries for graduates in the majors you’re mulling. Consider whether the career that corresponds with your preferred major will provide you with enough funds to cover the loan payments that will begin soon after you graduate.

To avoid borrowing more than you need, it’s important to reassess your expenses each semester. Cover as much as possible with federal direct loans before applying for private loans. Also take a fresh look at scholarship and work-study opportunities every semester.

2. Create a Detailed List

It’s important to prepare a spreadsheet that lists all your loans so you can compute the total amount of debt. This schedule should break out the details for each loan, identifying the type (federal or private, subsidized or unsubsidized) and the terms, including:

• Interest rate,
• Monthly payment,
• Current and principal balances,
• Repayment rules, and
• Grace periods.

Compiling this information while your student is still in school helps keep track of loans taken out each semester (or draws on open-ended private loans that allow borrowers to withdraw funds as needed up to a pre-approved credit limit). After graduation, the schedule can be used to formulate a repayment plan and prepare monthly budgets.

3. Explore Repayment Options

Several options are available for repaying your federal direct loans. The Federal Student Aid Loan Simulator  provides a helpful tool for comparing monthly payment alternatives.

If you have federal student loans, you might consider combining some or all of them into a Federal Direct Consolidation Loan. A consolidation loan has a fixed interest rate that’s the weighted average of the interest rates of the loans being consolidated, rounded up to the nearest eighth of a percent. While consolidating your loans may slightly increase your interest rate, it will lock you into a fixed rate. You also may be able to consolidate some private loans into a single private loan at a lower interest rate.

Bear in mind that consolidation has potential downsides. For example, you could end up with a longer repayment period, which translates to paying more interest over the loan term. And you might forfeit certain borrower benefits — such as discounts or rebates — associated with your current loans.

4. Inquire about Loan-Related Employee Benefits

Your employer may provide various types of student loan assistance — which could be significant enough to influence your job choice. For example, through 2025, employers can offer up to $5,250 in student loan repayment benefits per employee per year tax-free under current law.

Additionally, under a provision of SECURE 2.0, employers can make matching retirement plan contributions to cover the qualified student loan payments (QSLPs) made by plan participants during the year. The change went into effect for plan years beginning in 2024. Employees participating in the following plans may be eligible:

• 401(k) plans,
• 403(b) plans,
• SIMPLE-IRAs, and
• Governmental 457(b) plans.

Note that special rules apply to SIMPLE-IRA plans.

In effect, this provision allows employers to make matching contributions to the retirement accounts of employees who aren’t actually contributing to their accounts but who are making student loan payments. This provision helps participants reduce student debt while simultaneously building retirement savings.

5. Take Advantage of the Student Loan Interest Deduction

You may be eligible to write off up to $2,500 of student loan interest as an above-the-line adjustment on your personal return whether you itemize or not. This deduction is available only to the person legally obligated to repay the loan.

However, the deduction is phased out based on modified adjusted gross income (MAGI), and the amounts aren’t that high. For 2024, the phaseout begins at $80,000 for single filers ($165,000 for married couples who file jointly). For 2025, the phaseout begins at $85,000 for single filers ($170,000 for married couples who file jointly). You also may be eligible for state tax deductions.

6. Make Extra Payments to Reduce Your Principal

Paying down the principal on your loans reduces your total interest payments. It can also allow you to pay off your debt faster.

For instance, if you switch from monthly to biweekly payments, you’ll make an extra payment every year. Over 10 years, you could trim a year off your repayment schedule. Alternatively, if you receive a year-end bonus or tax refund, you might consider putting the extra cash toward paying down your student loans.    

Another strategy — known as the “debt avalanche” approach — calls for making an extra monthly payment on your highest interest rate loan. When that loan is paid off, apply the amount you were paying each month for the retired debt toward the loan with the next highest interest rate and so on. This strategy prevents excessive interest accumulation and allows you to tackle principal payments efficiently.

Important: When using the debt avalanche approach, continue making minimum payments on all loans to avoid penalties and keep accounts in good standing. You should also notify the lender that you want to apply the extra payments to the principal balance, not a prepayment of the loan’s next installment.

7. Enroll in Automatic Payment

Federal student loan programs grant a 0.25% discount on the interest rate to borrowers who set up automatic withdrawals from their checking accounts. Many private lenders offer similar discounts for automatic payments.

Aside from the discount, autopayments also ensure that you won’t miss any payments. This may be especially handy for young people who are adjusting to living independently and busy pursuing full-time careers.

8. Take Ownership

Effectively managing student loan debt requires a proactive approach, careful planning and financial discipline. One of the worst mistakes borrowers make is missing loan payments, assuming they’ll catch up later. If you’re having trouble making ends meet, you don’t have to struggle alone. Talk to your lender or another trusted financial advisor to assess your options and devise a realistic debt service plan that works for your situation.

As separate legal entities, estates and nongrantor trusts must file their own federal tax returns, just like individual taxpayers. Unlike individuals, however, these entities may distribute income to beneficiaries, which can shift tax liability. Beneficiaries, heirs, trustees, executors and those devising plans to transfer their assets need to understand how different types of distributions are taxed.

Principal vs. Income Distributions

The type of distribution — principal or income — is critical in determining the federal tax implications for the beneficiaries in most cases. However, no distribution from a revocable trust is taxable to the beneficiary. That’s because all taxable income is reported on the tax return of the trust creator (also known as a grantor or settlor). This treatment also applies to irrevocable grantor trusts, such as grantor-retained annuity trusts or intentionally defective grantor trusts.

Distributions from an estate generally aren’t taxable to heirs. Rather, they’re subject to the estate tax if the estate is large enough to trigger it. For 2025, the federal lifetime gift and estate tax exemption is $13.99 million ($27.98 million for a married couple).

Important: In 2026, the unified federal exemption is scheduled to fall to the pre-2018 level with a cumulative inflation adjustment for 2018 through 2025. If that happens, the exemption is estimated to be roughly $8 million for 2026. However, Congress is expected to extend the current exemption (or possibly make it permanent) as part of a comprehensive future tax bill. Contact your tax advisor for the latest developments.

When it comes to distributions from irrevocable nongrantor trusts, the recipient’s tax liability generally turns on the distribution’s origin. It depends on whether the distribution comes from the trust’s principal (meaning the assets originally contributed to the trust and any subsequent deposits) or the income that the principal has generated (for example, dividends, interest or rental income). Distributions from principal aren’t taxable to the recipient because the trust creator presumably already paid taxes on the principal.

Distributions from income are taxable for the recipients, usually at ordinary income tax rates. Tax-exempt income is an exception, though. Distributed income retains the character it had when the trust earned it. Thus, income that was tax-exempt for the trust is also tax-exempt upon distribution.

The IRS treats trust distributions as coming from current-year income. If a distribution exceeds the current-year income, the excess is attributed to principal and, therefore, not taxable for the recipient. Notably, a beneficiary could receive a distribution that combines both principal and income.

Say, for example, that a beneficiary receives a $20,000 distribution. If the trust had no current-year income, the distribution would be treated as a nontaxable principal distribution. If the trust earned $10,000 in dividend income, though, the distribution would be split equally between income (taxable) and principal (nontaxable).

But what if the trust had $10,000 in dividend income and a $10,000 capital gain? The distribution would still be split between income and principal. That’s because capital gains are generally added to principal rather than treated as income for trust accounting purposes (see below for more information on capital gains).

Fortunately, the beneficiary needn’t figure this out. The trust will issue a Schedule K-1 that indicates the character of amounts distributed and the amount the beneficiary should claim as taxable income.

The Role of DNI

The IRS defines distributed net income (DNI) as the income available for distribution from a decedent’s estate or trust. DNI limits the deduction an estate or trust can claim for amounts distributed to beneficiaries. Specifically, an estate or trust can deduct the lesser of:

• The trust income that’s required to be distributed plus other amounts “properly paid or credited or required to be distributed,” or
• DNI.

DNI is also the maximum taxable amount that can be distributed to a trust’s beneficiaries. Any excess distribution is tax-free to the beneficiaries.

To compute DNI, start with the estate or trust’s taxable income before the distribution deduction. Next, add the values of the applicable tax exemption and any tax-exempt interest, and subtract net capital gains. Trusts are allowed $100 or $300 exemptions, and estates can claim $600 exemptions.

Capital Gains

For estates and trusts, gains on assets held for 12 months or less are taxed as ordinary income. Long-term assets held for more than 12 months are subject to the applicable long-term capital gains tax rate (15% or 20%). Simple trusts, which are required to distribute all income every year and can’t distribute principal, pay the taxes on capital gains, which are added to principal.

Suppose a trust is permitted to allocate capital gains to income or distribute capital gains (in which case they’re included in DNI). In that situation, the beneficiaries typically will pay taxes on the gains. Trust beneficiaries also may incur capital gains tax on distributed assets that appreciate after being transferred to the trust (for example, shares of stock or real estate) if those assets are subsequently sold.

Minimizing Tax Obligations

Income tax rates for trusts and estates are the same as for individual taxpayers, but the taxable income brackets are narrower. As a result, trusts and estates reach the highest rate with a much smaller amount of taxable income than individuals do. For 2025, the 37% top marginal tax rate for single filers begins after $626,350 of ordinary income. A trust or estate is subject to that rate after reaching only $15,650 of income for 2025.

The same goes for long-term capital gains rates. For 2025, the top 20% rate doesn’t kick in for single filers until their taxable income exceeds $533,400. That rate applies to trusts and estates with adjusted capital gains above $15,900 for 2025.

That means many beneficiaries will be taxed at lower rates than the trust. Distributing income or capital gains to such beneficiaries can help minimize the trust’s overall tax bill. Not only will the distribution be taxed at a lower rate, but the trust may also be able to deduct the distribution. This approach is especially wise for trusts that generate significant income.

Proceed with Caution The taxation of distributions can be complicated — even without addressing any state tax laws that might apply. Contact your tax advisor to help you achieve your estate and trust goals while keeping a lid on the resulting taxes.

Perhaps because they know seniors remember a time when technologies were simpler, criminals increasingly prey upon them. But with age comes wisdom, and many older people are fast to remind would-be criminals that they weren’t born yesterday. Increasingly, they know how to spot possible fraud but law enforcement warns they should pay closer attention.

Here are some tips and considerations to help protect yourself.

At the Front Door

Sometimes trouble really does come knocking at your front door, but it’s also your side door you have to watch. Talking to someone at your front door can give an accomplice valuable time to run around back and break in. So, if the front doorbell rings, first check the other doors.

Frequently, people at the front door misrepresent themselves asdelivery persons, or the cable company or an electrician. Does the person have a real identification card that matches his or her driver’s license? Is there a truck to go with the uniform? If not, don’t open the door — your biggest piece of security equipment.

Carry your cell phone to the door with you, so you can speed dial 911 just in case of a problem — or use your pendant if you have central-station security. If you have a car with a remote “panic” button, you can hold that just in case. Any noise behind you, especially the other doors, and you can sound the alarm. A honking car alarm is annoying but may cause neighbors to check on you. Even if they don’t respond, thieves depend on not attracting attention, so the noise alone may be enough to scare them off or at least buy you some time to alert the authorities.

On the Telephone

The telephone lets people enter your home without a door. But, are callers who they say they are? If someone sounds suspicious, hang up. Charities need our help, but you never know who’s calling. Don’t give out personal information or do business with a stranger without first checking them out.

One common scam says the caller is from “The Help Desk” or “IT Department.” He has detected a problem with your computer and tries to sell you software to fix a problem that doesn’t really exist. Someone may call claiming to be from the IRS or the police department or your bank. Then, the caller asks you for your account information. The federal government will only notify you of a problem by mail, and other organizations will give you a real phone number where you can check them out. If you get these kinds of calls, they are probably scams.

Even caller ID is not always a safe bet. Scam artists make “spoof calls,” where they are able to put anything on your caller ID in the hope you will trust them as they steal your identity.

If a call seems to be from the police, call information and ask for the business number of your local police department (don’t tie up 911 with business calls), and then call them and ask them to check out if the caller was real. They never ask for account information.

If a caller says he or she is from your bank, the individual should already know your account number. You can phone the bank’s main number to check on the validity of the call. Or ask at your local branch where you know the bank employees and they know you.

Tax Scams

The IRS warns that scammers attempt to mislead taxpayers about tax refunds, credits and payments. They may pressure you for personal, financial or employment information. In some cases, they threaten victims with arrest or deportation if they don’t make a payment for a fake tax bill. Click here for more about the types of tax scams the IRS has identified.

Vendor Calls (live and phone)

When having work done on your home, get at least three solid bids. Seek bids from known vendors who have done good work for an acquaintance of yours. If someone comes to you unsolicited, be suspicious. Check the person out with the local town hall. See if he or she is licensed for the type of work you want done, and check with the local Better Business Bureau. Has anyone complained about the person online? Use a search engine to check it out.

Never give a partial payment to anyone before checking references. Speak to previous customers in your neighborhood. If the vendor has no references you can check, say no. Too many people have given someone a $5,000 deposit for a $100,000 contract — and never heard from these so-called vendors again. You may wonder why anyone would enter such a deal in the first place. Generally, the vendor presents a price that is too good to pass up. For example, he may look for a house with a roof that is badly in need of repair. He knocks on your door, tells you he’s replacing a roof on the next block and happened to pass by your house on his way home. He just happens to have materials left over and will do your roof for a fraction of the price if you can give him a deposit. Say no. Even if he is legitimate, he shouldn’t be asking for money up front.

Email and “Phishing”

Never respond to an email with money. If your credit card or bank tells you there’s a problem, don’t click on the email. Call the bank directly. Their number is on your last statement. There are just too many scammers asking you to do something right from the email. In fact, don’t even open an email until you know who sent it, because it could contain dangerous software or “malware.”

Another email scam is a new spin on the “confidence game,” where a con artist sends you a check, and in response you wire him much less cash. Often, it’s someone from Nigeria looking for the heirs of a wealthy industrialist who just died. The check always turns out to bounce after a recipient sends in a few thousand dollars of his or her money. If it sounds too good to be true, it probably is.

One heinous fraud comes when an emailer first hacks personal information about a relative. Then, the criminal positions the email as if he or she is the relative, stranded in an airport, unable to get home safely, without access to a phone, and must get $1,000 wired to a certain address immediately.

Under the pressure of a simulated threat to a relative, many will panic and send money. In reality, the relative has no knowledge this is even going on, and a simple phone call might prove that. Sometimes it comes as a phone call but be suspicious of any such situation.

Keep Your Guard Up

The scams described above are only some of the ways that thieves steal from honest people. New scams are being introduced all the time. We’re blessed to live in a golden era of technology. But where there’s gold, there will likely be criminals looking for people who will let down their guard. This is where wisdom and experience become invaluable.

If you’re self-employed, run your own small business, or have rental or investment income, there’s a good chance you must make quarterly estimated tax payments. These payments include income tax and, if applicable, self-employment tax. Failing to make them — or miscalculating how much you owe — can result in penalties and interest.

Who Needs to Pay Quarterly Estimated Taxes?

Anyone who receives income that isn’t subject to withholding may be required to make estimated tax payments. This typically includes:

• Independent contractors, such as freelancers, consultants and gig workers,
• Sole proprietors and small business owners,
• Partners in a partnership,
• S corporation shareholders,
• Landlords with rental income, and
• Investors with capital gains or dividend income.

Generally, you must make estimated payments if you expect to owe at least $1,000 in federal tax for the year after subtracting any withholding and refundable credits. This includes income tax and, to the extent applicable, self-employment tax (Social Security and Medicare).

When Are Quarterly Tax Payments Due?

The IRS divides the year into the following four payment periods, but the deadlines don’t align exactly with calendar quarters:

Estimated Tax Payment Schedule

If a due date falls on a weekend or holiday, it’s extended to the next business day. For example, June 15, 2025, falls on a Sunday, so the deadline is Monday, June 16, 2025.

How Are Estimated Taxes Calculated?

Calculating estimated taxes requires projecting total income, deductions, credits and withholding for the year. Specifically, here are six steps for the calculation:

1. Estimate total annual income from all sources.
2. Subtract deductions, such as above-the-line deductions (e.g., retirement plan contributions, self-employment deductions), the standard deduction or projected itemized deductions, and eligible business expenses.
3. Apply the appropriate federal income tax rate to determine your income tax.
4. Add self-employment tax, if applicable, which is 15.3% on net earnings from self-employment up to $176,100 for 2025 and 2.9% on net self-employment earnings over that amount.
5. Subtract any expected tax credits and withholding.
6. Divide the total by four to determine each quarterly payment.

Some quarters cover more months than others. For example, the June deadline covers just two months, while the January deadline covers four. Even so, the IRS generally expects equal payments throughout the year.

However, if your income is seasonal or fluctuates significantly, you may qualify for the annualized income installment method. Under this method, your payment amounts are adjusted based on when income was actually earned. This approach can help prevent penalties, but it’s more complex.

As you can see, properly estimating your income and deductible expenses and determining whether to use the annualized installment method is no small undertaking. Your tax advisor can help you with income and expense projections and the proper tax calculations.

What Happens If You Don’t Pay Enough?

Underpaying your estimated taxes can result in IRS penalties — even if you end up getting a refund when you file your return. Penalties are based on the underpayment amount, the length of the delay and the current IRS interest rate.

Common situations that trigger penalties are:

• Missing a payment,
• Paying after the due date, and
• Underestimating income and paying too little.

Safe harbor rules can help you avoid penalties. You’re generally in the clear if, through estimated taxes and withholding, you pay at least:

• 90% of your current year’s tax liability, or
• 100% of your previous year’s tax liability (110% if your adjusted gross income was over $150,000, or, if married filing separately, over $75,000).

If you have any income from which taxes are withheld, increasing your withholding might help you avoid penalties — and provide other benefits. See “An Alternative: Increase Withholding If You Also Have W-2 Income” below.

Tips for Staying on Top of Quarterly Tax Payments

Managing quarterly tax payments doesn’t have to be daunting. With some organization and a few smart habits, you can build a system that minimizes both the risk of penalties and your stress.

First, regularly set aside money for taxes. Consider opening a dedicated savings account to keep funds for taxes separate and automating regular transfers to the account if your income is steady.

How much should you save? A common rule of thumb is 25% to 30% of net income. But, depending on your marginal tax bracket, you may need to set aside more. If you have enough cash on hand, consider putting aside 5% to 10% beyond your estimates to cover unexpected income spikes or tax law changes.

How can you ensure you’re accurately estimating your taxes? Accountingtools or apps, such as QuickBooks, Xero and FreshBooks, can automatically track income and calculate estimated taxes. But these tools are only as good as the data you enter into them. If you aren’t properly recording all income and expenses, these solutions won’t provide accurate tax estimates.

It’s also critical to reassess your income and estimates every quarter and adjust your payments accordingly. Otherwise, you could end up underpaying taxes and owing penalties and interest — or overpaying taxes and giving the federal government an interest-free loan. 

If keeping track of deadlines isn’t your strong suit, you may want to automate your quarterly payments. You can use the Electronic Federal Tax Payment System (EFTPS) or IRS Direct Pay to set up automatic payments. This will ensure you make quarterly payments on time, but you still risk underpaying.

Easing the Compliance Burden

Estimating quarterly taxes may sound straightforward. However, it can be challenging to remember payment deadlines, project income and eligible deductions, and make any adjustments needed due to tax law changes. That’s why partnering with a knowledgeable tax professional isn’t just helpful — it’s smart business. Contact your tax advisor to stay compliant and avoid costly missteps. 

When you hire a nanny, housekeeper or another domestic worker, pay close attention to the tax rules.

Over the years, there have been news stories about political appointees and others who got into trouble because they didn’t pay nanny taxes. The same could happen to you.

You must generally pay Social Security, Medicare and federal unemployment taxes on wages paid to domestic workers who are considered “employees” under federal law.

However, you don’t have to bother with this if:

• You pay someone less than $2,800 in 2025 (up from $2,700 in 2024).
• You hire students age 18 or younger.
• You hire occasional workers like painters or house-cleaning services.

Beyond that, you have to determine if domestic helpers are employees under your control or independent contractors in business for themselves.

It’s not a simple question, but if the workers come part-time and advertise or hand out business cards, they’re probably self-employed and responsible for their own taxes. On the other hand, a live-in housekeeper or full-time nanny who works in your home is an employee.

If you believe a worker is an independent contractor: Put the arrangement in writing and keep a copy of the person’s business card, brochure or advertisement. Why do you need this protection? Sometimes, domestic helpers reveal the names of people they worked for when they apply for Social Security. Uncle Sam then sends out assessments for back taxes, penalties and interest — even many years later.

Because this is a confusing issue, consult with your tax professional to ensure you’re on the right track.

Termination can be painful, whether it’s for cause or part of a business slump that you can’t avoid.

Employees who are fired or laid off often have negative feelings about the company and some could act out their anger in damaging or violent ways. Of course, you can try to ease the pain by handing out generous severance  packages, outplacement benefits and counseling. Give out written information about the support the company will give and let employees know you are providing cushions, even though you aren’t legally required to. But don’t expect these provisions to satisfy all distraught ex-employees.

7 important precautions

The following seven steps can help keep your company safe from serious harm inflicted by former employees:

7. Have a supervisor or security officer discreetly pack an employee’s personal belongings and bring them to the waiting room. Verify that nothing is forgotten or missing. Have the person escorted to the parking lot and remove any vehicle stickers that allow entry into the parking lot or garage.

1. Before taking any action, discuss your plans with supervisors. Act quickly to avoid starting the rumor mill and giving employees time to think about ways to sabotage. And consult a labor attorney to discuss the issues.

2. Notify your security manager after employees have worked their last shifts – but before they return to work to receive news of the termination. (If you don’t have a security officer, consider hiring an outside firm to help in the termination process.) Plan to bar the employees’ access to the building when the termination interview starts, and deactivate any security codes the employees may have to the building.

3. Have your network administrator (with the help of supervisors) determine every computer system the employees can access and deactivate passwords. Common types of computer access include:

• Company intranets,
• Customer lists,
• E-mail lists,
• Company communications and library,
• HR systems involving benefits and job postings, and
• Databases used on the job.

4. Keep each termination interview private and compassionate. Avoid embarrassing ex-employees and assure them the details will be kept private.

5. During the termination interview ask for all company-related ID cards. Make sure employees return such equipment as cell phones and laptop computers.

6. Ask the security officer to accompany former employees to a private waiting room to pick up their belongings. Don’t let employees back into their work areas. You may be tempted to just escort them right to the reception area or parking lot, but this could be humiliating. Keep the entire procedure as private as possible.

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently identified an increase in fraudsters using the bureau’s name, insignia and powers to target the public in widespread schemes. FinCEN is tasked with safeguarding the U.S. financial system from illicit activity, combating money laundering and terrorism funding, and providing financial intelligence to promote national security. Here’s a rundown of the latest schemes and tips to help you avoid them.

MSB Fraud

According to a December 2024 FinCEN alert, scammers are registering as money services businesses (MSBs) with FinCEN and using that registration to appear legitimate. Registered businesses may claim that FinCEN vets, approves or licenses them, but the bureau doesn’t confer any such approvals. Scammers sometimes engage in virtual asset investment scams, instructing victims to buy virtual currency and send the funds to fraudulent MSBs. They might also direct potential victims to FinCEN’s MSB Registrant Search Page to gain credibility with potential investors.

Potential red flags for MSB schemes include:

• A company that’s registered as an MSB with FinCEN but isn’t licensed by any state financial regulatory authority where it claims to operate,
• A registered MSB that shares a street address with other recently registered MSBs, and
• A company with a limited online or social media presence that prominently highlights its registration or claims to be licensed by FinCEN, alongside unverified testimonials and promotions of risk-free high-return investments.

Impersonation Scams

Criminals use FinCEN’s name and insignia to impersonate the bureau and its employees in government imposter scams. Typically, they contact people through “spoofed” phone calls, text messages, emails or U.S. mail. Spoofing occurs when a perpetrator disguises an email address, sender name, phone number or URL to convince victims that they’re dealing with a trusted source.

A FinCEN imposter may already know a victim’s name, Social Security number and account numbers from information available on the “dark web” from data breaches. Scammers might demand payments for outstanding debts or anti-money laundering and countering the financing of terrorism (AML/CFT) financing violations. They may also provide fake documentation from FinCEN officials and threaten the arrest or seizure of victims’ accounts. Alternatively, scammers might claim that victims are entitled to financial grants. However, to receive the funds, the victim must first provide bank account information and pay a fee to the imposter to release the funds.

Potential red flags for these schemes include:

• Receipt of a phone call, text, email or mail from FinCEN demanding immediate payment,
• Receipt of a letter from the FinCEN director, deputy director, or other FinCEN or Treasury Department official requesting immediate payment, and
• Notifications about AML/CFT violations, outstanding debts or a Treasury grant.

BOI Reporting Schemes

To be clear, U.S. companies and U.S. citizens are currently exempt from FinCEN’s beneficial ownership information (BOI) reporting requirements. But that hasn’t stopped fraudsters from claiming that the reporting requirements remain in effect and using scare tactics to steal money or personal information from unwary victims. (See “The Ongoing BOI Reporting Saga Is Now Over for Domestic Companies” above.) However, foreign entities may still be required to file BOI reports with FinCEN.

Ongoing confusion and uncertainty about the rules have created opportunities for fraudsters. For example, some scammers charge victims to prepare reports but never actually send them to FinCEN. They may also falsely claim FinCEN charges a filing fee. In addition to claiming to be legitimate third-party filing companies, scammers may use names similar to “FinCEN” or purport to be another government agency and send victims fake reporting forms.

Potential red flags for these schemes include:

• Third-party filing services with little or no online presence,
• Third-party filers with names similar to legitimate companies or government agencies, and
• Claims that failure to file or make a payment to FinCEN will lead to fines, penalties or legal action.

An Ounce of Prevention

The first step to avoid becoming a victim of these schemes is understanding how FinCEN operates. Notably, the bureau never:

• Contacts the general public to request payment or provide specific information (other than general information about BOI reporting) by phone, text, email or mail,
• Sends direct invitations to connect on social media,
• Demands immediate payment or asks people to move their money to a safe location,
• Freezes assets or blocks transfers,
• Requests payments to release funds or prove that you’re not involved in criminal activity,
• Charges for filing reports directly with FinCEN,
• Offers grants or collects debts, or
• Approves or endorses any business registered as an MSB.

If you’re unsure about an email, phone, social media or mail communication claiming to be from FinCEN, use the contact information listed on the bureau’s website to verify its legitimacy.  

Report Suspicious Behavior

If you receive questionable solicitations incorporating FinCEN’s name, immediately contact the Treasury Department’s Office of Inspector General and the Federal Trade Commission. Victims of cyber-enabled impersonation scams should file a complaint with the FBI’s Internet Crime Complaint Center and their nearest FBI field office. Your financial advisors can also advise you on more ways to safeguard you, your family and your assets from FinCEN and other fraud scams.

As the name implies, a “Savings Incentive Match Plan for Employees” (SIMPLE) is designed to be easy for employers to operate and for employees to manage their accounts. But the latest round of tax law changes is anything but simple. Among other key provisions, the SECURE 2.0 Act authorizes a complex set of new rules for “super” catch-up contributions from eligible older workers.

A SIMPLE Start

Let’s start with the basic rules for SIMPLE-IRAs — the most common and straightforward type of SIMPLE. (There are more complications with the lesser-used SIMPLE-401(k) version.)

SIMPLEs offer a simplified plan structure and reduced reporting requirements for certain small businesses. For starters, an employer can operate a SIMPLE only if it has no more than 100 employees who earned at least $5,000 in the previous year. Any employee who’s been paid at least $5,000 in compensation for any two prior years at the company — and expects to receive at least that much this year — can participate in the plan.  

SIMPLEs are available to virtually every type of business, including C Corporations, S corporations, limited liability companies (LLCs) and partnerships. Self-employed individuals can also use this setup.

Regular contributions to a SIMPLE are made on a pretax basis within generous limits, allowing them to grow and compound without any current tax erosion. Typically, the employer will offer a wide range of investment options, including mutual funds targeted to a retirement date.

In addition, an employer operating a SIMPLE must provide either:

• Matching elective contributions of up to 3% of compensation (but not less than 1% in no more than two out of five years), or
• Nonelective contributions of 2% of each eligible employee’s compensation.  

The maximum compensation taken into account for these purposes, which is adjusted annually for inflation, is $350,000 in 2025. Employer contributions made to employee accounts are generally deductible.

Contributions to SIMPLEs vest immediately, and employees can withdraw funds from the account anytime. But distributions made before age 59½ are taxable and may be subject to an additional penalty tax unless a special exception applies.

Important: The early withdrawal penalty from a qualified plan or traditional IRA typically equals 10% of the distribution amount. With a SIMPLE-IRA, however, the penalty is 25% for the first two years the employee participates in the plan. After the two-year period expires, the usual 10% penalty applies to early SIMPLE plan withdrawals.

When distributions are finally made, the payouts are taxed at ordinary income rates. Usually, plan participants will be in a lower tax bracket if they wait until retirement to take withdrawals. The required minimum distribution (RMD) rules for qualified plans also apply to SIMPLEs. As with other SIMPLE distributions, RMDs are taxed at ordinary income rates.

Contribution Limits for SIMPLEs

The limit on employee contributions to SIMPLE accounts is adjusted annually for inflation. For 2025, the contribution limit is $16,500 (up from $16,000 in 2024). Similar to 401(k)s, the tax law also allows participating employees age 50 or older to make catch-up contributions to help grow their nest eggs later in life. This is where things start to get tricky.

Notably, SECURE 2.0 established new rules based on company size and created a special category of employees allowed to make “super” catch-up contributions. So, there are now two kinds of catch-up contribution opportunities for older plan participants:

1. Regular catch-up contributions. For 2025, the limit for regular catch-up contributions made by employees ages 50 and older is $3,500. This figure is indexed annually for inflation but is the same for 2024 and 2025.

2. Super catch-up contributions. Beginning in 2025, employees ages 60 through 63 can contribute more to their regular SIMPLE account. The limit in 2025 is equal to the greater of $5,000, 150% of the regular catch-up contribution limit or $5,250. After age 64, the limit reverts to the regular catch-up contribution limit.

Thus, the basic maximum SIMPLE contribution in 2025 is:

• $16,500 for employees under age 50,
• $20,000 for employees ages 50 through 59 ($16,500 plus $3,500),
• $21,750 for employees ages 60 through 63 ($16,500 plus $5,250), and
• $20,000 for employees ages 64 or older ($16,500 plus $3,500).

But wait, there’s more. SECURE 2.0 throws a few extra monkey wrenches into the mix.

The 10% rule. The contribution limit for all eligible employees, regardless of age, is increased by 10% for an eligible employer with 25 or fewer employees. This increase is automatic if the employer had no more than 25 employees earning at least $5,000 in the prior year. What’s more, employers with more than 25 employees can elect to offer the 10% increase if they provide either:

• Matching contributions of up to 4% of compensation (instead of the regular 2%), or
• Nonelective contributions of 3% of each eligible employee’s compensation (instead of the regular 3%).

So, if you benefit from the 10% boost, your employer either has 25 or fewer employees or makes the higher matching contribution for nonelective contributions. When the 10% rule applies, the contribution limit increases to:

• $17,600 for employees under age 50,
• $21,450 for employees ages 50 through 59 ($17,600 plus $3,850),
• $22,850 for employees ages 60 through 63 ($17,600 plus $5,250), and
• $21,450 for employees ages 64 or older ($17,600 plus $3,850).

Note that the indexed limit for super catch-up contributions doesn’t benefit from the 10% increase regardless of the company’s size or if it makes matching or nonelective contributions.

Additional SECURE 2.0 Provisions

If all that wasn’t confusing enough, SECURE 2.0 includes other changes that affect SIMPLE plans. Significantly, employers can now establish Roth-type accounts within a SIMPLE plan, effective as of 2023, though Roth accounts aren’t currently mandatory. Unlike traditional SIMPLEs, contributions to a Roth SIMPLE will be included in the employee’s income in the year of the contribution.

However, RMDs won’t be required from Roth-type SIMPLE accounts. Also, if a SIMPLE permits Roth contributions, catch-up contributions must be made to this type of account for those earning above $145,000.

The rule requiring mandatory Roth-type catch-up contributions for high wage-earners was scheduled to take effect on January 1, 2024. However, the IRS postponed the effective date to January 1, 2026, to give employers more time to comply with the new requirements.

Finally, SECURE 2.0 increased the required beginning date (RBD) for RMDs from qualified plans and SIMPLEs from age 72 to age 73, beginning in 2023. The RBD is scheduled to increase to age 75 in 2033.

Late Start for Employers

Fortunately, it’s not too late if your company doesn’t already have a SIMPLE for the 2025 tax year. It has until October 1, 2025, to establish a plan that can receive 2025 contributions. If you have any questions about this option or the dizzying array of new SIMPLE rules, contact your professional advisors.

We’re thrilled to announce that our Managing Partner, Dennis Cole, has been named to Forbes’ inaugural list of America’s Best-in-State CPAs for 2025. This prestigious recognition, developed in collaboration with research firm Statista, honors standout Certified Public Accountants from across the United States for their professional excellence, commitment to client service, and contributions to the accounting profession.

The list was curated through a rigorous process involving peer recommendations, client feedback, and independent assessments of professional achievements. Those selected are seen as leaders in their field, demonstrating both technical knowledge and the ability to build lasting trust and results for their clients.

Dennis’ inclusion on this list is a testament to his dedication, leadership, and the exceptional work he has consistently delivered throughout his career. Under his guidance, Beers, Hamerman, Cohen & Burger has continued to grow and evolve—fostering a client-first culture and a standard of excellence we are proud to uphold.

“We’ve always known Dennis was among the best, but it’s wonderful to see that acknowledged on a national level,” said a member of our leadership team. “He brings integrity, expertise, and a personal touch to everything he does.”

To read more about this recognition, visit the official announcements:

• CTCPA News: 13 CTCPA Members Named to Forbes List
• Forbes: America’s Best-in-State CPAs 2025

Please join us in congratulating Dennis Cole on this well-deserved honor!