deductions - Linkenheimer LLP CPAs & Advisors

The One Big Beautiful Bill: What It Means for You (and Your Business)

Congress just gift-wrapped a 1,000-plus-page “One Big Beautiful Bill Act” (yes, that’s the real name) and sent it to President Trump for signature on July 4th (because nothing says “patriotic” like a 900-plus-page tax law.). Fireworks ensued, literally and legislatively. Below is the quick-and-casual download on the provisions our clients are most likely to feel—whether you’re filing as an individual, running a business, or both.

Key Changes for Individuals

Bigger, permanent standard deduction and TCJA-era brackets – Beginning in 2026, the deduction rises to $15,750 (single) and $31,500 (joint) while today’s lower rates stick around. Most filers will see more income sheltered from tax without having to itemize.
SALT cap balloons to $40,000 for 2025-2029 – High-tax-state residents can deduct up to four times more in property and state income taxes for five years. Plan to prepay or “bunch” taxes during this window to maximize savings before the cap snaps back.
New $6,000 “senior deduction” (ages 65+) – Available 2025-2028 on top of the standard deduction. Retirees may owe less federal tax even if their income stays level.
Child Tax Credit increases to $2,200 and is indexed for inflation – With the refundable portion […]

By Linkenheimer LLP|2025-07-15T19:02:52+00:00July 14th, 2025|new tax, News, tcja|0 Comments

Startup Costs and Taxes: What You Need to Know Before Filing

The U.S. Census Bureau reports there were nearly 447,000 new business applications in May of 2025. The bureau measures this by tracking the number of businesses applying for an Employer Identification Number.

If you’re one of the entrepreneurs, you may not know that many of the expenses incurred by start-ups can’t currently be deducted on your tax return. You should be aware that the way you handle some of your initial expenses can make a large difference in your federal tax bill.

How to treat expenses for tax purposes

If you’re starting or planning to launch a new business, here are three rules to keep in mind:

Start-up costs include those incurred or paid while creating an active trade or business or investigating the creation or acquisition of one.
Under the tax code, taxpayers can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs in the year the business begins. As you know, $5,000 doesn’t go very far these days! And the $5,000 deduction is reduced dollar-for-dollar by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized over 180 months […]

By Linkenheimer LLP|2025-07-11T15:01:41+00:00July 11th, 2025|business, deduction, expensing|0 Comments

Ways to Manage the Limit on the Business Interest Expense Deduction

Prior to the enactment of the Tax Cuts and Jobs Act (TCJA), businesses were able to claim a tax deduction for most business-related interest expense. The TCJA created Section 163(j), which generally limits deductions of business interest, with certain exceptions.

If your business has significant interest expense, it’s important to understand the impact of the deduction limit on your tax bill. The good news is there may be ways to soften the tax bite in 2025.

The nuts and bolts

Unless your company is exempt from Sec. 163(j), your maximum business interest deduction for the tax year equals the sum of:

30% of your company’s adjusted taxable income (ATI),
Your company’s business interest income, if any, and
Your company’s floor plan financing interest, if any.

Assuming your company doesn’t have significant business interest income or floor plan financing interest expense, the deduction limitation is roughly equal to 30% of ATI.

Your company’s ATI is its taxable income, excluding:

Nonbusiness income, gain, deduction or loss,
Business interest income or expense,
Net operating loss deductions, and
The 20% qualified business income deduction for pass-through entities.

When Sec. 163(j) first became law, ATI was computed without regard to depreciation, amortization […]

By Linkenheimer LLP|2025-03-10T15:52:43+00:00March 10th, 2025|business, deduction, deductions|0 Comments

Can I Itemize Deductions on My Tax Return?

You may wonder if you can claim itemized deductions on your tax return. Perhaps you made charitable contributions and were told in the past they couldn’t be claimed because you didn’t have enough deductions to itemize. How much do you need? You can itemize deductions if the total of your allowable itemized write-offs for the year exceeds your standard deduction allowance for the year. Otherwise, you must claim the standard deduction.

Here’s how we’ll determine if you can itemize or not for 2024 when we prepare your return.

Standard deduction amounts

The basic standard deduction allowances for 2024 are:

$14,600 if you’re single or use married filing separate status,
$29,200 if you’re married and file jointly, and
$21,900 if you’re a head of household.

Additional standard deduction allowances apply if you’re age 65 or older or blind. For 2024, the extra allowances are $1,550 for a married taxpayer age 65 or older or blind and $1,950 for an unmarried taxpayer age 65 or older or blind.

For 2025, the basic standard deduction allowances are $15,000, $30,000 and $22,500, respectively. The additional allowances are $1,600 and $2,000, respectively.

Don’t assume

Suppose you think your total itemizable deductions for […]

By Linkenheimer LLP|2025-02-26T15:03:09+00:00February 26th, 2025|deductions|0 Comments

Looking Ahead to 2025 Tax Limits as You Prepare to File Your 2024 Return

Chances are, you’re more concerned about your 2024 tax return right now than you are about your 2025 tax situation. That’s understandable because your 2024 individual tax return is due to be filed by April 15 (unless you file for an extension).

However, it’s a good time to familiarize yourself with tax amounts that may have changed for 2025 due to inflation. Not all tax figures are adjusted annually for inflation, and some amounts only change when Congress passes new laws.

In addition, there may be tax changes due to what’s happening in Washington. With Republicans in control of both the White House and Congress, we expect major tax law changes in the coming months. With that in mind, here are some Q&As about 2025 tax limits.

I haven’t been able to itemize deductions on my last few tax returns. Will I qualify for 2025?

Beginning in 2018, the Tax Cuts and Jobs Act eliminated the ability to itemize deductions for many people by increasing the standard deduction and reducing or eliminating various deductions. For 2025, the standard deduction amount is $30,000 for married couples filing jointly (up from $29,200 in 2024). For single […]

By Linkenheimer LLP|2025-02-06T20:28:14+00:00February 6th, 2025|2025, deduction, deductions, New Tax Laws, News|0 Comments