Newell & Newell, PC

Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2024. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. Note: Certain tax-filing and tax-payment deadlines may be postponed for taxpayers who reside in or have a business in a federally declared disaster area. Tuesday, October 1 The last day you can initially set up a SIMPLE IRA plan, provided you (or any predecessor employer) didn’t previously maintain a SIMPLE IRA plan. If you’re a new employer that comes into existence after October 1 of the year, you can establish a SIMPLE IRA plan as soon as administratively feasible after your business comes into existence. Tuesday, October 15 If a calendar-year C corporation that filed an automatic six-month extension: File a 2023 income tax return (Form 1120) and pay any tax, interest and penalties due. Make contributions for 2023 to certain employer-sponsored retirement plans. Thursday, October 31 Report income tax withholding and FICA taxes for third quarter 2024 (Form 941) and pay any tax due. (See exception below under “November 12.”) Tuesday, November 12 Report income tax withholding and FICA taxes for third quarter 2024 (Form 941), if you deposited on time (and in full) all the associated taxes due. Monday, December 16 If a calendar-year C corporation, pay the fourth installment of 2024 estimated income taxes. Contact us if you’d like more information about the filing requirements and to ensure you’re meeting all applicable deadlines. © 2024

Electric vehicles (EVs) have become increasingly popular. According to Kelley Blue Book estimates, the EV share of the vehicle market in the U.S. was 7.6% in 2023, up from 5.9% in 2022. To incentivize the purchase of EVs, there’s a federal tax credit of up to $7,500 for eligible vehicles. The tax break for EVs and fuel cell vehicles is called the Clean Vehicle Tax Credit. The current version of the credit was created under the Inflation Reduction Act. Here are answers to some frequently asked questions. Which vehicles qualify for the credit? To qualify for the full $7,500, there are several requirements. For example: The vehicle must be a new plug-in electric or fuel cell vehicle. It must have a battery capacity of at least seven kilowatt hours. It must meet critical mineral and battery component requirements for vehicles placed in service on or after April 18, 2023. (If the vehicle meets only one of the two requirements, the buyer is eligible for a $3,750 credit.) The vehicle must undergo final assembly in North America and have a gross vehicle weight rating of less than 14,000 pounds. It must be purchased for personal use (not for resale) and must be primarily used in the United States. Are the most expensive EVs eligible for the credit? No. The vehicle’s manufacturer suggested retail price (MSRP) can’t exceed: $80,000 for vans, sport utility vehicles and pickup trucks, and $55,000 for other vehicles. Are there income limits for the buyer? Yes. To qualify for the new vehicle credit, your modified adjusted gross income (MAGI) can’t exceed $300,000 for married couples filing jointly, $225,000 for taxpayers filing as heads of households or $150,000 for other filers. How is the credit claimed? There are two ways. When we prepare your tax return, we’ll file Form 8936 with it. Alternatively, beginning in 2024, you can choose to transfer the credit to an eligible dealer when you buy a vehicle, which will effectively reduce the vehicle’s purchase price by the credit amount. If you don’t transfer the credit, it’s “nonrefundable” so you can’t get back more on the credit than you owe in taxes. And you can’t apply any excess credit to future tax years. Does a used EV qualify for a tax credit? Yes, but it’s not worth as much as the credit for new vehicle and the income limits are lower. Beginning January 1, 2023, if you buy a qualified used EV or fuel cell vehicle from a licensed dealer for $25,000 or less, you may be eligible for a credit of up to $4,000. Your MAGI can’t exceed $150,000 for married couples filing jointly, $112,500 for taxpayers filing as heads of households or $75,000 for other filers. Check before you buy If you’re interested in purchasing an EV, the tax credit can be a powerful incentive. But before you buy, make sure you meet all the eligibility requirements so you’re not disappointed. Many taxpayers and vehicles don’t qualify. Contact us for assistance. © 2024

Legendary singer Aretha Franklin died more than six years ago. However, it wasn’t until last year that a Michigan judge ruled a handwritten document discovered under her couch cushions was a valid will. This case illustrates the dangers of a so-called “holographic” will. It’s one where the entire document is handwritten and signed without the presence of a lawyer or witnesses. Facts of the case Initially, Franklin’s family thought she had no will. In that situation, her estate would have been divided equally among her four sons under the laws of intestate succession. A few months after she died, however, the family discovered two handwritten “wills” in her home. The first, dated 2010 and found in a locked cabinet, was signed on each page and notarized. The second, dated 2014, was found in a spiral notebook under her couch cushions and was signed only on the last page. The two documents had conflicting provisions regarding the distribution of her homes, cars, bank accounts, music royalties and other assets, leading to a fight in court among her heirs. Ultimately, a jury found that the 2014 handwritten document should serve as her will. Holographic wills can cause unexpected outcomes Michigan, like many states, permits holographic wills. These wills, which don’t need to be witnessed like formal wills, must be signed and dated by the testator and the material portions must be in the testator’s handwriting. In addition, there must be evidence (from the language of the document itself or from elsewhere) that the testator intended the document to be his or her last will and testament. Holographic wills can be quick, cheap and easy, but they can come at a cost. Absent the advice of counsel and the formalities of traditional wills, handwritten wills tend to invite challenges and interfamily conflict. In addition, because an attorney doesn’t prepare them, holographic wills tend to be less thorough and often contain ambiguous language. If you need a will, contact your estate planning attorney for help. Having your will drafted by a professional can give you peace of mind knowing that your assets will be divided as you intended. © 2024

Taking proactive steps now could help reduce your tax liability for 2024 and 2025. Here are some considerations.

Many people now work from their home offices. Some of them qualify for home office deductions, but unfortunately, many of them don’t. Here are the rules for eligibility.

Interested in buying a plug-in electric vehicle? You may be eligible for a valuable federal tax credit. Here are the rules.

It may seem that writing and signing a will by hand (called a “holographic” will) is a simpler and cheaper route to take. But doing so can result in family conflicts and other problems after your death.

During divorce proceedings, transferring retirement plan assets can be tricky. Using a qualified domestic relations order may help.

If you inherited an IRA or defined contribution plan, such as a 401(k), do you know how recently issued IRS regulations will affect you?

Hiring your child at your business this summer? It can be a tax-smart idea. Here are the benefits.