Schaefer Business Solutions LLC

Who has their W2’s? Let’s get it! Shoot me a text to get started!

It’s the 2026 season opener!!! IRS will begin accepting E-file returns today! 🎉 Have questions about the new Schedule 1A (no tax on tips and overtime), new Trump accounts, new rules on bonus depreciation? Reach out! I’d love to help. I provide 100% virtual appointments nationwide or mobile services for Sumpter and Lake counties.

Can You Claim a Parent Living With You as a Dependent? 🤔

Remember personal exemptions? They were suspended under the Tax Cut and Jobs Act. Now, OBBBA (One Big Beautiful Bill Act) permanently eliminates them, but you may still be able to claim an elderly parent as a dependent — and unlock valuable tax credits.

Here’s what you need to know for 2025:

Personal exemptions are no longer deductible
BUT the $5,200 inflation-adjusted exemption amount is still used to determine dependent eligibility under the qualifying relative rules.

You may be able to claim a parent if:

Their gross income is under $5,200
You provide more than half of their support
They meet all other IRS dependency requirements

While you can’t claim a personal exemption, qualifying a parent as a dependent may allow you to:

Claim the Credit for Other Dependents (up to $500)
Potentially qualify for Head of Household filing status
Access other dependent-related tax benefits

Example:
A taxpayer supports their elderly parent who earns $3,500 for the year. Since that income is below the $5,200 threshold and the taxpayer provides most of the support, the parent may qualify as a dependent — even without a personal exemption.

Have questions about whether you can claim a parent or other dependent? Reach out to Schaefer Business Solutions — We're happy to help you navigate the rules and maximize your tax benefits.

New for 2025: “No Tax” on Overtime Deduction!

For Tax Years 2025–2028, workers who earn qualified overtime pay may be able to deduct the extra “half” portion of time-and-a-half pay from their federal taxable income (still subject to Social Security & Medicare taxes)

How It Works:

Only the amount above your regular hourly rate qualifies!!

Here's how it will work:
Joe earns $20/hour and works 10 overtime hours paid at $30/hour.
The extra $10/hour = $100.
He can deduct $100, lowering his federal taxable income.

Key Details to Know:

Keep your last paycheck of the year handy, 2025 is a transition year—may use reasonable estimates
Overtime must be required under the Fair Labor Standards Act (FLSA) and properly reported.
Must have a valid U.S. Social Security number
Deduction capped at $12,500 (single) / $25,000 (MFJ)
Phase-out begins at MAGI of $150,000 (single) / $300,000 (MFJ)
Married Filing Separately is not eligible

This is a major tax break for workers putting in extra hours, but proper reporting and planning are key for 2025!

Have questions about the No Tax on Overtime deduction?
Schaefer Business Solutions is here to help you make the most of it.

New for 2025: "No Tax" on Tips!

Starting Tax Year 2025, employees and self-employed individuals in professions where tipping is customary—like food service, hospitality, and personal care—can claim a federal income tax deduction for tips received (this does not include Medicare and Social Security tax).

Key Details:

Must have a valid U.S. Social Security number.

2025 is a transition year: reasonable documentation is sufficient; in 2026, employers will report on Form W-2.

Tipped workers should report monthly tip totals to employers and keep a daily log.

Qualified tips include voluntary cash or charged tips received directly or through tip sharing.

Maximum deduction: $25,000 per return and certain exclusions apply

This is a major win for tipped workers, helping reduce federal income tax while keeping compliance simple.

Are you a tipped worker? Review the IRS approved occupations here:https://home.treasury.gov/system/files/136/Tipped-Occupations-Detailed-8-27-2025.pdf

Need help claiming your No Tax on Tips deduction? Schaefer Business Solutions can guide you to maximize this new benefit!

home.treasury.gov

New for 2025: IRS Transition Away from Paper Checks!

The IRS is modernizing refunds and payments! Paper check refunds are still possible, but will be delayed.

If you e-file: Your missing banking info will trigger an IRS notice to submit info or request a waiver.

Refunds may be held up to 6 weeks until banking info is provided; if no action, a paper check is issued.

Tax payments can still be made by paper check.

Questions about the new IRS process? At Schaefer Business Solutions, we help you navigate these changes and ensure your refunds and payments go smoothly.

Send a message to learn more

Do You Have Digital Assets? New for 2025 – Form 1099-DA!

The IRS is stepping up digital asset reporting with Form 1099-DA, designed for cryptocurrency, stablecoins, and NFTs.

Key Points:

Reports gross proceeds, acquisition & sale dates, and asset type
Cost basis reporting now required in 2026
Short-term vs. long-term classification determines tax rates
Wash Sale Rule now applies! Selling & repurchasing within 30 days will disallow the loss

Need help reporting your crypto or NFT transactions? Schaefer Business Solutions can guide you through Form 1099-DA and make sure your taxes are accurate!

Are You Required to File a Federal Tax Return for 2025?
Here’s a quick guide to gross income thresholds by filing status:

Single:

$15,750 if under 65
$17,750 if 65+ or blind
$19,750 if 65+ and blind

Married Filing Jointly:

$31,500 if both under 65
$33,100 if one 65+ or blind
$34,700 if both 65+
$37,900 if both 65+ and blind

Married Filing Separately:

$5 (any age)

Head of Household

$23,625 if under 65
$25,625 if 65+
$27,625 if 65+ and blind

If your income is near these thresholds, it’s a good idea to review your filing requirements early to avoid penalties. Need help determining if you must file? Schaefer Business Solutions can guide you through the rules and ensure you’re in compliance.

🚗 2025 Clean Vehicle Credit – Expiring! ⚡

If you bought a new clean vehicle BEFORE Sep 30, 2025, you may be eligible for a tax credit up to $7,500!

Did you buy a clean vehicle in 2025?
At Schaefer Business Solutions, we help taxpayers claim the maximum Clean Vehicle Credit and ensure all requirements are met. Message us today to get started!

Send a message to learn more

Big Update for Families: Child Tax Credit Changes for 2025!

The Child Tax Credit (CTC) has been enhanced, and these changes could mean more money back for many families. Here’s what you need to know

Credit Amounts:

CTC increased from $2,000 to $2,200 per qualifying child under age 17
Refundable portion (ACTC): up to $1,700 per child, even if you owe no tax!
Starting in 2026, the credit will be indexed for inflation, so it will increase over time!

Income Phase-Out Thresholds:

$200,000 – Single filers
$400,000 – Married filing jointly

Eligibility Highlights:

Child must be under 17, claimed as a dependent, and have a valid SSN
Child must live with you more than half the year and not provide their own support
Parent/guardian must also have a work-eligible SSN

Need help maximizing your family tax benefits?
Schaefer Business Solutions is here to guide you through every credit and deduction available to you.

New for 2025: Charitable Contribution Deduction for Non-Itemizers!

Great news for taxpayers who usually take the standard deduction! Beginning in Tax Year 2026, you’ll once again be able to deduct charitable donations—even if you don’t itemize! This change makes permanent a popular benefit that was previously available during the COVID relief years.

Key Details:

Up to $1,000 deduction for single filers
Up to $2,000 deduction for married filing jointly
Applies only to cash contributions
Donations must be made to qualified charities

You no longer have to itemize to get a tax benefit for giving back. This change encourages charitable giving while still taking the standard deduction!

Questions about how this fits into your tax planning?
Schaefer Business Solutions is here to help you make the most of every deduction.

Send a message to learn more