Yearly Archives: 2026

If you’re 65 or older, there’s a new tax benefit you need to know about—and it could save you thousands of dollars on your 2025 tax return. 

The “One Big Beautiful Bill Act,” signed into law in July 2025, created an additional $6,000 deduction for seniors. This isn’t a replacement for anything you’re already getting—it’s a brand new deduction that stacks on top of your existing tax benefits. 

Understanding the New Senior Deduction 

Here’s what makes this deduction special: it’s available whether you itemize or take the standard deduction, and it’s in addition to the existing extra standard deduction that seniors already receive. 

For 2025, a single taxpayer age 65 or older can now claim a total standard deduction of up to $23,750 (that’s the regular $15,750 standard deduction, plus the existing $2,000 senior addition, plus the new $6,000). A married couple where both spouses are 65 or older can claim up to $46,700. 

Who Qualifies? 

To claim this deduction, you must be 65 or older by December 31, 2025. The deduction is available per eligible individual, so if both spouses qualify, you can claim the full $12,000 combined amount. 

There’s an income cap to be aware of. The deduction begins to phase out for taxpayers with modified adjusted gross income (MAGI) over $75,000 for single filers or $150,000 for married couples filing jointly. It phases out completely at $175,000 for individuals and $250,000 for joint filers. 

One important note: this deduction is not available to married couples filing separately. 

The Power of Stacking Deductions 

What makes this particularly valuable is that it works regardless of whether you itemize. If you have significant medical expenses, charitable contributions, or state and local taxes that push you into itemizing territory, you can still claim this $6,000 deduction on top of your itemized deductions. 

For example, a 67-year-old single filer with $35,000 in itemized deductions and income under $75,000 could deduct a total of $41,000 from their taxable income ($35,000 itemized + $6,000 new senior deduction). 

Important Timing: Available Through 2028 

This deduction is temporary. It’s available for tax years 2025 through 2028, after which it’s currently set to expire. That makes planning ahead even more critical if you’re approaching retirement or making decisions about income timing. 

What This Means for Your Tax Planning 

This new deduction changes the landscape for seniors navigating tax planning decisions. It may affect when you take retirement account distributions, how you structure investment income, or whether Roth conversions make sense for your situation. 

At Lightening the Load, we’re helping clients understand exactly how this new deduction impacts their unique tax situation. We’ll calculate your eligibility, determine the phase-out impact if your income exceeds the thresholds, and help you make strategic decisions to maximize this benefit while it’s available. 

Whether you’ve been filing your own returns for years or working with another preparer, now is the time to have a conversation about how this substantial new deduction fits into your overall tax strategy. 

Let us lighten your load. 

January 31st is swiftly approaching! If you’ve paid contractors, freelancers, or vendors this year, the 1099 filing deadline should already be on your radar. Don’t panic—but don’t procrastinate either. Here’s your survival checklist for getting it right. 

Start NOW: Your Pre-Filing Action Items 

Pull your payment records. Review all payments made to non-employees throughout 2025. Look through your accounting software, bank statements, and credit card records. You’re looking for anyone you paid $600 or more for services. 

Collect missing W-9 forms. This is the number one mistake that trips up small business owners. You need a completed W-9 from every vendor before you can file their 1099. Missing information means you can’t file, and missing the deadline means penalties. Reach out now to anyone who hasn’t provided one. 

Identify which forms you need. Not all vendors get the same form. Understanding which 1099 to use prevents costly filing errors. 

Know Your 1099 Forms 

1099-NEC is for payments to independent contractors and freelancers totaling $600 or more. This includes your graphic designer, bookkeeper, marketing consultant, or anyone providing services who isn’t your employee. Due January 31st to both the recipient and the IRS. 

1099-MISC reports other types of payments like rent ($600+), prizes and awards ($600+), or royalties ($10+). The deadline is February 28th for paper filing or March 31st for electronic filing. 

1099-K is issued by payment processors like PayPal, Venmo, or Stripe. For 2025, you’ll receive one if you processed $20,000 and had 200+ transactions through these platforms. Be careful not to double-count this income if you also receive a 1099-NEC from the same client. 

1099-INT reports interest income of $10 or more from business accounts or investments. 

Who Doesn’t Get a 1099? 

This is where many small business owners get confused. Generally, you don’t issue 1099s to corporations (S-Corps or C-Corps). However, attorneys are the major exception—they get a 1099 regardless of their entity structure if you paid them $600 or more. 

LLCs can be tricky. Some are taxed as corporations, some aren’t. This is exactly why you need that W-9 form—it tells you how the LLC is taxed and whether a 1099 is required. 

The Real Cost of Getting It Wrong 

Let’s talk penalties, because they add up fast. If you’re 1-30 days late, it’s $60 per form with a maximum penalty of $232,500 for small businesses. Miss the deadline by 31 days to August 1st? That jumps to $130 per form with a $664,500 maximum. File after August 1st and you’re looking at $330 per form with a $1.3 million cap. 

Intentional disregard? That’s $660 per form with no maximum penalty. The IRS doesn’t mess around with this. 

Your Action Plan for the Next Two Months 

Review your vendor list this week and identify everyone who needs a 1099. Send requests for W-9s immediately to anyone you’re missing. Verify that LLCs and other entities have provided accurate tax classification information. Set up your filing method—if you’re filing 10 or more forms, electronic filing is required. Mark January 31st on your calendar in red ink, and consider having everything ready by mid-January to avoid last-minute chaos. 

Don’t Navigate This Alone 

Think of 1099 filing as a narrow trail with steep drop-offs on either side—one misstep and you’re dealing with penalties and IRS notices. At Lightening the Load, we help small business owners get their 1099 filing right the first time. We’ll review your vendor payments, identify who needs forms, verify your information, and handle the filing to ensure you meet all deadlines without the stress. 

The January 31st deadline isn’t flexible, but your approach to it can be. Start now, and you’ll file with confidence instead of panic. 

Let us lighten your load. 

 

New year, new you—and maybe a new business structure? January isn’t just about setting goals; it’s the critical window for making tax elections that could save you thousands of dollars this year. 

If you’re running your business as a sole proprietor or your LLC isn’t quite working the way you hoped, now is the time to evaluate your options. The decisions you make in January can dramatically impact your tax bill come April. 

The March 15th Deadline You Can’t Ignore 

Here’s what many small business owners don’t realize: if you want to elect S-Corporation status for the current tax year, you generally need to file Form 2553 by March 15th. Miss that deadline, and you’re waiting another year to see the benefits. 

This deadline makes January the perfect time for a business structure check-up. You have enough time to carefully evaluate your options, gather necessary information, and file properly—without the last-minute scramble. 

When S-Corp Status Makes Sense 

For profitable LLCs, electing S-Corp taxation can be a game-changer. Here’s why: as an LLC, all your business income is subject to self-employment tax (15.3%). With S-Corp status, you pay yourself a reasonable salary (subject to payroll taxes), and additional profits can be distributed as dividends—avoiding that self-employment tax hit. 

But there’s a catch: S-Corp status comes with additional compliance requirements, including payroll processing and more stringent recordkeeping. It’s not right for every business, but for many profitable small businesses, the tax savings far outweigh the extra administrative work. 

Sole Proprietors: It Might Be Time to Level Up 

Still operating as a sole proprietor? You’re missing out on liability protection and potentially paying more in taxes than necessary. Forming an LLC provides legal separation between you and your business, and it opens the door to more favorable tax treatment. 

The good news? You can form an LLC and elect S-Corp status in the same strategic move—maximizing both protection and tax benefits right from the start. 

Don’t Forget the QBI Deduction 

Your business structure also affects your eligibility for the Qualified Business Income (QBI) deduction—a valuable deduction that can reduce your taxable income by up to 20%. Different entity structures navigate the QBI deduction’s phase-outs and limitations differently, making your January review even more critical. 

Getting It Right 

Choosing the right business structure isn’t a one-size-fits-all decision. It depends on your income level, business type, growth plans, and long-term goals. What worked when you started your business might not be optimal now. 

Think of this as reaching a new waypoint on your business journey—sometimes you need to reassess your route to reach the summit more efficiently. At Lightening the Load, we help small business owners evaluate their entity structure and make informed decisions about S-Corp elections, LLC formations, and ongoing compliance requirements. We’ll analyze your specific situation and guide you toward the structure that makes the most tax sense for your business. 

Don’t let this January pass without a structure review. The tax savings could be substantial. 

Let us lighten your load. 

Working from your lake house in Tennessee while your company is based in Illinois? Spending winters in Arizona but keeping your primary home in Michigan? Congratulations—you’ve just entered the complex world of multi-state tax compliance. 

Here’s the thing: states are getting more aggressive about claiming you as a resident, and with remote work becoming the norm, the lines have never been blurrier. What used to be straightforward—live in one state, file in one state—has become a maze that trips up even the most organized taxpayers. 

Understanding Tax Residency: It’s Not Where You Think You Live 

Most people assume they’re a resident of the state where they own a home or where their driver’s license is issued. But states have their own rules, and they often don’t agree. Some states consider you a resident if you spend just 183 days there. Others look at where your “domicile” is—essentially, the place you intend to return to and consider your permanent home. 

The catch? You can only have one domicile, but you might owe taxes in multiple states depending on where you earn income, own property, or spend significant time. 

Common Multi-State Scenarios That Create Tax Headaches 

Remote workers face unique challenges. If you live in Georgia but work remotely for a company in another state, you might owe taxes in both places. And if you’re considering that move to Florida or Tennessee for their no-income-tax appeal, timing and documentation matter more than you think. 

Property owners need to be especially careful. Owning a rental property on the Carolina coast or in the Smoky Mountains? You’ll likely need to file there. And if you’re a snowbird spending winters in Florida while maintaining your Georgia home, both states might try to claim you as a resident if you’re not carefully tracking your days and maintaining clear ties to your domicile. 

Small business owners navigating multi-state operations face even more complexity—from nexus rules to apportionment formulas, especially as they expand across the Southeast. 

The Cost of Getting It Wrong 

States are conducting more residency audits than ever, and the penalties for incorrect filing can be steep. We’re talking back taxes, interest, and penalties that add up quickly. Some states even charge penalties for failing to file when you didn’t know you had an obligation. 

Your Path Forward 

Think of multi-state tax compliance as navigating unfamiliar terrain—it’s much easier with an experienced guide. At Lightening the Load, we help individuals and small business owners understand their specific state tax obligations and create a compliance strategy that works for their unique situation. 

Whether you’re a remote worker, own property across state lines, or split your time between locations, we’ll help you understand where you need to file, what income is taxable where, and how to avoid costly mistakes. Because tax compliance shouldn’t feel like a guessing game. 

Let us lighten your load.