Category Archives: Taxes

The holidays are a time for businesses to celebrate their employees’ hard work and success. Throwing a company party is a great way to boost morale, but did you know it can also offer a tax benefit? Navigating the rules for deducting these expenses can be tricky, but getting it right can mean a significant tax savings for your business. 

Here’s a guide to making your company holiday party a tax-smart move. 

The 100% Deduction Rule 

The IRS generally allows businesses to deduct 100% of the cost of a company holiday party, but there are a few important conditions. The key is that the party must be a business expense and not just a social event. 

• For Employees Only: To qualify for the 100% deduction, the party must be primarily for the benefit of employees and their families. This means you must invite your entire staff—not just a select group or management team. 

• Not Lavish or Extravagant: The IRS has a rule that the expenses must be reasonable. While there’s no specific dollar limit, the cost of the party shouldn’t be considered lavish or extravagant for a business of your size. 

• Documentation is Key: As with any business deduction, you must have proper documentation. Keep a detailed list of attendees, all receipts, and a record of the purpose of the event. 

What if I Invite Clients or Contractors? 

This is where things can get complicated. If you invite non-employees, such as independent contractors or clients, the deduction for their portion of the expenses may be limited. Generally, expenses for client entertainment are not deductible. However, a portion of the meals and beverage expenses may be deductible if the event has a clear business purpose. 

Gifts for Employees 

Many businesses also give out gifts during the holidays. The tax treatment of these gifts depends on their nature: 

• Cash and Cash Equivalents: Year-end cash bonuses and gift cards are generally considered taxable income for employees, and your business can deduct them as compensation. 

• De Minimis Gifts: Small, non-cash gifts of minimal value are often considered a “de minimis” fringe benefit. These gifts, such as a holiday ham or a gift basket of food, are not taxable to the employee and are fully deductible for the business. 

Feeling overwhelmed by year-end business tasks? That’s what we’re here for at Lightening The Load.  

The holiday season is a time for giving, and for many, that generosity extends to the causes and organizations they care about most. What you may not realize is that with a smart tax strategy, your charitable donations can not only make a significant impact on your chosen charities but also on your tax situation. At Lightening the Load, we’re here to help you make your giving go further. 

Here’s a guide to strategic charitable giving as the year draws to a close. 

The Golden Rule of Giving 

To be tax-deductible, your donation must be made to a qualified charitable organization. This means the charity must be a public charity, private foundation, or other organization approved by the IRS. A quick check on the IRS website can confirm an organization’s status. 

Cash vs. Non-Cash Donations 

When it comes to giving, you have a choice between donating cash and non-cash items. 

• Cash Donations: These are the most straightforward. Keep meticulous records, including receipts, bank records, and a written acknowledgment from the charity for any donation of $250 or more. 

• Non-Cash Donations: Items like clothing, household goods, or vehicles can also be donated. Generally, you can deduct the fair market value of the item, but there are special rules to follow. For high-value items, you may need to get a qualified appraisal. 

The “Bunching” Strategy 

With the higher standard deduction, many taxpayers no longer itemize their deductions every year. If your itemized deductions don’t exceed the standard deduction this year, you might not see a tax benefit from your donations. 

A smart tax strategy is to “bunch” your donations. This means consolidating several years’ worth of charitable contributions into a single year. In that year, your itemized deductions would likely exceed the standard deduction, giving you a significant tax benefit. You can then take the standard deduction in the following years. 

New Deductions for Non-Itemizers 

The new tax bill also introduces a new charitable deduction for those who do not itemize. Starting in 2026, you may be able to deduct up to $1,000 for single filers and $2,000 for married couples filing jointly for charitable contributions made. 

Make your giving go further this holiday season. We can help you structure your charitable donations for maximum tax benefit. We are here to help!  

The way we work is changing, with more and more individuals building careers and earning income through the gig economy and side hustles. But with this flexibility comes a new set of tax responsibilities that can feel overwhelming. At Lightening the Load, we specialize in guiding individuals through complex tax situations, and that includes helping you turn your side hustle into a financially savvy operation. 

Your tax journey as a gig worker is fundamentally different from that of a traditional employee. Here’s what you need to know. 

The Importance of Tax-Conscious Record Keeping 

Unlike a W-2 employee, taxes aren’t automatically withheld from your gig income. This means you are responsible for keeping detailed records of both your income and your expenses throughout the year. 

• Track Your Income: Keep a log of all income, even if it’s not reported on a Form 1099. Every dollar earned from a side hustle is considered taxable income. 

• Deduct Your Expenses: The biggest opportunity for tax savings lies in properly deducting your business expenses. This includes costs for things like: 

• Business mileage for a rideshare driver 

• Supplies for a freelance artist 

• Internet and phone bills used for work 

• Software subscriptions and professional fees 

Estimated Quarterly Taxes 

Since taxes aren’t taken out of your paychecks, you are likely responsible for paying estimated quarterly taxes. Failing to do so can result in penalties from the IRS. We can help you calculate and schedule these payments so you can stay ahead of your tax obligations and avoid a large tax bill at the end of the year. 

The Self-Employment Tax 

Another key difference is the self-employment tax. This includes both the Social Security and Medicare taxes that would typically be split between an employee and employer. As a self-employed individual, you are responsible for paying both portions, which adds an additional layer to your tax planning. 

Your side hustle deserves a smart tax strategy. Let us at LTL help you turn your gig into a financially savvy operation. 

he new year is upon us, and with it comes the start of tax season. Instead of waiting for a last-minute scramble, getting a head start on your tax preparation is a move that can save you time, stress, and money. At Lightening the Load, we believe in a proactive approach, and this checklist is designed to get you organized and ready for a smooth tax filing experience. 

Your Essential Tax Season Checklist 

1. Personal and Family Information 

Start with the basics. Having this information ready at the beginning of the process ensures a seamless flow. 

• Social Security numbers for you, your spouse, and any dependents. 

• Dates of birth for everyone on your return. 

• If you were issued one by the IRS, your Identity Protection PIN. 

2. Income Documents 

This is the cornerstone of your tax return. Gather all documents that report your income from the prior year. 

• W-2s from all employers. 

• 1099 Forms (1099-NEC for independent contractor work, 1099-INT for interest, 1099-DIV for dividends, etc.). 

• SSA-1099 for Social Security benefits. 

• Any other forms reporting income, such as from rental properties or side hustles. 

3. Deduction & Credit Documentation 

To ensure you’re taking advantage of every tax break you qualify for, you need to have the proper documentation. 

• Records of charitable contributions, including cash, checks, and donated items. 

• Homeownership records, such as your Form 1098 for mortgage interest and records of real estate taxes paid. 

• Receipts for medical expenses not covered by insurance. 

• Records of education expenses, including Form 1098-T from educational institutions. 

• Business expenses, including mileage logs and receipts for supplies, travel, and meals. 

4. Tax Payments Made 

Don’t forget to account for the taxes you’ve already paid. This can significantly reduce or eliminate your final tax bill. 

• Records of estimated tax payments made throughout the year. 

• Any payments made with a prior-year extension request. 

5. Business and Self-Employment Documents 

For small business owners and those in the gig economy, your record-keeping is vital. 

• Profit and Loss statement for your business. 

• Records of all business expenses, categorized by type. 

• Documentation for assets purchased for business use, which may qualify for depreciation. 

Don’t wait until January! Use this checklist to get a head start on your tax preparation. And if you need help, we’re just a call away. 

Healthcare and taxes have always been intertwined, but new tax legislation has made the connection even more significant. For individuals and families with Health Savings Accounts (HSAs) or those considering one, understanding these changes is crucial to maximizing your tax savings. At Lightening the Load, we’re here to help you make sense of these new rules and ensure your tax strategy is as healthy as you are. 

The New Rules for HSAs 

The new tax bill loosens some of the restrictions around HSAs, making them a more flexible and powerful tax-advantaged tool for healthcare expenses. 

• Expanded Telehealth Access: The new law makes permanent the ability for high-deductible health plans (HDHPs) to cover telehealth services before you meet your deductible, without jeopardizing your HSA eligibility. 

• Direct Primary Care: A major change is the new ability to participate in Direct Primary Care Arrangements (DPCAs) and still be HSA-eligible. You can also now use your HSA funds to pay for DPCA fees. This opens up new ways to use your HSA to pay for a more comprehensive healthcare experience. 

Other Health-Related Tax Changes 

Beyond HSAs, the new legislation introduces other tax-related provisions for healthcare and dependents. 

• Increased Dependent Care FSA Limits: The annual exclusion from taxable income for dependent care Flexible Spending Arrangements (FSAs) has increased from $5,000 to $7,500. This is a significant benefit for families with childcare expenses. 

• Enhanced Adoption Tax Credit: The tax credit for adoption assistance has also been improved, becoming partially refundable, which can provide much-needed relief for families. 

Healthcare and taxes are now more intertwined than ever. We can help you understand the new rules and maximize your health-related tax savings.