Sienna Consulting, LLC

WHAT HAPPENS IF YOU DON'T FILE YOUR TAXES?

If you missed the deadline and still haven't filed your taxes don't wait for the IRS to catch you. The interest and penalties get higher the longer you wait. But don't worry, you are better off filing late than not at all. A qualified CPA can help get you back on the right track and work with you on the payment you owe the IRS.

It’s Tax Day!
If you need to extend, remember it’s an extension to FILE your taxes, not an extension to PAY your taxes.

7 Self-Employment Tax Deductions to Know

Freelancers, contractors, and other self-employed individuals are eligible for valuable tax-write offs. Keep track of these eligible expenses to lower your taxable income:

1. Home Office – a portion of your mortgage or rent, property taxes, utilities, repairs and maintenance
2. Mileage or Vehicle Expenses – 70 cents per mile or actual vehicle expenses depending on the number of miles used for business purposes
3. Office Supplies expense – supplies for your office, computer equipment, etc.
4. Phone and Internet costs – the percentage of your personal phone and internet that you use for your business
5. Business travel expenses – flights, hotels, taxis, and some meals are deductible for legitimate business purposes
6. Continuing Education – work related tuition, fees, books, etc.
7. Advertising - getting your name out there is a business expense

Is a Solo 401(k) right for you?

Are you a business owner with no additional employees?
It pays to open a Solo 401(k) plan which allows you to grow your retirement funds while simultaneously saving your tax dollars.

As the EMPLOYEE you can contribute up to $23,500 or 100% of your compensation, whichever is less. Those age 50 and older can contribute an additional $7,500

As the EMPLOYER you can make an additional profit-sharing contribution of up to 25% of your net self-employment income or compensation.

In total, the Solo 401(k) contribution limit (employee + employer) for 2025 is $70,000 or $77,500 for those age 50 or older.

New reporting rule: If you earned freelance income of more than $5,000 last year on PayPal, Venmo, Cash App or similar platform, the IRS will now be notified, and you can expect to receive a Form 1099-K. For 2025, this threshold drops to $2,500. This income has always been taxable, only the 1099 reporting requirements have changed.

4 Smart Tax moves to make each year
1. Consider contributing to an IRA (deadline is tax day)
2. Consider a Solo 401(k) or SEP IRA if you are self-employed (deadline is the due date of your tax return-including any extensions)
3. Max out your Health Savings Account (HSA) (deadline is tax day)
4. Consider your itemized deductions – if you have more itemized deductions than your standard deduction ($15,000 single, $30,000 married filing joint for 2025), you can save money by itemizing. Deductions can include: Mortgage interest, property tax, state and local income tax, sales tax, high medical expenses, cash contributions and donations.

Has Your Marriage Status Changed?

To avoid a surprise at tax time be sure to:
• Report your name change to the Social Security Administration and the IRS (these names must match to avoid a potential delay in any tax refunds)
• Update your new address with the IRS
• Adjust your paycheck withholding amounts
• Review your filing status options with your CPA

Where's My Refund?

Taxpayers who filed a return and are waiting for their refund can check the status of a refund payment by using the “Where's My Refund?”
link: https: https://sa.www4.irs.gov/wmr/
**Updates are available within 24 hours after the IRS receives an e-filed return.**

‼️ IT PAYS TO HIRE A CPA ‼️

Did you know accounting expenses (including bookkeeping and tax return preparation) are write-offs? CPAs can save you time, help you understand your financial situation and set you up for future tax savings.

It's that time of year again. Be sure to save any 1099s you receive for your tax preparer.