Even successful small businesses can run into trouble when it comes to taxes. Many of the most common mistakes are not intentional—they come from missing information, outdated assumptions, or waiting too long to plan.

At McKay Tax & Accounting in Roy, Utah, we have helped business owners across Weber County navigate these challenges for over 40 years. Understanding what to avoid can save time, money, and unnecessary stress.

Mixing Business and Personal Expenses

One of the most common issues is failing to separate business and personal finances. This can create confusion, limit deductions, and raise red flags if records are unclear.

Missing Deductions

Many business owners either overlook deductions or are unsure what qualifies. Expenses like mileage, software, equipment, and home office use are often underreported, leading to higher tax liability than necessary.

Poor Recordkeeping

Waiting until tax season to organize receipts and expenses increases the chance of errors. Consistent, year-round tracking makes filing easier and more accurate.

Not Planning for Quarterly Taxes

Businesses that do not plan for estimated quarterly payments can face penalties and cash flow issues. Setting aside funds throughout the year helps avoid surprises.

Misclassifying Workers

Incorrectly categorizing employees and independent contractors can lead to compliance issues and potential penalties. It is important to understand the distinction and apply it correctly.

Relying on Outdated Information

Tax laws change regularly. What worked last year may not apply this year, especially with new deductions, credits, and phase-outs.

Waiting Until the Last Minute

Filing at the last minute limits your ability to make strategic decisions. Proactive planning allows for adjustments that can improve your overall tax position.

Why Local Guidance Matters

Working with a Roy, Utah tax professional who understands both federal tax law and the needs of Weber County businesses can help you avoid costly mistakes and identify opportunities to save.

McKay Tax & Accounting provides personalized tax preparation, bookkeeping, and year-round planning for individuals and businesses throughout Northern Utah.

A Smarter Approach to Taxes

Avoiding mistakes is not just about compliance—it is about building a stronger, more stable business. With the right support and preparation, tax season becomes more manageable and far less stressful.

Running a small business in Weber County comes with opportunity—but also responsibility, especially when it comes to taxes. With changing regulations and increasing complexity, having a clear tax strategy can make a meaningful difference in your bottom line.

At McKay Tax & Accounting in Roy, Utah, we have worked with local businesses for over 40 years. Whether you are just starting out or managing an established company, these tax tips can help you stay organized, compliant, and financially prepared.

Keep Clean, Consistent Records

Accurate bookkeeping is the foundation of effective tax planning. Tracking income and expenses throughout the year—not just at tax time—helps ensure nothing is missed and reduces the risk of errors.

Separate Business and Personal Finances

Using dedicated business bank accounts and credit cards simplifies recordkeeping and strengthens your position in the event of an audit. It also provides a clearer picture of your business performance.

Understand Deductible Expenses

Many everyday business costs may be deductible, including supplies, software, mileage, equipment, and certain home office expenses. Knowing what qualifies—and documenting it properly—can significantly reduce taxable income.

Take Advantage of Retirement Contributions

Options like SEP IRAs or Solo 401(k)s allow business owners to save for the future while lowering current tax liability. These strategies can be especially valuable for self-employed individuals.

Plan for Estimated Taxes

Small business owners are often required to make quarterly estimated tax payments. Planning ahead helps avoid penalties and keeps cash flow more predictable throughout the year.

Stay Ahead of Tax Law Changes

Tax rules continue to evolve, with updates affecting deductions, credits, and business write-offs. Staying informed—or working with a professional—can help you take advantage of opportunities while remaining compliant.

Work with a Local Tax Professional

Partnering with an experienced tax professional in Roy, Utah, who understands both federal regulations and the needs of local businesses can provide peace of mind and strategic insight. McKay Tax & Accounting offers personalized support for small businesses across Weber County, including bookkeeping, tax preparation, and year-round planning.

Looking Ahead

Strong tax planning is not just about filing a return—it is about making informed decisions throughout the year. Taking proactive steps now can help your business stay organized, reduce stress, and maximize financial outcomes.

For guidance tailored to your business, McKay Tax & Accounting is here to help.

As tax season approaches, many individuals and business owners in Ogden, Utah, begin gathering documents and preparing to file their taxes. However, a few simple steps taken before filing can significantly improve accuracy and potential tax savings.

At McKay Tax & Accounting, we work with clients across Weber County every year who want to avoid last-minute stress and make informed financial decisions. Here are a few key things Ogden residents should consider before filing their 2025 taxes:

1. Gather All Income Documents Early

Make sure you have all W-2s, 1099s, investment statements, and any additional income records. Missing documents can delay your return or lead to corrections later.

2. Review Potential Deductions and Credits

Changes for 2025 may impact standard deductions, child tax credits, and other opportunities. Understanding what you qualify for ahead of time helps ensure nothing is missed.

3. Organize Business Expenses

For small business owners in Roy City and Weber County, properly categorized expenses can significantly reduce taxable income. Clean records make the process smoother and more accurate.

4. Consider Retirement Contributions

Contributions to IRAs and other retirement accounts may still be available before filing and can help reduce your tax liability.

5. Plan Ahead for 2026 Changes

With upcoming tax law changes, now is a good time to think beyond this year’s return and start planning strategically.

Local Expertise Matters

Working with a local Ogden, Utah CPA means you have someone who understands both federal changes and how they impact individuals and businesses in this area.

McKay Tax & Accounting has been serving the Ogden community for over 40 years, providing personalized tax preparation, bookkeeping, and year-round tax planning.

Schedule Early

Appointments fill quickly during tax season. If you are looking for guidance or want to ensure your taxes are handled accurately, it is best to schedule early.

FOR IMMEDIATE RELEASE

McKay Tax & Accounting Announces New Office Location in Roy, Utah and Continued Growth After 40 Years of Service

Roy, UT — McKay Tax & Accounting, a trusted name in tax preparation and accounting services in Northern Utah for over four decades, is proud to announce the opening of its new office location in Roy, Utah.

After 40 years of serving individuals, families, and businesses, founder Richard McKay continues to expand the firm’s capabilities with the addition of a new business partner and a modern office space designed to better support clients year-round. The new location offers improved accessibility and convenience for clients throughout Weber County and surrounding communities.

The new office is located at:
5360 S 1900 W, Suite B2
Roy, UT 84067
(Located just north of Harmons in the Roy shopping center)

McKay Tax & Accounting provides a full range of services including personal and business tax preparation, bookkeeping, and proactive tax planning. The firm is known for its personalized approach, helping clients navigate complex tax laws while identifying opportunities to maximize savings and reduce stress during tax season.

“This move represents an exciting new chapter for our firm,” said Richard McKay. “While our location is changing, our commitment to our clients remains the same. We are grateful for the trust our community has placed in us over the past 40 years and look forward to continuing to serve both long-time and new clients in our updated space.”

With the upcoming tax season and evolving tax regulations, McKay Tax & Accounting encourages individuals and business owners to begin planning early and schedule appointments in advance.

For more information or to schedule an appointment, please contact:

McKay Tax & Accounting
801-731-1857
RMcKay@McKayTax.com
www.McKayTax.com

As we approach the end of the year, we’re writing with some exciting news about our firm and to help you prepare for the upcoming tax season.

First, after 43 wonderful years in our current location, we are thrilled to announce that we are moving! Our new, modern office is just a few miles away and is designed to help us serve you more efficiently in a comfortable, accessible space.

Exciting News! We will be moving to this address in the New Year. We will let you know our move-in date so you know where your tax appointment will be.  Look for that update in the New Year, as we expect to move in before the end of the month, January 2026.

5360 S 1900 W Ste B2

Roy, UT 84067

Our new office is located just north of Harmons in the Roy shopping center. We look forward to welcoming you to our new space soon!

Navigating Year-End 2025 & A Look Ahead to 2026

This is a crucial time for tax planning. The end of 2025 offers opportunities to improve your tax situation, and significant changes are on the horizon for 2026, primarily due to new legislation.

Please note: This information is for educational purposes and should not be considered as accounting, legal, insurance, or investment advice. Tax laws are subject to change, so please consult a professional for the latest guidance.

Key Tax Changes for 2025

Here are some of the most important updates for the 2025 tax year.

Standard Deductions

The standard deduction amounts have increased for 2025:

Single: $15,750

Married Filing Jointly: $31,500

Head of Household: $23,250

Additional Deduction (Over 65 or Blind): An additional $1,600 per person ($2,000 for single or head-of-household filers).

New Deduction for Seniors: For 2025-2028, individuals aged 65 and older may receive an additional $6,000 deduction per person ($12,000 for married couples). This benefit begins to phase out for individuals with a Modified Adjusted Gross Income (MAGI) between $75,000 and $175,000 (and between $150,000 and $250,000 for married couples).

Itemized Deductions

State and Local Tax (SALT) Deduction: The cap on the SALT deduction will increase from $10,000 to $40,000. This amount is scheduled to increase by 1% annually through 2029. However, for high earners with income over $500,000, the deduction will be phased out, potentially down to $10,000.

2025 Tax Brackets

Inflationary adjustments mean more of your income may be taxed at lower rates.

For Single Filers:

10% on income up to $11,925

12% on income over $11,925

22% on income over $48,475

24% on income over $103,350

32% on income over $197,300

35% on income over $250,525

37% on income over $626,350

For Married Filing Jointly:

10% on income up to $23,850

12% on income over $23,850

22% on income over $96,950

24% on income over $206,700

32% on income over $394,600

35% on income over $501,050

37% on income over $751,600

For Head of Household Filers:

10% on income up to $17,000

12% on income over $17,000

22% on income over $64,850

24% on income over $103,350

32% on income over $197,300

35% on income over $250,500

37% on income over $626,350

New & Expiring Deductions/Credits

Qualified Overtime Pay Deduction: A new deduction for overtime compensation up to $12,500 ($25,000 for joint filers) is available. This phases out for those with a MAGI over $150,000 ($300,000 for joint filers).

Qualified Tips Deduction: A deduction for tips received by workers in the food and beauty industries, limited to $25,000. This also has income phase-outs.

Passenger Vehicle Loan Interest Deduction: A deduction for interest on new, U.S.-assembled personal vehicles, capped at $10,000. Income and vehicle price limits apply.

Energy Credits Termination: The new and previously owned clean vehicle credits will expire for vehicles acquired after September 30, 2025. All other energy credits expire after December 31, 2025.

Child Tax Credit: The credit increases to $2,200 per child and will be adjusted for inflation in future years.

Child Care Credit: The percentages for this credit have increased. Additionally, the maximum contribution to dependent care flexible spending accounts has risen from $5,000 to $7,500.

A Look Ahead: Key Tax Changes for 2026

Several changes are scheduled to take effect in the 2026 tax year.

Charitable Contributions: A new “above-the-line” deduction of $1,000 for individuals and $2,000 for joint filers will be available, meaning you won’t have to itemize to claim it. For those who do itemize, a new 0.5% AGI floor will be introduced. For example, if your AGI is $200,000, the first $1,000 of your charitable donations will not be deductible.

Home Mortgage Insurance: The deduction for treating mortgage insurance premiums as interest is set to be reinstated.

Educator Expenses: This deduction can be claimed as an itemized deduction or as an above-the-line deduction up to $300 (adjusted for inflation).

Gambling Losses: The deduction for gambling losses will be limited to 90% of the losses incurred during the year.

Saver’s Credit: The contribution limit used to calculate this credit will increase from $2,000 to $2,100.

End-of-Year Tax Strategies for 2025

Here are a few strategies to consider before December 31st:

Charitable Donations: If you itemize, consider making donations before year-end. “Bunching” donations (making multiple years’ worth of donations in one year) can also be an effective strategy.

Flexible Spending Accounts (FSAs): Be sure to use the funds in your medical and child care FSAs before they expire.

Capital Gains and Losses: Consider selling underperforming stocks to offset capital gains. Be mindful of the “wash sale” rule if you plan to repurchase similar stocks.

Retirement Planning:

IRAs: You have until the tax filing deadline to contribute up to $7,000 ($8,000 if you’re over 50) for the 2025 tax year.

401(k)s: Maximize your contributions, especially if your employer offers a matching program.

Updates for Business Owners

Mileage Rate: The business mileage reimbursement rate for 2025 is 70 cents per mile.

Bonus Depreciation: This is scheduled to increase back to 100% for 2026.

Employee Meals: The deduction for meals provided to employees for the employer’s convenience will be eliminated after 2025.

We understand that navigating these changes can be complex. Our goal is to help you understand how these updates will affect your financial situation and to assist you in making the most of available tax-saving opportunities.

We sincerely appreciate your continued trust and loyalty and are excited about this new chapter for our firm. Please feel free to reach out with any questions.

Sincerely,

Rich McKay

McKay Tax & Accounting

801-731-1857

RMcKay@McKayTax.com

5360 S 1900 W Ste B2

Roy, UT 84067

Dear Clients,

As we approach the year-end, we are pleased to present our annual tax planning insights for your consideration. The financial landscape has seen slight changes in 2024, and we aim to provide you with essential updates and recommendations.

Look out for your appointment confirmation and questionnaire arriving by January 5 or sooner.

Please take a moment to review the letter of tax updates and changes below.  Don’t hesitate to reach out with any questions or concerns.

Happy Holidays and have a wonderful New Year!

Sincerely,

Rich McKay

801-731-1857

RMcKay@McKayTax.com

Please note that this information is for educational purposes and should not be relied upon for accounting, legal, insurance, or investment advice. Tax laws may change, so consult a professional for the latest guidance.

2024 and 2025 Tax Planning

2024 Standard Deductions

In 2024, the standard deductions were $14,600 for single filers, $21,900 for the Head of Household, and $29,200 for those filing as Married/Jointly. If you are over 65 or blind, you can add additional amounts per person for single or head of household ($1,950), and others can add $1,550.

The standard deductions for 2025 will increase to $ $15,000, and $22,500, and $30,000 respectively.

2024 Tax Brackets

For Single Filers:

– Taxable income under $11,925 is taxed at 10%.

– Taxable income under $48,475 is taxed at 12%.

– Taxable income under $103,350 is taxed at 22%.

– Taxable income under $197,300 is taxed at 24%.

– Taxable income under $250,525 is taxed at 32%.

– Taxable income under $626,350 is taxed at 35%.

– Taxable income over $626,350 is taxed at 37%.

For Married Joint Filers:

– Taxable income under $23,850 is taxed at 10%.

– Taxable income under $96,950 is taxed at 12%.

– Taxable income under $206,700 is taxed at 22%.

– Taxable income under $394,600 is taxed at 24%.

– Taxable income under $501,050 is taxed at 32%.

– Taxable income under $751,600 is taxed at 35%.

– Taxable income over $751,600 is taxed at 37%.

For Head of Household Filers:

– Taxable income under $17,000 is taxed at 10%.

– Taxable income under $64,850 is taxed at 12%.

– Taxable income under $103,350 is taxed at 22%.

– Taxable income under $197,300 is taxed at 24%.

– Taxable income under $250,500 is taxed at 32%.

– Taxable income under $626,350 is taxed at 35%.

– Taxable income over $625,350 is taxed at 37%.

In 2024, due to inflation, more income will be taxed at lower levels, resulting in lower taxes.

2024 Child Tax Credit

The Child Tax Credit remains unchanged at $2,000 for dependents under 17 and $500 for dependents over 16 for 2024 and 2025

2024 Energy Credits

– Electric Vehicles: Many new EVs qualify for a credit of up to $7,500. With some limitations, the break is up to $4,000 if buying a used EV.

– Residential Clean Energy Property: A 30% non-refundable credit is available for new solar, wind, geothermal, or fuel cell technology.

– Energy-Efficient Home Improvement Credit: This credit applies to various eco-friendly upgrades, with a general $1,200 yearly credit limit.

Year-End Tax Planning

Here are some key considerations for year-end tax planning:

Charitable Donations

If you plan to itemize deductions, make your charitable donations before December 31. Keep detailed receipts with itemized values for each donated item. Consider bunching donations to maximize deductions in specific years.

Flex-Spending Accounts

Review and allocate your Flex Spending Accounts funds for medical and child care expenses. This can provide tax savings.

Stock Sales

Offset capital gains by selling underperforming stocks. Be mindful of wash sale rules when repurchasing similar stocks.

Retirement Planning

– IRAs: Contribute to your IRA before Tax Filing Day to get deductions for 2024 (up to $7,000 under 50 and $8,000 over 50). Consider donating your 2024 minimum distribution to a charity by December 31, 2024.

– Roth IRAs: Explore rollovers and “back door” contributions.

– 401(k) and Roth 401(k): Take advantage of employer matching contributions.

Retirement Distributions

For questions about retirement fund distributions or retirement planning, please seek personalized advice.

Notable Business Changes

– Business meals will remain at a 50% deduction in 2024 and 2025.

– 2024 business mileage reimbursements are 67 cents/mile, with 2025 rates to be announced soon.

– Bonus Depreciation: Reduced to 60% in 2024 and 40% in 2025.

That concludes our updates for the 2024 tax filing year. Feel free to contact me for answers to your tax questions at no additional cost.

Below you will find your 2022 Tax Updates. Feel free to contact me if you have any questions.

2022 Standard Deductions

In 2022 Standard Deductions and Credits will return to the previous levels. The new 2022 standard deductions are $12,950 for single, $19,400 for the Head of Household, and $25,900 for those filing as Married/Jointly.

Child Tax Credit

The Child Tax Credit goes back to $2,000 (from 2021s 3,000 and 3,600) for dependents under 17 and $500 for dependents over 16. The higher tax credit for 17-year-old dependents from 2021 expired for 2022.

Child Care Credit

The Child Care Credit has changed. The Child Care Credit for 2021 had limits of 8,000 for one dependent and 16,000 for two dependents. For 2022, the Child Care Credit will go back to 3,000 for one dependent and 6,000 for two dependents.

Notable Business Changes

Business meals will remain 100% for 2022 but will return to 50% in 2023.

2022 Business miles reimbursements were 58.5 cents/mile until July 1. After July 1, business miles change to 62.5 cents/mile.

Year-End Tax Planning

Here are a few things to think about for year-end tax planning.

Charitable Donations

If you plan to itemize and need to make a trip to the DI or Salvation Army, do so before December 31. Be sure to get a receipt. Write down each item and the value of each item directly on your receipt.

Some taxpayers strategize by bunching charitable deductions in one year — meaning they itemize one year and take the standard deduction the following year. To do this, you would wait to pay your 2022 charity or make 2022 donations for the year you choose to itemize. Instead, make your donations in January 2023 and make any additional 2023 donations by December 31, 2023, to include your donations in one itemized year. In this example, you will get twice the deduction in one year (2023 as the itemized year) and take the standard deduction in 2022. You’ll want to choose the year that best serves your need for deductions.

You could also do this with other itemized deductions. For example, you can do this with medical expenses if you can group medical services into one year to maximize deduction value.

Flex-Spending Accounts

This time of the year is when employees must specify how much salary they will set aside in Flex Spending Accounts (section 125) for medical and child care expenses.

Using flex funds to pay for medical and child care expenses saves federal and state taxes and an additional 7.65% in FICA and Medicare taxes.

Be sure to estimate medical and child care expenses low.

Stock Sales

If you have underperforming stocks that you wouldn’t mind unloading, now is the time to offset any capital gains. Selling stocks at a loss can offset your capital gains for profitable stock sales throughout the year.

If you have a capital loss at the end of the year, you can carry that loss for later years and even write off up to $3,000 against your regular income for the year.

Choose what low-performing stocks you sell wisely. Wash sale rules don’t allow you to buy back into the same stock at a similar amount as your original sale for 31 days.

Retirement Planning

IRAs

Depending on your income, you can get a deduction for an IRA contribution in 2022. This deduction can be up to $6,000 if you are under 50 and $7,000 if you are over 50. Your IRA deduction will count even if you wait until Tuesday, April 18, 2023 (Tax Filing Day).

If you are required to take a 2022 minimum distribution from your IRA account, you can make that distribution payable to the charity of your choice tax-free if donated by December 31, 2022.

Roth IRAs

One of the best options out there for retirement planning is IRAs.

If your income for contributing to a Roth is over $125,000 for filing as Single or Head of Household or $198,000 for filing as joint married. Additionally, you do not have any other traditional IRAs. In that case, you can convert a non-deductible IRA to a Roth IRA with little or no tax due.

401(k) and Roth 401(k)

Usually, your employer will match all or part of your 401(k) contributions. Their matching contribution is essentially free money! To take advantage of this in tax planning, enroll in your company’s 401(k) and contribute up to the matching point.

Retirement Distributions

Please call me for the answers to your questions about early distributions from a retirement fund or planning your retirement. A simple phone call may save thousands of dollars in additional taxes and penalties.

That’s all the updates for the 2022 tax filing year!

Feel free to call me anytime for answers to your tax questions (including major events) at no additional cost.

Look for your appointment confirmation and questionnaire to arrive in the mail by January 5 or sooner.

Happy Holidays and have a wonderful New Year!

Sincerely,

Rich McKay

801-731-1857

RMcKay@McKayTax.com

This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, insurance, or investment advice. Any tax advice in this email reflects our professional judgment based on our understanding of the facts provided to us and on current tax law. Tax law is subject to change. Subsequent changes in the facts provided to us, the law, or its interpretation may affect this advice. We are not responsible for updating our advice for subsequent changes in the law or its interpretation. Please immediately contact the sender if you have received this message in error.

Year End Tax Letter 2021

2022 Standard Deduction Guidelines

The new 2021 standard deductions are $12,950 single, $19,400 for the Head of Household, and $25,900 for those filing as Married/Jointly. The Child Tax Credit is the same as 2020 at $2,000 for dependents under 17 and $500 for dependents over 16.

Here are a few things to think about for year-end tax planning:

Charitable Donations

If you think that you will itemize and you need to make a trip to the DI or Salvation Army do so before December 31st. Be sure to get a receipt and write the items and value of each item on the
receipts. Some taxpayers strategize by bunching charitable deductions in one year. This means they itemize one year and take the standard deduction the next year. To do this you would wait to pay
your 2021 charity or make 2021 donations. Instead, make your donations in January 2022 and make any additional 2022 donations by December 31, 2022, to include your donations in one year. This will give you twice the deduction in one year and allow you to take the standard deduction on your off year. You could also do this with other itemized deductions, such as medical expenses if you can manage them into a specific calendar year. Without itemization, you can deduct a maximum of $600 Married and $300 Single if you gave it to a qualifying charity.

IRA Deduction

Depending on your income, you may be able to get a deduction for an IRA contribution for 2021 and 2022 of up to $6,000 (or $7,000 if you are over 50 years old). Your IRA deduction will count even if you wait until tax filing day in 2022 (Monday, April 18, 2022). If you are over 70½ years old and choose to take a 2021 distribution from your IRA account, you can make that distribution payable to the charity of your choice tax-free.

Stock Sales

If you have a few underperforming stocks that you wouldn't mind unloading, now is the time. If you have them, you can sell your stocks at a loss to offset any capital gains you may have for profitable stock sales throughout the year. If you end up with a capital loss, you can carry that loss for later years and even write off up to $3,000 against your normal income for the year.

Flex-Spending Accounts

This time of the year is when employees must specify how much salary they will set aside in Flex Spending Accounts (section 125) for medical and child care expenses. Using flex funds to pay for medical and child care expenses save federal and state taxes but also saves an additional 7.65% in FICA and Medicare taxes. Be sure to estimate medical and child care expenses low. Extra money left in your Flex Spending Accounts at the end of the year is
lost.

Retirement

Please call me for the answers to your questions about early distributions from a retirement fund or planning your retirement. A simple phone call may save thousands of dollars in additional taxes and penalties.

As always feel free to call me anytime for answers to your tax questions (including major events) at no additional cost. Look for your appointment confirmation and questionnaire to come in the
mail by January 5th or sooner.

Have a Merry Christmas and Happy New Year!

Most of the COVID-related tax changes were related to the extension of your 2019 tax year filing. However, there are some tax strategies that are still available until the end of the year.  

COVID-19 Tax Strategies Still Available:

• 2020 401k and IRA distributions up to $100,000 can be taken penalty-free and you can pay the regular tax over three years or have it nontaxable if you make a re-contribution (“put it back”) within three years rather than the normal 60 days.  
• Minimum retirement account distribution (taxpayers over 70½ years of age) can be ignored for 2020.  
• If you did not get a stimulus 2020 check and qualified based on your 2020 tax return there is a reconciliation in the 2020 tax return that could give you more money.

2020 Standard Deduction Guidelines:

The new 2020 standard deductions are $12,400 single, $18,650 for the Head of Household, and $24,800 for those filing as Married/Jointly.  The Child Tax Credit remains the same at $2,000 for dependents under 17 and $500 for dependents over 16.

Here are a few things to think about for year-end tax planning:

 Charitable Donations

If you think that you will itemize and you need to make a trip to the DI or Salvation Army do so before December 31st. Be sure to get a receipt and write the items and value of each item on the receipts.  

Some taxpayers strategize by bunching charitable deductions in one year. This means they itemize one year and take the standard deduction the next year.  To do this you would wait to pay your 2020 charity or make 2020 donations.  Instead, make your donations in January 2021 and make any additional 2021 donations by December 31, 2021, to include your donations in one year. This will give you twice the deduction in one year and allow you to take the standard deduction on your off year.  

You could also do this with other itemized deductions, such as medical expenses if you can manage them into a specific calendar year.  

Without itemization, you can deduct a maximum of $300 if you gave it to a qualifying charity.

IRA Deduction

Depending on your income, you may be able to get a deduction for an IRA contribution for 2020 of up to $6,000 (or $7,000 if you are over 50 years old). Your IRA deduction will count even if you wait until tax filing day in 2021 (Thursday, April 15, 2021).  

If you are over 70½ years old and choose to take a 2020 distribution from your IRA account, you can make that distribution payable to the charity of your choice tax-free. 

Stock Sales

If you have a few underperforming stocks that you wouldn’t mind unloading, now is the time. If you have them, you can sell your stocks at a loss to offset any capital gains you may have for profitable stock sales throughout the year. If you end up with a capital loss, you can carry that loss for later years and even write off up to   $3,000 against your normal income for the year.

Flex-Spending Accounts

This time of the year is when employees must specify how much salary they will set aside in Flex Spending Accounts (section 125) for medical and child care expenses.  

Using flex funds to pay for medical and child care expenses save federal and state taxes but also saves an additional 7.65% in FICA and Medicare taxes.  Be sure to estimate medical and child care expenses low. Extra money left in your Flex Spending Accounts at the end of the year is lost.

Retirement

Please call me for the answers to your questions about early distributions from a retirement fund or planning your retirement. A simple phone call may save thousands of dollars in additional taxes and penalties. 

As always feel free to call me anytime for answers to your tax questions (including major events) at no additional cost.  Look for your appointment confirmation and questionnaire to come in the mail by January 5th or sooner. 

Have a Merry Christmas and Happy New Year!

Sincerely

Rich McKay

801-731-1857

RMcKay@McKayTax.com

Taxes change from year to year, and for some, it may seem entirely different while others may view it as almost the same.  That’s why we thought we’d put together a little list of what changes to expect for your 2020 taxes.

First, let’s review what your tax rates are for 2019.

Now, here are the tax rates and changes you can expect for 2020.

If you have any questions about these changes or additional changes from year to year, hop over to our Contact page and reach out to us.