Higginbotham-Baldeon Enrolled Agents, Inc.

Here is the news about September and important due dates.  The most important thing for this month is the extension due date for corporations and partnerships, which is September 15th, 2025.  Filing timely will prevent the penalty for late filing on Partnerships and S-Corporations tax returns, which is $245 per month, times the number of shareholders or partners, up to 12 months.  The penalty will be calculated from March 15th, 2025, until the tax return is filed after September 15th, 2025.  This could impact on an S-Corporation with a maximum penalty of $2,940 with one shareholder and a partnership with $5,880 with a minimum of two partners. Another due date on September 15th, 2025, is the third quarterly estimate payment for your personal tax return, especially for taxpayers with business reported on their personal tax returns, and income received during the year with insufficient withholdings.  Now, with more tax updates, the Qualify Business Income (QBI) is the 20% deduction on the net profit of your business for 2025, for sole proprietorships, partnerships, or S-Corps, and the One Big Beautiful Bill (OBBB) Act made it permanent.  Next is the depreciation Section 179, with a maximum deduction of $1,250,000, for 2015.  This deduction is available for purchases of new and used equipment placed in service during the 2025 tax year, as long as it's new to your business. The equipment or software must be used for business purposes more than 50% of the time to qualify. Perhaps, Section 179 can be taken only for property use in trade or business, available for roof, HVAC, QIP, alarm system, fire protection system, security system, and property used for lodging. It is essential to mention that Section 179 is not available on page 1 of Schedule E (Rental). For vehicles over 6,000 pounds GVWR, with a cap of $31,300 and for light trucks and cars under 6,000 pounds GVWR, a cap of $20,400. Another one is the Bonus depreciation, which for eligible assets in 2024, the deduction rate is 60%, and the OBBB made Bonus depreciation 100% deductible for eligible assets placed in service after January 19th, 2025. Qualified property includes depreciable assets with a recovery period of 20 years or less, such as vehicles, furniture, manufacturing equipment, computer software, and qualified improvement property (QIP). QIP involves interior improvements to commercial buildings, excluding specific structural elements. Unlike Section 179, bonus depreciation has no annual dollar limit and can create a net loss for tax purposes.  However, if elected, it must be applied to all assets of the same tax asset class acquired that year. More good business tax stuff next month.  Remember, this is a very brief overview.  It is your responsibility to discuss any tax and financial changes with your professional advisor for assistance in evaluating your situation.  For details and specific assistance in applying the general information in this article, call us at your earliest convenience or contact your tax advisor.  Provided by Pedro L. Baldeon, E.A., (321) 632-5726, a member of the National Society of Tax Professionals.