Tax Tips to Start the Year Right – Ep. 271

Welcome to the Accumulating Wealth podcast. I’m Hunter Satterfield. And I’m Judson Crawford. We’re CPAs, wealth advisors, and partners at Cain Watters and Associates, a financial services firm here to help business owners navigate the decisions they face every day. And since it’s the beginning of the year, we figured this was the perfect time to talk about something everybody loves, Judson, taxes. 

Oh, I can feel the excitement through my headset just now. But hear us out. This episode is all about tax tips to help you get ready for filing season. That’s right. We are covering reminders and planning ideas for individuals and small business owners, things you can actually do now that may make your life easier later. 

So grab your coffee and let’s get started. 

Okay, Hunter, so today we’re talking about… Well, let’s date this. Not the date of recording, but we are dropping this on February 3rd of 2026. So we’ve just kind of started the year in podcast. We’ve done our prediction episode. We did our 2025 market update episode, and so now we have to get down to actual stuff that needs to get done now, because we are going to find ourselves, or are finding ourselves, right in the middle of tax season already. 

Yeah, we’re not going to be able to talk about the World Cup or Taylor and Travis today. Not today, but I’m sure we will- Th- yeah … in the future. Throughout the year. Well, and I think it’s important, we are recording on the 29th of January, as you said, dropping February 3rd. Yesterday, the Fed paused. No rate cut. 

So we’ll talk a little bit more about that. We are going to have a market 2026 episode here coming soon, listeners, but we thought it would be appropriate to at least say Fed paused, and then a rash of earnings dropped yesterday, all kinds of tech, and Microsoft had one of their worst days ever today in the market. So tons to talk about.  

And Facebook had a good day. Well, good in the grand scheme of things. Yeah. So we’ll talk about that on a future episode, but today, Judson, is taxes. Today is taxes, and again we’re going to take this and we’re going to, we’re going to think about what you need to do right now, because we are now in the midst of the 2025 tax season. 

The year has ended, so there’s nothing you can do about it, right? Wrong. So let’s talk about first, the year’s over, but if you are in a high tax bracket or you’re in a liability position, what are some things you can still do to maybe affect your tax liability? Yeah, I think things that you can do legally, they’re still out there. 

Yeah, good point. Good point. Yeah there, I’m sure there are things that could be done illegally. No, I think the biggest place to start, Judson, is really just thinking about retirement contributions, right? Because whether it’s an HSA, an IRA for some that might be eligible for a deduction there, 401(k)s, DBs, a lot of those things don’t have terminated dates until April 15th, so there’s still stuff that can be done. 

Maybe we start, let’s do IRAs and HSAs first. IRA accounts. IRA accounts. Okay. And HSAs autocorrected H-A-S by all Microsoft software. Microsoft, come on. Okay, listen, if you are a developer with Microsoft Copilot, you could do one thing to change our lives. Fix that freaking autocorrect. All right. So, HSAs, super simple. 

That sucker can still be contributed for last year. You definitely want to make sure that you get the maximum, even if maybe your employer gave you a piece and you haven’t finished contributing up to the max for you and your family or just for you individually. That is, again, a tax deduction in, and the growth is all tax-free, as we’ve said before on this podcast, the best account that’s out there. 

But go get that sucker funded ASAP before April 15th- Yeah … and that’ll help with taxes. Like you said, you got till April 15th to do that. And completely off the top of my head, the self-only coverage HSA maximum is $4,300. For family, it’s $8,550, and if you are 55 and older, you can get an extra $1,000 because we like to make our catch-up contributions confusing, where some are 50 and some are 55. 

That’s right. But you have until April 15th. One little thing on that is, if you are making a contribution into your HSA for 2025, make sure you designate it as that online, because they will often automatically make that a 2026 contribution unless you specifically designate it. That’s right, and that’s a good tip actually on IRAs as well, right? Yeah.  

So IRAs you can still fund for 2025. Now, the deductibility of that is going to come down to your income thresholds and things like that. So there will be people that are listening that can contribute to an IRA, even if you’re also doing a 401(k), and take a tax deduction. It’s based on income. There are people that can automatically contribute directly to a Roth IRA, which wouldn’t help your taxes, but it would certainly be excellent for long-term growth, help your retirement growth.  

And there are people that can do the backdoor contribution as well. So, everybody’s going to fall into one of three buckets, but the key thing there is you can still contribute for last year at $7,000 plus $1,000 in catch-up if you’re eligible. And that all IRAs are an April 15th deadline as well, except for one. 

You can do, if, again, we’re going to talk a little bit about retirement plans and you kind of fall into two categories here. Do you already have a retirement plan set up, or do you not have a retirement plan set up? If you don’t have a retirement plan set up, there is something called a SEP IRA, and it can work in some circumstances. 

Usually this is best if you’re beginning your career and you’re in the first couple years of your business ownership. But since you’re filing that on a business tax return, that filing deadline will, or that funding deadline will be March 15th, and there aren’t extensions on a SEP IRA. But something to talk to your advisor about if you want, if you’re wanting to get a deduction and don’t have a retirement plan set up. 

That’s right. And then the last one I think on the retirement piece is the 401(k), which, 401(k)s and DBs I guess on both of those, and, you still have an opportunity. You can no longer contribute to your 401(k) deferral, because that has to be done through your payroll. But you can make sure that you can still fund the maximum in profit sharing, and then even if you didn’t get all of it in deferral, a lot of plans would still allow you to catch up the rest by doing additional profit sharing as well. 

So those are decisions, I think, Judson, that folks just need to get… First off, right now is a perfect time. Get your stuff to your pension company, right? Step one is get all that over to your pension company ASAP so that they can start to think strategically about making sure you can max that out and reduce your taxes for last year. 

Yeah, and if you don’t have a 401(k) profit sharing plan, or if you have a lot of excess cash and you have a 401(k) and want to add a cash balance plan, you actually have quite a bit of time to get that done. Now you can go all the way up until the extended deadline to set those up. You don’t want to wait that long. Get on top of it.  

So if you know that you have a liability or you’re in a high tax bracket and you don’t have a retirement plan, call an advisor because you can still set that up, and you can actually get a huge tax deduction between one or two of those if you still want to. Yeah.  

All right, so moving on from retirement accounts, couple other things you can do still for 2025 if you haven’t done them yet. The first would be if you put a building into service last year, you can still go out and do a cost segregation study on that building. That can be done all the way up until you actually file your taxes. So if you plan to file your return sometime this summer you want to give your cost segregation group a few months advance notice so they can get this thing turned around. 

But again, we’ve talked about those on the pod in the past, but what that is essentially doing is it’s segregating the costs of the building that you either built or purchased, and creating opportunities for you to accelerate depreciation, especially, Judson, under the new OBBA rules, accelerate depreciation on that asset. 

So, we’ve always said that, hey, you really need to be acquiring buildings in excess of $1 million for this to really make a bunch of sense, but at this point, pretty much everything is at that level. Yeah. So, it’s going to make sense in almost all situations. But I mean, Judson, all the time we can go to a cost segregation group and just say, “Hey, here’s the date was, this was acquired. Here was the cost of it. Does it make sense?”  

And a lot of times they’ll spell out if it does or not. And especially with the accelerated bonus being at 100% if you put it into service after January 19th of 2025. I know that’s odd, but that’s the rule. I do think that even if the building you purchased or put in place was a little bit less than $1 million, let’s say over $500,000, it’s worth looking into or at least having a proposal run. 

And as a CPA, I will tell you, your CPA can’t really do a cost segregation like the cost segregation engineers do. They may be able to help you out a little bit, but it is not going to be the same, and you can get some very accelerated deductions by doing a full cost segregation. Well, they can’t do it with that attitude, Judson. 

It’s true. It’s not very … encouraging … I should just say, “But they’re not going to do it.” Yeah. Or they’re not going to do it right. Yeah, good point. No, I think that’s a really big one to go ahead and get lined up. I mean, again, it doesn’t have to be done until your return is filed, so if you’re going to extend anyway, you can still get that done. 

And Judson, I think we can just very quickly rabbit trail off. Look, listeners, there were so many changes in the One Big Beautiful Bill last year, especially related to depreciation. When you are working with your CPA on the 2025 filing, please make sure that your CPA is just not being lazy and doing same as last year. 

There’s just so many opportunities with increased bonus, as Judson talked about, 179, all these opportunities you don’t want to necessarily miss out because your CPA is just clicking a button and moving on down the road. We have new tax law, like we talked about last summer, and some of that tax law got put into place in 2025, some not until 2026. 

But again, in summary you just want to make sure that you’re really getting through those laws and making the right decisions based on those new laws. That’s right. All right, Judson. Totally agree.  

Last one on what you can still do for 2025? Yeah. One thing that people often forget to do is, you’re running your small business, and oftentimes you may be out, and you put a business expense on a personal credit card. 

This could be anything as simple as deductible meals, entertainment. It could be a CE course, just not having the business credit card available or grabbing the wrong one. If you’re really in need of deductions, it is worth a review of your personal credit card expenses to make sure there aren’t any expenses that you need to reclassify from personal to business, because I have seen clients that have mistakenly had $5,000, $10,000 worth of expenses that they accidentally put on their personal card, and that makes a difference. 

Yeah, I think it is definitely the case on travel, right? Like, you accidentally throw the airline flight for you and your spouse and the hotel on the wrong card. Or maybe you’re using a card that gives you points, and it’s not a business card. The other one, oftentimes with clients, is Amazon, just because you might have your personal card in there for personal purchases, your business for business purchases, and something just ends up on the wrong one. 

Just making sure that all the stuff that you buy for your business is, in fact, getting run through. It’s like maybe while you’re watching the hit new show on Netflix or something, you can just rip through Amazon real quick. The hit new show I don’t know I don’t even… Yeah, I don’t know where he is. 

Skyscraper live. And I was just thinking about that. Yeah. That was awesome if you didn’t watch it if you didn’t watch it, spoiler alert, he lives. He lives. So you can go watch it now. He climbed that building in 10 minutes faster than I could. Judson and I were on an elevator, we were text storming each other during that, because we were both watching it live, and we were both uncomfortable to say the least. Yep, for sure.  

All right. So, Judson, the deadline, unfortunately, right now the deadline for 1099s is still around, but by the time the listeners grab this, it will be too late. You want to talk about that real quick? Yeah. So, a couple years ago, they moved back the deadline for 1099s. You have to file by January 31st. 

So, a 1099 if you’re operating a business, you basically have to pay a 1099 to any non-employees that you’re compensating, so contract labor, any rent that you pay, and some other miscellaneous things like legal expenses. Anything over, in 2025, the amount is $600. If you paid anybody over $600, you have to give them a 1099, and that has to be done by January 31st. 

It’s February 3rd, so if you haven’t done that, Sorry. Sorry, but you still need to do it. And so it’s really not hard. Obviously, your CPA or bookkeeper should have been doing this, but if you do your own QuickBooks, you may not have done it. It doesn’t take a lot if you have the information of the person that you paid, but there are penalties if you get caught. That’s right.  

So definitely get those filed, and even if it’s late, you can still do it and just pay the small penalty for them being late as well. Again, it’s February 3rd, and if you do it by the end of February, technically 30 days after, so in the beginning of March, but 30 days after the filing deadline, it’s only $60 per 1099. 

After that, it goes up to $130 until August. Then after August, it goes to $340, or if they deem that you intentionally disregarded it, which means you just didn’t file, they can charge you $680 per 1099. You don’t want to pay that. I’m dying to know where they came up with those numbers, but then I remember our increase special every year, and it’s just random. Random. So, it is what it is. Yep.  

Well, and I think that’s a good segue to our next segment, which is preparing for 2025 tax year. So, especially right now, Judson, we talk about, hey, you have to issue these 1099s, but you’re also, listeners, probably getting these things in your email inbox or in the mail. 

Judson and I were talking about before we were going on, we’re getting those, right? Yep. You’re getting charitable giving statements. You’re getting 1099s, 1098s, all these different things and now would be a good time to go ahead, we’ve talked about this before, go ahead and get a folder set up somewhere on your computer, on a Google Share Drive, whatever you use to track stuff, and just start dumping that stuff in. 

Because you may not be filing your return right now because you might be on extension, or you might have to wait for your business return or whatever else it is. But I can tell you in June, you’re going to be like, “Where’d that form go?” Yep. When it’s sitting right in front of you right now. So, I’ve been doing that all week. 

I just save it in my inbox, and then as soon as I get home, right-click, download, throw it in a folder so that when I file my taxes on April 14th, LOL- … on September 14th, that I will have those available. More like October 14th, but whatever. September 14th’s the goal this year, buddy.  

So, and one thing I do, and have done this for a long time, is I have the little scan app on my iPhone, so if I get one in the mail, because I don’t really want to carry it with me and scan it at the office, I just scan it on my scan app, send it to myself, and it goes right in the same file as everything else. 

And if you disregard or maybe, like, the emails from your banks are going to junk, this weekend’s a perfect time to maybe go into your different banks and download 1099s. That can be for mortgage interest. That can be for investment accounts. Do it during the Super Bowl, because nobody really cares about the Seahawks or the Patriots. 

Yeah, just kidding We almost got it right. We did, yeah. My side was not very good. It was good. They almost won. They did almost win. Yeah, that was actually a great game. But I think we are, as far as the AWP goes, we’re now cheering for the Patriots, because ‘Merica, and because then we’ll be right. Yeah, I don’t know. 

I’m kind of probably going to cheer for the Seahawks just because the- like you even care about the NFL. I don’t care about either, but I’ll cheer for the Seahawks because, I mean, the Patriots have had a lot more. City of Boston’s had a lot of winnings they have had lots of winnings. And the city of Seattle hasn’t. Including the Tea Party. 

So other things for 2025 is, I already mentioned this, but get on your pension admin, get that stuff done, because those pension admin groups are going to… They are a first in, first out shop, so they’re going to start getting- FIFO they’re going to start getting backlogged up, and you want to… Their system’s going to get constipated, Judson. That’s right. And so what you want to do is get in early and get that info in. 

I’ve already seen like four or five pension reports start dropping for clients that got their stuff in first week of January. So, get that done. I’m proud of you for bringing up poo-poo talking. It wasn’t me. It was not… Constipation does not have to be poo-poo talk. It’s just a word. Okay. The system is constipated.  

All right, so Judson, a question we always get is, “Why isn’t my return done April 15th? Why do I have to go on extension? Isn’t that a bad thing?” What is our response? We’ve said it on the pod before, but what’s our response to that?  

Well, there’s a couple things. If you have something like a pension plan, you are probably going to extend naturally because it is often, your pension administration is often not done, or your pension may often not be funded by April 15th. 

Secondly, just like you getting your information into your pension company, to get all of your information in, if you own a business, to get all your 1099s done, to get your accounting done, to get all of your information in so that your business is filed by March 15th and your personal is filed by April 15th, it takes a lot, not only from the tax department, but really on you, taxpayer. 

Because a lot of times, just like Hunter’s talking about, when you’re accumulating all of your tax data, you forget a thing or two, and you can’t file incomplete. So, a lot of times it’s just very natural that returns get extended, and it is an easy thing to do. You get an automatic extension. There’s no questions. If you file the extension, you get an extra six-month period, no questions asked. That’s right.  

I just think it’s – look, I think the reality is, is trying to hustle and get something done and having inaccuracies or whatever else, especially if you’re waiting on other stuff, just waiting and getting it done in the summer and reducing your audit risk also helps, but long story short, you don’t have to file by April 15th, to your point, Judson, so take your time. Make sure you have everything complete and ready. Make sure your cost seg’s done, your pension stuff’s done, and then you can get your stuff done from there.  

So the biggest question we get around extensions for people that are maybe new to owning their business, and so this is kind of a different thing and they used to just be a W-2 employee and filing was easier, or they just haven’t been used to extending. 

The biggest question we get is, “If you extend your tax return, does that increase your risk of audit?” Wait, if you extend? Yes. Okay. Sorry, I wanted to make sure I was correct. No, it does not. No. In fact, there are some studies, the IRS is never going to say this, there are some studies that it actually reduces your risk of audit because they start with the returns that are coming in earliest as they’re pulling for audit. 

So again, don’t we’re not guaranteeing that by any stretch. We’re not on record on that necessarily, but there is plenty out there. But it definitely doesn’t increase. No, your audit risk in any way. Not at all. At least not right now. Maybe when the robots and the IRS take over. That’s true. Maybe then. 

Just a reminder, folks, before we talk about what you might the final topic here, just a reminder that we do anticipate this to be the largest tax refund season ever. And so that’s not just you, that’s your patients, that’s your coworkers, that’s your neighbors. Should be the White House best sense on record saying could be $100 to $150 billion of refunds, so about $1,000 to $2,000 per household. So, it should be a wonderful tax season. We’ll see what happens to the economy and market as a result.  

But Judson, when we talk about, like, refunds and needing to know “Hey, what do you need to pay?” All that stuff, I think the first place we have to start is if you don’t know sometime soon, even if you’re going on extension, if you don’t know sometime soon what your payment is going to be because your CPA’s not being proactive in creating a projection, that’s a problem. 

Or you don’t have a CPA advisor. Or, yeah, exactly. That’s a problem. I mean, by now you should have a pretty reasonable idea of what payment or refund is coming in April so that you can plan and strategize around it. Nobody likes surprises and the reality is that there’s no reason why your CPA shouldn’t be able to get you a ballpark number right now. 

So, I think that’s the first step. Like, as we head towards needing to make payments on April 15th or not, knowing what the number is the most important thing. That’s right. And I think that goes back to something that we do for all of our clients, which is working with them throughout the year, right? 

Because many CPAs, and this isn’t putting them down, it’s just that if your main mode in your life is filing tax returns and maybe doing bookkeeping you’re not keeping up necessarily with the growth of a business, right? And so, no matter what last year was, or for, in this case, 2024, 2025 is likely to be different. 

Could be higher, could be lower, but that’s going to change your tax liability. So, if you don’t know where you landed for 2025, you need to find out soon, because not only are there consequences to what you owe in taxes, but we’re at the point now between now and April 15th that it is possible that you have some interest accruing. 

That’s right. Yeah, if you did not get to a spot where you are penalty-proof, which we’ll explain in just a second, obviously getting that payment made as quickly as possible will help you. So, the rules, as a reminder, are you need to be at 110% of last year’s tax, so that’d be 2024’s tax bill, or 100% of what you owe for 2025. 

So, if last year’s tax was $100,000 and this year’s tax is $100,000, right? So, 2024, 2025. Then you need to make sure you’ve paid in $100,000. That’s where you need to be right now. If last year’s tax was $100,000 and this year’s $150,000, then you need to be at 110%. That’s 110%. By when? By January 15th. That’s right. 

So that has passed. Two weeks ago. Yeah, so that has passed. But you don’t want to leave that payment outstanding until April, or heck, even on extension if you file in August, because you are paying interest and penalties every single day you do not make that payment. So, number one is knowing what it is, are you penalty proof or not, and if you are not penalty proof, getting that payment made is super important so you can stop the accruing. 

That is correct. So again, like Hunter said, if you didn’t make a payment on January 15th but you think that you aren’t penalty proof, make the payment right now. Don’t wait until – you can get online and you can do it very easily, but make it now, stop the interest. If you are between that, you’re penalty proof but you still owe taxes, you can write that check on April 15th, right? 

That’s right, and you want to just make sure your CPA has done a final check. I mean, look, at that point you have all your 1099s, you have every mortgage statement, charitable giving statement, you have everything, so they should be able to get you a really good number to make that final payment even if you go on extension, because if you don’t make it by April 15th, you go on extension and you owe something, then you are still accruing penalty and interest. 

One more little topic before we wrap up. You wanted to make a little comment on your very favorite tax of all time, the pass-through entity tax? Yeah, I did. I mean, look, there are some… so we talk about in 2025, are there still things you can do? There are some states, some, where if you have not elected for PTE, you might still be able to do so. 

So, if you live in a state income tax state, at this point they all pretty much have PTE in place. Talk to your CPA if you’ve not paid any for 2025, because you may still be able to for 2025. Some states you’ll have already missed that, but it’s a great reminder to start for 2026, because those payments will begin in April. 

That’s the other thing that I want to just mention as we hang up here is we’ve talked about, hey, the 2025 tax filing season and you might still owe something April 15th. Reminder that your first payment for 2026 to get penalty proof is also due April 15th, so it could be a double whammy. So just make sure with your CPA you’ve got a good indication of what you still owe for 2025, what you’re going to owe for 2026, so you can start to make sure those payments are made, because the double payment’s coming up in April. 

So basically, get prepared. That’s right. Taxes don’t stop. Never. And neither does death. And since it’s going to be the biggest refund of the year, spend it now, before you even get it. That’s right. Go put it on a credit card. Yeah. Because it’s coming. It is, no matter what, guaranteed. Okay. All right. Get us out of here. 

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