FAQs

Audits are generally requested by lenders, key stakeholders, grantors, investors, regulatory requirement, and by organizational documents.

Audits provides a level of assurance that the financial statements and related notes are fairly stated. The auditor performs various audit tests, based on audit risk assessments of the entity, in order to issue an opinion on the financial statements.

Other reduced levels of assurance on financial statements are reviewed financial statements, with limited assurance and the compilation with the lowest level of assurance.

Reviewed financial statements, including notes to the financial statements are tested using analytic tests and inquiry, and provides limited assurance.

Compiled financial statements can include notes to the financial statements or can be omitted, and have no assurance.

The value of a business is often determined by the expected future cash flows. Attributes that also help determine the value of a business include:

• History of cash flows
• Growth potential
• The age of the business
• Market share
• Barriers to entry
• Competition
• Location
• Risk of the industry
• Financial condition
• Regulatory environment

The short answer is, it depends. Things to consider, when choosing the type or form of business entity:

• What is the business and how does it operate – is it an operating business or holding assets?
• What is the purpose of the business – is it your primary business, or is the business set up for a special purpose?
• What type of assets are held in the business?
• Does the business need to retain and build capital and what are its cash needs?
• Is it an existing business or a startup?
• What are the projections or expected income over the next 3 to 5 years?

Knowing the answer to these questions will be helpful in choosing the most advantageous entity type for your business. Please contact us and we can assist you in making this decision.

The following holding periods are suggestion only. Federal, state, institution rules, and regulations may apply.

Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” requires most federal payments and collections—including tax refunds and tax payments—to move from paper checks to electronic methods by September 30, 2025.

The U.S. Department of the Treasury, under Executive Order 14247, is modernizing how federal payments and collections are handled. Beginning September 30, 2025, most tax-related transactions—including refunds and payments to the IRS—must be electronic. This change aims to make tax processes faster, safer, and more cost-effective by phasing out paper checks and encouraging secure digital options. If you receive tax refunds or make tax payments, here’s what you need to know to prepare.

• Starting after September 30, 2025, the IRS will issue tax refunds electronically only, unless an exception applies.
• When filing your tax return, provide your bank account and routing number for direct deposit.

This means:

• Direct deposit will be the primary method.
  • You can elect to allocate your refund to as many as three separate accounts
  • Prepaid debit cards that are reloadable and have an account and routing number assigned to them may be able to be used.
  • Some mobile apps or digital wallets may have account and routing numbers, check with the app provider.
• Paper checks will be phased out except for rare cases (e.g., no banking access).

According to the Taxpayer Advocate Office, once the return has been processed, the taxpayer(s) will be sent a letter requesting the bank account information be provided within 30 days of the letter date. The letter will also contain a dedicated phone number that can be used request an exception and issuance of a check. After six weeks, a paper check will be sent to the taxpayer(s).

Payments to the IRS must also be made electronically. Check for payment deadlines and plan for processing time when making your paymnets electronically.

Options include:

• IRS Direct Pay (from your bank account).
• Electronic Federal Tax Payment System (EFTPS).
• Electonic Funds Withdawal: Available when you file your return using tax preparation software or with a tax professional.
• Debit/credit card payments through IRS-approved processors. Fees vary by processor.
• Avoid mailing checks after September 30, 2025.

Yes, paper checks may still be used for:

• Individuals without access to banking or electronic systems.
• Emergency or exceptional cases defined by Treasury regulations.

• IRS Payments
• EFTPS Enrollment
• Taxpayer Advocate Service

OBBBA is a major tax reform law effective for tax years beginning in 2025. It makes many Tax Cuts and Jobs Act (TCJA) provisions permanent, introduces new deductions, and phases out certain credits. Most provisions start with 2025 tax returns (filed in 2026). Some expire after 2028.

• Single/MFS: $15,750
• Head of Household: $23,625
• Married Filing Jointly/QSS: $31,500

Plus, seniors (65+) get an extra $6,000 per person ($12,000 for joint filers) through 2028, phased out at MAGI $75,000 (single) or $150,000 (joint).

No. Personal exemptions remain eliminated, permanently.

• EITC: No changes under OBBBA.
• CTC: Increases to $2,200 per qualifying child in 2025, indexed for inflation. Phaseouts remain $200,000 (single) and $400,000 (joint).

A qualifying child for the Child Tax Credit must meet all of the following IRS requirements:

• Relationship: Must be your son, daughter, stepchild, eligible foster child, brother, sister (including half- or step-sibling), or a descendant such as a grandchild, niece, or nephew.
• Age: Must be under age 17 at the end of the tax year.
• Residency: Must have lived with you for more than half of the year (temporary absences for school, illness, or military service are allowed).
• Support: Must not have provided more than half of their own support during the year.
• Dependency: Must be claimed as your dependent on your tax return.
• Identification: Must have a valid Social Security Number (SSN) issued by the tax return due date (including extensions).
• Joint Return: Cannot file a joint return with a spouse unless it is solely to claim a refund of withheld or estimated taxes.
• Citizenship/Residency: Must be a U.S. citizen, U.S. national, or U.S. resident alien.

Examples

Qualifying Child Example:
Maria is a single parent with one child, Jacob, who is 10 years old. Jacob lived with Maria for the entire year, does not provide more than half of his own support, and Maria claims him as a dependent. Jacob has a valid Social Security Number and is a U.S. citizen.

Result: Jacob qualifies as a “qualifying child” for the Child Tax Credit, so Maria can claim the credit of $2,200 for him on her 2025 tax return.

Non-Qualifying Child Example:
David has a daughter, Emily, who is 19 years old and a full-time college student. Emily lived with David for most of the year and has a valid SSN, but because she is over age 17 at the end of the tax year, she does not meet the age requirement for the Child Tax Credit.

Result: Emily does not qualify for the Child Tax Credit, even though she may qualify as a dependent for other purposes.

Beginning in 2026, Non-Itemizers will be able to take an above-the-line deduction for cash donations:

• Single up to $1,000
• Joint up to $2,000.

Example: If you donate $1,200 in cash to a qualified charity in 2026 and take the standard deduction, you can still claim $1,000 above-the-line.

Beginning in 2026 charitable contributions for itemizers will be subject to a new floor. This means that the first .5 percent of charitable contributions will not be deductible if a taxpayer chooses to itemize deductions.

Example: In 2026, Sarah has an Adjusted Gross Income (AGI) of $200,000 and makes $10,000 in charitable contributions. Under the new rule, the first 0.5% of AGI ($1,000) is not deductible. AGI: $200,000, 0.5% floor: $200,000 × 0.005 = $1,000, Total contributions: $10,000, Deductible amount: $10,000 – $1,000 = $9,000. So, even though Sarah donated $10,000, only $9,000 will be deductible if she itemizes her deductions.

Cap increased to $40,000 for MFJ ($20,000 Single) for 2025–2029; indexed annually; reverts to $10,000 in 2030. Income phaseout begins with MAGI of $500,000 (single, MFJ, HOH) and $250,000(MFS).

Example: A married couple paying $18,000 in state income tax and $15,000 in property tax can deduct $33,000 (within the $40,000 cap) for 2025.

Yes.

• Tips: Up to $25,000 deductible
• Overtime: up to $12,500 (single) / $25,000 (joint).

Both phase out at MAGI $150,000 (single) or $300,000 (joint) and apply for 2025–2028.

Example: Alex earns $40,000 salary and $20,000 in tips. Alex can deduct up to $20,000 in tips (within $25,000 cap). Standard deduction: $15,750 Resulting in a significant reduction in taxable income.

Covers K–12 tuition and homeschooling expenses. Due to a broad expansion in allowable expenses to include many costs that are non-tuition expenses such as: curriculum, tutoring, standardized test fees, educational therapies, and dual enrollments fees.

Beginning in 2026 the allowable K-12 education withdrawal limitation increases to $20,000 per student

*State adoption varies, make sure to verify your state rules prior to making a withdrawal from your 529 for K-12 expenses.

Example: Parents paying $8,000 for private school tuition can use 529 funds without federal penalty.

Qualifying seniors will receive an additional deduction to the standard deduction, starting in 2025. The additional deduction is $6,000 (single) or $12,000 (joint) for taxpayers 65+, phased out at starting at $75,000 MAGI (single) and $150,000 MAGI (MFJ).

Example: A 68-year-old single filer with $60,000 MAGI gets an extra $6,000 deduction.

Exemption rises to $15M (individual) starting 2026. This is an increase from 2025’s exemption amounts of $13,990,000 (individual)

Example: An individual gifting $1M in 2026 uses part of their $15M lifetime exemption.

Yes. OBBBA makes the 20% QBI deduction permanent for pass-through entities (S Corps, partnerships, sole proprietorships).

• Phaseout thresholds: $75,000 (single) and $150,000 (joint), indexed for inflation.
• New minimum deduction: $400 once QBI exceeds $1,000.

Sample Scenario: Maria owns a small consulting firm structured as an S Corp. Her QBI is $120,000. Under OBBBA, she qualifies for the full 20% deduction, reducing taxable income by $24,000.

Yes. OBBBA restores and makes permanent 100% bonus depreciation for qualified property acquired and placed in service after Jan. 19, 2025. Section 179 limit: Increased to $2.5M, phaseout at $4M.

Sample Scenario: ABC Manufacturing buys $500,000 of equipment in February 2025. They can immediately expense the full amount using bonus depreciation.

The flat 21% corporate tax rate remains unchanged and is now permanent, removing uncertainty for C Corps.

Yes. Section 163(j) now uses EBITDA instead of EBIT for the 30% cap on business interest deductions, generally allowing more interest expense.

OBBBA permanently reinstates immediate expensing of domestic R&E costs (including software) for tax years after Dec. 31, 2024. Foreign R&E remains amortized over 15 years. Small businesses with average annual gross receipts of $31M or less can elect retroactive deductions to 2022.

Sample Scenario: A tech startup spends $200,000 on software development in 2025. They can deduct the full amount immediately instead of amortizing over several years.

Yes. Businesses must report qualified tips and overtime on W-2 or 1099 forms. Deduction limits: $25,000 for tips, $12,500 for overtime ($25,000 for joint filers). These deductions do not affect payroll taxes.

Possibly. With QBI permanence and higher phaseouts, S Corps and partnerships may gain more benefit. Advisors should review reasonable compensation and wage strategies.

Yes. Employers must report: Qualified tips and overtime amounts, Occupation codes, SSNs for eligibility. Also, 1099 reporting threshold increased to $2,000 (up from $600).

Yes. Businesses should adjust quarterly estimates for 2025 onward to reflect permanent QBI deductions, bonus depreciation, and new expensing rules.

Some credits for employee training, tech upgrades, and green energy remain, but many green incentives sunset earlier—act quickly.

OBBBA makes permanent several international and foreign-related provisions originally introduced under the TCJA. These include the deduction for foreign-derived intangible income (FDII), now modified and renamed as foreign-derived deduction eligible income (FDDEI), and global intangible low-taxed income (GILTI), which is now referred to as net CFC tested income (NCTI). It also retains the base erosion minimum tax amount.

In terms of energy provisions, the OBBBA terminates several green energy credits after 2025 and makes modifications to other energy-related credits.