Tax Filing Guide for 2025

 As the years race past, it is almost time to get ready to close the books in 2024. When you do, you will need to hand over the details to the IRS within a short period. While April 2025 might feel like it is a long way off right now, it can approach quickly. That is especially true if your company has a busy season that coincides with the holidays of 2025. Whatever the case may be for your startup, bringing a CPA Beverly Hills on board to prepare your taxes will pay off.

Considering this, it is time to look at a few new things you have to navigate this spring. Here is a condensed version of the corporate and personal tax world for the new year.

Corporate Alternative Minimum Tax Rates

Brought forth by the Inflation Reduction Act, the corporate alternative minimum tax (CAMT) probably will not impact your startup for some time. That is because this rule only applies to companies with an adjusted financial statement income (AFSI) that averages out above $1 billion. If your company reaches this AFSI threshold, you are subject to a 15% minimum tax on profits reported to shareholders.

While most startups are well below the $1 billion AFSI threshold, it is still worth calling out this NPRM. That is because if this rule change is adopted, it will dramatically alter how large companies in the US get taxed. Without this change, the Treasury says that 60% of the affected corporations would have an effective federal tax rate of 1% or less.

Direct File is a Permanent Option

The IRS piloted a new filing option during the 2024 filing season and things went well. Over 15,000 taxpayers used the IRS’s new Direct File system and completed a survey about it later. Respondents seemed to think pretty highly of this new filing option. A CPA Beverly Hills went over this data and found 90% claiming the experience of using Direct File was “excellent” or “above average.” They even reported it was easy to use.

This new filing option could be a boon to the IRS’s reputation. Among survey respondents, 85% said using Direct File increased their trust in the agency.

The best thing is this – Direct File is free to use.

Generally speaking, startups benefit from working with an accountant to file their corporate taxes. This allows you to properly maximize benefits like the R&D credit to minimize your tax liability.

Final Regulation on the Excise Tax on Certain Stock Buybacks

In June 2024, the Treasury and the IRS issued final regulations about how to report and pay the excise tax for corporate stock repurchases. Another installment from the Inflation Reduction Act, this new requirement imposes a 1% excise tax on the aggregate fair market value of some corporate stock repurchases. You should also know that a company can dodge this tax because they did not buy back any shares in 2024. This excise tax goes back to apply to any repurchases made from January 1, 2023, onward.

Now, here is the good news for startups. This regulation only applies to publicly traded companies. So, as you are growing, you do not need to worry about this added tax or ask your CPA Beverly Hills to prepare it for you. It does, however, benefit you to keep this relatively new rule in mind. If you grant an investor a bunch of shares with the intention to buy them back later, for instance, you should factor this in.

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