What the One Big Beautiful Bill Means for Your Business

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The One Big Beautiful Bill (OBBB) legislation represents an overhaul of the federal tax landscape, introducing dramatic changes to taxes, credits and deductions that will impact taxpayers across all income levels. And everyone from entry-level employees to Fortune 500 CEOs will be affected.

The good news is that once you wrap your head around these changes, your business may benefit from opportunities to optimize your tax strategy. Here’s what you need to know:

  • Paid family and medical leave credit. Now a permanent credit, employers can choose between two methods for calculating the credit: a percentage of wages paid to qualifying employees during family and medical leave, or a percentage of premiums paid for insurance policies providing paid family and medical leave. Additionally, employers may now elect to include employees with at least six months of service (reduced from one year).
  • Employer-provided childcare credit. Effective in 2026, the OBBB increases the credit percentage for “qualified childcare expenditures” from 25% to 40% for regular businesses and 50% for eligible small businesses. The maximum credit is $500,000 ($600,000 for eligible small businesses). Beginning in 2027, all amounts are subject to annual inflation adjustments.
  • Employee exclusion for employer-paid student loans. The OBBB permanently extends the employee exclusion for qualifying employer student loan payments. Starting in 2026, the current $5,250 maximum exclusion amount will be adjusted annually for inflation.

What’s next?

Stay in the know as additional guidance and regulations are released, and reach out to the tax planning experts at Magone & Company to get your questions answered.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your business situation.

OBBB: From Moving Costs to 529 Plans, Here’s What Changed

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The One Big Beautiful Bill (OBBB) introduced sweeping changes to tax credits and deductions that will impact individuals and families across all income levels.

Whether you’re just starting your career, raising a family or planning for retirement, these changes are likely to impact your bottom line. Here’s what you need to know:

  • Dependent care assistance. The OBBB raises the annual tax-free limit for employer-provided dependent care assistance to $7,500 ($3,750 for married filing separately), effective for tax years beginning after 2025.
  • Moving costs. Also effective for tax years after 2025, the OBBB eliminates the moving expense deduction and exclusion for most taxpayers. Exceptions remain for active-duty armed forces members relocating due to military orders and permanent change of station, as well as a new exception added for U.S. intelligence community employees and appointees relocating due to assignment changes.
  • Bicycle commuting expenses. The OBBB ends the tax-free treatment of employer bicycle commuting reimbursements.
  • 529 plans post-secondary credentialing expenses. The OBBB expands 529 plan qualified expenses to include “post-secondary credentialing expenses.” Eligible credentials include state or federally issued occupational/professional licenses, apprenticeship completion certificates registered with the Department of Labor and credentials defined under the Workforce Innovation and Opportunity Act.
  • Information reporting, Forms 1099-NEC and 1099-MISC. Beginning with 2026 payments, the reporting threshold increases from $600 to $2,000 (with inflation adjustments starting in 2027). Backup withholding requirements are updated accordingly.
  • Tips deduction. There’s a new deduction allowing up to $25,000 for “qualified tips,” phasing out for taxpayers with a modified adjusted gross income (MAGI) over $150,000 ($300,000 joint filers). The IRS must publish a list of tip-receiving occupations and update withholding procedures by 2026. This deduction expires after 2028.
  • Overtime deduction. The new deduction allows up to $12,500 ($25,000 for joint filers) for qualified overtime compensation as defined under the Fair Labor Standards Act, with the same MAGI phaseout thresholds as the tips deduction. This deduction expires after 2028.

Keeping more money in your pocket 

Stay informed as additional guidance becomes available, and consider how these changes might affect your personal tax situation. Don’t hesitate to reach out to the experts at Magone & Company for guidance on optimizing your tax strategy.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your business situation.

Maximizing the Tax Benefits of Your Remote Workforce

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The pandemic fundamentally altered how many U.S. businesses operate. Distributed teams and flexible arrangements have become permanent fixtures rather than temporary fixes.

For employers and workers, this also means new opportunities and challenges for tax planning and compliance.

The reality of remote workers

Companies have discovered that productivity doesn’t require physical proximity. In fact, 60% of remote workers report their flexible work arrangement has boosted their ability to get work done and meet deadlines. This proven effectiveness means that today’s employers may have teams spanning cities and states, creating complex tax implications that extend beyond traditional office-based considerations.

Comprehensive tax credit and incentive (TC&I) analysis has become essential for businesses supporting remote teams. These specialized programs provide detailed assessments of available opportunities, breaking down qualification requirements and implementation strategies tailored to your specific business model.

TC&I experts examine your operations, identifying federal, state and local programs that align with your workforce distribution, ensuring you’re capturing every available benefit while maintaining full compliance across all jurisdictions where your employees work.

Navigating the nexus challenge

Before your businesses can capitalize on these opportunities, you must establish and manage nexus obligations.

State tax nexus determines where your business has sufficient connection to warrant tax obligations, and remote employees can create these connections in states where you’ve never maintained a physical presence.

Each state has different standards for establishing nexus through employee activities. Some require minimal employee presence to trigger obligations, while others have higher thresholds. Getting nexus right requires a proactive approach:

  • Conduct regular nexus assessments. Implement regular reviews of employee locations and activities to identify new potential nexus obligations before they become compliance issues.
  • Establish clear remote work policies. Develop guidelines that address tax implications of employee relocations and temporary work arrangements.
  • Engage multi-state tax professionals. Partner with specialists who understand the nuanced requirements across different jurisdictions.

Credits that reward a remote work strategy

Once your nexus obligations are properly managed, the evolving work landscape has expanded access to numerous tax credit opportunities for remote employers. For example:

  • State-specific remote work incentives. Various states offer credits for companies hiring remote workers or relocating operations.
  • Home office deduction optimization. While limited for employees, businesses can structure arrangements to maximize legitimate office-related deductions.
  • Technology investment credits. Many jurisdictions offer incentives for investments in equipment and software that enable remote collaboration.
  • Economic development incentives. Location-specific credits may be available when remote workers are based in designated economic zones.

Making the most of your remote workforce

Regular assessment of your workforce distribution, combined with strategic implementation of available credit programs, positions your business to thrive. Learn how the experts at Magone & Co can help. Reach out or give us a call today at (973) 301-2300.

 

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your business situation.

 

Why Cyber Criminals Love Small Businesses (And How to Make Them Think Twice)

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Remember the big Target data breach a few years ago?

Hackers didn’t just wake up one day and decide to attack the retail giant directly. Instead, they strategically planned and infiltrated a small HVAC contractor that serviced Target’s stores, using that access point to compromise over 41 million customer records.

Cybercriminals continue to view small businesses as stepping stones to bigger prizes — and your sensitive data makes your small business an attractive entry point.

The small business cybersecurity gap

Forty-seven percent  of businesses with fewer than 50 employees have no cybersecurity budget. Even more alarming, 51% have no cybersecurity measures in place at all.

Small business owners wear many hats, juggling multiple responsibilities and often lacking the resources to stay on top of evolving security threats. Small businesses typically store valuable financial information — including tax records, employee data and customer payment details — while maintaining fewer security protocols than larger corporations.

When small businesses suffer breaches, the consequences ripple through the economy and impact countless livelihoods. Beyond the immediate financial losses, these attacks can force business closures, eliminate jobs and erode customer trust.

The good news? You don’t need a Fortune 500 budget to build a strong defense against cybercriminals. Check out 10 ways to help protect the sensitive data that your business needs to operate:

  1. Maintain current software. Regular software updates are your first line of defense. Configure devices and applications to update automatically, ensuring you have the most updated security measures in place.
  2. Implement strong authentication practices. Replace simple passwords with memorable passphrases that combine multiple unrelated words and symbols. Layer this protection with multi-factor authentication to make it as secure as possible.
  3. Deploy anti-malware protection. Invest in reputable antivirus software and ad-blocking tools. These solutions actively scan for and neutralize threats before they can compromise your data.
  4. Establish secure network connections. Utilize Virtual Private Network (VPN) services to encrypt your internet traffic, especially when accessing financial data remotely. This encryption makes intercepted data virtually unreadable to attackers.
  5. Have backup systems in place. Maintain and secure backups of all critical documents and financial records. Store these backups on separate devices or in a cloud service that remains walled off from your primary systems.
  6. Secure email communications. Since data often travels via email, implement encryption protocols and consider using secure file-sharing platforms for sensitive document transmission.
  7. Limit access and permissions. Grant employees access only to the sensitive information necessary for their specific roles. Regularly audit these permissions, especially as employees move into new roles or leave the company.
  8. Develop an incident response plan. In advance of a possible breach, make sure you have detailed procedures nailed down, including steps for containing threats and notifying impacted parties.

Turning knowledge into protection  

Protecting your tax data is essential for small business survival. Be proactive in preparing your business for whatever the future may bring. Questions about how we protect our clients’ data? Don’t hesitate to reach out.

 

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your unique circumstances.

 

 

 

 

What’s Costing You More: Taxes or Poor Planning?

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By the time your CPA is preparing your tax return, most opportunities to minimize taxes have already passed.

The truth is that many people don’t know the difference between tax preparation and tax planning. While both are crucial for your financial health, they serve completely different purposes and happen at different times of the year.

Understanding tax preparation

Tax preparation focuses largely on compliance and maintaining good standing with the IRS. It’s about documenting what happened in the previous tax year and making sure you comply with current tax laws. When you compile your W-2s, 1099s and receipts for your yearly taxes, you’re engaging in tax preparation.

This process involves calculating your taxable income, identifying eligible deductions and credits, and completing the necessary forms to file your return, so you can report your financial activity accurately and pay the right amount to Uncle Sam.

But by the time you’re sitting down to prepare your return, it’s too late to change most financial decisions for that tax year. You can’t go back and contribute more to your 401(k) or restructure investment sales to minimize capital gains. That’s why tax planning is so important.

Failing to plan is planning to fail

Tax planning is a proactive, forward-thinking approach that examines your entire financial picture to identify opportunities for tax savings. Effective planning considers multiple variables like your current income, expected future earnings, retirement timeline, investment objectives, life events and family situation. The goal is to help you make smarter decisions throughout the year that position you for optimal tax outcomes.

For example, tax planning might involve timing the sale of investments to offset gains with losses or converting traditional IRA funds to Roth IRAs during lower-income years. It may also include estate planning considerations, such as gifting strategies that reduce future tax burdens for your heirs.

So while tax preparation focuses on one year at a time, tax planning takes a multi-year view of your financial life.

Tax planning and preparation: Better together

Tax preparation ensures you remain compliant with current tax laws and avoid penalties, and keeps you out of trouble with the IRS. On the other hand, tax planning helps you maximize your financial potential, keeping more money in your pocket. Both are crucial for your financial success.

Clients who rely solely on tax preparation risk unexpected tax bills and missed opportunities come tax season. But those who embrace tax planning are in a better position to build long-term wealth. Small moves — like increasing retirement contributions and utilizing tax-advantaged health savings accounts — can result in big savings over time.

Your best bet? Work with professionals who understand both tax preparation and planning. The tax experts at Magone & Company can help you make the most of your tax situation. Contact us at (973) 301-2300 to learn if you’re leaving money on the table.

 

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance that is specific to your unique circumstances.

 

Transform Your Tax Refund into Long-term Wealth: 7 Strategic Moves

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Did you know that 25% of American taxpayers consider their tax refund free money? In fact, 26% of taxpayers report using their refund to treat themselves to things they normally wouldn’t buy, like clothing and accessories (45%), electronics (40%) and shoes (37%).

Instead of spending your next refund on items that will come and go, think about how you can use it to accelerate your financial future.

Whether you receive $500 or $5,000, the following strategies can help transform your refund into a foundation for long-term financial security.

Eliminate high-interest debt. The path to wealth begins with breaking free from debt. Every dollar you owe represents money that could be working for you through investments and savings. Your best bet is to tackle high-interest obligations first — credit cards, personal loans and payday advances — where interest rates can be as high as 15-25%.

By eliminating these costly debts, you’re freeing up monthly cash flow for wealth-building initiatives.

Open a strategic savings account. Whether you’re planning a home purchase or a dream vacation, establishing separate savings accounts for specific objectives keeps you motivated and organized. Consider automating your savings by setting up direct deposits or scheduled transfers from another account.

This “pay yourself first” approach removes the temptation to spend and ensures consistent progress toward achieving your goals.

Build an emergency fund. Financial emergencies can derail your savings in an instant. An adequate emergency fund ideally contains three to six months of essential living expenses and minimum debt payments.

By building a financial cushion, you’re protecting your investments from premature withdrawals as well as accumulating new debt when unexpected costs arise.

Boost your retirement savings. Compound growth makes time your most powerful wealth-building tool, transforming small contributions today into substantial retirement funds tomorrow. Check out these powerful growth scenarios.

Maximize contributions to tax-advantaged accounts like traditional or Roth IRAs for immediate deductions or tax-free growth. Self-employed individuals may explore SEP IRAs for higher limits.

Invest in home improvements. Home improvements can increase your property value while improving your quality of life. Focus on projects with strong return on investment, including kitchen updates, bathroom renovations or additional square footage.

Remember, your primary residence is likely your largest asset, and maintaining and improving it protects and grows that investment.

Create multiple income streams. Use your tax refund as seed money for generating additional income. This could mean starting a side business, using it as a downpayment to purchase a rental property or buying equipment for freelance work.

Even small additional income sources can compound significantly over time when reinvested wisely.

Enhance your earning potential. The best investment you can make is often in yourself. Use your refund for education, professional certifications or skill development that can increase your earning capacity.

For example, you may complete a degree, learn new technology skills or obtain industry certifications to boost your professional value — and your salary. Higher earnings create more opportunities for saving, investing and building wealth throughout your career.

Seize the opportunities

Your tax refund is money you’ve already earned that’s waiting for you to put it to work. Instead of spending it, invest it in your financial future. Find out how the tax experts at Magone & Company can help ensure you receive the maximum return based on your unique situation. Reach out today.

 

The above information is provided for general education purposes and should not be considered financial or tax advice. Please consult your accountant or financial advisor for advice specific to your situation.