I am writing this article early in February hoping, as the eternal optimist, that many taxpayers will have a “come to Jesus” moment as ministers would say, and this year file their tax return, early, on time, or at least file an extension. Let’s look at the initial steps it will take to make this season different.
Get Ready Checklist
Documents for Income: When it comes to income you should have gathered by now your W-2, 1099 G( for unemployment), estimated payments (1040-ES), 1099-B or 1099-S (sale of stocks or property like Bitcoin), 1099-SA (health savings), 1099 and Schedule K. If you have earned income this year, most likely the aforementioned represented your sources of income.
Documents for Deductions: By now you should have the usual suspects such as, form 5498-SA ( health saving contributions), receipts of home energy saving improvements, charitable contributions (cash from non profit and house of faith), non cash contributions such as property receipts, 1098 or mortgage interest statement, scholarship or fellowship records or receipts, vehicle sales tax paid or or personal property tax paid on vehicle invoice, electric vehicle information and medical expenses.
2025 Tax Consideration
Ghost Preparers: You will need to choose your tax preparer or do it yourself carefully. There are a growing number of individuals masquerading as professional tax preparers who are designated by the IRS as “ ghost preparers.” These are the people who prepare your returns taking impermissible credits and deductions, thereby inflating your refund. The end result is that when you receive any IRS letters about your return, you can never find your tax preparer.
Digital Assets: When it comes to digital assets or currency such as Bitcoin, you should understand fundamentally that the IRS does not view it as currency but as property just like the stocks and bonds you possess. It means that something you can use as currency to purchase items is viewed as being taxable. Therefore your bitcoins can either be taxed as long term capital gains at interest rates ranging from 0% to 20%, or can be taxed as a short term ordinary gain with rates ranging from 10% to as high as 37%. The IRS is increasing its scrutiny of digital currency this year by requiring brokers to report the sale of digital assets on form 1099-DA. Operating in secret is no longer an option.
Electric Vehicle Credits: Tax credits of $7,500 or $ 4,000 are available if you purchased a new or used EV in 2024, but it will need to be reported on your tax return. At the time you purchased your vehicle the dealer should have provided you with what is called a time of sale report indicating that the IRS had accepted your credit. You will not be allowed to claim the credit without the time of sale report. Therefore, if you do not have it, check back with your dealer to retrieve a copy. What you need to file is IRS form 8936, “Clean Vehicle Credits.” This form can also be used if at the time of purchasing you did not receive the tax credit.
In writing this article in the tradition of religious speakers when they say, “ I’m closing now.” That does not mean I’m finished writing, but that I have another three or more paragraphs to write, but I won’t do that to you. Here it is. There are always things you can still do after December 31, 2024 to reduce your tax liability if you accept my appeal and experience your “ come to Jesus” IRS preparation moment early this year. For example you can still contribute to your retirement account up to $7, 000 or $8,000 if you have not done so which will reduce your adjusted gross basis on a dollar for dollar basis on your taxes. You also can establish a Health Saving Account for 2024 which can help reduce your tax liability or increase your refund. While I know everybody wants to be saved from the IRS, many will either not file on time, wait until the last minute or not file an extension and therefore will not accept my appeal. My hope is that this year’s tax filing season for you will be different.
WHAT’S UP! Today’s What’s Up is about surveillance or surge pricing. Most of you are familiar with surge pricing or the concept, which is simply based upon the fact that when demand is high and supply is low and there is a shortage, prices increase. Surveillance pricing on the other had takes all your shopping history, behaviors, patterns, algorithms and other data about you and can charge you a different price from another person for the same product or service. An example of what I mean is that surveillance pricing will offer you a higher airline ticket price simply because you are using an Apple Mac or product as opposed to another device to execute your transaction. The thinking is that if you are an Apple product user, you probably can afford to pay more. Surveillance pricing will also consider factors such as where you live to determine the price or cost of an item or product you are sold. What I’m saying is that your online shopping price may now be based on where you live. Why is that important? With Artificial Intelligence (AI) playing an ever increasing role in our financial stewardship, companies are now engaging in targeted pricing.
Who? The Federal Trade Commission (FTC) sent out letters to companies such as Mastercard and JPMorgan Chase Bank regarding this practice which could be unfair and less than transparent. What to do? Use a VPN which may mask your location and help avoid different regional prices. And that’s what’s up!
Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2025 All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.
