As of January 2025, the unemployment rate was reported to be 4%. Employers facing hiring challenges may benefit from a valuable one-time federal tax credit available through 2025. The Work Opportunity Tax Credit (WOTC) incentivizes businesses to hire individuals from specific groups often facing employment barriers. These include veterans, recipients of specific aid programs, ex-felons, long-term unemployed individuals and eligible summer youth employees. To claim the credit, employers must certify the eligibility of new hires by filing the required form with their state workforce agency within 28 days of the employee's start date.
Note: Unless extended by legislation, the WOTC won't be around much longer, so take advantage of it while you can. Click here for more about the WOTC.
To help encourage more people to save for retirement, the SECURE 2.0 Act requires employers with newly established 401(k) and 403(b) plans to enroll workers automatically, starting in 2025. Recently proposed IRS regulations stipulate that automatic enrollment is mandatory for plans initiated after Dec. 29, 2022. Unless employees opt out, plan sponsors must enroll them at an initial contribution rate of at least 3% of pay. Sponsors must then raise the contribution rate 1% each year until it reaches 10%. There are certain exceptions to the automatic enrollment rule for small and new businesses, churches, and government entities. Contact us for more information.
If your business is in the market for new wheels this year, you should know the IRS has released the 2025 depreciation limits for "luxury" business vehicles. For vehicles placed in service in 2025, depreciation limits are as follows: $20,200 for year one, $19,600 for year two, $11,800 for year three and $7,060 for each succeeding year. This includes passenger cars, SUVs, trucks and vans. The IRS also announced lease inclusion amounts for lessees of passenger vehicles first leased in 2025. To read Rev. Proc. 2025-16, click here.
Business owners, beware. Identity theft is a growing threat that can cripple your business or shut it down forever. Signs of business identity theft include the inability to file a tax return because a return has already been filed using the business ID number, a request for a routine extension is rejected, and tax transcripts obtained by the business don't match its tax returns. To help stay ahead of this cybercrime, install anti-malware and anti-virus software and employ firewalls. Use multi-factor authentication, encrypt and backup sensitive files, and limit personnel with access to these files. Contact us with questions, or click here for more information.
TechNet, a bipartisan group of tech executives from companies such as Apple, Amazon and Google, communicated its tax priorities to lawmakers in a recent letter. To encourage "innovation, spur economic growth and strengthen the global competitiveness of American businesses," TechNet advocates maintaining the current 21% corporate tax rate and favorable tax treatment for qualified small business stock. It also supports permanently reinstating R&D and software development deductions and increasing the 1099-K reporting threshold. To incentivize domestic semiconductor production, the group proposes extending the 25% advanced manufacturing investment credit. Click here to read the letter.