FOX6 Cents: Local expert offers tax season tips
FOX6 Cents: Local expert offers tax season tips
Hartland CPA Brooke Leiterman says new federal tax law changes are making filing more complex this year, while higher refunds and expanded credits could benefit many taxpayers.
HARTLAND, Wis. - Taxes aren’t exactly something we look forward to every year. Don’t tell that to Brooke Leiterman.
"I’ve just always enjoyed it," Leiterman said. "I never thought I’d want to do taxes, and then I got into it, and it’s interesting."
Leiterman is a CPA at RPB CPAs in Hartland. She says numbers, forms and tax laws are never boring. This year it’s kept her busier than ever.
"We haven’t had this many changes in a few years," Leiterman said. "But every four years, there’s a new set of laws that come in."
Leiterman said the passage of President Donald Trump’s One Big Beautiful Bill last July triggered differences in the way some of us do our taxes this year.
No tax on tips
What we know:
"With the tax on tips, it’s not all qualified," Leiterman said. "They have to be voluntary tips that are able to be deducted. It’s up to $25,000 – so not depending on how you have your tips."
Voluntary tips are classified as tips that are not part of a mandatory service charge. The deduction phases out for single filers earning more than $150,000 and $300,000 for joint-filers. Bartenders, baristas, housekeepers, food delivery workers and salon workers are just a few of the employees who would qualify.
No taxes on overtime
What we know:
No taxes on overtime is also new. You’ll find that in Box 14 of your W-2. The IRS says individuals who receive qualified overtime compensation may deduct the funds that exceed their regular rate of pay – such as the "half" portion of "time-and-a-half" compensation.
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"It’s not the entire amount," said Leiterman. "If you work 50 hours in a week, it’s not that full amount you were paid in the extra 10 hours that’s deductible. It’s really just about 1/3 of that overtime pay."
Larger refunds
What we know:
Refunds are also expected to be larger for most Americans. Data from the IRS shows the average refund is up 10.2% – which equates to roughly $3,800 for an average refund.
"I think this year, the refunds that I have seen are higher – just with the additional child tax credit," Leiterman noted.
Child tax credit & senior deduction
What we know:
The One Big Beautiful Bill bumped the Child Tax credit to $2,200 per eligible child. From now on, the rate will be adjusted based on inflation.
There’s also good news for seniors.
"For the federal senior deduction, that is up to $6,000 for anyone over 65 years old," Leiterman said.
The IRS says you have to be 65 or older by the end of the tax year to qualify.
"It’s definitely motivating when you can hand over a return and let them know they are getting a nice refund this year. You found something that increased it and helped them out. But then you have the other side of it and have to deliver bad news sometime," said Leiterman, especially when you do your taxes online. "There are deductions that are missed, credits that are missed."
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The government allows for extensions. But the deadline for filing an extension is also April 15.
"They don’t always know that they missed it. Sometimes they are just tired of preparing it on their own and over their heads," Leiterman added.
Which is why Leiterman says a Certified public accountant, or CPA, can be helpful. Leiterman says RPB CPAs alone processes 1,000 individual returns every year. The forms can be daunting. The numbers are mind-numbing. But Leiterman says she’s always eager to help.
"I’d say get ahead of it now. Don’t wait until April 15th," Leiterman said. "If you’re going to try and file it on your own, go through the questions slowly."
The Source: Information in this post was provided by Fidelity, the IRS, RPB CPAs, and the Wisconsin Institute of Certified Public Accountants.