Sellers CPA June 2025 Tax Newsletter

Welcome to the June 2025 Tax Newsletter from Sellers CPA, your trusted tax and accounting firm in Dadeville, Alabama. Our goal is to provide you with the latest tax updates and strategies to navigate the complexities of tax planning and compliance effectively. This edition builds on our May 2025 newsletter, incorporating recent federal and Alabama-specific tax developments, insights on the Department of Government Efficiency (DOGE) and Elon Musk’s involvement, and mid-year planning tips to keep your financial strategy on track. Let’s explore what’s new for June 2025!

Federal Tax Updates: DOGE, Executive Actions, and Emerging Trends

The federal tax landscape continues to evolve, with significant developments tied to Elon Musk’s recent departure from the Department of Government Efficiency (DOGE) and ongoing executive actions under President Donald J. Trump. Below are the key updates and their potential impact on financial planning:

• Elon Musk’s Exit from DOGE: As of May 28, 2025, Elon Musk officially stepped down from his role as a special government employee leading DOGE, a taskforce aimed at reducing federal spending and improving government efficiency. Musk claimed DOGE achieved $175 billion in savings, though analyses, including one by Yahoo Finance, suggest these figures may be inflated due to errors in calculations. Despite Musk’s exit, DOGE’s mission is expected to continue under new leadership, with Russ Vought, a key figure in Project 2025, taking over. However, some experts, including a former DOGE staffer, predict the initiative may lose momentum without Musk’s influence, potentially limiting its long-term impact on federal spending.

  Financial Planning Implications: DOGE’s cuts to federal programs, including $400 million in DEI grants and USAID reductions, may reduce government spending, potentially lowering long-term Treasury yields and interest rates on mortgages, small business loans, and credit cards, as Musk suggested in February 2025. However, recent legislation, such as the “One Big Beautiful Bill Act,” is projected to increase the federal deficit by $3.8 trillion by 2034, which could counteract these benefits and lead to higher interest rates or inflation. Businesses and individuals should monitor these developments and consider locking in fixed-rate loans now to hedge against potential rate hikes. Additionally, DOGE’s workforce reductions (260,000 federal jobs cut) and agency restructuring may disrupt federal contracts or grants, particularly for nonprofits and small businesses reliant on government funding.

• Proposed Tax Rate Changes: Discussions around reducing federal income tax rates and adjusting capital gains taxes continue, though no legislation has been finalized. These proposals could affect investment strategies and business cash flow, making it critical to model various tax scenarios.

• Tax Credit Proposals: Potential expansions of tax credits for small businesses, renewable energy, and family expenses (e.g., childcare) are under consideration. These could provide savings opportunities for Alabama businesses and families, but eligibility details remain unclear.

• IRS Enforcement Priorities: The IRS is increasing scrutiny on worker misclassification and unreported cryptocurrency transactions, including DOGE (the cryptocurrency). With Musk’s departure from DOGE, speculation about his influence on cryptocurrency markets persists, but no direct policy changes have been confirmed. Ensure accurate reporting of all crypto transactions to avoid penalties.

For guidance on navigating these federal developments, including DOGE’s impact on your financial strategy, contact Sellers CPA at (256) 825-8259 or info@sellerscpa.net (mailto:info@sellerscpa.net) to schedule a consultation.

Alabama-Specific Tax Updates

Alabama’s tax policies remain critical for residents and businesses. Here are the latest updates for June 2025:

• Parental Choice Tax Credit: As highlighted in May, Alabama’s Parental Choice Tax Credit program, effective for the 2025-26 school year, prioritizes families earning $150,000 or less, with a $250 million cap. Applications are now open, and high demand underscores the need for early submission. Contact us to ensure your application is complete and compliant.

• Alabama Filing Deadlines: For those who extended their 2024 Alabama individual income tax returns, the deadline is June 15, 2025. Businesses on a fiscal year should verify state-specific deadlines to avoid penalties. Our team can assist with filings and payment planning.

• Sales Tax Compliance: Alabama’s economic nexus rules require out-of-state sellers with significant sales in the state to collect and remit sales tax. Recent state audits are targeting e-commerce businesses, so maintaining accurate records is essential.

• Local Tax Incentives: Some Alabama counties are offering tax incentives for businesses investing in job creation or infrastructure. If you’re expanding operations, contact us to explore eligibility.

Mid-Year Tax Planning: Strategies for 2025

June is a pivotal time to refine your tax and financial strategy, especially in light of DOGE-related changes. Consider these steps:

• Income and Deduction Review: Assess year-to-date income and expenses to project your 2025 tax liability. Adjust withholdings or estimated tax payments to avoid penalties, particularly if federal spending cuts or deficit increases impact interest rates or economic conditions.

• Retirement Contributions: Maximize contributions to IRAs ($7,000 limit for 2025, $8,000 for those 50 and older) or 401(k)s. Business owners can explore SEP IRAs or Solo 401(k)s for higher contribution limits, especially if DOGE’s cuts reduce federal funding for your business.

• Charitable Giving: If itemizing deductions, consider bunching charitable contributions to exceed the 2025 standard deduction ($14,600 for single filers, $29,200 for married filing jointly). Donor-advised funds can help manage large gifts efficiently.

• Tax-Loss Harvesting: With potential changes to capital gains tax rates, review your investment portfolio to offset gains with losses. DOGE’s economic ripple effects, such as potential market volatility from federal budget changes, make this strategy timely.

• Business Expense Planning: Leverage Section 179 deductions or bonus depreciation for qualifying equipment or property purchases. Businesses affected by DOGE’s contract terminations should prioritize expense planning to offset reduced revenue.

To discuss how these strategies, including DOGE’s impact, apply to your situation, contact Sellers CPA for a consultation.

Compliance Corner: Avoiding Common Tax Pitfalls

• Worker Classification: Misclassifying employees as independent contractors can lead to IRS and Alabama Department of Revenue audits, with penalties for unpaid payroll taxes. DOGE’s workforce reductions highlight the importance of proper classification to avoid scrutiny.

• Cryptocurrency Reporting: The IRS requires reporting of all cryptocurrency transactions, including DOGE. Musk’s high-profile role in DOGE (the taskforce) has not directly influenced DOGE (the cryptocurrency), but increased IRS focus on crypto compliance necessitates accurate records.

• Quarterly Estimated Taxes: Self-employed individuals and businesses must make their next quarterly estimated tax payment by June 16, 2025 (as June 15 falls on a Sunday). Review income projections, especially if DOGE-related cuts affect your revenue, to ensure timely payments.

Spotlight: Sellers CPA Services

At Sellers CPA, we provide tailored solutions to meet your tax and accounting needs:

• Tax Planning and Compliance: Ensuring accuracy and savings for individual and corporate tax returns.

• Bookkeeping and Payroll: Streamlining your financial operations.

• Business Consulting: Offering strategic guidance for business growth and compliance.

• Audit Support: Representing you during IRS or state audits.

Learn more at sellerscpa.net or contact us to schedule a consultation.

What’s Next?

As we head into the second half of 2025, proactive planning is essential to address tax obligations and leverage opportunities, particularly with DOGE’s ongoing influence on federal spending and economic conditions. Contact Sellers CPA at (256) 825-8259 or info@sellerscpa.net (mailto:info@sellerscpa.net) to schedule a consultation. Stay tuned for our July 2025 newsletter, covering updates on federal tax proposals, Alabama’s budget outlook, and back-to-school tax tips.

Disclaimer: Tax laws are complex and subject to change. This newsletter is for informational purposes only and does not constitute professional tax advice. Always consult a qualified CPA for personalized guidance.

Sellers CPA

123 S. Main Street, Dadeville, AL 36853

Phone: (256) 825-8259

Email: carol@sellerscpa.net