Denise H. Lunt, CPA

09/08/2026

Could Bad Debts Lower Your 2026 Taxes?

When customers or others don’t pay what they owe your business, you may be able to claim a bad debt deduction to help offset the financial loss. But it isn’t automatic. Businesses must satisfy specific federal tax rules and maintain adequate records to support the deduction.

Not Every Unpaid Debt Is Eligible...

Whether an unpaid debt is deductible depends on several factors. First, the debt generally must be connected to your trade or business. Examples include unpaid customer invoices, certain loans to customers or suppliers, and some business-related guarantees.

The debt also must be bona fide. This means there must have been a genuine expectation of repayment when the money was advanced, or credit was extended. Documentation such as invoices, contracts, promissory notes, and payment terms can show the transaction was a legitimate debt rather than a gift or capital contribution.

Additionally, not every business is eligible to deduct unpaid customer receivables. The purpose of the deduction is to offset a previous tax liability. So, you must have previously included the receivable in your income.

If your business uses the cash-basis method of accounting, you generally recognize income only when payment is received. Because unpaid invoices generally haven’t been included in taxable income, they’re typically not deductible as bad debts.

Accrual-basis businesses generally recognize income when it’s earned rather than when payment is received. As a result, they may be eligible for a bad debt deduction if an amount previously included in income later becomes partially or totally worthless. For partially worthless business debts, a charge-off for accounting purposes generally is required.

How Mixed-Purpose Debts Are Treated...

Some debts may involve both business and personal motives. For example, suppose you guarantee a loan for one of your best customers, who also happens to be a close friend. If the borrower defaults, whether the loss is treated as a business or nonbusiness bad debt depends on whether your dominant motivation in making the guarantee was to help your business or your friend.

The distinction is important because nonbusiness bad debts are deductible only if they’re totally worthless. And they’re treated as short-term capital losses, which can generally offset capital gains and up to $3,000 of ordinary income annually, with any excess carried forward.

Document Your Collection Efforts...

One of the most important requirements is showing that you’ve made reasonable efforts to collect the debt. Simply deciding that a customer probably won’t pay usually isn’t enough to conclude the debt is worthless.

It’s also critical to keep records of the actions you’ve taken. These may include invoices, reminder notices, collection letters, payment plans, correspondence with attorneys or collection agencies, and information showing the debtor’s financial difficulties, bankruptcy, or insolvency. Going to court isn’t necessary if you can demonstrate that obtaining a judgment would be futile.

If you haven’t consistently documented your collection efforts, there’s still time. Review overdue accounts and make sure your files reflect the steps you’ve taken to pursue payment. This can make a significant difference if the IRS questions your deduction.

Review Your Receivables Now...

Do you have aging receivables or other potentially uncollectible business debts? Contact the office before year-end for help evaluating your options, ensuring your documentation is complete, and identifying the deductions you may be eligible to claim.

Check out our Monthly Newsletter; all this information came through at the following link:
https://www.starcpa.com/newsletter.php

*Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. We would be happy to do the required research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter defining the scope and limits of the desired consultation services.

Take a look at our Newsletter page. Denise H. Lunt, CPA is a full service tax, accounting and business consulting firm located in Guymon, OK.

09/04/2026

🚨🗓️Upcoming Tax Due Dates🗓️🚨

September 15th...

Individuals - Pay the third installment of 2026 estimated taxes (Form 1040-ES) if not paying income tax through withholding or are not paying sufficient income tax through withholding.

Calendar-year corporations - Pay the third installment of 2026 estimated income taxes, completing Form 1120-W for the corporation’s records.

Calendar-year S corporations - File a 2025 income tax return (Form 1120-S) and provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1 if an automatic six-month extension was filed. Pay any tax, interest and penalties due.

Calendar-year S corporations - Make contributions for 2025 to certain employer-sponsored retirement plans if an automatic six-month extension was filed.

Calendar-year partnerships - File a 2025 income tax return (Form 1065 or Form 1065-B) and provide each partner with a copy of Schedule K1 (Form 1065) or a substitute Schedule K1 if an automatic six-month extension was filed.

Employers - Deposit Social Security, Medicare, and withheld income taxes for August if the monthly deposit rule applies.

Employers - Deposit nonpayroll withheld income tax for August if the monthly deposit rule applies.

September 30th...

Calendar-year trusts and estates - File a 2025 income tax return (Form 1041) if an automatic five-and-a-half-month extension was filed. Pay any tax, interest, and penalties due.

October 13th...

Individuals - Report September tip income of $20 or more to employers (Form 4070).

Check out our Monthly Newsletter; all this information is available at the following link:
https://www.starcpa.com/newsletter.php

*Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. We would be happy to do the required research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter defining the scope and limits of the desired consultation services.

Take a look at our Newsletter page. Denise H. Lunt, CPA is a full service tax, accounting and business consulting firm located in Guymon, OK.

09/02/2026

⚠️Scam of the Week⚠️
📲This Text Is a Trick📲

Your phone buzzes with a text claiming to be from Apple Pay account services. You glance down to read it, and you feel a rush of fear. The text states that someone just charged $8,250 to your account. The message gives you a case number and a phone number, and warns that a second $8,250 charge will be processed in 35 minutes unless you call the phone number right away. With the clock ticking, you might feel panicked and pressured to call.

But this is actually a smishing, or text message phishing, scam! If you call the number in the text, you won't reach Apple Support. Instead, cybercriminals posing as Apple Support will ask for your name, credit card number, or the email address associated with your real Apple account. If you share these details, cybercriminals could take over your account and steal your money!

Follow these tips to avoid falling victim to this phishing scam:

1. If you get a text about a big, unexpected charge, don't call the number in the message. Instead, navigate to your Apple Pay app or to your bank's website directly to check your account.

2. Never share your banking details or personal information with someone who contacts you unexpectedly, even if they claim to be from Apple Support.

3. Cybercriminals often use deadlines and fear to rush you into making quick decisions. Always stop and think before you act!

🚨Always stop and think before you take action!🚨

This week's scam alert is brought to you by The KnowBe4 Security Team! We take our clients' online safety seriously and want to keep everyone informed about what's going on and what can put them at risk.

Feel free to contact our office with any questions!

08/27/2026

⚠️Scam of the Week⚠️
✉️ Don't Bank on This Email ✉️

Imagine you open your inbox and receive an urgent message from your bank, warning you that your account will be restricted unless you confirm your information right away. The email has your bank's logo and color scheme, and includes a link to update your information. Because the message looks real and you don’t want to lose access to your money, it’s tempting to select the link.

But this email is actually a phishing scam! If you select the link, you'll be prompted to download a tool that claims to protect your account. But that download actually installs malware that lets cybercriminals remotely access your device. This malware can allow them to view your mailing address, bank account details, and other information that they can use right away to steal your identity!

Follow these tips to avoid falling victim to this phishing scam:

1. Verify bank alerts by logging in directly to your bank's official app or website, never through a link in an email.
2. If you're ever unsure whether a bank alert is real, contact your bank using the phone number on the back of your debit or credit card.
3. Always stop and think before you act! Cybercriminals rely on alarming messages to get your attention and force you to make fast decisions.

🚨Always stop and think before you take action!🚨

This week's scam alert is brought to you by The KnowBe4 Security Team! We take our clients' online safety seriously and want to keep everyone informed about what's going on and what can put them at risk.

Feel free to contact our office with any questions!

08/25/2026

💲Plan Now for Deferring Tax on Advance Payments💲

With year-end fast approaching, now is a good time to review strategies that could affect your business’s 2026 tax liability. One area that may deserve attention is the tax treatment of advance payments. Some accrual-basis businesses may be able to defer recognizing a portion of that income.

A Tax-Planning Strategy...

For federal income tax purposes, advance payments generally must be reported as taxable income in the year received. This treatment always applies if your business uses the cash method of accounting for tax purposes. However, if your business uses the accrual method, it may qualify for favorable tax deferral treatment.

Accrual-basis businesses can elect to postpone including all or part of an eligible advance payment in taxable income until the year after it’s received. To qualify, among other requirements, an advance payment must:

Be at least partially included in revenue for a later year according to the business’s applicable financial statement (AFS) or, if there’s no AFS, be treated as earned in a later year, and
Be received for goods, services, or other eligible items listed in IRS guidance.

If your accrual-basis business receives eligible advance payments in 2026, you potentially can elect to defer reporting some or all of that income until 2027 for federal tax purposes.

The AFS Requirement...

An AFS can be an audited financial statement used for credit or financial reporting purposes, certain reports submitted to federal or state agencies, or a filing with the Securities and Exchange Commission, such as a Form 10-K or annual report.

If your business doesn’t have an AFS and elects the deferral method, the advance payment generally must be included in taxable income in the year received to the extent your business treats it as earned that year. Any remaining amount is included in income the following year.

Identifying Eligible Payments...

Advance payments that may qualify for deferral include payments for services, goods, gift cards, intellectual property, and computer software licenses, warranty contracts, and subscriptions. Certain other payments may also qualify under IRS guidance.

However, rents (with some exceptions), certain insurance premiums, payments for financial instruments, and some service warranty contracts aren’t eligible.

Timing Is Key...

The rules surrounding the tax treatment of advance payments can be complex. Contact the office to discuss whether your business may qualify to defer recognition of advance payments and how this strategy could fit into your overall tax-planning approach.

Check out our Monthly Newsletter; all this information came through at the following link:
https://www.starcpa.com/newsletter.php

*Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. We would be happy to do the required research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter defining the scope and limits of the desired consultation services.

Take a look at our Newsletter page. Denise H. Lunt, CPA is a full service tax, accounting and business consulting firm located in Guymon, OK.

08/21/2026

📚Lending to Family or Friends? Know the Tax Rules📚

Making a personal loan to a family member or friend can create unexpected tax issues. If the loan carries little or no interest, the IRS might treat all or part of it as a taxable gift under the below-market loan rules.

To pass muster with the IRS, your loan should be backed by a written promissory note that includes the interest rate, a schedule showing dates and amounts for interest and principal payments, and the security or collateral, if any. Charge an interest rate that equals or exceeds the applicable federal rates set by the IRS. They potentially change each month. Contact the office for details.

Check out our Monthly Newsletter; all this information came through at the following link:
https://www.starcpa.com/newsletter.php

*Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. We would be happy to do the required research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter defining the scope and limits of the desired consultation services.

Take a look at our Newsletter page. Denise H. Lunt, CPA is a full service tax, accounting and business consulting firm located in Guymon, OK.

08/20/2026

⚠️Scam of the Week⚠️
This Charge Doesn't Add Up...

Imagine you're on the web when a full-screen alert takes over your browser. The alert shows an Apple or Amazon logo, a red warning symbol, and a message that your account was just used for a large purchase. The alert tells you to call a support number immediately, and it blocks the rest of the page so that number is the only thing you can click. You recognize the logo and are worried about the large purchase, so you quickly call the number.

But this alert is actually a scam! If you call the number, you won’t be talking to support staff, but a cybercriminal instead. They’ll ask you to verify your account by providing personal information, or they might try to get you to pay a fake fee. If you do this, you’ll be falling right into the cybercriminal’s trap!

Follow these tips to avoid similar scams:

1. Never call a phone number that appears in an unexpected alert on your screen. Instead, go to the organization’s official website to find the support number.
2. If an alert claims you were charged, sign in to your bank’s website directly to review your recent transactions.

Always stop and think before you take action!

This week's scam alert is brought to you by The KnowBe4 Security Team! We take our clients' online safety seriously and want to keep everyone informed about what's going on and what can put them at risk.

Feel free to contact our office with any questions!

08/18/2026

💵Choosing the Right Business Funding Solution💵

Access to capital helps small businesses succeed and grow. Whether you need to cover cash flow gaps, fund expansion plans or invest in long-term assets, it’s important to understand all your financing options. This will help you make informed decisions and select funding that aligns with your goals.

5 Financing Options to Consider...

Your business may have access to several types of financing, with most options falling into five broad categories:

1. Lines of credit. This is a common form of financing because of its simplicity and flexibility. Once approved, businesses can borrow up to their credit limit whenever needed without re-applying. It can help meet periodic, temporary cash flow shortfalls. It’s often wise to establish a line of credit before you need it, so funds are readily available.

2. Term loans. These loans are issued for a specific period. They’re repaid with interest over a set number of years and are mainly used to purchase fixed assets, such as machinery, vehicles, and equipment, or to support major business investments.

3. Commercial mortgages. This type of term loan is used to purchase new or existing commercial property, including retail space, industrial warehouses, and office buildings.

4. Government loan programs. Small Business Administration (SBA) loan programs, including 7(a) and 504 loans, are a significant source of funding for qualifying businesses. The SBA periodically updates program rules and lending limits, so review current SBA requirements before applying. Because the SBA guarantees a portion of these loans, lenders may extend financing to businesses that otherwise wouldn’t qualify under standard underwriting criteria.

5. Equipment leases. When acquiring equipment, leasing may be a better option than purchasing it outright. This can be especially beneficial for technology that may quickly become outdated. Leasing can help preserve cash flow while allowing businesses to upgrade equipment as needs change.

Alternative Funding...

Your business may also be able to access funding from less traditional sources. Examples include online lenders and specialized financing providers.

They may offer financing solutions that complement traditional lending options, including working capital loans, equipment financing, and factoring. Factoring allows a business to receive cash based on outstanding customer invoices, helping improve short-term cash flow.

Moving Forward...

Some financing options may offer tax advantages. Interest paid on business loans, including lines of credit, term loans, commercial mortgages, and SBA loans, may be deductible, subject to various rules and limits. Payments made under qualifying equipment leases are generally deductible as a business expense.

If you’re considering borrowing or exploring alternative funding sources, contact the office for help evaluating your options, understanding the financial and tax implications, and identifying financing solutions that best fit your needs.

Check out our Monthly Newsletter; all this information came through at the following link:
https://www.starcpa.com/newsletter.php

*Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. We would be happy to do the required research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter defining the scope and limits of the desired consultation services.

Take a look at our Newsletter page. Denise H. Lunt, CPA is a full service tax, accounting and business consulting firm located in Guymon, OK.

08/14/2026

Single? You Still Need an Estate Plan!

If you’re single with no children, an estate plan can help ensure your wishes will be carried out, and important decisions remain in trusted hands.

Without a will, state intestacy laws generally determine who inherits assets. While beneficiary designations may control certain accounts, assets without beneficiary designations or joint ownership typically pass according to state law. For singles with no children, state law may call for assets to be distributed to relatives such as parents, siblings, aunts and uncles, or cousins. If no relatives can be located, assets may pass to the state.

For wealthier singles, there are also estate tax considerations. Singles with significant assets should consider estate planning techniques such as trusts to help minimize taxes.

Additionally, powers of attorney can allow someone you trust to handle financial matters and make medical decisions on your behalf if you become incapacitated.

Check out our Monthly Newsletter; all this information came through at the following link:
https://www.starcpa.com/newsletter.php

*Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. We would be happy to do the required research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter defining the scope and limits of the desired consultation services.

Take a look at our Newsletter page. Denise H. Lunt, CPA is a full service tax, accounting and business consulting firm located in Guymon, OK.

08/13/2026

⚠️Scam of the Week⚠️
A Vote You’ll Regret!

Imagine you open WhatsApp, a popular messaging app, and see a message from someone you know. They send you a link and ask you to vote in an online contest—for example, for their niece in a dance recital or their pet in a costume contest. The message feels casual, but a little urgent, like something a friend would send in a rush. Since the message comes from someone you trust, you don’t feel worried about clicking the link.

But think twice before clicking. This is actually a scam to take over your WhatsApp account! Selecting the "vote" link opens a page that appears to be part of WhatsApp, asking you to verify or connect. This may seem like a harmless step, but if you do so, cybercriminals will connect to your account. Then, they can access your messages and contacts to learn your personal information. They can even forward the same scam to everyone in your contacts!

Follow these tips to avoid falling victim to this WhatsApp scam:

1. Be cautious of unexpected messages containing links, even if they appear to come from a real friend or family member.
2. Never link a new device to your account unless you're the one who initiated the connection. If you receive a message asking you to connect a new device, that’s a red flag for a scam.
3. Regularly check the devices linked to your WhatsApp account in your WhatsApp settings. If there are any devices you don’t recognize, unlink them.

Always stop and think before you take action!

This week's scam alert is brought to you by The KnowBe4 Security Team! We take our clients' online safety seriously and want to keep everyone informed about what's going on and what can put them at risk.

Feel free to contact our office with any questions!