Passelli Accounting Services, LLC

Passelli Accounting Services, LLC CPA specializing in small business taxes, individual taxes, tax planning, and bookkeeping.

Before the One Big Beautiful Bill Act, bonus depreciation was phasing out — 40% in 2025, 20% in 2026, gone by 2027. Busi...
09/07/2026

Before the One Big Beautiful Bill Act, bonus depreciation was phasing out — 40% in 2025, 20% in 2026, gone by 2027. Businesses were racing a calendar. Now, for qualified property acquired and placed in service after January 19, 2025, the rate is 100% with no scheduled sunset.

What that unlocks, particularly for property owners:

A building itself is 27.5- or 39-year property and gets no bonus. But a cost segregation study reclassifies components — electrical, specialized HVAC, flooring, site improvements — into 5-, 7- and 15-year lives that do qualify. At 100% bonus, those reclassified dollars come off in year one instead of over decades.

Qualified improvement property gets the same treatment. A $400,000 interior renovation of commercial space is fully deductible in the year placed in service rather than spread across 15 years.

Section 179 still has a role, especially for roofs, HVAC and security systems on nonresidential property. For 2026 the cap is $2.56M with a $4.09M phase-out.

Three caveats worth knowing before you get excited: bonus depreciation can create a net operating loss and Section 179 can't; states don't all conform; and accelerated depreciation gets recaptured when you sell.

Acceleration isn't a bigger deduction. It's the same deduction, earlier — which only helps if this year's rate beats the rate in the years you'd otherwise claim it.

There's a federal tax credit for paid family and medical leave that just became permanent, expanded, and meaningfully ea...
09/04/2026

There's a federal tax credit for paid family and medical leave that just became permanent, expanded, and meaningfully easier to claim. Most owners I talk to have never heard of it.

Section 45S provides eligible employers a general business credit of 12.5% to 25% of wages paid to employees on qualifying family or medical leave, for up to 12 weeks per year. The One Big Beautiful Bill Act made it permanent and widened who qualifies.

What changed for 2026:

• Part-time employees working 20 or more hours a week can be qualifying employees
• You can count employees at six months of service rather than a full year
• You can claim the credit on insurance premiums for leave coverage, not only on wages actually paid

That last one is the real shift. Notice 2026-28, issued August 5, explains the new premium method — and under it, the credit is determined without regard to whether any employee actually took leave that year. For a small employer, that converts an unpredictable credit into a budgetable one.

The catch: you need a written leave policy meeting the requirements, in place for the year you claim. 2026 is the first full year under the amended rules. Comments on the notice are due October 16.

If you carry leave coverage or are weighing it, price this out now.

The largest expansion of health savings accounts in two decades took effect this year, and many of the people who became...
09/02/2026

The largest expansion of health savings accounts in two decades took effect this year, and many of the people who became eligible have no idea.

Three changes as of January 1, 2026:

Bronze and catastrophic ACA plans now count as HSA-compatible. Most previously didn't qualify, which shut out a large share of marketplace enrollees. If you're self-employed and buying your own coverage, you may be able to open an HSA for the first time.

Direct primary care arrangements no longer disqualify you. If you pay a flat monthly fee to a primary care practice, you can still contribute as long as the fee is $150 or less per month for individual coverage ($300 for family). Those fees also became a qualified medical expense payable from the HSA.

Telehealth relief is now permanent. A plan can cover virtual care before you meet the deductible without costing you eligibility.

2026 contribution limits: $4,400 individual, $8,750 family, plus a $1,000 catch-up at 55.

Why it matters: the HSA is the only account in the code with a triple benefit — deductible going in, tax-free growth, tax-free out for medical costs. For a self-employed owner, it's often the most efficient dollar available after the retirement plan.

Review it before open enrollment, not during.

09/01/2026

The $600 1099 threshold survived since 1954. It did not survive the One Big Beautiful Bill Act.

For payments made in 2026, you file a 1099-NEC or 1099-MISC only once you've paid a vendor $2,000 or more for the year. The threshold indexes for inflation beginning in 2027.

Separately, the 1099-K threshold reverted to $20,000 and more than 200 transactions, retroactive to 2022. The $600 phase-in that had everyone worried about Venmo and PayPal never landed.

Three things not to misread:

The income is still taxable. Pay a contractor $1,900 and they still report it, you still deduct it. What changed is whether a form gets filed — not what's owed.

Some payments kept their old thresholds. Gross proceeds to attorneys stay at $600. Royalties stay at $10.

States don't automatically follow. Some conform to federal, some set their own. If you have filing obligations outside Florida, verify before assuming fewer forms.

The practical takeaway: your W-9 process shouldn't change at all. You won't know who crosses $2,000 until the year is over, and chasing a W-9 in January from a vendor you paid in March is exactly how penalties happen. Collect it before the first check goes out.

#1099

If you give to charity, 2026 changed the math. Three things took effect this year.1. A new floor for itemizers. You can ...
08/30/2026

If you give to charity, 2026 changed the math. Three things took effect this year.

1. A new floor for itemizers. You can deduct charitable contributions only to the extent they exceed 0.5% of AGI. At $200,000 of AGI, the first $1,000 of giving isn't deductible — donate $2,000 and half of it disappears. The floor applies to everything combined: cash and non-cash, public charities and private foundations.

2. A new deduction for non-itemizers. If you take the standard deduction, you can now deduct up to $1,000 of cash gifts ($2,000 joint) on top of it. No 0.5% floor applies here. It doesn't cover donor-advised funds or certain supporting organizations.

3. A cap for top-bracket donors. Taxpayers in the 37% bracket now receive only a 35% benefit from itemized deductions, charitable ones included.

C corporations get their own version: contributions below 1% of taxable income aren't deductible.

The planning response is the same one that came out of the 2017 standard deduction increase — bunching. If your annual giving sits near the floor, two years of gifts in one year clears it with room to spare, while giving evenly can waste part of both years.

The board member who gives $500 a year to the organization they serve may now get nothing for it. Worth a conversation before December.



Two Things Crypto Holders Need to Know Right NowFirst, the reporting regime is tightening.For 2025 transactions, brokers...
08/28/2026

Two Things Crypto Holders Need to Know Right Now

First, the reporting regime is tightening.

For 2025 transactions, brokers reported gross proceeds only. Most Forms 1099-DA arrived with the "noncovered security" box checked and no cost basis. For digital assets acquired in a custodial account after January 1, 2026, brokers must also report basis, acquisition date and holding period — and that data feeds the same automated matching system the IRS has run against stock sales for decades.

Translation: mismatches between your return and broker-reported data will generate notices automatically, at scale.

The gap that causes trouble is everything else. Assets held before 2026, moved between wallets, or run through DeFi remain noncovered, and the burden of proving basis is yours. Reconstructing it years later from exchange exports and on-chain history is slow and expensive. Build those records now, while you still can.

Second, there's an active scam. The IRS has warned about letters mailed to digital asset holders directing them to a fake "Digital Asset Compliance Portal" that mimics IRS.gov to harvest personal information. Verify anything you receive through your IRS Individual Online Account or with your tax professional before entering a single field.

And the baseline rule hasn't changed: you report digital asset income, gains and losses whether or not a 1099-DA shows up.

Third quarter estimated tax payments are due Tuesday, September 15.If you're self-employed, an S corp shareholder, a par...
08/27/2026

Third quarter estimated tax payments are due Tuesday, September 15.

If you're self-employed, an S corp shareholder, a partner, a landlord, or anyone with meaningful income not subject to withholding — this one's yours.

Two things worth checking before you send the number you guessed back in April:

Has this year actually looked like last year? A strong Q2, a property sale, a large distribution or a bonus changes the math. So does the opposite. If income is down, you may be overpaying and handing the government an interest-free loan until April.

Are you inside a safe harbor? Pay 100% of last year's tax liability — 110% if your prior-year AGI exceeded $150,000 — or 90% of this year's, and the underpayment penalty generally goes away regardless of what you owe next spring. For volatile income, the prior-year safe harbor is usually the cleaner target.

Three things people miss:

• The estimated tax penalty is not covered by the IRS's new automatic penalty relief
• Withholding is treated as paid evenly across the year, so a Q4 withholding bump can fix an earlier underpayment in a way a Q4 estimate can't
• Florida has no personal income tax, but property or business activity in another state can create estimates there

If you're unsure where you stand, a mid-year projection takes far less time than fixing it in April.

Treasury and the IRS released proposed regulations on August 20 covering what Trump Accounts can actually be invested in...
08/26/2026

Treasury and the IRS released proposed regulations on August 20 covering what Trump Accounts can actually be invested in — and the answer is narrower than many parents expected.

Refresher: a Trump Account is a new type of traditional IRA for a child under 18, created by the Working Families Tax Cuts. Children born 2025 through 2028 are eligible for a $1,000 government seed contribution, and parents and employers can add more.

The proposed rules limit investments during the "growth period" — from account opening through December 31 of the year the child turns 17 — to funds that track a qualified index of primarily U.S. companies, don't use leverage, and carry only nominal annual fees.

In practice: low-cost broad-market index funds and ETFs. No stock picking, no leveraged products, no high-fee funds.

Treasury's logic is that fees compound against a child the same way returns compound for them. Over a horizon this long, an expense ratio isn't a rounding error.

The regulations would generally apply to tax years beginning on or after January 1, 2026. Comments are open through October 20, 2026.

Worth thinking through before funding one: how a Trump Account interacts with a 529, a custodial account, or an existing gifting plan. These aren't interchangeable, and the withdrawal rules differ in ways that matter.

"No tax on overtime" may be the most misunderstood provision in the tax code right now. The IRS issued Fact Sheet 2026-1...
08/24/2026

"No tax on overtime" may be the most misunderstood provision in the tax code right now. The IRS issued Fact Sheet 2026-13 this month to clean it up.

Three things people get wrong:

1. Overtime is still taxed. This is a deduction on your return, not an exclusion from your paycheck. Withholding, Social Security and Medicare still apply to every overtime dollar.

2. Only the premium counts. On time-and-a-half, only the "half" qualifies. Ten OT hours at a $30 regular rate? The deduction is built on $150, not $450.

3. It has to be FLSA overtime. Extra pay required only by a union contract, state law or company policy doesn't qualify — just overtime mandated under Section 7 of the FLSA.

The limits: up to $12,500 ($25,000 joint), phasing out above $150,000 MAGI ($300,000 joint). Available whether or not you itemize. Runs 2025 through 2028.

The real change for 2026: employers must report qualified overtime in Box 12 of the W-2 under Code TT. That reporting was waived for 2025, and many workers reconstructed the number from pay stubs. Not anymore — if it isn't in Box 12, it isn't deductible. A self-prepared Form 4852 won't substitute; you'd need a corrected W-2c.

Employers: your payroll system needs to track this now, not in January.

Workers: check Box 12 against your pay stubs before you file.

08/24/2026

How to hire your children and cut your tax bill

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