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Congress failed to reach an agreement on funding beginning October 1, 2025. Until further notice, the federal government is shut down.

Social Security Administration

During the federal government shutdown, payments to all people who currently receive Social Security benefits and Supplemental Security Income (SSI) will continue with no change in payment dates. You will still receive your payments on time.

Medicare and Medicaid will continue to operate uninterrupted.

Internal Revenue Service

IRS operations will continue normally for the first five business days of the shutdown,
Audits and taxpayer services will be paused, but revenue collections and installment plans will continue
Only efiled returns will be processed. Any mailed-in returns will be processed when the government reopens
Filing deadlines remain unchanged. Taxpayers who filed for an extension for their 2024 returns must still submit them by October 15, 2025, and tax-exempt organizations face a November 17, 2025 deadline. Taxpayers must continue to meet deadlines and make payments, even if IRS services are delayed or unavailable.

2026 Filing Season

The shutdown timing is critical for the IRS, which is actively preparing for the 2026 tax filing season. This year’s preparations are especially complex due to sweeping changes introduced by the new tax laws.

The legislation permanently implements many provisions of the 2017 Tax Cuts and Jobs Act, including the expanded standard deduction and revised tax brackets. It also introduces new deductions for tip income, overtime pay, and auto loan interest while repealing several clean energy credits.

Implementing these changes requires updated IRS guidance, revised forms, and reprogrammed systems, which could be delayed if the agency is forced to furlough staff. Any disruption now could ripple into the 2026 filing season, which may result in a delay for the opening of the filing season.

What Taxpayers Should Do

• Use electronic filing: E-filed returns are processed faster and are less likely to be affected by staffing shortages.
• Make payments on time: Even if the IRS is slow to process returns, penalties for late payments still apply.
• Document everything: Keep records of correspondence, payments, and filings in case of future disputes.

If you would like a consultation about how the furlough affects your finances or your tax return, feel free to call us at (631) 585-9698.

Filing your small business taxes doesn’t have to be scary.  By understanding and taking advantage of all the deductions available, you can significantly reduce your taxable income and keep more of your hard-earned money.  As a small business owner of a sole proprietorship, partnership, or LLC, you may be able to deduct many business-related expenses that you would not be able to deduct if you were just an employee.  These deductions don’t stop at simply reducing your taxable income either.  When you take small business deductions for taxes, you also reduce your income, which is subject to self-employment tax.

Self-employed health insurance deduction

If you have income from self-employment and buy your own health insurance, you may qualify to deduct your health insurance premiums as an adjustment to income.  To qualify for the self-employed health insurance deduction, you must be ineligible for health insurance benefits through an employer, your own, or your spouse’s.  The coverage can be for you, your spouse, and your dependents.  This tax deduction cannot be more than your business’s net income.

Business startup costs

If you are just starting, the IRS offers some valuable tax breaks for new small business owners.

If your startup costs total $50k or less, you can claim the business startup deduction, which allows you to deduct up to $5,000 of business startup costs and $5,000 of organizational costs.  If your startup costs exceed $50k, you can deduct a fixed amount of the expenses each year.

If you took out a business loan, you may deduct any loan fees or professional fees you had to pay to secure the loan.  

If you paid to have some new business cards made, you can also deduct the cost for those.

Internet and other service fees

The monthly fees you pay for internet service can really add up.  You may also be paying subscriptions for virus and malware control, professional references, and software subscriptions to keep your business activities running smoothly.

Internet and related service costs are all deductible for small businesses.  When getting your paperwork together to get your taxes done, take the time to look for all internet, subscription, and other service fees you pay that may entitle you to a deduction this tax season.

Phone service tax deductions

If you have separate phones for business use, whether landlines or cell phones, you can deduct the lines you use for your business in full.

If you have a second line or cell phone that you use for both business and personal calls, you can deduct a percentage of the cost of your phone service.  For example, if you use your cell phone for business purposes 75% of the time and personal calls for 

Professional dues and subscriptions

You can deduct the cost of trade journals, magazine subscriptions related to your work, and dues to maintain your professional license.   Professional dues and subscriptions add up, and they’re easy to miss as a deduction if you pay them automatically every year.  

You can’t deduct dues to clubs the IRS considers to have more of a social or recreational aspect, such as dues to business, social, athletic, luncheon, sporting, airline, and hotel clubs.

Cost of Sales

If you sell products you make or buy in your business, the cost of those products can be a significant portion of your total business expenses.  That’s why it’s essential to calculate the deductible amount of your cost of goods sold each year.

Materials and supplies you use to make products, whether or not they become part of the products, should be included in the cost of goods sold.  An expense is considered inventory if it is used in the manufacture or mining of the goods you sell.  For example, manufacturing labor is included in the cost of goods sold.  Selling and administrative labor costs are not.

Bad debts

If someone owes you a debt that comes from operating your business, you can write off that debt on your business return.

If you make loans in the course of your business to suppliers, clients, employees, and so on, you can take a business deduction for the bad debts when these loans become uncollectible.

Car expenses and mileage

If you use your vehicle for business travel, your mileage and business car expenses can provide a valuable tax deduction.  Track your business miles when visiting clients or making purchases to maximize deductions.

For 2025, you can choose between the standard mileage rate of 70 cents per mile or deduct actual vehicle expenses when driving your car for business use.  The IRS requires tracking of business, commuting, and personal miles (and the business purpose of your miles), regardless of the method chosen.  If opting for actual expenses, keep records of gas, maintenance, insurance, and registration fees.

Home office deduction

If you have an area in your home that you use as an office or for any other business purpose, you may be able to take a deduction for your home office expenses, but — you guessed it — there’s a catch.

There are specific rules for claiming the home office deduction.  The office space must be solely devoted to your business and nothing else.  You can deduct expenses based on the square footage that you use exclusively for business.

When you claim a home office, you deduct direct and indirect expenses

Direct expenses are those that apply only to your home office, such as painting or repairing just your office.  You claim 100% of direct costs.

Indirect expenses include a percentage of the amount you pay for electricity, rent, and other household expenses.  To find the percentage, divide the total square footage of your home by the number of square feet in your home office.

If finding all those utility bills and other receipts is a problem, the IRS has another option.  You can use a simplified home office deduction, which allows you to take a flat $5 per square foot deduction for your home office, up to a maximum of 300 square feet.

 Contract labor costs

If you hire any independent contractors or freelancers to do work for your business, you can also deduct any amounts paid from your taxable business income.

Self-employment tax

As a self-employed business owner, you pay the full Social Security and Medicare tax on your self-employment income.  Your employer does not share in the cost.  To help compensate for this, the IRS allows you to deduct one-half of your self-employment tax on your tax return.

If you would like a consultation about small business deductions, feel free to call us at (631) 585-9698

Driving for Uber or Lyft can be a great way to earn extra income, but tax season can confuse new drivers. Rideshare drivers are independent contractors, so they don’t have taxes automatically withheld from their earnings. Instead, they must report their rideshare income and can take advantage of many tax expenses to reduce their income and tax liability. One of the best ways to lower your tax bill is by claiming every business expense available. Do Uber and Lyft take out taxes? Uber and Lyft do not withhold income or self-employment taxes from your earnings. As an independent contractor, you are responsible for setting aside money for Social Security and Medicare taxes and making quarterly estimated tax payments to the IRS if necessary. Who needs to pay estimated taxes? Anyone who expects to owe at least $1,000 in taxes from self-employment income must make quarterly estimated tax payments to the IRS. If you file your taxes with us, we can help you calculate and set up automatic estimated tax payments. Which Lyft and Uber tax forms do rideshare drivers receive? If you process at least 200 transactions with at least $20,000 in gross trip earnings, you will receive a Form 1099-K. If you earn at least $600 in non-driving earnings, such as referrals, on-trip promotions, or other incentives and bonuses, you will receive a Form 1099-NEC. Drivers may also receive a tax summary from the rideshare service detailing their ride payments, non-ride earnings, and business-related expenses such as fees and tolls. Uber and Lyft often provide these to drivers with their end-of-year statements. All these documents should be available to you by Jan. 31. Even if you do not receive a Lyft or Uber Form 1099, you must report all rideshare income on your tax return, so keeping your records is very important. Top tax deductions for rideshare drivers As a rideshare driver, your most significant tax deduction is typically for your car. The IRS allows you to deduct miles driven for business use, which includes: • Driving to pick up a passenger • Transporting a passenger to their destination • Driving between fares There are two methods for deducting mileage. The standard mileage deduction method allows you to deduct a set rate per mile driven for business. For 2025, the rate is $0.70 per mile. The IRS requires detailed records of all business miles, so it’s essential to keep an accurate mileage log or use a mileage tracking app (examples include MileIQ and Everlance) to keep track of your business-related driving. The actual expenses method allows you to deduct the specific car expenses associated with your rideshare business, such as gas costs, vehicle repairs, and maintenance. Depending on your situation, this requires more detailed record keeping but may lead to a bigger deduction. If you opt for the actual expenses method instead of the standard mileage deduction, you can deduct a portion of the costs related to your rideshare vehicle. Eligible vehicle expenses include: • Gas • Car registration fees • Oil changes • Routine maintenance and repairs • Car insurance • Car washes or detailing • Vehicle depreciation (only if your business use of the car is greater than 50%) • Lease payments or car payments To claim these tax write-offs, you’ll need to calculate the percentage of your car’s use for business-related purposes and keep detailed records of all expenses. If you only use your vehicle for business, your expenses are 100% deductible. If you financed your vehicle, you can deduct the interest paid on your car loan, even if you use the standard mileage deduction instead of the actual expenses method. You can also deduct any tolls and parking fees paid while actively driving for Uber or Lyft. However, you cannot deduct fees paid during personal trips, parking tickets, or traffic fines. Since your mobile phone is an essential tool for rideshare driving, you can deduct: • A percentage of your phone bill (proportional to business use) • The cost of your mobile phone (if purchased solely for business use) • Cell phone accessories used for business purposes, like chargers and mounts You can write off 100% of your phone expenses as a tax deduction if you use a separate business phone exclusively for rideshare services. If you also use your phone for personal use, it’s best to keep a log of your work hours to help you determine how often you use your phone for business purposes. You can deduct the fees and commissions charged by the rideshare platform as business expenses. Deductible fees can include: • Uber and Lyft commissions • Booking fees • Tolls paid through the app • Referral fees • Mileage tracking app subscription The year-end statements you get in the mail from the rideshare service should list any fees and commissions you paid. You can also view these figures via your online account or driver dashboard. Expenses related to passenger comfort and safety are deductible, including: • Music streaming subscriptions (if used for passenger enjoyment) • Extra phone chargers for guests to use • Bottled water and snacks for passengers • Seat covers or cleaning supplies to maintain a tidy vehicle • First aid kits • Jumper cables • Roadside assistance plans These costs qualify as business expenses provided they are for your rideshare work. If you are a self-employed rideshare driver, you can deduct your health insurance premiums, including coverage for yourself, your spouse, and your dependents. However, this deduction has some limitations: • If rideshare driving is your primary job, you can deduct the full cost of your health insurance premiums as an adjustment to income on your tax return. • If you have another job offering health insurance but choose to purchase your own plan, you may not be eligible for this deduction. • The deduction applies only to months when you were not eligible for an employer-sponsored health plan. It is essential to keep records of your health insurance payments so that we can determine the amount you are eligible to deduct. For any other questions about taxes on tips, we’re here to help. Call (631) 585-9698 for a free consultation to determine how we can best serve you–contact us today.

Social Security benefits provide a source of income for retirees and are funded by a payroll tax on wages. How much tax you pay on your Social Security benefits depends on your total income, including other income sources besides Social Security. The federal government taxes retirement benefits for many people, but a portion of those benefits is tax-exempt. Generally, the lower your retirement income, the larger the exemption you’ll receive. To determine the taxable percentage of your Social Security income, the IRS looks at two things: 1. Your annual combined income: This includes any income you earn from wages, capital gains, retirement plan distributions, pension payments, business income, and half your Social Security benefits. 2. Your marital status: If married, your taxable limit will be higher. Supplemental security income (SSI) is not taxable. This benefit is for low-income people who are blind, 65 or older, or have a qualifying disability. Every year, the Social Security Administration sends a form SSA-1099. This form shows the total Social Security benefits you received during the tax year, including monthly retirement, survivor, and disability benefits. If you have not received your form SSA-1099 when it is time to file taxes, you can get a new copy from the Social Security Administration’s website. Income thresholds and taxation rates You must pay tax on Social Security payments once your annual taxable income reaches $25,000 (or $32,000 if you are married and file jointly). How much tax you pay depends on how far you exceed the limit. • If you file as an individual: • Up to $25,000: No tax • $25,000–$34,000: Up to 50% of your benefits may be taxed. • More than $34,000: Up to 85% of your benefits may be taxed. • If you file a joint return: • Up to $32,000: No tax • $32,000–$44,000: Up to 50% of your benefits may be taxed. • More than $44,000: Up to 85% of your benefits may be taxed. If you need more information or have questions about Social Security benefits and how they impact your taxes, we’re here to help. Contact us today, give us a call at (631) 585-9698.

Choosing your legal business structure is one of the most important decisions you will make as a small business owner. As with most business decisions, there is no one-size-fits-all solution for selecting the best option for your business formation. The classification you choose ultimately depends on your business goals, ownership structure, and more.

But how do you determine whether a Limited Liability Company (LLC) or a Corporation is best for your business?

LLC vs. Corporations at a glance
Both are separate legal business entities that offer liability protection for their owners and have state compliance requirements that they must meet

From there, each business classification has its unique requirements depending on the type of corporation or LLC. The main aspects include the ownership restrictions, management structure, and taxation of each kind of business.
Ownership and management

LLCs
LLCs can have one owner or multiple owners called members. They have a very flexible ownership structure — they can be owned by individuals, trusts, estates, other LLCs, corporations, and foreign individuals.

LLCs also have more flexibility in distributing income, losses, and credit items

LLCs allow for greater flexibility in their management structures. Members can manage the LLC themselves or hire a management team to handle business contracts and day-to-day operations. Most states, including New York, require members to explain their management structure in their Articles of Organization document.

Corporations
The owners of a corporation are called shareholders. Small corporations are limited to 100 domestic shareholders. These corporations can only be owned by individuals, estates, and certain trusts (not other corporations, LLCs, or partnerships). The ownership percentage is proportional to the number of stocks they own. Income, losses, and credit items are distributed proportionally based on the number of shares owned.

Unlike LLCs, it is relatively easy for corporations to transfer ownership or authorize additional shares to their owners

Pros and cons of LLCs and Corporations
LLC pros:
• Limited liability protection for your personal assets
• No double taxation
• Management flexibility
• Easier to create and operate than a corporation
LLC cons:
• Harder to transfer ownership
• Profits subject to Social Security and Medicare taxation
• Fewer fringe benefits – these must be treated as taxable income
Corporation pros:
• Limited liability and perpetual existence (if the shareholder passes away, the corporation continues to exist)
• No self-employment tax to worry about
• Only subject to pass-through taxation – one of the most valuable benefits of being an S corp
• Losses can be written off on your personal tax return
Corporation cons:
• Limited ownership options and growth potential
• Must pay a reasonable wage to employee-shareholders (the IRS tends to scrutinize this)
• Must pay payroll tax to make up for no self-employment tax
• Compliance costs can be high

We can help you choose the appropriate business structure, make the filing process as smooth as possible, and ensure that all the necessary requirements are met.

Call (631) 585-9698 for a free consultation to determine how we can best serve you and your business–contact us today.