5 Tax Updates That Could Save You Money (or Cost You If Ignored) 

Tax laws are always changing, and staying on top of them is the best way to avoid unnecessary penalties and unlock valuable savings. Below are five areas that could have a direct impact on your finances this year—and some of them may surprise you.

1. Your Retirement Plan Could Trigger a $150,000 Penalty

If you’re self-employed and have a solo 401(k) or similar retirement plan, you may be required to file Form 5500-EZ once your plan assets exceed $250,000.

• The risk: Missing this filing could mean penalties of up to $250 per day, capped at $150,000 per unfiled return.
  
  

• The good news: The IRS offers a Late Filer Penalty Relief Program—with fees capped at $1,500 per plan—if you act before penalties are assessed.
  
  

✅ Takeaway: If you have a self-employed retirement plan, double-check your filing obligations before July 31.

2. Turn Your Corporate Vehicle into a Tax-Smart Asset

If your corporation owns a vehicle that you also use personally, the IRS has strict rules about reporting personal use. Done correctly, however, your business may be able to deduct 100% of the vehicle’s costs (depreciation, fuel, insurance, and maintenance).

• If business use drops below 50%, you lose access to accelerated depreciation like Section 179.
  
  

• For high-value vehicles, you must use IRS valuation methods for personal use.
  
  

✅ Takeaway: Handle this correctly, and your company car can be a tax asset. Handle it incorrectly, and it could trigger amended W-2s or nondeductible expenses.

3. Personal Vehicles Can Deliver a Surprise Deduction

Even if you used your personal vehicle and deducted mileage (or received mileage reimbursement), you may be entitled to a hidden deduction when you sell or trade in that car.

This is because the IRS mileage rate already includes embedded depreciation. When you sell the vehicle, you can calculate a deductible ordinary loss tied to business use.

✅ Example: A $50,000 car used 80% for business, later sold for $20,000, could unlock a $12,937 deductible loss.

4. Why Landlords Should File 1099s

Many landlords assume they don’t need to file 1099-NECs for contractors (plumbers, electricians, etc.). While often true, choosing to file can strengthen your case for valuable tax breaks.

• Supports your claim that rental activity qualifies as a business under Section 199A.
  
  

• Helps unlock the 20% qualified business income (QBI) deduction.
  
  

• Bolsters eligibility for the de minimis safe harbor, which allows immediate deductions for repairs up to $2,500.
  
  

✅ Example: $20,000 in rental income could mean a $4,000 deduction, saving nearly $1,000 at a 24% tax rate.

5. Life Insurance: You Don’t Have to Die to Benefit

Permanent life insurance policies (whole life, universal life, indexed universal life) build cash value over time—and you don’t need to wait for a death benefit to use it.

Ways to access funds include:

• Withdrawals (tax-free up to your premiums paid)
  
  

• Loans (tax-free, with low interest, using your policy as collateral)
  
  

• Policy surrender or sale (which may trigger taxes, but can provide immediate liquidity)
  
  

✅ Takeaway: A properly structured policy can be a source of tax-advantaged cash flow during your lifetime.

Final Thoughts

From avoiding six-figure penalties to uncovering hidden deductions, these tax updates highlight why proactive planning matters.

Even small steps—like filing a 1099 for your rental property or correctly handling your company car—can mean thousands in savings.

👉 Want to see which of these opportunities apply to you? Contact us today, or read more in our detailed blog breakdown.