Cadman

Earned income tax credits.

For qualifying taxpayers who have three or more qualifying children, the tax year 2025 maximum Earned Income Tax Credit amount is $8,046, an increase from $7,830 for tax year 2024. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs. Read more here

Audit Trend Alert: Schedule C Scrutiny

The IRS's heightened focus on Schedule C filings has led to an uptick in scrutiny, particularly regarding deduction claims. Key areas to pay attention to include:

IRS Alert on Misrepresenting Wellness Expenses

The IRS has issued an alert regarding companies misrepresenting nutrition, wellness, and general health expenses as medical care for FSAs, HSAs, HRAs, and MSAs. This alert emphasizes the strict definitions of medical expenses under tax law, which do not typically include general health and wellness costs unless they are directly related to the diagnosis, cure, mitigation, treatment, or prevention of a disease.

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