2025 Tax Season - Alert #3
 

Digital Asset Reporting Update

If you have digital assets/crypto, 2025 is the first year that custodial brokers you might be using (Coinbase for example) are required to issue a 1099DA to you. A few highlights about the new 1099DA form

  • The custodial brokers have until Feb 15th to issue the 1099DA for 2025
  • The 1099DA will not include transfers between wallets
  • Activity will be reported in aggregate, not by transaction
  • The 1099DA is NOT required to include cost basis data for 2025


This last bullet is critical and will require you to provide your best estimate of the appropriate cost basis. Without this cost basis data, 100% of the 1009DA proceeds would be reported as taxable income.
1099DA Form
 

HR-1 (Big Beautiful Bill) call outs
 

As we have begun working on 2025 returns, we wanted to call out three areas of HR-1 that will require input from you (if they apply)
Close-up of a tip jar on a counter with some coins and a banknote inside_ labeled Tip Box in a caf or restaurant setting.

TIP

 INCOME
two clock bells and a stick with the words Overtime pay. the concept of overtime or payment by time

OVERTIME

INCOME
Car Loan Application Form Concept

CAR LOAN INTEREST

Tip Income

  • If you received tip income that was not reported on your W2 or if you are a small business that had 1099 income including tips (Uber driver, hair stylist, etc.), we need the amount of tips you received in 2025 to determine if you qualify for the potential exclusion of up to $25,000 of tip income.

Overtime Income

  • If you received overtime pay, most W2's will not report this separately in 2025. As a result, we need your final paystub for 2025 showing the amount of overtime to determine if you qualify for the exclusion of up to $12,500 (per filer) of overtime premium income.

New Car Loan Interest

  • If you purchased a qualifying new vehicle in 2025 (final assembly in the US), we need the VIN of the new vehicle purchased in order to determine if you qualify for a deduction of up to $10,000 of loan interest.


We are also including a very useful chart our strategic payroll partner (ADP) shared with us. This is a great summary of the key provisions of HR-1 (in particular the 2nd page).
HR-1 (OBBA) Reference Chart
 

RMD's for Inherited IRA's

We receive many calls asking what the Required Minimum Distribution (RMD) requirements are when a client has received an inherited IRA. Here are the basic guidelines:


If the owner of the IRA had started taking RMD's before they passed away, the beneficiary must take annual RMD's in years 1-9 and the IRA must be fully distributed by the end of year 10.


If the owner did not begin taking RMD's before they passed away, the beneficiary can take distributions anytime (i.e., no annual RMD required) but must fully distribute the IRA by the end of year 10.


If it is a ROTH IRA, no RMD's are mandated but the entire account must be distributed by year 10.

In case you missed them...

Tax Alert #1
Tax Alert #2
Dad Jokes My Favorite Type Of Punishment_ Trendy Dad Funny Jokes Quote Design For Tshirt_ Banner_ Poster_ Background

The only difference between death and taxes is that Congress doesn't meet every year to make death worse.

Will Rogers


Death, taxes and childbirth - there is never a convenient time for any of them!

Mark Twain

Balcerzak Financial Services, LLC | 6455 S Yosemite St. Suite 440 | Greenwood Village, CO 80111 US

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