Month: December 2025

Why Accurate Financial Records and Reporting are Vital to Your Restaurant’s Success

As we approach the end of the tax year, it’s more important than ever to for your financial records and reports to be in order. When it comes to your restaurant’s financials, accuracy and timeliness are paramount. To better understand the role of financial recordkeeping and reporting in the success of your business, let’s first distinguish between these two closely connected processes.

Financial Recordkeeping vs. Reporting

Financial recordkeeping is the process of tracking and recording all financial transactions that take place within a business, including sales, expenses, and payroll. Examples of financial records include journal entries, ledgers, receipts, and invoices.

Financial reporting, on the other hand, is the process of consolidating, analyzing, and communicating financial data to provide transparency, insights, and key metrics (e.g., cost of goods sold, food costs, labor costs, EBIDTA, gross profits, gross profit margin, menu item profitability, net profit margin, etc.). Some examples of financial reports include income statements, balance sheets, and cash flow statements.

Why are accurate financial records and reports so important?

Below are some of the functions that financial records and reports serve:

Provide valuable information to help you make data-informed business decisions.
Allow you to monitor your business’s performance and profitability.
Produce key metrics for budgeting, financial forecasting, and cash flow management.
Present a picture of your business’s financial health to stakeholders.
Attract and maintain investors by offering transparency and proving profitability.
Provide data for tax planning, helping you determine your eligibility for tax credits and minimize your tax liability.
Highlight opportunities for operational improvement and cost saving.
Help you detect issues early on, reducing the chance of costly errors, oversight, and theft.
Ensure compliance with tax and other regulations.

Tips for Accurate Recordkeeping and Reporting

Reconcile your books regularly. Routinely reconciling your accounts—that is, comparing your internal financial records with your external bank and credit card statements—acts as a critical internal control. Frequent bank reconciliations help to verify the accuracy of your financial records and detect potential discrepancies early on.
Establish and maintain other internal controls, such as segregation of duties, inventory management, internal audits, approval processes, access controls, and variance analyses (comparing actual figures against budgeted or forecasted amounts).
Consider using a point-of-sale (POS) system for efficient data tracking and management. Integrating your POS system with your accounting software can help to improve the accuracy of your recordkeeping and reporting processes.
Make sure you have the right people on your team, including a CPA who can support your business’s success through industry-specific bookkeeping, financial reporting, tax planning, and more.

Let RBT CPAs Support You

When it comes to choosing your team, consider partnering with RBT CPAs for remarkable service you can trust. RBT’s specialized restaurant accounting experts will help you keep your books in order throughout the year, ensuring the highest level of accuracy, timeliness, and compliance. Beyond managing your restaurant’s books, our team is also available to support all of your other accounting, tax, audit, and advisory needs. Give RBT CPAs a call today—and find out how we can be Remarkably Better Together.

New “No Tax on Overtime” Regulations: What Local Government Employers Need to Know

The “No Tax on Overtime” rule, part of the One Big Beautiful Bill Act passed in July, has created a temporary federal income tax deduction for qualified overtime pay. The deduction—which applies retroactively to overtime pay earned beginning January 1, 2025, and extends through December 31, 2028—imposes new reporting and compliance requirements on employers. Below are some key details of the new law, followed by the steps local government employers will need to take to ensure compliance for 2025 and beyond. Please note the following is not intended as tax advice, but rather as a summary of the new law and corresponding IRS guidance. For individualized tax advice, please reach out to RBT CPAs’ governmental accounting team.

“No Tax on Overtime” Key Points

For tax years 2025 through 2028, employees may deduct “qualified overtime compensation” from their taxable income (capped at $12,500 for single filers or $25,000 for joint filers).
“Qualified overtime compensation” is defined as the “half” portion of overtime pay required under the FLSA (Fair Labor Standards Act). Anything beyond the half (i.e. double time or more) is not subject to the deduction.
Note that the deduction applies only to the premium portion of overtime pay. For example, if an employee’s regular hourly rate is $20 per hour and the overtime rate is $30 per hour, only the $10 premium portion of overtime pay qualifies for the deduction.
The deduction applies to the federal definition of overtime, which is hours worked over 40 in a week—not over 8 hours in a day.
The deduction begins to phase out for taxpayers with a modified adjusted gross income (MAGI) above $150,000 for single filers and $300,000 for joint filers. The deduction phases out completely when MAGI reaches $275,000 for single filers and $550,000 for joint filers.
Tax forms (W-2s and 1099s) for 2025 will not reflect separate reporting of overtime compensation.
The IRS has announced transition penalty relief for tax year 2025, so employers will not be penalized for failing to separately report qualified overtime compensation amounts for 2025. However, employers are encouraged to track and report overtime pay as accurately as possible for 2025, so that employees can still claim the deduction.
New mandatory reporting requirements will take effect for the 2026 tax year.

Short-Term Employer Action Items

Overtime Pay Tracking and Reporting

For 2025, continue using current Forms W-2, 1099, and 941, as the IRS will NOT update these forms to reflect the new deduction this year.
Ensure payroll systems can accurately identify and track the “qualified overtime compensation” (the FLSA-mandated premium portion) for each employee.
The IRS encourages employers to provide employees with a separate accounting of qualified overtime pay for 2025 to help them claim the new deduction. This information can be provided to employees via an online portal, additional written statements, or in box 14 of the employee’s Form W-2.

Monitor IRS guidance for new or revised forms and reporting procedures for 2026.

Employee Communication

Consider notifying employees about the new deduction and the importance of accurate overtime reporting, as this may affect their tax filings.

Coordination with Payroll Providers

If you use a third-party payroll provider, confirm that they are aware of the new requirements and are updating their systems and processes accordingly. Some payroll preparers have stated that they will report qualified overtime amounts in box 14 of employee W-2s.

Next Steps

Now is the time to start reviewing your current payroll and reporting systems to ensure compliance with the new “no tax on overtime” rules. Stay alert for further IRS guidance, especially regarding new forms and procedures for 2026 and beyond. GFOA has released answers to Frequently Asked Questions regarding implementation of the new law. If you have any additional questions about implementation or compliance, please don’t hesitate to reach out to the governmental accounting team at RBT CPAs. Together, we can be remarkably better.

Expiring Clean Energy Tax Incentives and New FEOC Restrictions Under the OBBBA

Following the passage of the One Big Beautiful Bill Act (OBBBA) in July, many federal clean energy tax credits and deductions face accelerated expiration timelines or newly imposed restrictions. Below are some of the expiring clean energy incentives and expanded restrictions that could impact builders, landlords, commercial property owners, and real estate investors.

Clean Energy Incentives Set to Terminate

Section 25D Residential Clean Energy Credit—expires after December 31, 2025

The Residential Clean Energy Credit is a 30% credit that applies to the purchase of new, qualified clean energy property for a primary or secondary residence. Qualifying property includes solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and battery storage technology. To qualify for the credit, property must be fully installed and placed in service by December 31, 2025.

Section 25C Energy Efficient Home Improvement Credit—expires after December 31, 2025

The Energy Efficient Home Improvement Credit is a 30% credit (up to $3,200 a year) that applies to qualified energy-efficient improvements to a primary residence. Qualifying improvements include insulation and air sealing materials or systems, exterior doors, exterior windows and skylights, central air conditioners, natural gas/propane/oil water heaters, natural gas/propane/oil furnaces and hot water boilers, electric or natural gas heat pumps, electric or natural gas heat pump water heaters, biomass stoves and boilers, and home energy audits. To qualify for the credit, this property must be placed in service by December 31, 2025.

Section 45L New Energy Efficient Home Credit—expires for homes acquired after June 30, 2026

The New Energy-Efficient Home Credit is a tax credit of up to $5,000 per home available to eligible contractors who build or substantially reconstruct qualified new energy-efficient homes. This credit expires for homes acquired after June 30, 2026.

Section 179D Energy Efficient Commercial Buildings Deduction—expires for projects with construction beginning after June 30, 2026

The Energy Efficient Commercial Buildings Deduction is a tax deduction available to qualifying building owners who place in service energy-efficient commercial building property (EECBP) or energy-efficient commercial building retrofit property (EEBRP). The deduction will not apply to any property for which construction begins after June 30, 2026.

Section 30C Alternative Fuel Vehicle Refueling Property Credit—expires after June 30, 2026

The Alternative Fuel Vehicle Refueling Property Credit is a tax credit available to businesses and individuals who install qualified refueling or recharging property, including electric vehicle charging equipment, in a qualifying location. This credit expires for property placed in service after June 30, 2026.

Expanded FEOC Restrictions

FEOC (Foreign Entity of Concern) restrictions are regulations that limit or prohibit tax credits for entities or projects with significant ties to certain foreign nations—specifically China, Russia, North Korea, and Iran. The OBBBA extends FEOC restrictions to several additional clean energy tax credits, in an effort to reduce U.S reliance on foreign entities. Previously limited to the section 30D Clean Vehicle Credit and the section 48D Advanced Manufacturing Investment Credit, FEOC restrictions will now also apply to the following tax credits:

45Y Clean Electricity Production Credit
48E Clean Electricity Investment Credit
45X Advanced Manufacturing Production Credit
45U Zero-Emission Nuclear Power Production Credit
45Q Carbon Oxide Sequestration Credit
45Z Clean Fuel Production Credit

For most calendar-year taxpayers, the expanded restrictions will take effect beginning January 1, 2026. The new FEOC rules impact the real estate industry by limiting the eligibility of certain projects for renewable energy credits. We recommend that you check with your contractor to see if any of these restrictions apply to you.

Contact RBT CPAs for Additional Guidance

RBT CPAs’ real estate accounting team is here to help you take advantage of these clean energy tax incentives before they expire, and to navigate the new FEOC restrictions. And as always, our experts are available to support all of your other tax, accounting, audit, and advisory needs. Give us a call today and find out how we can be Remarkably Better Together.

Year-End Reminders for Veterinary Practices

As we approach the end of 2025, veterinary practices should consider what needs to be accomplished before December 31 for planning purposes. December is a critical time to tie up any loose ends, double-check your financial reporting, and take steps to reduce your tax liability for the current year. Below are some important reminders for veterinary hospitals as we close in on year-end.

New Equipment Purchases: If you need new equipment for your hospital, consider purchasing that equipment and placing it in service before December 31 to receive the tax benefit for 2025. Keep in mind that the One Big Beautiful Bill Act, passed in July, restored 100% bonus depreciation and expanded the Section 179 deduction. 100% bonus depreciation applies retroactively to qualifying property acquired and placed in service after January 19, 2025, while the Section 179 expansion is effective for tax years beginning after December 31, 2024.
Inventory: Inventory counts have an impact on financial reporting, including year-end profit and loss statements. Conduct a physical inventory count before or at year-end, ensuring that your system accurately reflects what you have.
Health Insurance Premiums: Health insurance premiums for shareholders who own more than 2% of an S corporation need to be reported on W-2s. Provide this information to your payroll provider before year-end to avoid having to amend W-2s.
Personal Use of Company Vehicles: Any personal use of company vehicles must also be reported on employee W-2s and should be reported to your payroll provider before year-end. Employees should keep detailed records of all business and personal use of company vehicles, including miles traveled, locations, dates, times, and the purpose of the travel.
PTET: Discuss the possibility of opting into the Pass-Through Entity Tax (PTET) with your CPA, if the option is available in your state. The PTET can reduce your taxable income by providing a workaround for the federal cap on state and local tax (SALT) deductions. PTET elections must be made by March 15.
Retirement Plan Contributions: Maximizing your contributions to employee-sponsored retirement accounts before December 31 will lower your tax liability for 2025.
Staff Bonuses: Employee bonuses are considered “supplemental wages” by the IRS, and are required to be properly reported and taxed. Year-end staff bonuses issued before December 31 can be written off for the current year.

Prepare for Year-End with RBT CPAs

Meet with one of our veterinary accounting professionals at RBT CPAs to complete your year-end checklist. RBT CPAs has been providing accounting, tax, audit, and advisory services to businesses in the Hudson Valley and beyond for over 55 years. Reach out to us today—together, we can be remarkably better.

Charitable Remainder Trusts: A Tax-Efficient Giving Strategy

Charitable remainder trusts (CRTs) can be an effective means of managing your wealth and achieving your charitable giving goals. Let’s go over the basics of charitable remainder trusts and their potential benefits.

What is a charitable remainder trust, and how does it work?

A charitable remainder trust (CRT) is a type of irrevocable trust that allows donors to donate to charity while also receiving certain tax benefits. The grantor of a charitable remainder trust makes contributions to the trust in the form of property, cash, or other assets. Either the grantor themselves or another designated beneficiary then receives distributions from the trust for life or for a set period of time (no longer than 20 years). After that time, the remainder of the trust’s assets is donated to one or more charitable organizations of the grantor’s choosing—hence the name “charitable remainder trust.”

Types of CRTs

There are two main types of charitable remainder trusts:

Charitable Remainder Annuity Trust (CRAT): pays a fixed dollar amount each year and does not allow additional contributions.
Charitable Remainder Unitrust (CRUT): pays a fixed percentage based on the trust balance (which is revalued annually) and allows for ongoing contributions.

Benefits of Charitable Remainder Trusts

Predictable income stream: A CRT provides a regular and reliable income stream to the non-charitable beneficiaries for the lifetime of the trust.
Immediate partial income tax deduction: A CRT provides a partial income tax deduction to the donor in the year the trust is created and funded. The amount of the deduction is limited to the value of the remainder interest that will go to charity. This amount will vary based on factors such as the payout rate of the trust and the ages of the noncharitable beneficiaries. The deduction is also subject to AGI limits and other limitations under the tax code.
Tax-free growth: Because the CRT is a tax-exempt entity, assets within the trust grow tax-free.
Deferred capital gains tax: CRTs avoid immediate capital gains tax on the sale of assets transferred to the trust.
Reduced estate taxes: Since a CRT is an irrevocable trust, the assets within the trust are removed from the grantor’s taxable estate, thereby reducing the grantor’s estate tax liability.
Asset protection: The assets in a CRT are protected from creditors and lawsuits.

Other Things to Know

Since a CRT is an irrevocable trust, the grantor relinquishes control of the trust’s assets to the trustee. Any assets that go into the trust cannot be returned.
The annual annuity distributed from the trust must be at least 5%, but no more than 50%, of the initial fair market value of the trust’s assets.
The portion donated to charity must be at least 10% of the initial value of the assets in the trust.
Based on how the trust is structured, the grantor or other beneficiaries may receive income from the trust annually, semi-annually, quarterly, or monthly.
Payments from a charitable remainder trust are taxable as income and must be reported to the IRS. CRTs must file Form 5227, Split-Interest Trust Information Return

Partner with RBT for Your Estate Planning

RBT’s Trust, Estate, and Gift team is here to help you establish and manage your charitable remainder trust. Our experienced professionals handle your trust’s accounting, tax compliance, and financial administration, so you can have the peace of mind that your assets are protected. Call us today and find out how we can be Remarkably Better Together.

Staying Compliant with the OBBBA’s New “No Tax on Overtime” Regulations