News Updates

— The Internal Revenue Service today announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.

Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes (two of them implementing flat taxes), three states cutting corporate income taxes, and two states adopting new first-year expensing provisions. Generally, state tax changes take effect either at the start of the calendar year (January 1) or the fiscal year (July 1 for most states), with rate changes for major taxes typically implemented effective January 1—either prospectively, as in these cases, or retroactively, as may happen under legislation enacted in the new year.

The November 2024 General Fund Receipts news release has been posted to the Nebraska Department of Revenue's website.

A loophole in a new law allowed some taxpayers to get money back while many lost the chance.

Social Security benefits are not entirely tax-free. Up to 85% of your benefits can be taxed, depending on your income. Five things you or your older clients should know about Social Security include the tenet that income matters more than age.

Incoming state senators recently convened at the Capitol for several days of seminars and hands-on practice that gave them a peek at what they can expect when they begin work on Jan. 8.

A federal district court, finding that the Corporate Transparency Act (CTA) is likely unconstitutional, issued an order Tuesday prohibiting the enforcement of the CTA and the beneficial ownership information (BOI) reporting rule in the CTA's accompanying regulations.

Governor Jim Pillen is previewing some of his priorities for the 2025 legislative session. These initiatives, and others, align with his administration’s ongoing commitment to kids, taxes, agriculture and values.

To address the talent needs within the accounting profession and expand access to accounting careers, the American Institute of CPAs (AICPA) and the National Association of State Boards of Accountancy (NASBA) have proposed changes to the profession's model law. Here is information regarding each exposure draft, how to submit your comments, and links to the comment letters submitted by the Nebraska Society of CPAs to the AICPA and NASBA. All comment letters will be made public.

House Speaker Mike Johnson (R-LA) expressed caution regarding President-elect Donald Trump's proposal to eliminate income tax on tips, emphasizing the need for financial feasibility. "You've got to do the math," Johnson stated during an interview on CNN's State of the Union. He acknowledged the urgency of advancing Mr. Trump's economic agenda, which includes significant tax cuts, as Congress prepares for a challenging tax landscape in the coming year. Mr. Trump's plans aim to extend personal income tax cuts and reduce corporate tax rates, but Mr. Johnson highlighted the importance of ensuring these savings are sustainable. Meanwhile, Donald Trump Jr. noted that some cabinet picks may face controversy, stating: "Some of them are going to be controversial because they'll actually get things done." The transition team is prepared with alternative candidates if necessary, he added.

For the first time since 2020, the IRS announced a decrease in interest rates for tax overpayments and underpayments, effective January 1, 2025. The new rates will be 7% for individuals and 6% for corporations, down from 8%. This marks a significant change, as the last reduction occurred during the COVID-19 pandemic in 2020. The IRS noted: "Interest rates have been at their current levels of 8% for overpayments and underpayments for individuals since the fourth quarter of 2023." The rates are determined quarterly based on the federal short-term rate, with specific adjustments for corporations and large corporate underpayments.

The Experience, Learn & Earn (ELE) program currently has 105 students enrolled this fall, representing more than 50 employers, with registration for Spring 2025 open until January 1, 2025. Mike Decker, AICPA’s vice president of CPA examination and pipeline, stated: “That’s a testament to the enduring value of the CPA credential, from the newest graduates to mid-career professionals.” The program is designed for individuals who have completed their bachelor’s degree and core accounting classes but lack the 150 credit hours required for licensure. Participants can earn up to 30 university credits through affordable online courses, with support from participating employers, including flexible work schedules and tuition reimbursement. Wendy Garvin, NASBA executive vice president, noted the program's evolution, stating, “An expanded offering to individuals not associated with a participating employer is an exciting evolution of the program.”

Elon Musk and Vivek Ramaswamy, the leaders of President-elect Donald Trump's "Department of Government Efficiency," (DOGE) are reportedly keen to create a mobile app for Americans to file their taxes free with the IRS. Sources close to the matter have told the Washington Post that the pair see an opportunity to improve how millions of taxpayers interact with the federal government. Additionally, DOGE posted on X that “In 1955, there were less than 1.5m words in the U.S. Tax Code. Today, there are more than 16m words. Because of this complexity, Americans collectively spend 6.5bn hours preparing and filing their taxes each year. This must be simplified." However, changing the tax code would require an act of Congress, leaving unclear how the DOGE organization could resolve the biggest obstacle to a new free filing system. Kyle Pomerleau, a tax expert at the conservative-leaning American Enterprise Institute, pointed out that a mobile app would not be able to know how much small business owners spend on expenses, or how much of the year a child lives with one parent as opposed to the other — inputs that are necessary to produce a federal tax return.

FinCEN official says the reports “track more closely” with businesses created in 2024, which have a tighter deadline to file than businesses created earlier.

Gov. Jim Pillen is officially calling on Nebraska lawmakers to address “inconsistencies” in the state’s main school aid formula in the 2025 legislative session.

The AICPA Peer Review Board (PRB) has approved an update to peer review standards aimed at aligning them with new quality management (QM) standards. The Peer Review Standards Update (PRSU) No. 2, titled "Reviewing a Firm's System of Quality Management and Omnibus Technical Enhancements," is set for publication later this month. Key changes include revisions to terminology to conform with QM standards and adaptations to address risk-based considerations. The update will be effective for peer reviews starting on or after December 1, with QM-related revisions applicable for years ending on or after December 31, 2025. The board also decided that retiring partners may continue serving on peer reviews for up to 36 months.

The 2024 Nebraska Tax Incentives Annual Report has been certified to the Legislature and posted to the Nebraska Department of Revenue's website.

KPMG’s statement cited the time of and cost of the 150-hour rule as one of the top barriers that lead students to opt against becoming accounting majors, noting that they are already seeing the related shortage of accountants impact businesses and smaller firms.

Calling all CPAs — if you have been licensed for at least three years and have supervised newly licensed CPAs during the past year, you can volunteer to participate in an online survey and virtual focus group to provide feedback on the CPA Competency-Based Experience Pathway.

Tax and finance departments face a trifecta of concerns this year: increased regulations, constrained budgets, and a severe talent shortage. However, they’re optimistic about generative AI’s ability to relieve at least a little of the pressure.