Businesses are reminded to review and update their emergency preparedness plans

As hurricane and wildfire season peaks, the IRS is reminding businesses to update their emergency preparedness plans. This reminder (IR-2025-89) comes as part of National Preparedness Month but applies year-round.

Businesses should safeguard critical financial records such as tax returns, payroll data, and insurance policies. Cloud storage and digital backups ensure that records remain accessible even if offices are damaged.

The IRS also recommends documenting valuable equipment and assets through photos or videos to support insurance claims and tax relief applications. In federally declared disasters, the IRS often grants extended filing and payment deadlines, but proper documentation is key to receiving relief.

Small businesses should also review continuity plans, including evacuation procedures, employee contact lists, and backup operations. Reviewing insurance coverage to ensure it reflects current needs is equally important.

By taking simple steps now, small business owners can reduce disruption, protect employees, and recover more quickly in the event of a disaster. Preparedness not only protects financial health but also builds resilience for the business and its community.

Final SECURE 2.0 rules clarify Roth catch-up contributions for retirement plans

The IRS has released final regulations on several provisions of the SECURE 2.0 Act, including new Roth catch-up contribution requirements for retirement plans. This is an important update for small business owners who sponsor 401(k) or similar retirement plans.

Catch-up contributions allow employees aged 50 or older to save more for retirement. Under the new rules, higher-income earners making catch-up contributions must designate those amounts as Roth (after-tax) contributions.

This affects payroll, plan administration, and employee communications. Small businesses should confirm that their plan providers and payroll systems are prepared for the change. Employers should also be ready to explain the difference between Roth and pre-tax contributions to employees who may be impacted.

Other SECURE 2.0 provisions expand access for part-time employees and increase tax credits for small businesses that start retirement plans. These incentives can make offering a plan more affordable while helping attract and retain staff.

The IRS’s final regulations (IR-2025-91) provide clarity, but compliance may still be complex. Business owners are encouraged to work with retirement plan administrators and financial advisors to implement the changes correctly. By doing so, they can meet obligations, avoid penalties, and demonstrate care for their employees’ long-term financial security.

A warning is issued about false tax credit claims spreading on social media

The IRS is warning taxpayers about fraudulent tax schemes spreading on social media, particularly involving the Fuel Tax Credit and the Sick and Family Leave Credit. These schemes encourage ineligible claims, resulting in inaccurate returns and significant penalties.

Already in 2025, the IRS has assessed $162 million in penalties tied to false claims (IR-2025-90). For small business owners, this is a reminder to be cautious and ensure tax filings are accurate and supported by documentation.

The Fuel Tax Credit, for example, applies only to off-highway business use, such as farming equipment. Misusing it — or claiming credits unrelated to actual business activities — can lead to audits, denial of refunds, and fines.

To protect themselves, business owners should:

● Work only with credentialed, reputable tax professionals.

● Review tax returns carefully before filing.

● Rely on official IRS resources, not unverified online advice.

While most preparers are trustworthy, some engage in fraud. Asking questions, keeping good records, and staying alert can help businesses avoid problems. By remaining vigilant, small business owners can safeguard their operations and focus on growth rather than costly disputes with the IRS.

IRS New guidance on the “no tax on tips” provision supports service-based businesses

The service industry — including restaurants, bars, salons, and hospitality businesses — often relies heavily on tips as a part of employee compensation. With the passage of the One, Big, Beautiful Bill (OBBB), the IRS has issued new guidance clarifying how tips are treated for tax purposes.

The regulations list nearly 70 occupations where tips are customary — from bartenders and servers to tour guides. The guidance also defines “qualified tips,” helping employers understand which tips may be eligible for tax benefits or deductions.

For small business owners, this means reviewing payroll systems to ensure that tips are accurately tracked and reported. Many point-of-sale systems already handle this, but employers should confirm that their processes align with the new IRS standards. Accurate reporting protects both the business and employees from penalties.

The IRS is also inviting public comments on the proposed regulations. This gives business owners and industry associations a chance to share their input before the rules are finalized.

Ultimately, the guidance aims to support fairness for employees while simplifying compliance for employers. Service businesses should take this opportunity to review procedures, educate staff, and work with tax advisors to stay compliant.

Mark Your Calendar: Upcoming Tax deadlines Ahead

September 15

● Individuals: Pay the third installment of 2025 estimated taxes (Form 1040-ES) if not paying enough through withholding.

● Calendar-year corporations: Pay the third installment of 2025 estimated income taxes (Form 1120-W for records).

● Calendar-year S corporations:

○ File 2024 income tax return (Form 1120-S) and provide shareholders with Schedule K-1 if a six-month extension was filed.

○ Make 2024 contributions to employer-sponsored retirement plans (if a six-month extension was filed).

● Calendar-year partnerships: File 2024 income tax return (Form 1065 or 1065-B) and provide partners with Schedule K-1 if a six-month extension was filed.

● Employers: Deposit Social Security, Medicare, and withheld income taxes for August (monthly deposit rule).

● Employers: Deposit nonpayroll withheld income tax for August (monthly deposit rule).

September 30

● Calendar-year trusts and estates: File 2024 income tax return (Form 1041) if a five-and-a-half-month extension was filed. Pay any tax, interest, and penalties due.

October 10

● Individuals: Report September tips of $20 or more to employers (Form 4070).

Review Your Estimated Taxes Before Year-End

As a small business owner, staying ahead on taxes isn’t just about avoiding penalties—it’s about protecting your cash flow and making smarter financial decisions. September is a key month because the third installment of 2025 estimated taxes is due. This is the perfect time to pause and review whether your tax payments align with the income your business has actually earned so far this year.

Many owners set their estimated tax amounts early in the year, based on projections. But businesses rarely run exactly to plan—revenues may rise faster than expected, or expenses may not be as high as forecast. If your estimated payments are too low, you risk underpayment penalties and a surprise bill at tax time. If you’ve been overpaying, you may be tying up cash that could be reinvested into operations, payroll, or growth.

To make sure your payments are on track, consider using the IRS Tax Withholding Estimator, a free tool that helps you calculate the right amount. Even better, review your year-to-date financials with your bookkeeper or CPA. A mid-year or “third quarter” check-in can help adjust payments, plan for deductions, and make sure retirement contributions or other tax-advantaged strategies are fully utilized.

This review is also a chance to plan ahead for year-end. By adjusting now, you can free up cash, avoid stress, and reduce surprises. Remember—good tax planning isn’t about reacting at filing time, it’s about staying proactive throughout the year.