Block Financial Solutions

🚨 Texas Franchise Tax Reports Are Due TODAY 🚨

If your total revenue was $2.65 million or more, a payment must be submitted by today.

If your revenue was below $2.65 million, no tax payment is due, HOWEVER your Annual Information Report still must be filed to avoid forfeiture of your entity.

If you are an ongoing bookkeeping client of Block Financial Solutions, this has already been handled for you.

Did you convert to an S Corp to save on taxes? But somehow you’re paying MORE?

There’s a very good chance the issue is your basis.

As an S Corp owner, you are required to track your stock basis every year. Most people don’t. Then tax season arrives carrying a baseball bat and poor communication skills.

Your basis generally includes:

* Money you personally put into the company
* Profits reported to you

Your basis is generally reduced by:

* Owner draws/distributions
* Losses previously taken

If you take distributions that exceed your basis, those excess draws become taxable capital gains.

Just because money came out of the business does NOT mean it’s tax free.

Reporting a loss or very low income means your basis is not increasing and therefore owner draws become taxable gains.

This is one of the biggest mistakes we see with S Corps, especially when owners are constantly pulling money out without proper bookkeeping or basis tracking.

If you are operating as an S Corporation, you are REQUIRED to pay yourself a reasonable salary through payroll on a W-2.

It is not optional. It is not a “loophole.” It is not something your friend on TikTok made up.

The IRS specifically requires S Corp owners who actively work in the business to take reasonable compensation before taking distributions.

No payroll = major audit risk, penalties, back payroll taxes, and a very unhappy IRS.

If your “tax professional” set up your S Corp but never discussed payroll with you, that should concern you.

Block Financial Solutions helps clients stay compliant AND strategic. There’s a right way to save money on taxes without creating a disaster later.

Block Financial has grown a lot—but one thing hasn’t changed.

We’re still hands-on, still accessible, and still focused on doing things the right way for every single client.

Over the past couple of years, we’ve helped more individuals and business owners than we ever expected, fixed a lot of messy situations, and built relationships that actually last.

We’re proud of the growth, but we’ve never wanted to be the kind of firm where you feel like just another number.

Every client matters. Every return matters. Every detail matters.

Grateful for the trust, the referrals, and the continued support.

We’re growing—just not at the expense of what got us here.

You must let us know ASAP if you need an extension !!!

💰 SELF-EMPLOYED? READ THIS BEFORE APRIL 15 💰

If you’re a business owner, you could still LOWER your tax bill for 2025… even right now.

👉 One of the most powerful (and overlooked) strategies:
Contributing to a SEP-IRA

Here’s the quick breakdown:
✔️ You can contribute up to 20% of your net self-employment income
✔️ Max contribution for 2025 is $70,000
✔️ This directly reduces your taxable income (aka… saves you money)

💡 Example:
Make $200,000? You could contribute around $40,000 and potentially save $13,000+ in federal taxes

🚨 Here’s the part most people miss:
If you file an extension, you can still fund your SEP-IRA up until October 15th

But…
👉 You MUST file or extend by April 15 to keep that option open

✔️ No account yet? No problem — you can open one quickly with major brokerages

This applies to:
• Sole proprietors
• Single-member LLCs
• Freelancers & 1099 earners

If you’re self-employed and not using strategies like this… you’re probably paying more in taxes than you need to.

💼 Block Financial Solutions

🚨 We’re almost at the finish line… just 8 days left! 🚨

If you haven’t filed yet, now is the time. Waiting until the last minute only adds stress (for you… and let’s be honest, for us too 😅).

At Block Financial Solutions, we’re working hard to get everyone taken care of before the deadline, but we cannot guarantee on-time filing without all required documents.

📌 Missing paperwork = extension
📌 No response = extension
📌 Last-minute submissions = likely extension

We’re here to help, but we’ve got to keep things moving for all of our clients.

Let’s get it done ✔️

Backed by Block!!!

🚨 16 DAYS LEFT TO FILE YOUR TAXES 🚨

Yes… that fast.
No… the IRS is not going to “just give you a few extra days.”

If you:
✔ Haven’t filed
✔ Haven’t sent your documents
✔ Are still “waiting on one more thing”

You are officially on borrowed time.

Extensions are an option…
But owing with no plan? That’s where problems start.

At Block Financial Solutions, we’re still taking clients — but spots are filling up fast

📲 Get on the schedule now before you’re stuck filing late or stressing over penalties

We get asked this all the time…
“If you already have access to my QuickBooks, why do you need my bank statements?”

Simple answer: Reconciliation.

And let’s clear something up…
QuickBooks (or any accounting software) is not perfect.
It only knows what gets entered. If something is missed, duplicated, or categorized wrong… your reports are wrong. Period.

Also… this isn’t some advanced, over-the-top process.
This is basic bookkeeping.

Every legitimate set of books should be reconciled monthly. No exceptions.

That’s why bank statements matter. They’re the source of truth.

Every month, we match your bank statements to your books to make sure:
✔ Nothing is missing
✔ Nothing is duplicated
✔ Transactions are categorized correctly
✔ Your balances actually match reality

And here’s the part people don’t always want to hear…
If your accountant isn’t asking for your bank statements, they’re not doing their job.

If your books aren’t being reconciled, they’re not accurate… it’s that simple.

📢 PSA for Business Owners 📢

If you own an S-Corporation or Partnership, your business tax return deadline is coming up fast. These returns are due in just 6 days.

Even if you plan to file an extension, it still needs to be submitted before the deadline to avoid penalties.

If you haven’t gathered your documents or spoken with your tax professional yet, now is the time to do it. Waiting until the last minute can limit your options and create unnecessary stress.

Mark your calendars and make sure your business return is handled before the deadline.

The truth about donations and deductions 👇

You donate $20–30k thinking Uncle Sam is about to clap… and then nothing changes. Here’s why.

1. The standard deduction is $31,500 (MFJ).
If your total itemized deductions don’t exceed $31,500, your charitable donations do absolutely nothing on your federal return.

Mortgage interest + property taxes (capped at $10k) + charitable donations + medical over 7.5% of AGI must be over $31,500 to matter.

If they aren’t? Standard deduction wins. Every time.

2. Only the amount ABOVE $31,500 helps.

Example:
Standard deduction = $31,500
Total itemized = $34,000

You only “benefit” from $2,500.

That $30k in donations didn’t reduce taxable income by $30k. It reduced it by $2,500.

Brutal but accurate.

3. Deductions reduce income, not tax dollar-for-dollar.

If you’re in the 22% bracket:

$2,500 × 22% = $550 in actual tax savings.

You gave $30,000.
You saved $550.

That’s not a rebate. That’s math.

4. Texas doesn’t give you a second chance.
No state income tax = no extra benefit there.

5. Strategy matters.

If you’re consistently donating $20–30k a year, you should be looking at:

• Bunching donations into alternating years
• Donor-advised funds
• Gifting appreciated stock
• QCDs after 70½

Generosity is admirable. But tax planning requires intent. If you’re going to give big, structure it smart so at least the tax code works with you instead of politely ignoring you.

💡 Tax Tip Tuesday

Ever wonder why a big loss in your business doesn’t create a huge refund?

Here’s why 👇

For pass-through entities like partnerships and S-corps, your business loss is not automatically fully deductible on your personal return.

Under IRS rules, your deductible loss is limited to:

1️⃣ Your basis in the business (IRC §§ 704(d) for partnerships and 1366(d) for S-corps)
2️⃣ Your at-risk amount (IRC § 465)
3️⃣ Passive activity loss limits if applicable (IRC § 469)

Let’s break that down:

✔ Basis Limitation
You can only deduct losses up to your tax basis in the entity.
Basis generally includes:
• Money you contributed
• Property you contributed
• Your share of income
• For partnerships, your share of liabilities
• For S-corps, only direct shareholder loans (not corporate debt)

If your loss exceeds your basis, the excess is suspended and carried forward until you restore basis.

✔ At-Risk Rules
Even if you have basis, you must also be economically “at risk” for the investment. Non-recourse financing often does not count (with some real estate exceptions).

✔ Passive Loss Rules
If you don’t materially participate, losses may be limited and carried forward until you have passive income or dispose of the activity.

📌 Bottom line:
A $100,000 loss does not automatically mean a $100,000 deduction on your 1040.

Losses are powerful, but they’re governed by multiple IRS limitation rules before they ever hit your refund.