As a business owner, your vehicle may be an essential tool for operations, and it’s possible to reduce your tax burden by properly deducting vehicle-related expenses. But did you know you have options? Whether you own or lease a vehicle for business, there are ways to maximize your deductions, and it all starts with understanding the choices available to you.

The Difference Between Actual Expenses and the Standard Mileage Deduction

When it comes to deducting business vehicle expenses, you generally have two options: the actual expenses method and the standard mileage deduction. Each has its advantages, so let’s break them down:

Method 1: Actual Expenses

Under this method, you can deduct the actual costs of using your vehicle for business. This includes:

• Gas, oil, and maintenance
• Repairs and tires
• Insurance premiums
• Loan interest
• Depreciation (more on that below)

For business owners who use their vehicles frequently, this method can offer significant savings. However, it’s important to track all the costs associated with owning and maintaining your vehicle. Keeping accurate records of these expenses is essential to substantiate your deductions.

Method 2: Standard Mileage Deduction

Alternatively, you can opt for the IRS standard mileage rate for calculating your deduction. This rate covers most vehicle-related expenses like gas, maintenance, insurance, and even depreciation. It simplifies the process since you don’t have to track individual expenses, but it’s important to note that for some vehicles, especially larger ones, the actual expenses method might yield a higher deduction.

For 2025, the IRS standard mileage rate was 70 cents per mile. As of December 29, 2025, the Internal Revenue Service announced that the optional standard mileage rate for business use of automobiles will increase by 2.5 cents in 2026, to 72.5 cents per mile. To claim this deduction, you will need to track the number of miles you drive for business purposes.

Understanding Depreciation: A Key Factor for Business Vehicle Deductions

When you own a business vehicle, you can depreciate its value over several years. Depreciation allows you to deduct a portion of the vehicle’s cost each year, reducing your taxable income over time. The IRS offers specific guidelines on how to calculate depreciation, but it’s essential to keep accurate records to ensure you’re claiming the right amount.

Here are some important considerations about depreciation:

• Vehicles with a Gross Vehicle Weight (GVW) under 6,000 pounds are considered luxury automobiles and have depreciation limits.
• Vehicles with a GVW over 6,000 pounds may qualify for accelerated depreciation, allowing you to deduct a larger portion of the vehicle’s cost in the earlier years of ownership.
• If you don’t use the vehicle exclusively for business purposes, depreciation deductions will be limited based on the percentage of business use, and if you go below 50% business usage, depreciation methods are further limited.

Depreciation is particularly useful for larger vehicles, as it can significantly increase your deductions over time. However, when you sell or dispose of the vehicle, you’ll need to account for depreciation recapture, which could impact your tax return.

The Importance of Contemporaneous (or Real-Time) Mileage Logs

Regardless of whether you choose the actual expenses method or the standard mileage rate, keeping contemporaneous mileage logs is a must.  You can even do this in your QuickBooks.

Contemporaneous refers to keeping real-time records of your mileage, each day, as it’s happening — not logging trips after the fact, at year-end when you’re trying to document for a tax deduction.

For each trip, make sure to track:

• The date of the trip
• The destination
• The business purpose of the trip
• The starting and ending odometer readings

Why is this so important? If the IRS ever audits your business, having detailed, up-to-date mileage logs will be essential for proving your deductions. Fortunately, there are many apps and tools available to make this process easier and more efficient, so you can track your mileage on the go.

Key Takeaways

• Actual expenses offer a deduction for all costs associated with vehicle ownership, including gas, maintenance, insurance, and loan interest, along with depreciation.
• The standard mileage deduction simplifies the process by offering a fixed rate for business miles driven.
• Depreciation can reduce taxable income over time, but be sure to track it correctly.
• Contemporaneous mileage logs are critical for both methods to ensure you’re prepared in case of an audit.

Need Help? Let’s Talk.

Whether you’re unsure which method is best for your business or you need help keeping your mileage logs in order, we’re here to assist you. Reach out today to schedule a consultation.

If you want trustworthy financials — the kind your accountant, tax preparer, or board can rely on — one of the simplest things you can do in QuickBooks is set a closing date password. This small step helps protect the accuracy of your numbers and prevents accidental changes after a period has been finalized.

At New Business Directions, we work with business owners who want to grow their business without losing their minds. One way we can help you retain your sanity? Teaching you how to use this simple QuickBooks feature: setting a closing date password in QuickBooks.

Why You Should Set a Closing Date Password in QuickBooks

Imagine you’ve just sent your year‑end backup file to your CPA or auditor. Later, someone edits a past‑dated transaction in QuickBooks — changing amounts or dates that have already been reported. That creates discrepancies and can trigger confusion, extra work, or even incorrect tax filings.

A closing date password “locks” your reporting period so no one can modify the numbers without explicit permission. It’s a simple but powerful safeguard that protects your data integrity.

When to Set a Closing Date Password

• Year‑End: A best practice for most organizations — especially if you’re sending data for taxes or audits.
  
• Quarterly: If your board reviews quarterly reports, lock the books after each reporting cycle.
  
• Before External Reporting: Anytime you share your numbers externally, a closing date password adds peace of mind.

Step-by-Step Tutorial: How to Set the Closing Date Password

1. Log in as the Admin user (only an admin can change this preference).
   
2. In QuickBooks, go to Edit > Preferences > Accounting > Company Preferences.
   
3. Click Set Date/Password, and choose the closing date for the period you want to lock.
   
4. Exclude non‑posting transactions like estimates or purchase orders — they don’t affect financial results and can remain flexible.
   
5. Choose your password. Use something memorable (and meaningful!) to your team that’s also secure.

Once it’s set, QuickBooks will prompt anyone trying to enter or change a transaction dated before the closing date to enter the password. If they don’t have it — or shouldn’t be making the change — they won’t be able to proceed.

How to Monitor What Happens in QuickBooks After Closing

In the Accountant version of QuickBooks, you can run:

• Audit Trail Reports: shows who made changes and when.
  
• Closing Date Exception Reports: shows edits that occurred in closed periods and what was changed.

These tools help you keep an eye on your file’s history, giving you confidence that your books stay clean and reliable.

Final Thoughts

Setting a closing date password is more than a QuickBooks setting — it’s part of a good accounting discipline that supports accurate reporting, easier audits, and fewer surprises at tax time.

If you ever need support with QuickBooks setup, cleanup, training, or workflow improvements, we’re here to help. Explore resources on our website, subscribe to our newsletter, and learn how we can help bring clarity and confidence to your accounting system. 

As the year winds down, it’s time to get your 1099 reporting strategy in order. Whether you run a business or a nonprofit, staying compliant with IRS information return rules isn’t optional — and mistakes can be costly.

From collecting Form W-9s from every service provider to understanding which 1099 form applies (and when it’s due), the details matter. This guide walks you through the essential steps for the 2025 tax year, including updated thresholds, key deadlines, and practical tips to streamline your reporting process. Let’s break down what you need to know — and do — before January 31, 2026, rolls around.

1. Collect and Maintain a Form W-9 from Every Service Provider (Mandatory)

You must obtain a completed Form W-9 from every service provider you engage (including sole proprietors, partnerships, corporations, and LLCs) — without exception.

• The W-9 gives you the name, taxpayer-identification number (TIN), and entity type information you need in order to determine whether you must issue a 1099.
• If the TIN is a Social Security Number, it must match the person’s name on the W-9 exactly (via IRS TIN matching).
• If the TIN is an Employer Identification Number (EIN), it must match the business name on the W-9.
• Retain the W-9 in your records for potential IRS verification; failure to collect may trigger backup withholding or penalties.

2. Understand the Difference Between Forms 1099-NEC and 1099-MISC

• Form 1099-NEC is used for non-employee compensation — payments for services (including attorneys, contractors, consultants) when made in the course of your trade or business.
• Form 1099-MISC is used for payments such as rent, royalties, prizes/awards, or other miscellaneous income not reported on another 1099 form.

3. Save These Due Dates for 1099s

For Form 1099-NEC (non-employee compensation): 

• The IRS instructions state you must file with the IRS on or before January 31, 2026. 
• You must also furnish recipient copies by January 31, 2026. 

For Form 1099-MISC (rents, royalties, etc.):

• Recipient copies due by January 31, 2026. 
• IRS filing: If paper, due by February 28, 2026; if electronic, due by March 31, 2026. 

4. Review Updated Reporting Thresholds and What They Mean for Small Businesses

• For tax year 2025: the threshold for issuing 1099-NEC or 1099-MISC remains $600.
• Beginning tax year 2026: the threshold for both 1099-NEC and 1099-MISC will rise to $2,000, and starting in tax year 2027, the threshold will be indexed for inflation. 
• For Form 1099-K (payments via third-party settlement organizations/payment apps): under the One Big Beautiful Bill Act (OBBBA) the threshold has been restored to $20,000 and 200 transactions (i.e., both conditions must be met) for tax year 2025 and going forward. 

The previously planned lower thresholds (e.g., $2,500 or $600) for 1099-K are not in effect; the higher threshold is back.

5. Know How 1099 Rules Apply to Your Business or Nonprofit

• You must collect a W-9 from every service provider, regardless of entity type (even if you’re sure they’re a corporation). That gives you the information needed to determine your reporting obligations.
• If you pay a service provider $600 or more (for services) in 2025, you’ll generally need to issue a 1099-NEC (assuming they’re not treated as a vendor exempt from reporting).
• If you pay rent, royalties, or other miscellaneous payments under the 1099-MISC rules at or above $600, you must issue that form accordingly.
• If you pay through a third-party settlement organization (PayPal, Venmo, marketplace platform): you may not receive a 1099-K unless gross payments exceed $20,000 and the number of transactions exceeds 200. Regardless of whether you receive a form or not, all income must be reported on your tax return.
• Do not rely on whether you receive a form to determine whether you must report income. Receipt of a form is an information aid — your tax-reporting obligation remains irrespective of receiving a 1099.

6. Review this Quick Action Checklist for 1099s at the end of 2025

• Send W-9s to all service-providers (and securely store them).
• Review all payments made in 2025 for services, rents, royalties, etc., and determine which ones hit the $600 threshold.
• Issue required 1099-NEC or 1099-MISC forms by January 31, 2026, and file the IRS copy timely.
• If you use payment apps or platforms to pay providers or vendors, track the gross payments and count of transactions to each payee — note that they must exceed $20,000 and 200 transactions before a 1099-K will be issued.

Bottom Line

For tax year 2025, the rules are relatively stable: $600 threshold for 1099-NEC/MISC, W-9s required for all service providers, and the 1099-K threshold is back at the $20,000/200-transaction level. Don’t wait until the last minute to start preparing your 1099s—get your W-9s in, identify your payments early, and ensure your records are ready for the January rush.

We’re happy to guide our customers through the process, from verifying vendor details to ensuring accurate filings. Let us take the stress out of 1099 compliance so you can focus on your business as we head into the new year.

Wishing you a smooth year-end, clean filings, and peace of mind.

AI is amazing. It’s fast, creative, and sometimes eerily insightful. But lately, we’ve noticed more small business owners using ChatGPT like it’s Google — and that’s a mistake.

Let’s clear something up: ChatGPT is not a search engine. It doesn’t “look up” facts on the internet (unless you’re using a paid plan with browsing enabled). It’s a language model — it predicts words based on patterns in data. Used well, it’s a brilliant assistant. Used carelessly, it’s a potential security risk.

As financial advisors, we handle sensitive financial and customer data every day — and we’re seeing more instances where AI use could compromise confidentiality or create exposure risks. In today’s tech-heavy world, knowing how to use digital tools safely is quickly becoming part of the core skill set for business owners.

Here’s what you (and your team) need to know before you feed it sensitive information.

The Free Version of ChatGPT: Helpful but Handcuffed

If you’re using the free ChatGPT (powered by GPT-4-mini as of 2025), you’re essentially driving the demo car. It’ll get you from point A to point B, but you’re missing airbags, seatbelts, and GPS.

Key limitations of the free version

• Limited accuracy and reasoning. GPT-4-mini is faster but less capable than GPT-5. It can give you solid summaries or ideas, but it’s not great at complex reasoning, analysis, or nuanced business writing.
• No file uploads or advanced tools. You can’t share spreadsheets, PDFs, or data for analysis — but you definitely shouldn’t be pasting confidential info here anyway.
• No real-time internet access. The free tier doesn’t browse or fetch live data, so it may provide outdated or incomplete information.
• No enterprise-grade privacy. Conversations in the free tier may be used to improve future models unless you explicitly opt out in Settings.
• No team or collaboration features. Everything happens in your personal workspace, without admin controls or audit trails.

If you’re brainstorming blog titles, it’s great.
If you’re pasting financials or sensitive internal data, stop right there.

Why the Paid Version of ChatGPT is Worth It

The paid versions — ChatGPT Plus, Team, or Enterprise — run on GPT-5-turbo, which is faster, smarter, and far more secure. It’s like upgrading from a bicycle to a Tesla with autopilot and airbags.

Here’s what you get with a paid ChatGPT subscription:

• Access to the most capable model. GPT-5-turbo delivers better reasoning, accuracy, and context — ideal for business use.
• Live data and integrations. You can browse the web in real time, generate charts, analyze data, and connect tools like Google Drive, Slack, and Excel.
• File uploads and analysis tools. Upload spreadsheets, documents, or PDFs for accurate insights — without risking a crash or timeout.
• Enhanced privacy and control. Paid accounts can turn off model training and disable chat history. Your data stays your data.
• Team & Enterprise security. Business accounts offer SOC 2 compliance, Single Sign-On (SSO), centralized admin controls, and role-based permissions.

Think of it this way:
The free version is like chatting in a crowded café where anyone might overhear.
The paid version gives you a private office with the door locked and a security system installed.

Lock It Down: Security Settings You Should Enable

Even with a paid account, security isn’t automatic. You still have to tighten the bolts. Below, we outline four steps to keep your AI-driven work secure.

1. Turn on Multi-Factor Authentication (MFA)

This adds a second layer of protection beyond your password — like a code from your phone or authenticator app. If someone steals your password, MFA keeps them out. Apply it to your ChatGPT log-in, as well as any other digital account you use to run your business or live your life.

2. Control Your Data Settings

Open ChatGPT, head to Settings → Data Controls and:

• Turn off “Improve the model for everyone.” This stops your data from being used for AI training.
• Disable or limit Chat History. Chats without history are not stored long-term.
• Regularly delete old conversations containing sensitive material.

3. Use Temporary Chats for Added Privacy

When you toggle off chat history, conversations aren’t saved — perfect for one-off or private discussions.

4. Never Share Confidential or Private Information

This one’s simple but essential:
Don’t upload or type anything you wouldn’t post on your website.

That means:

• No customer names or numbers
• No proprietary formulas
• No account credentials
• No internal financials or HR data

Once it’s entered, you can’t be certain where it ends up — even if you’re careful.

Smart Use of AI = Safe Use of AI

ChatGPT can save you hours, spark creativity, and improve decision-making — but only if you treat it like the powerful tool it is.

Use it to draft, summarize, brainstorm, and analyze.
Don’t use it to store, process, or transmit confidential business data.

If you’re serious about leveraging AI in your business (and you should be), get a paid account, lock down your settings, and train your team on responsible AI use. Because when you’re paying with your data, “free” AI isn’t that free after all.

Bottom Line

Artificial Intelligence can make you faster, smarter, and more creative — but only if you protect your information while using it.

Treat ChatGPT like you would any other powerful business tool: use it intentionally, configure it securely, and never hand it the keys to your data vault.

Looking to enhance security and reduce risks of data breach, fraud, or phishing? Read our article, “Don’t Click that Sh*t” here.

(With apologies to our nonprofit friends…)

Let’s start with an apology to our nonprofit customers whose world revolves around budgets. We get it — grant compliance demands a budget. You have to show exactly how funds will be spent. Budgets in your world are a necessary evil.

But for everyone else? Let’s be honest: budgets are a waste of time.

In the for-profit world, a budget is like a New Year’s resolution: full of good intentions and forgotten by February. They’re static. You set them, you tuck them away, and you hope they magically keep you “on track.” But a budget doesn’t help you create results; it just tells you how to spend what you already have. With budgets, you aim low to feel safe. You plan for what you think you can do. Then you call it “realistic.”

That’s not how growth happens.

Why Forecasts are More Valuable than Budgets Every Time

A forecast is different. It’s alive. It moves! It changes as you do.

Forecasts are forward-looking. They don’t ask, “What did we spend?” They ask, “What are we going to make happen next?” A forecast…

• tells you how to make a profit.
• gets updated every month as real numbers roll in.
• helps you see trends early and adjust before the year runs off the rails.
• forces you to make decisions — not excuses.

With a forecast, you’re not reacting to last quarter’s mess. You’re designing next quarter’s success.

How to Stop Thinking Like a Budgeter and Start Thinking Like a Forecaster

Step 1: Start with the end in mind. Decide how much profit you want next year — yes, decide. Profit is a choice, not an accident.

Step 2: Work backward. What level of revenue do you need to hit that goal? What will it cost to get there?

Step 3: Update your forecast monthly. When sales shift or expenses change, adjust the forecast and re-aim. The goal is progress, not perfection.

Step 4: Aim high. Budgets play defense. Forecasts play offense. If you want to grow, you have to stop “budgeting” for survival and start forecasting for success.

Here’s the Bottom Line

A budget tells you how to spend your money.
A forecast tells you how to make more of it.

If you’re serious about hitting your 2026 revenue and profit goals, stop budgeting for what’s safe — and start forecasting what’s possible. Reach out to learn more about how we can help create a living forecast that keeps you on track (and off the hamster wheel).