April 2025 Newsletter

Reading through tax law isn’t something most people do for fun. But what if the laws are interesting or strange? In this month’s newsletter, test your knowledge about quirky tax laws with our annual tax quiz.

There’s also a list of questions to review to make sure you’re prepared as we approach the April 15th filing deadline.

Also in this edition, read through several ideas for making your spring cleaning a little more fun, and learn about answers to some of life’s pressing questions such as Why do socks always vanish?

Please pass this information on to anyone that may find it useful and call if you have any questions or concerns.

Upcoming dates:

April 15

– Individual income tax returns for 2024 are due

– First quarter 2025 estimated tax payments are due

It’s Tax Day!

Here are some last-minute details and tips

With the individual tax-filing deadline on Tuesday, April 15th, if you have not already done so, now is the time to complete all filing arrangements and payments.

While this information is provided in our filing instructions, it makes sense to provide this information to everyone, whether you have filed or not.

If you have not already done so, ask yourself these questions:

1. Did you sign your e-file authorization form?

IRS Form 8879 needs to be signed before your taxes can be e-filed. If filing jointly, your spouse needs to sign as well. If you haven’t already, please return the signed form ASAP to ensure that your taxes can be e-filed on time. But don’t sign it before reviewing the tax return. Remember, this signature means you agree with the accuracy of the tax return.

2. Do you need more time to file?

If you are not ready to file your taxes before the April 15th deadline, you can file for a six-month extension. Be aware that it is only an extension of time to file — not an extension of time to pay taxes you owe. You still need to pay all taxes by April 15th!

3. Do you owe money?

If yes, make your tax payment now! The IRS has several payment options. If mailing a payment, include Form 1040-V and ensure the mail is postmarked on or before April 15th. Sending the payment by certified mail will ensure you have proof of a timely payment. Late payments, even by one day, are subject to IRS penalties and interest.

4. Do you need to deposit funds into your IRA or HSA?

If you claim an IRA or HSA contribution on your tax return for the 2024 tax year, all deposits to those accounts need to be made by April 15th. Once completed, save proof of the contribution with your 2024 tax files.

5. Do you need to make an estimated tax payment?

The first quarter estimated tax payment for 2025 is also due by April 15th. If you owe taxes for 2024, making 2025 estimated payments might make sense for you. A quick way to calculate a first quarter payment is to divide the taxes you paid in 2024 by four, then adjust this number for any paycheck withholdings. Send your payment along with Form 1040-ES to the IRS by April 15th. Then schedule a tax-planning meeting to determine the best approach for the remainder of the year.

If you do miss a deadline, file your return and pay the taxes as soon as you can to stop the accruing of interest and penalties.

Customer Retention Metrics You Need to Know

Your business’s ability to retain customers is one of the most important components to sustained growth and profitability. Here are the three retention metrics useful for every business owner.

Retention rate. Most customer retention is measured over a set period of time, typically one year. To determine your rate, take a look at the number of customers who ordered from you last year. Then see what percent of them order at least once from you over the current year. If you measure this percent each month you can see how your retention builds throughout the year. The key is to compare your retention rate to the same period in prior months and years. A rising rate means you are on the right track; a shrinking rate means you need to make changes. According to the Harvard Business Review, a 5% increase in your retention rate increases profits by 25% to 95%!
Part 1 – Cut’em Nail Salon Example: Cut’em Nail Salon starts the year with 700 active clients. They add 300 new customers during the year, and their active client base is 800 at the end of the year. On the surface things look good, right? This increase of 100 clients is over 14%! But when you calculate the retention rate, it is 71.4% (800 clients minus 300 new clients means 500 of last year’s clients still use Cut’em. 500 divided by 700 equals 71.4%). What happened to the 200 customers that did not return? Cut’em doesn’t know if this is good or bad news, as it only makes sense when comparing it to the last few years’ retention performance.
Existing customer revenue percentage. Core customers almost always contribute the most to your sales. But how much? To figure out your returning customer revenue percentage, start with a list of revenue by customer for the last 12 months. Identify the returning customers and add up revenue attributed to them. Divide that number by your total revenue. Use this information to balance your spending between new customer acquisition and retaining your core customers. If you are like most businesses, you will realize there is tremendous value in spending more time and effort on retention, even when your business is full!
Part 2 – Cut’em Nail Salon Example: Assume the nail salon’s total revenue is $1 million and the revenue from the 500 returning clients is $900,000. In this case, the core customers represent 90% of the revenue but only 62.5% (500 divided by 800) of the customers!
Most valuable customers. Now identify which customers spend the most and buy the most often. Odds are, many of your top customers have similar characteristics. In the end, your goal is to keep these customers happy and get more just like them!
Part 3 – Cut’em Nail Salon Example: In the example above, the average revenue per client is $1,250 per client or over $100 per month ($1 million divided by 800 clients). If the top 20 clients represent $100,000 in revenue or $5,000 per client, you can quickly see how important they are!

The key take away is that sustained growth and profitability comes from the core customers you retain each year. And the best place to start is to calculate and understand your retention numbers and their trend.

Annual Tax Quiz – Quirky Tax Facts!

From quirky tax laws to surprising deductions, this fun 10-question multiple choice quiz will test your knowledge about interesting tax facts from here and around the world. Let’s see how you do—answers are at the end!

Given our British origins, let’s start with a fun English tax fact. What was taxed in England during the 17th century, resulting in an abundance of bald heads?A. Hats
B. Hair powder
C. Wigs
D. Shampoo
- Answer: C – Wigs
  In 1795, England taxed wig powder, causing many to stop wearing wigs altogether.
Which U.S. president introduced the first federal income tax?A. Abraham Lincoln
B. George Washington
C. Franklin D. Roosevelt
D. Theodore Roosevelt
- Answer: A – Abraham Lincoln
  The first federal income tax was introduced in 1861 to fund the Civil War. As promised, after the war ended, so too did the income tax, only to be re-introduced in the early 1900s.
What strange item did the IRS allow a bodybuilder to deduct as a business expense?A. Body oil
B. Protein shakes
C. Tanning lotion
D. Ostrich eggs
- Answer: A – Body oil
  The IRS allowed a bodybuilder to deduct body oil as it was deemed ordinary and necessary for his competitions.
In which country was a window tax imposed, leading to bricked-up windows in older buildings?A. France
B. England
C. Germany
D. Italy
- Answer: B – England
  The window tax was introduced in 1696, with many homeowners bricking up their windows to avoid the tax.
What is the nickname for the U.S. tax system due to its progressive nature?A. Robin Hood Tax System
B. Pay-As-You-Go
C. Tax the Rich System
D. The Graduated Tax
- Answer: D – The Graduated Tax
  The U.S. tax system is called graduated because rates increase with income levels. It is also known as a progressive tax system.
What popular children’s activity was taxed in Arkansas in 1990, sparking outrage?A. Playgrounds
B. Hula hoops
C. Swing sets
D. Clown shows
- Answer: B – Hula hoops
  Arkansas briefly taxed hula hoops in 1990, considering them a recreational activity.
Which of the following pets were successfully deducted as a business expense?A. A cat used for pest control in a junkyard
B. A dog trained to sniff out counterfeit money
C. A parrot that served as an office greeter
D. A goldfish for calming customers
- Answer: A – A cat used for pest control
  A junkyard owner successfully deducted a cat’s care as a business expense.
What is the origin of the word tax?A. It comes from the Latin word taxo, meaning I evaluate.
B. It derives from Old French taxer, meaning to split.
C. It originates from Greek, meaning to take.
D. It stems from the ancient Sanskrit word for tribute.
- Answer: A
  It comes from the Latin word taxo, meaning I evaluate.

How Did You Score?

6–8 Correct: Impressive! You’ve got a solid grasp on quirky tax facts.
3–5 Correct: Not bad! Your brain knows a bit of interesting tax trivia.
0–2 Correct: You live a wonderful life, unencumbered with unusual tax laws in your memories.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.