October 2026 Clients’ Updates & Reminders

Posted on by AlisaNaCPA

October 2026 Clients’ Updates & Reminders

As we enter the final quarter of 2026, we’d like to share a few important tax and business updates.

Business Updates

September / Quarter 3 2026 Excise Tax Return Reminder

This is a friendly reminder that the September / Quarter 3 2026 WA State Department of Revenue Excise Tax Return is due soon. If you have not already provided your sales information, please send us your sales information by Friday, October 16 to ensure timely filing.

Quarter 4 Local Sales & Use Tax Changes

Effective October 1, 2026, please check for new tax rate changes for some jurisdictions.

2027 Washington State Minimum Wage Increase

https://www.lni.wa.gov/news-events/article/26-17

Beginning of January 1, 2027, Washington State’s minimum wage will increase to $ 17.73 per hour.

Some local jurisdictions will have higher minimum wage rates than the state minimum.

  • Bellingham: $19.13 per hour
  • Burien: $21.63 per hour (500 or more employees), $20.63 (between 21-499 employees)
  • Everett: $20.77 per hour
  • Renton: $21.57 per hour
  • SeaTac: $20.74 per hour
  • Seattle: $22.14 per hour
  • Tukwila: $21.65 per hour

Washington Saves: New Retirement Savings Requirements

As we mentioned in the September Newsletter, Washington Saves is scheduled to begin on July 1, 2027.

Washington Saves is new retirement plan savings program that may apply to employers meeting certain requirements

The program generally applies to Washington employers that:

  • Have been operating in Washington for at least two years;
  • Maintain a physical presence in Washington;
  • Do not offer a qualifying retirement plan; and
  • Had employees work at least 10,400 combined hours during the prior year (about five full-time employees).

We encourage potentially affected employers to begin preparing ahead of the July 2027 implementation including reviewing payroll system updates, retirement contribution procedures, and related recordkeeping / reporting requirements.

If you’d like to confirm whether WA Saves applies to your business, and know more about this new plan, please feel free to contact us.

For more information about WA Saves, please visit the website at

https://www.wasaves.com/employers

INDIVIDUAL TAX UPDATES

IRS Saver’s Match : New Retirement Savings Benefit Starting 2027

https://www.irs.gov/credits-deductions/savers-match

Starting 2027, eligible taxpayers who contribute to a retirement plan or IRA may receive a federal match of up to 50% of their contribution, up to $ 1,000 per person each year, deposited directly to their retirement account. The matching amount varies based on income, and Saver’s Match for 2027 contribution can be claimed when filing your 2027 tax return in 2028.

IRS Tax Credit Scam Warning

https://www.irs.gov/newsroom/irs-warns-of-tax-credit-scams-targeting-the-tribal-community

The IRS recently warned taxpayers about promoters advertising nonexistent “Tribal Tax Credits” and other fraudulent tax credit schemes. The IRS reminds taxpayers that they remain responsible for positions taken on their tax returns, even when promoted by third parties.

The new IRS Mobile App – IRS2Go

https://www.irs.gov/newsroom/irs-launches-new-mobile-app-expanding-digital-services-for-taxpayers

The IRS launched a new IRS mobile app, IRS2Go and provides expanded access to selected IRS account services including checking refund status, making payments, and viewing tax records. When downloading the app, please make sure you are using the official IRS app.

If you have any questions about these updates or need assistance, please feel free to contact our office.

As always, thank you for your continued trust in our team.

Alisa Na CPAs & Advisors

Important Updates for Washington Employers

Posted on by AlisaNaCPA

Washington Saves: New Retirement Savings Requirements

Dear Clients,

We wanted to make our Washington business clients aware of an upcoming retirement savings program that may affect employers beginning in 2027. Washington Saves is expected to begin July 1, 2027.

What is Washington Saves and who may be affected?

The program generally applies to Washington employers that:

  • Have been operating in Washington for at least two years;
  • Maintain a physical presence in Washington;
  • Do not offer a qualifying retirement plan; and
  • Had employees work at least 10,400 combined hours during the prior year (about five full-time employees).

Employers that already offer a qualifying retirement plan generally will not be required to participate.

For covered employers, responsibilities will include registration, employee enrollment, payroll withholding, timely remittance, and required notices. Employers cannot contribute or match employee contributions.

For more information about the program and requirements, please visit:

https://www.wasaves.com/employers

Employer Planning Point

Employers should begin preparing for possible payroll updates, employee communications, remittance procedures, and recordkeeping.

If you have questions about whether Washington Saves may apply to your business or would like assistance preparing the new requirements, please do not hesitate to contact us.

Warm regards,

ALISA NA CPAs & Advisors

September 2026 Client Updates & Reminders

Posted on by AlisaNaCPA

We’d like to share a timely reminder and updates to help you stay informed and prepared. Here are the latest from the Dept of Revenue, IRS and Dept of Labor.

BUSINESS UPDATES

August 2026 Excise Tax Return Reminder

This is a friendly reminder that the August 2026 WA State Department of Revenue Excise Tax Return is due soon. If you have not already provided your sales information, please send us your August sales information by Friday morning (09/18/26) to ensure timely filing.

Quarter 4 Local Sales & Use Tax Changes

Effective October 1, 2026, please check for new tax rate changes for some jurisdictions.

IRS Online Service Expansion

https://www.irs.gov/newsroom/irs-online-services-spotlight-taxpayers-can-get-more-done-online

Through IRS online accounts, businesses and taxpayers now can access more self-service options including checking tax balances, making payments, viewing notices, and transcripts, all without calling in.

Required Training and Orientation Must Be Paid

https://www.dol.gov/newsroom/releases/whd/whd20260810

The Department of Labor continues to focus on ensuring employees are paid for all the time they are required to work including mandatory training, orientation, and meetings. We encourage employers to review their timekeeping practices to make sure employees are being paid for all required work-related activities.

INDIVIDUAL TAX UPDATES

2026 IRS Interest Rates

https://www.irs.gov/newsroom/interest-rates-remain-the-same-for-the-fourth-quarter-of-2026

The IRS determines the interest rate on unpaid taxes every quarter. For October 2026 to December 2026, the rate for individual taxpayers is 7% that applies to both underpayments and overpayments of federal taxes. If you have any outstanding balance with the IRS, the interest rate may affect the amount owed.

If you have any questions or need assistance, please don’t hesitate to contact us. We’re always happy to help.

Thank you for your continued trust in our team.

Warm regards,

ALISA NA CPAs & Advisors

2026 Tax Planning: Key Update Before Year End

Posted on by AlisaNaCPA

Dear Clients,

We hope this newsletter finds you well as we head into the Fall planning season.

Several federal tax rules have changed for 2026. Some may lower your tax bill, while others may affect decisions about retirement contributions, charitable contributions, and deductible expenses.

Tax year 2026 covers income earned from January 1 through December 31, 2026. These tax returns will generally be filed in 2027.

The standard deduction is increasing
The standard deduction reduces the amount of income subject to federal income tax. For 2026, the amounts are:

  • $32,200 for married couples filing jointly
  • $16,100 for single taxpayers and married taxpayers filing separately
  • $24,150 for heads of household

Higher deduction for state and local taxes
Taxpayers who itemize may be able to deduct more of their state income taxes, sales taxes and property taxes.

For 2026, the state and local tax (SALT) deduction is generally limited to:

  • $40,400 for most filing statuses
  • $20,200 for married taxpayers filing separately

The deduction begins to decrease taxpayers with modified adjusted gross income above $505,000, or $252,500 for married taxpayers filing separately.

Additional deductions for workers and seniors
Several deductions introduced for 2025 continue to be available in 2026. Depending on income and other requirements, taxpayers may qualify for deductions related to:

  • Qualified tip income
  • Qualified overtime pay
  • Interest paid on certain qualifying vehicle loans
  • An additional deduction for taxpayers age 65 or older up to $6,000

Despite names such as “no tax on tips” or “no tax on overtime”, these rules do not automatically make all tips or overtime tax-free. They are deductions with specific qualifications, income limits, and documentation requirements.

Please keep pay statements, Forms W-2 and 1099, vehicle-purchase documents, loan statements, and other supporting records.

Retirement contribution limits are higher
Taxpayers may be able to save more for retirement in 2026:

  • The employee contribution limit for most 401(k), 403(b) and governmental 457 plans are $24,500.
  • The IRA contribution limit is $7,500.
  • Taxpayers age 50 or older may contribute up to $8,600 to an IRA including the catch-up amount of contribution.
  • Special super catch-up contribution of $11,250 may apply to employees between the ages 60 and 63.

Certain higher-paid employees making retirement-plan catch-up contributions may be required to make those contributions to a Roth account.

Consider reviewing your contribution percentage before year-end, especially after a raise, bonus or job change.

Health Savings Account limits are increasing
For taxpayers enrolled in a qualifying high-deductible health plan, the 2026 Health Savings Account contribution limits are:

  • $4,400 for self-only coverage
  • $8,750 for family coverage

HSA contributions may be tax-deductible, and withdrawals used for qualified medical expenses are generally tax-free.

A charitable deduction may be available without itemizing
Beginning in 2026, taxpayers who take the standard deduction may deduct qualifying cash donations of up to:

  • $1,000 for single filers
  • $2,000 for married couples filing jointly

Donations must be made to qualifying organizations, and taxpayers should retain receipts or other written records.

The Child Tax Credit continues
The Child Tax Credit is worth up to $2,200 per qualifying child. Depending on income and eligibility, up to $1,700 per child may be refundable through the Additional Child Tax Credit. Social Security number and earned-income requirements apply.

What should you do now?
Good tax planning should take place before December 31, not when the tax return is being prepared. We recommend taking the following steps before year end :

  • Review your federal and state tax withholding.
  • Keep records for tips, overtime, and qualifying vehicle loan interest.
  • Reevaluate your retirement and HSA contributions.
  • Save receipts for charitable donations.
  • Contact us before selling investments or business property.
  • Let us know about major life changes, including marriage, divorce, retirement, a new child, a home purchase, or a new business.

Tax planning is most effective when done before year-end. We encourage you to contact our office to schedule a tax planning and advisory meeting so we can review your individual or business situation, identify potential tax-saving opportunities, and help you plan ahead for 2026 and beyond.

Please feel free to contact our office for assistance.

August 2026 Client Updates & Reminders

Posted on by AlisaNaCPA

Dear Clients,

We hope you are enjoying the last few weeks of summer! We’d like to share a few key reminders and updates this month to help you stay informed.

2025 EXTENDED TAX RETURN DEADLINES
A friendly reminder for those who filed an extension for their 2025 tax return.
To help us prepare and file your return on time, please send us your complete 2025 tax documents and information by:

  • August 14, 2026 — Form 1065 and Form 1120-S
  • September 11, 2026 — Form 1040 and Form 1120

Documents received after these dates may not leave enough time for us to complete your return by the extended filing deadline:

  • Partnerships (Form 1065) and S Corporations (Form 1120S) – September 15, 2026
  • Individuals (Form 1040) and C Corporations (Form 1120) – October 15, 2026
  • If your individual return includes FinCEN or FBAR reporting – October 15, 2026

You may securely upload your documents using your dedicated SafeSend Gather link that was previously sent to you. Please call our office if you need assistance.

BUSINESS UPDATES

July 2026 Excise Tax Return Reminder
This is a friendly reminder that the July 2026 WA State Department of Revenue Excise Tax Return is due soon. If you have not already provided your sales information, please send us your July sales information by Monday, August 17th to ensure timely filing.

Disaster Relief Resources Available for Wildfire-Impacted Businesses and Property Owners
https://dor.wa.gov/about/news-releases/2026/disaster-relief-resources-available-wildfire-impacted-businesses-and-individuals
If you or your business were affected by the recent wildfires in Spokane, you may qualify for tax relief or other assistance from the WA Dept of Revenue. Learn more about available disaster tax relief and how to apply from the WA DOR Website.

New Dept of Labor Guidance on When Commute is Paid Work
https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FLSA/FLSA2026-10.pdf
The Dept of Labor clarifies when pre-shift calls and drive time count as compensable hours for mobile/traveling employees.

IRS Simplifies Penalty Relief with New Automatic Process
https://www.irs.gov/newsroom/irs-simplifies-penalty-relief-introduces-automatic-process-for-eligible-taxpayers
The IRS starts Automatic Exemption from Penalty (AEP) replacing First Time Abate. Business and individuals with a clean 3 year filing/payment history will now automatically avoid failure to file, failure to pay, and failure to deposit penalties with no action required.

INDIVIDUAL TAX UPDATES

Receiving Gifts from a Covered Expatriate
If a U.S. citizen or resident receives a gift or inheritance from a non-U.S. person, the general rule is still that the recipient does not pay gift tax, though gifts over $100,000 from a foreign person may need to be reported on Form 3520.

The important exception is Section 2801. If the donor is a covered expatriate—someone who gave up U.S. citizenship or long-term green-card status and met certain tax, net-worth, or compliance tests—the U.S. recipient may owe tax on the gift or inheritance.

For 2025 and 2026, the first $19,000 received from covered expatriates is excluded. Amounts above that are generally taxed at 40%, and the recipient files Form 708 to report and pay the tax. If the foreign gift exceeds $100,000, Form 3520 may also be required.

If you are expecting a large gift or inheritance from someone who previously gave up U.S. citizenship or a green card, confirm whether they are a covered expatriate. Planning before the transfer can make a significant difference in the tax outcome.

Charitable Deduction Even If You Don’t Itemize
https://www.irs.gov/taxtopics/tc506
Starting in 2026, taxpayers who don’t itemize deduction can still deduct upto $1,000 ($2,000MFJ) in cash contribution to qualified charities. The proper documentation is required by the IRS to claim it.

If you have any questions or need assistance, please don’t hesitate to contact us. We’re always happy to help.

Thank you for your continued trust in our team.

Warm regards,
Alisa Na CPAs and Advisors

Gift, Loan, or Income?

Posted on by AlisaNaCPA

How the IRS Determines the Nature of Money Transfers

Sending or receiving money from family and friends is a normal part of life. Parents may help with a child’s living expenses, family members may provide financial support, and friends often exchange money for shared expenses.

From a tax perspective, however, these transactions are not always as simple as they seem. The IRS does not view every transfer as a routine movement of funds. Instead, it looks at the nature of the transaction itself. Whether money is classified as a gift, a loan, or income can significantly affect its tax treatment.

Understanding these distinctions can help prevent unnecessary tax issues and avoid questions later.

Gift or Income?

For tax purposes, money transfers generally fall into one of two broad categories.

A gift is a transfer made without receiving something of value in return. In most cases, gifts are not taxable to the recipient. Income, on the other hand, represents compensation for work, services, business activity, or other earnings and is generally taxable.

For example, when parents provide financial support to a child, the transfer is typically treated as a gift. However, if someone receives money in exchange for helping a friend with work or providing services, the payment may be considered taxable income.

The important point is that tax treatment is determined by the actual purpose of the transaction, not by what the parties choose to call it.

Common Situations That Create Confusion

In practice, many transactions fall into gray areas.

Common examples include:

  • Parents paying a child’s rent
  • Friends reimbursing one another for shared expenses
  • Informal loans between family members with no written records
  • Large one-time transfers for financial support

When these transactions are not clearly documented, they may be interpreted differently if questions arise later.

Real-Life Examples

The same movement of money can have very different tax consequences depending on the circumstances.

For example:

A parent sends a fixed amount of money to a child each month.

  • This is generally treated as a gift.

A business owner receives money from an acquaintance.

  • If the payment is actually compensation for services, it may be considered taxable income.

Friends split the cost of a vacation and transfer money to one another.

  • If the transfers simply reimburse shared expenses, they are generally not taxable.

The context behind a transaction is often more important than the amount itself.

Common Misconceptions About Gift Tax

Many people assume that giving money automatically creates a tax liability. In most cases, that is not true.

Federal law allows individuals to make gifts up to certain annual limits without filing a gift tax return. Even when those limits are exceeded, the result is often a filing requirement rather than an immediate tax payment.

The key point is that filing a gift tax return and owing gift tax are not the same thing.

Why Large Deposits Can Raise Questions

Even when a transfer is not taxable, large deposits can sometimes require explanation.

This is particularly important for:

  • Self-employed individuals
  • Business owners with significant cash flow
  • Accounts with frequent deposits

The IRS may review bank deposits as part of determining whether income has been properly reported. If a deposit represents a gift or a simple transfer, supporting documentation may be needed to demonstrate its nature.

How the IRS Distinguishes Between a Loan and a Gift

Simply saying that money was “loaned” is not always enough.

To support loan treatment, it is helpful to have:

  • A written agreement
  • A repayment schedule
  • A genuine expectation that the funds will be repaid

Without these elements, the IRS may view the transaction as a gift rather than a loan.

Practical Steps That Can Help

Although the rules may seem complicated, a few basic habits can help prevent problems.

When significant amounts of money are transferred, it is helpful to keep a simple record of the purpose. Clearly noting whether the transfer is intended as a gift or a loan can make a meaningful difference later.

Even between family members, maintaining a record through bank transfers is generally preferable to using cash. Cash transactions can be much harder to explain if questions arise.

If funds are intended to be a loan, having a basic written agreement can help establish the intent of the parties. The document does not need to be overly complicated, but it should demonstrate the structure of the arrangement.

Business owners should also keep personal and business funds separate. Using the same account for both can make otherwise innocent transfers appear to be taxable business income.

What Matters Most: Intent and Documentation

The transfer of money itself is usually not the issue. The challenge lies in how the transaction is characterized.

The IRS looks beyond labels and focuses on the actual purpose of the transaction, the surrounding facts, and the supporting documentation.

When intent is clear and records are properly maintained, most transactions can be handled without difficulty. When documentation is missing or inconsistent, even routine transfers can create unnecessary tax questions.

A small amount of organization today can prevent significant issues later.

2026년 7월 고객 세무 업데이트 및 안내사항

Posted on by AlisaNaCPA

화창한 날씨에 고객 여러분 모두 건강하고 평안한 여름 보내시기 바랍니다.

최근 세무 및 행정 관련 소식을 정리해 전해드리며, 고객님의 사업 운영에 유익한 정보가 되기를 바랍니다.

비지니스 안내

2026년 6월 워싱턴 주 Excise Tax 보고 안내

2026년 6월 / 2분기 Department of Revenue Excise Tax Return 보고 마감일이 다가오고 있습니다. 아직 6월 매상자료를 전해 주시지 않은 경우, 기한 내에 보고가 원활히 진행될 수 있도록 7월 17일 금요일 오전까지 6월 자료를 보내주시기 바랍니다.

IRS Business Tax Account 갱신안내

https://www.irs.gov/businesses/business-tax-account

S Corporation 혹은 C Corporation 의 IRS Business Tax Account 지정 책임자 (Designated Official) 이신 경우, 비지니스 관련 IRS 의 세무정보에 대한 접근 권한을 유지 수 있도록 7월 29일까지 엑세스 권한 갱신을 하셔야 합니다.

EIN 확인서, CP575 온라인 발급 가능

https://www.irs.gov/individuals/understanding-your-cp575-notice

IRS Business Tax Account 를 통해 EIN 확인서 CP575를 온라인으로 간편하게 다운로드 하실 수 있습니다. CP575는 비지니스 EIN 을 증빙하는 공식 서류로, 은행 및 금융기관 등에서 사업체 정보확인을 위한 자료로 사용될 수 있습니다

ESSB 5814 관련 Sales Tax 벌금 면제 프로그램

https://dor.wa.gov/about/news-releases/2026/penalty-relief-program-available-sales-tax-services-changes

Dept of Revenue 에서는 ESSB 5814에 따른 Sales Tax 변경에 영향을 받는 사업체를 대상으로 벌금 면제 프로그램을 운영하고 있습니다. 해당 사업체가 자진 신고 및 세금을 납부하는 경우, 벌금 면제 대상이 될 수 있으니 참고하시기 바랍니다.

2026년 3분기 지역별 Sales & Use Tax 세율 변경

2026 년 7월 1일부터 일부 지역의 Sales & Use Tax 세율이 변경되어 다시 한 번 안내해 드립니다.

아래 링크를 참고하셔서 적용 세율을 확인하시기 바랍니다.

Rate Change Notices

Sales Tax Rate Lookup Tool

Tax Rate Lookup Mobile App

Downloadable Files

Burien 최저임금 변경 안내

https://www.burienwa.gov/city_hall/laws_regulations/minimum_wage

City of Burien 의 최저임금이 재인상 되었습니다. Burien 에서 사업을 운영하고 계시는 고용주께서는 사업체 규모 및 직원 수에 따라 적용되는 최저 임금을 확인하시기 바랍니다. (직원 수가 15명 이하인 소규모 업체의 경우 2026년 시간당 최저임금은 $ 19.28입니다.) 위의 City of Burien 링크를 방문하셔서 자세한 내용을 확인하시기 바랍니다.

Everett 및 Renton 지역 최저 임금 변경

7월 1일부터 Everett 과 Renton 지역, 직원 수 15 – 499인 비지니스에 적용됩니다.

Everett 최저임금

  • 직원 수 500인 이상인 비지니스: 시간당 $20.77 (워싱턴주 전체 직원 수 기준)
  • 직원 수 15~499인 비지니스: 시간당 $19.77 (또는 에버렛 내 연간 총매출이 200만 달러 이상인 비지니스 포함)
  • 2026년 1월 1일~6월 30일까지는 시간 당 $18.77, 7월 1일부터 $19.77로 인상됩니다.
  • 직원 수 14인 이하인 비지니스에는 적용되지 않습니다.

Renton 최저 임금

  • 직원 수 500인 이상의 비지니스: 시간당 $ 21.57
  • 직원 수 15-499인 비지니스: 시간당 $ 21.57 (2026년 1월 1일~6월 30일까지는 시간 당 $20.57, 7월 1일부터 $21.57로 인상됩니다.)
  • 직원 수 14인 이하인 비지니스에는 적용되지 않습니다

개인 세무 안내

워싱턴 주 상속세 개정

https://dor.wa.gov/taxes-rates/other-taxes/estate-tax-tables#Wprior

2026년 7월 1일 이후의 사망자부터 적용되는 워싱턴주의 상속세 규정이 변경됩니다. 이번 개정에 때라 상속세 공제 및 신고 기준 금액이 $ 3,000,000 으로 변경되며, 상속세율이 10-20% 로 적용되니, 자세한 내용은 위의 링크를 참고하시기 바랍니다.

궁금하신 사항이나 저희 도움이 필요하신 경우 언제든 저희 사무실로 연락해 주세요.

늘 보내주시는 신뢰와 성원에 감사를 드립니다.

ALISA NA CPAs & Advisors

July 2026 Client Tax Updates & Reminders

Posted on by AlisaNaCPA

Dear Clients,

We hope you are having a great summer!

We’d like to share a few reminders and important updates that may affect you or your business to help you stay informed.

BUSINESS UPDATES

June / Quarter 2 2026 Excise Tax Return Reminder

This is a friendly reminder that the June / Quarter 2 2026 WA State Department of Revenue Excise Tax Return is due soon. If you have not already provided your sales information, please send us your June / Quarter 2* sales information by Friday morning (07/17/26) to ensure timely filing.

IRS Business Tax Account Reminder

https://www.irs.gov/businesses/business-tax-account

If you are the designated official for your S or C Corporation’s IRS Business Tax Account, please remember to renew your designation by July 29 to keep uninterrupted access to your business tax information

Need Proof of Your EIN?

https://www.irs.gov/individuals/understanding-your-cp575-notice

You can now download the EIN verification letter (CP575) directly from the IRS Business Tax Account. This digital notice can be used by banks and other financial institutions as proof of your EIN.

Penalty Relief for sales tax under ESSB5814

https://dor.wa.gov/about/news-releases/2026/penalty-relief-program-available-sales-tax-services-changes

WA Dept of Revenue is offering temporary penalty relief for businesses affected by the retail sales tax changes under ESSB 5814. Eligible businesses may qualify if they voluntarily file and pay the tax owed. If your business may be impacted by these sales tax changes, we recommend reviewing your filing requirements and taking action promptly

Quarter 3 Local Sales & Use Tax Changes

Effective July 1, 2026, please check for new tax rate changes for some jurisdictions.

Rate Change Notices

Sales Tax Rate Lookup Tool

Tax Rate Lookup Mobile App

Downloadable Files

Update on Burien’s Minimum Wage

https://www.burienwa.gov/city_hall/laws_regulations/minimum_wage

The City of Burien has updated its minimum wage requirements. Employers located in Burien should review the applicable minimum wage rate based on their business size and employee count. (For small employers with 15 or fewer employees, 2026 hourly minimum wage is $ 19.28.) Please visit the city’s website for more details.

For Everett and Renton, Local Minimum Wage Changes – Effective July 1 for employers with 15 to 499 employees

Everett: $20.77/hour for employers with more than 500 employees in Washington. For employers with 15 to 499 employees (OR annual gross income over $2 million revenue in Everett) $18.77/hour from Jan 1 to June 30, 2026, and $19.77 from July 1 to Dec 31, 2026. Employers with 14 or fewer employees are not affected.

Renton: $21.57/hour for employers with more than 500 employees. For employers with 15 to 500 employees, $20.57/hour from Jan.1 to June 30, 2026, and $21.57 from July1 to Dec. 31, 2026. Employers with 14 or fewer employees are not covered.

INDIVIDUAL TAX UPDATES

Washington State Estate Tax 2025 Law Change

https://dor.wa.gov/taxes-rates/other-taxes/estate-tax-tables#Wprior

Washington updated the estate tax rules for individuals who pass away on or after July 1, 2026. The changes include $3,000,000 estate tax exclusion and filing threshold, and a 10-20% estate tax rate schedule. Please see the link for details.

If you have any questions or need assistance, please don’t hesitate to contact us. We’re always happy to help.

Thank you for your continued trust in our team.

Warm regards,
ALISA NA CPAs & Advisors

Washington Real Estate Sales and Taxes

Posted on by AlisaNaCPA

Why Capital Gains Tax Still Deserves Attention

Because Washington State does not impose a personal income tax, many property owners assume there are no significant state tax considerations when selling real estate. However, the tax picture is often more complex than many people expect. While direct real estate sales are generally excluded from Washington’s Capital Gains Tax, other taxes and reporting considerations may still apply.

Understanding the broader picture, including federal taxes, Washington’s Real Estate Excise Tax (REET), and the structure of the transaction itself, can help avoid unexpected tax consequences.

Washington Capital Gains Tax and Real Estate

Washington’s Capital Gains Tax applies to certain long-term capital gains, but direct sales of real estate are generally excluded from the tax. This exemption applies to most sales of residential property, rental property, commercial real estate, and land when the real property itself is being sold.

However, not all real estate-related transactions receive the same treatment. The tax treatment can vary significantly depending on how the transaction is structured.

For example:

  • Selling real estate directly is generally excluded from Washington Capital Gains Tax.
  • Selling an ownership interest in an entity that owns real estate may be subject to different tax rules and could create capital gains tax considerations.

This distinction is frequently overlooked but can have a meaningful impact on the overall tax outcome.

Federal Tax Considerations Still Matter

Even when Washington Capital Gains Tax does not apply, federal tax consequences may still be significant.

A real estate sale can potentially trigger:

  • Federal capital gains tax based on the appreciation of the property
  • Depreciation recapture for rental or business property where depreciation deductions were previously claimed

A primary residence may qualify for certain federal gain exclusions if ownership and use requirements are met. Investment and rental properties, however, are generally subject to federal tax when sold at a gain.

Washington REET (Real Estate Excise Tax)

Separate from Capital Gains Tax, Washington imposes a Real Estate Excise Tax (REET). Unlike capital gains tax, REET is based on the selling price of the property rather than the profit earned from the transaction.

Because REET is based on the sale price rather than profit, it may apply even when the gain on the sale is limited. As a result, REET often represents a significant closing cost and should be considered early in the planning process.

Why Tax Costs May Be Higher Than Expected

Many property owners focus primarily on whether Washington has an income tax and overlook other tax considerations that may apply.

Rental properties are a common example. If depreciation deductions have been claimed over time, a portion of the gain may be subject to depreciation recapture when the property is sold. When REET is combined with federal tax obligations, the overall tax burden may be larger than expected.

Understanding these factors before listing a property can help avoid surprises at closing.

Timing and Structure Still Matter

Even when Washington Capital Gains Tax does not apply, the timing and structure of a transaction remain important planning considerations.

Factors worth reviewing include:

  • The timing of the sale relative to other income during the year
  • Whether the property is held individually or through an LLC or partnership
  • Whether the transaction is structured as a direct property sale or the sale of an ownership interest
  • Whether a 1031 exchange may be available

The earlier these factors are evaluated, the more planning opportunities may be available.

Documents to Organize Before a Sale

Preparing documentation in advance can make the tax analysis and reporting process much smoother.

Important records may include:

  • Original purchase and closing documents
  • Records of capital improvements and major renovations
  • Depreciation schedules
  • Loan payoff information
  • Rental or business-use records

Having these documents readily available can improve the accuracy of tax projections and reduce delays during the transaction process.

What Property Owners Should Remember

Washington Capital Gains Tax generally does not apply to direct real estate sales. However, that does not mean a real estate transaction is entirely free of tax considerations.

Depending on the circumstances, property owners may need to evaluate:

  • Federal capital gains tax
  • Depreciation recapture
  • Washington REET
  • Ownership structure and transaction design

Selling real estate is more than a simple transaction. Understanding the tax implications before a sale can help property owners make more informed decisions and avoid unexpected tax consequences.

Related services from Alisa Na CPAs & Advisors

2026 Quarter 2: Sales Tax Rate Tools

Posted on by AlisaNaCPA

Notification from Washington Department of Revenue:

Sales Tax Rate Tools
The Quarter 2, 2026, Washington State sales tax rate changes are now available.

On April 1, 2026, the sales tax rate lookup tool, including the map and latitude/longitude search, will include the following changes:

  • Sales and use tax within the City of Asotin will increase one-tenth (.001) of one percent for emergency communication systems and facilities.
  • Sales and use tax within the City of Battle Ground will increase three-tenths (.003) of one percent for housing and related services, and local law enforcement programs.
  • Sales and use tax within the City of Burlington will increase two-tenths (.002) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Centralia will increase two-tenths (.002) of one percent for transportation services.
  • Sales and use tax within Clark County will increase two-tenths (.002) of one percent for housing and related services, and local law enforcement programs.
  • Sales and use tax within the City of Edmonds will increase one-tenth (.001) of one percent for transportation services.
  • Sales and use tax for lodging businesses within the City of Enumclaw will increase three-tenths (.003) of one percent for transportation services and decrease three-tenths (.003) of one percent for Special hotel-motel tax. This is a reporting change only and not a rate change.
  • Sales and use tax within the City of Goldendale will increase one-tenth (.001) of one percent for criminal justice purposes, fire protection purposes, or both.
  • Sales and use tax within Jefferson County will increase three-tenths (.003) of one percent for local law enforcement programs, and transportation services, except for the City of Port Townsend which will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Kalama will increase one-tenth (.001) of one percent for transportation services.
  • Sales and use tax for lodging businesses within King County will increase for transportation services and decrease for Special hotel-motel tax while others will increase by three-tenths (.003) of one percent for transportation services.
  • Sales and use tax within the City of Lynnwood will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Richland will increase one-tenth (.001) of one percent for transportation services.
  • Sales and use tax within the City of Ritzville will increase one-tenth (.001) of one percent for transportation services.
  • Sales and use tax within Skagit County will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Tacoma will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Toppenish will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Tukwila will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Washougal will increase three-tenths (.003) of one percent for housing and related services, and local law enforcement programs.
  • Sales and use tax within the City of Wenatchee will increase one-tenth (.001) of one percent for local law enforcement programs.
  • Sales and use tax within the City of Winthrop will increase one-tenth (.001) of one percent for transportation services.
  • Sales and use tax within the City of Woodway will increase one-tenth (.001) of one percent for transportation services. A new lodging code has been created, this is a reporting change only.
Alisa Na CPA | Edmonds Accounting Firm