News

In this edition

The IRS is providing implementation guidance on the One, Big, Beautiful Bill. Below are the expansions and changes to deductions affecting taxpayers as they prepare for the filing season.

Car Loan Interest

Key takeaways about this deduction:


Effective 2025 through 2028
Up to $10,000 per year for interest on qualified new vehicle loans
Phase-out begins at modified adjusted gross income of:

$100,000 for single filers
$200,000 for joint filers




Standard Desuction Increases

The standard deduction increases for tax year 2026, to:


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


Deduction for Seniors

Key takeaways about this deduction:


Additional $6,000 per taxpayer aged 65 or older
$12,000 if both spouses qualify
Phase-out begins at modified adjusted gross income of:

$75,000 for single filers
$150,000 for joint filers





















No Tax on Overtime

Key takeaways about this deduction:


It applies only to the overtime premium portion of wages
Modified adjusted gross income caps annually at:

$12,500 for single filers
$25,000 for joint filers




No Tax on Tips

Key takeaways on tips deduction for tax year 2026:


Up to $25,000 of qualified tip income is deductible
Phase-out begins at modified adjusted gross income of:

$150,000 for single filers
$300,000 for joint filers



 







Source: IRS.gov

US TAX, U.S. TAX
 

IN GENERAL
Under the Taxpayer Bill of Rights, all taxpayers have the right to representation before the IRS by a representative of their choice. See Publication 1 (Rev. 9-2017), Your Rights as a Taxpayer. Taxpayers are also entitled by Internal Revenue Code (IRC) 6103(c) to designate another person to receive or inspect the taxpayer’s tax returns or “return information” (as defined in the statute) by making a request to the IRS for, or a consent to, the disclosure to the person. The IRS, however, must withhold any return information when the agency determines that disclosure of the information would seriously impair federal tax administration. See IRC 6103(e)(7).

NECESSARY AUTHORIZATIONS, THEIR TYPES, AND METHODS OF SUBMISSION

Overview of Authorizations
A. Before an eligible tax practitioner can represent and act on behalf of a taxpayer before the IRS, the practitioner must file a Form 2848, Power of Attorney and Declaration of Representative, with the agency, or an equivalent power of attorney. See section 601.504(a) of the Statement of Procedural Rules (describing the “[s]ituations in which a power of attorney is required”). A valid authorization is needed, accompanied by a declaration of representative as described in Procedural Rule 601.502(c). When properly completed, Form 2848 includes all necessary elements. Proc. R. 601.503(b)(1). The necessary elements are listed in section 601.503(a)(1)-(6). By signing a Form 2848, a taxpayer authorizes the “representative(s) to receive and inspect my confidential tax information and to perform acts I can perform with respect to the tax matters described . . . .” (Line 3). In Part II of the form, Declaration of Representative, the representative attests to their eligibility to represent the taxpayer(s) identified in Part I of the form and the representative’s designation (a thru r). Most representative are attorneys, certified public accounts (CPAs), and enrolled agents (EAs) (designations a, b, and c, respectively). These professionals are “practitioners” under Treasury Circular No. 230, Regulations Governing Practice before the Internal Revenue Service (31 CFR Subtitle A, Part 10).

A “practitioner” is defined in Circular 230 section 10.2(a)(5), in conjunction with sections 10.3(a)-(e) and 10.2(a)(1), (a)(2). Besides the three already mentioned, practitioners include enrolled retirement plan agents (ERPAs) (designation r) and enrolled actuaries (designation e). Tax return preparers granted limited practice privileges under the IRS's voluntary Annual Filing Season Program (AFSP) can act as representatives (designation h, “Unenrolled Return Preparer”) in examinations of tax returns that the preparer prepared and signed.

B. In addition to submitting a Form 2848, a practitioner (or other tax professional) can submit a more limited authorization request, namely, Form 8821, Tax Information Authorization (TIA), which can be used to designate any third party to receive and inspect account information for the tax matter(s) and tax year(s) specified. IRM 21.3.7.5(2) (09-08-2016). A Form 8821 or other TIA operates, under IRC 6103(c), as a written request for or consent to disclosure of a taxpayer’s confidential tax information to a person that the taxpayer designates. 26 CFR 601.501(b)(15) (defining a tax information authorization as a “document signed by the taxpayer authorizing any individual or entity (e.g., corporation, partnership, trust, or organization) designated by the taxpayer to receive and/or inspect confidential tax information in a specified matter). As mentioned, section 6103(c) authorizes disclosure, subject to requirements and conditions prescribed by regulations, of a taxpayer’s return or “return information” to the “person or persons as the taxpayer may designate[,]” unless federal tax administration would be seriously impaired.

Unlike a Form 2848 representative, the designee on a Form 8821 need not be an attorney, CPA, IRS enrolled practitioner, or AFSP participant. But more significantly, a Form 8821 or other TIA does not authorize a designee to:

speak on the taxpayer’s behalf, other than appear as a witness for the taxpayer or to provide information to the IRS, typically in response to a request for the information (Circular 230 section 10.8(b); 26 CFR 601.501(b)(13));
execute a request to allow disclosure of returns or return information to another third party;
advocate the taxpayer’s position regarding federal tax laws;
execute waivers, consents, or closing agreements; or
represent the taxpayer in any other manner before the IRS.
C. Adequately completed authorizations specify the tax periods, taxes (income, employment, excise, etc.), and tax forms, as applicable, to which they relate. And, upon receipt by the IRS, the authorizations are recorded on the Central Authorization File (CAF), which is the IRS’s “computerized system of records which houses authorization information from both powers of attorney and tax information authorizations” and “contains several types of records, among them taxpayer and representative’s records, tax modules and authorizations.” IRM 21.3.7.1.1(1) (03-15-2023).

To enhance taxpayer confidentiality and to facilitate interaction between practitioners and IRS personnel, each practitioner (or other filer) is assigned a nine-digit CAF number when they file their first authorization with the IRS. CAF numbers differ from a tax practitioner’s or other tax professional’s preparer tax identification number (PTIN). Once they’ve been assigned their CAF number, the holder of the number should use it on all future Forms 2848 and 8821 that they file.

Providing Authorizations to the IRS




















Traditional Submission/Filing
Historically, tax professionals were obliged to use an all-paper process for filing authorizations, sending hand-signed Forms 2848 by mail or fax. These forms were generally sent to the appropriate CAF Unit for processing. The CAF Unit then manually entered the information from the form into the CAF system. Currently, tax professionals can continue to use this all-paper process to file authorizations. The Instructions to Form 2848 list the submission mailing addresses and fax numbers, which depend on the taxpayer’s location. Alternatively, a practitioner could, and still can, choose to transmit or deliver a Form 2848 directly to an IRS employee handling the matter(s) that are subject of the practitioner’s representation (for example, a Revenue Agent (who’s assigned to the represented taxpayer’s examination), Revenue Officer, Appeals Officer, or other IRS personnel) instead of the CAF Unit.

Options Expanded Following the Taxpayer First Act
In response to the Taxpayer First Act of 2019 (Pub. L. No. 116-25), in January 2021, the IRS established uniform standards and procedures for the acceptance of taxpayers’ electronic signatures, by expanding the submission options for Forms 2848 and 8821 through the use of the Taxpayer Digital Communication (TDC) Secure Messaging portal available on IRS.gov: Submit Forms 2848 and 8821 Online. In conjunction with the creation of the TDC portal submission option, the IRS adopted rules for using electronic signatures on these forms. Currently, the portal is the only allowable method for filing Forms 2848 and 8821 bearing electronic signatures.

In July 2021 the IRS subsequently further expanded the online submission options through the launch of Tax Pro Account, which allows tax professionals to complete, electronically sign, and submit power-of-attorney and TIA requests to their individual clients’ online accounts (which are necessary to use Tax Pro Account) where the taxpayers can review and electronically approve (and execute) or reject the requests. Tax Pro Account is directly integrated with the CAF to allow real-time processing of authorizations. Most authorizations are active immediately because the system is fully automated, reducing the time required for tax professionals to obtain access to the information they need to represent or otherwise provide services to taxpayers.

Current State
In sum, at present, practitioners have several options to submit authorizations to the IRS to formalize their representation of a client before the IRS or obtain access (as a disclosure designee) to a client’s tax information to assist the client Practitioners can use:

the legacy process (fax/mail);
the online submission portal; or
the Tax Pro Account.
Both the online portal and Tax Pro Account utilize the modernized IRS digital identity platform and align with requirements outlined in IRM 10.10.1, IRS Electronic Signature (e-Signature) Program.

CONCLUSION
A practitioner’s options for submitting authorization requests are summarized below. The time required to process paper forms and the limitations on the acceptance of faxed forms, unless they contain the taxpayer’s handwritten (wet) signature, underscore the value and efficiency of the online portal and Tax Pro Account. Moreover, because forms submitted through the online portal are processed by CAF Unit personnel on a first-in, first-out basis (along with faxed and mailed forms), Tax Pro Account’s real-time processing of authorizations, on the other hand, will make it the preferable option when time is of the essence.

- Use Tax Pro Account

Submit authorization request to taxpayer's online account.
    ♦ All-digital submission
    ♦ Online identity verification and authentication*
    ♦ Real-time processing

Use for —
    ♦ Individual taxpayer with online account ONLY **

Note—
    ♦ Limited tax matters and periods
    ♦ Prior authorizations revoked for same tax matters or periods

* See IRM 21.2.1.58 (11-25-2024), “Secure Access Digital Identity (SADI)”
** At the time of this publication. Check Tax Pro Account website for current capabilities.

- Submit Forms Online

Submit Forms 2848 and 8821 online to the IRS.
    ♦ Secure form upload
    ♦ Electronic or handwritten signature acceptable*
    ♦ First-in, first-out processing

Use for —
    ♦ Individual or business taxpayer
    ♦ Any tax matter or period

Note—
    ♦ Prior authorizations can be retained or revoked

* If taxpayer electronically signs in a remote transaction (i.e., taxpayer and practitioner are at separate locations at time of signing), taxpayer’s identity must be authenticated.

- Fax or Mail Forms

If you can’t use an online option, you can fax or mail authorization forms to the IRS.
    ♦ Paper forms by fax or mail
    ♦ Handwritten signature only
    ♦ First-in, first-out processing

Use for—
    ♦ Individual or business taxpayer
    ♦ Any tax matter or period

Note—
    ♦ Prior authorizations can be retained or revoked









Source: IRS.gov

US TAX, U.S. TAX
 

WASHINGTON — The Internal Revenue Service announced today that the amount individuals can contribute to their 401(k) plans in 2026 has increased to $24,500, up from $23,500 for 2025.
The IRS today also issued technical guidance regarding all cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2026 in Notice 2025-67, posted today on IRS.gov.

Highlights of changes for 2026
The annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $24,500, up from $23,500 for 2025.
The limit on annual contributions to an IRA is increased to $7,500 from $7,000. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment is increased to $1,100, up from $1,000 for 2025.
The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $8,000, up from $7,500 for 2025. Therefore, participants in most 401(k), 403(b), governmental 457 plans and the federal government’s Thrift Savings Plan who are 50 and older generally can contribute up to $32,500 each year, starting in 2026. Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in these plans. For 2026, this higher catch-up contribution limit remains $11,250 instead of the $8,000 noted above.
The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2026.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase‑out ranges for 2026:


For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $81,000 and $91,000, up from between $79,000 and $89,000 for 2025.
For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $129,000 and $149,000, up from between $126,000 and $146,000 for 2025.
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $242,000 and $252,000, up from between $236,000 and $246,000 for 2025.
For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

















Other phase-out ranges and limitations
The notice also provides limitations for 2026 for Roth IRAs, the Saver’s Credit and SIMPLE retirement accounts.


The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $153,000 and $168,000 for singles and heads of household, up from between $150,000 and $165,000 for 2025. For married couples filing jointly, the income phase-out range is increased to between $242,000 and $252,000, up from between $236,000 and $246,000 for 2025. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $80,500 for married couples filing jointly, up from $79,000 for 2025; $60,375 for heads of household, up from $59,250 for 2025; and $40,250 for singles and married individuals filing separately, up from $39,500 for 2025.
The amount individuals can generally contribute to their SIMPLE retirement accounts is increased to $17,000, up from $16,500 for 2025. Pursuant to a change made in SECURE 2.0, individuals can contribute a higher amount to certain applicable SIMPLE retirement accounts. For 2026, this higher amount is increased to $18,100, up from $17,600 for 2025.
The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most SIMPLE plans is increased to $4,000, up from $3,500 for 2025. Under a change made in SECURE 2.0, a different catch-up limit applies for employees aged 50 and over who participate in certain applicable SIMPLE plans, which remains $3,850. Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in SIMPLE plans, which remains $5,250.






Source: IRS.gov

US TAX, U.S. TAX
 

The One, Big, Beautiful Bill (OBBB) (Public Law 119-21, 139 Stat. 72 (July 4, 2025)), accelerated the termination of the Clean Vehicle Credit, sections 30D, 25E, and 45W.
On August 21, 2025, IRS issued frequently asked questions (FAQs) in Fact Sheet 2025-05 relating to the modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under OBBB.
Key points in the FAQs include:


New user registrations for the Clean Vehicle Credit program, through the Energy Credits Online (ECO) portal, closed on September 30, 2025.
The ECO portal will remain open beyond September 30, 2025, for limited usage by previously registered users to submit time of sale reports and updates to such reports, such as when there has been a returned vehicle.

When submitting time of sale reports, they should submit supporting documents such as the complete vehicle deal jacket and any documents pertaining to the clean vehicle credit, which may expedite the review process.



















Important reminders for repayments – IRS reissuing Pay.gov invoices for unpaid advance payments for vehicle returns or cancellations:


When a dealer submits a return or cancels a time of sale report, they must repay the advance payment of the credit received at the original time of sale.
Pay.gov electronically sends an invoice and access code to the email address associated with the dealer’s advance payment registration. Payment will not be automatically debited.
When the invoice is received, the dealer should promptly repay the advance payment within 30 days of receipt of the invoice.
Advance payments for new time of sale report submissions will only be paid out for that vehicle after the dealer first repays the IRS any advance payment for a returned or cancelled time of sale report.
If a dealer is unable to locate the email containing the invoice and access code, please contact the IRS at irs.clean.vehicles.dealer.info@irs.gov to request a new one.


For more information on the expiration of the clean vehicle credits, please see Fact Sheet 2025-05.




Source: IRS.gov

US TAX, U.S. TAX
 

Planning for retirement may seem daunting, but it’s important to start early. Individual retirement accounts provide tax incentives for people to make investments towards their financial future.
IRAs let earnings grow tax deferred. Individuals pay taxes on investment gains only when they make withdrawals. Depositors may be able to claim a deduction on their individual federal income tax return for the amount they contributed to an IRA.
Here are some highlights for the many types of IRAs:

Traditional IRA
Most common type of IRA and generally, the money in a traditional IRA isn't taxed until it's withdrawn.
There are annual limits to contributions depending on the person's age and the type of IRA.
When planning when to withdraw money from an IRA, taxpayers should know:
They may face a 10% penalty and a tax bill if they withdraw money before age 59½, unless they qualify for an exception
Usually, they must start taking withdrawals from the IRA when they reach age 73, age 72 if they turned 72 in 2022. For tax years 2019 and earlier, that age was 70½
Special distribution rules apply for IRA beneficiaries.

Roth IRA
Same rules as a traditional IRA, but there are differences:
Contributions are made with after-tax funds, and a taxpayer can't deduct contributions to a Roth IRA.
Qualified distributions are tax free.
Don't require withdrawals until after the death of the owner.
 
















Other types of IRAs
Simplified employee pension – A SEP IRA is set up by an employer. The employer makes contributions directly to an IRA set up for each employee.
Savings incentive match plan for employees – A SIMPLE IRA allows the employer and employees to contribute to an IRA set up for each employee. It is suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
Payroll deduction IRA – Employees set up a traditional or a Roth IRA with a financial institution and authorize a payroll deduction agreement with their employer.



Source: IRS.gov

US TAX, U.S. TAX
 

Note: This Fact Sheet has been updated July 25 by adding to the section on “No Tax on Car Loan Interest” new language describing the requirement for “Final assembly in the United States.”

Below are descriptions of new provisions from the One Big Beautiful Bill Act, signed into law on July 4, 2025, as Public Law 119-21, that go into effect for 2025.

 


New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.


“Qualified tips” are voluntary cash or charged tips received from customers or through tip sharing.
Maximum annual deduction is $25,000; for self-employed, deduction may not exceed individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).


Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.

Self-employed individuals in a Specified Service Trade or Business (SSTB) under section 199A are not eligible. Employees whose employer is in an SSTB also are not eligible.
Taxpayers must:

include their Social Security Number on the return and
file jointly if married, to claim the deduction.




Reporting: Employers and other payors must file information returns with the IRS (or SSA) and furnish statements to taxpayers showing certain cash tips received and the occupation of the tip recipient.
Guidance: By October 2, 2025, the IRS must publish a list of occupations that “customarily and regularly” received tips on or before December 31, 2024.

The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and payors subject to the new reporting requirements.




“No Tax on Overtime”


New deduction: Effective for 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay – such as the “half” portion of “time-and-a-half” compensation -- that is required by the Fair Labor Standards Act (FLSA) and that is reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.


Maximum annual deduction is $12,500 ($25,000 for joint filers).
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).


Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.

Taxpayers must:

include their Social Security Number on the return and
file jointly if married, to claim the deduction.




Reporting: Employers and other payors are required to file information returns with the IRS (or SSA) and furnish statements to taxpayers showing the total amount of qualified overtime compensation paid during the year.
Guidance: The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and other payors subject to the new reporting requirements.

















“No Tax on Car Loan Interest”


New deduction: Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)


Maximum annual deduction is $10,000.
Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).


Qualified interest: To qualify for the deduction, the interest must be paid on a loan that is:

originated after December 31, 2024,
used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),
for a personal use vehicle (not for business or commercial use) and
secured by a lien on the vehicle.




If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.


Qualified vehicle: A qualified vehicle is a car, minivan, van, SUV, pick-up truck or motorcycle, with a gross vehicle weight rating of less than 14,000 pounds, and that has undergone final assembly in the United States.
Final assembly in the United States: The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer's premises. Alternatively, taxpayers may rely on the vehicle’s plant of manufacture as reported in the vehicle identification number (VIN) to determine whether a vehicle has undergone final assembly in the United States.

The VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA) provides plant of manufacture information. Taxpayers can follow the instructions on that website to determine if the vehicle’s plant of manufacture was located in the United States.


Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.

The taxpayer must include the Vehicle Identification Number (VIN) of the qualified vehicle on the tax return for any year in which the deduction is claimed.


Reporting: Lenders or other recipients of qualified interest must file information returns with the IRS and furnish statements to taxpayers showing the total amount of interest received during the taxable year.
Guidance: The IRS will provide transition relief for tax year 2025 for interest recipients subject to the new reporting requirements.


Deduction for Seniors


New deduction: Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law.


The $6,000 senior deduction is per eligible individual (i.e., $12,000 total for a married couple where both spouses qualify).
Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).


Qualifying taxpayers: To qualify for the additional deduction, a taxpayer must attain age 65 on or before the last day of the taxable year.
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.

Taxpayers must:

include the Social Security Number of the qualifying individual(s) on the return, and
file jointly if married, to claim the deduction.







Source: IRS.gov

US TAX, U.S. TAX
 

WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.

Optional standard milage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:


70 cents per mile driven for business use, up 3 cents from 2024.
21 cents per mile driven for medical purposes, the same as in 2024.
21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.


The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.
















While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.

Notice 2025-5 PDF contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.
Source: IRS.gov

US TAX, U.S. TAX
 

People with disabilities and their families can use Achieving a Better Life Experience accounts to help pay for qualified disability-related expenses. ABLE accounts are savings accounts that don't affect eligibility for government assistance programs. Here are some key things people should know about these accounts.

Contribution limit

The contribution limit for 2025 is $19,000. Certain employed ABLE account beneficiaries may make an additional contribution. The additional amount is the designated beneficiary's compensation for the tax year or, for 2025, the amount of $15,650 for residents in the continental U.S., $19,550 in Alaska and $17,990 in Hawaii.

Saver's Credit

ABLE account designated beneficiaries may be eligible to claim the Saver's Credit for a percentage of their contributions. This is a non-refundable credit for people who:


Are at least 18 years old at the close of the taxable year,
Are not a dependent or a full-time student, and
Meet the income requirements.


The beneficiary can claim this credit using Form 8880, Credit for Qualified Retirement Savings Contributions PDF.
















Rollovers and transfers from Section 529 plans

Families may roll over funds from a 529 plan to another family member's ABLE account. The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a Section 529 plan do count toward the annual contribution limit.

Rollovers from a 529 to an ABLE account, plus the annual contribution to the ABLE account, cannot exceed the maximum contribution amount for the year. For example, the $18,000 annual contribution limit for 2024 would be met by parents contributing $10,000 to their child's ABLE account and rolling over $8,000 from a 529 plan to the same ABLE account.

Qualified disability expenses

States can offer ABLE accounts to help people who become disabled before age 26 or if their families pay for disability-related expenses outlined in Publication 907, Tax Highlights for Persons with Disabilities. Though contributions aren't deductible for federal tax purposes, distributions – including earnings – are tax-free to the beneficiary if the taxpayer pays for a qualified disability expense.

More information


Form 1099-QA, Distributions from ABLE Accounts
Form 5498-QA, ABLE Account Contribution Information
Instructions for Forms 1099-QA and 5498-QA PDF


Source: IRS.gov
US TAX, U.S. TAX
 

Most refunds issued in less than 21 days: EITC refunds for many available by March 3

The easiest way to check a refund's status is by using Where's My Refund? on IRS.gov or the IRS2Go app.

Many factors can affect refund timing after the IRS receives a tax return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer.

Under the federal Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) refunds before mid-February. Where's My Refund? should show an updated status by February 22 for most early EITC/ACTC filers. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by March 3 if they chose direct deposit and there are no other issues with their tax return.

Report taxable income; don’t file before receiving key documents

People should report all taxable income on their tax return and wait to file until they receive all of their income and informational documents. Taxpayers may receive various income and information statements such as Forms 1099 from banks or other payers, unemployment compensation, dividends, pensions, annuities or retirement plan distributions. Taxpayers receiving Forms 1099-K, for payments on sale of goods and services through an online marketplace or payment app, can visit What to do with Form 1099-K to help them figure and report the correct amount of income on their tax return.

Choose a trusted tax professional

More than half of taxpayers turn to a tax professional for help filing a tax return. While most tax preparers deliver exceptional and professional service, selecting the wrong preparer can lead to financial harm.

Taxpayers should review the tips for choosing a tax preparer and learn how to avoid unethical “ghost” return preparers who don’t sign or include a valid preparer tax identification number (PTIN) on every tax return they prepare. Taxpayers can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find trusted professionals. The IRS also reminds taxpayers that choosing someone affiliated with a recognized national tax association is always a good option. Tax professionals accepted into the IRS electronic filing program are authorized IRS e-file providers, qualified to prepare, transmit and process electronically filed tax returns.

Be aware of tax scams

Be aware of scammers, who can become more active during tax season. They will attempt to mislead people about tax refunds, credits and payments. They pressure people for personal, financial, employment information or money.

Watch out for:


A big payday. If it sounds too good to be true, it probably is. Bad tax advice on social media may convince people to lie on tax forms or mislead them about credits they can claim.
Demands or threats. Impersonators want people to pay “now or else.” They threaten arrest or deportation. They don’t let people question or appeal the amount of tax they owe.
Odd or misspelled website links. Odd or misspelled web links can take people to harmful sites instead of IRS.gov.


Tax-related identity theft occurs when someone uses stolen personal information, including Social Security numbers, to file a tax return claiming a fraudulent refund. If a person suspects they are a victim of identity theft, they should continue to pay their taxes and file their tax return, even if they must file a paper return. Visit Identity Theft Central to find out more.





Know the signs of identity theft

Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone and email to set up individuals, businesses, payroll and tax professionals. Check out the latest consumer alerts and read more about the most recent tax related scams identified by the IRS.

More help is now available

The IRS also provides taxpayers help in-person at Taxpayer Assistance Centers nationwide.

Some improvements taxpayers will see during the 2025 filing season are:

IRS Individual Online Account. The IRS continues to add more functionality to this important tool. Individuals can create or access their IRS Online Account at Online account for individuals. With an IRS Online Account, people can:


View key details from their most recent tax return, such as adjusted gross income.
Request an Identity Protection PIN.
Get account transcripts, to include wage and income records.
Sign tax forms like powers of attorney or tax information authorizations.
View and edit language preferences and alternative media.
Receive and view over 200 IRS electronic notices.
View, make and cancel payments.
Set up or change payment plans and check their balance.


New scam alert. To help protect taxpayers against emerging threats, there’s a new banner on the Online Account homepage that alerts taxpayers of potential scams and schemes, along with a link to their Digital Notices and Letters page to view correspondence sent to them from the IRS. The feature helps to educate taxpayers on common scams and fraudulent efforts to steal taxpayer information and provide taxpayers with more ability to validate the legitimacy of IRS communications.

Redesigned notices. The IRS successfully redesigned 284 notices in 2024, exceeding the agency’s 200 notice goal. It is important to note that 200 notices were redesigned and deployed in 2024 and an additional 84 redesigned notices are in line to be deployed in 2025. All notices will be added to Individual Online Account so taxpayers receiving a specific letter can see it.

Mobile-adaptive tax forms. Taxpayers can now access 67 forms on cell phones and tablets. The most recent forms feature “save and draft” capabilities, which allow the taxpayer to start a form, save it and return to it later. The addition of save and draft allows for future capabilities, including the ability for multiple spouses to sign a form.

Virtual assistants to help with refunds and other questions. Whether a taxpayer uses an online tool or calls the IRS, they will experience upgraded help features. During filing season 2025, the IRS will offer voicebot services to all taxpayers calling the IRS for refund information. The voicebot is available in English and Spanish and has helped thousands of callers without the need to wait for the next available representative. Taxpayers will have to authenticate their identity to gain access to their refund information by providing select information from their tax return.

Last year the IRS began using online chatbots for various functions. These chatbots use either guided help through choice buttons or an open text box for a customized question. The chatbots use natural language processing and understanding to interpret the input from the taxpayer to provide an appropriate response. To launch the chatbot, the taxpayer simply clicks on the “Chat” button in the lower right corner of the webpage. Currently taxpayers can use chatbots from eight webpages.


Source: IRS.gov
US TAX, U.S. TAX
 

Taxpayers should start gathering and organizing records to get ready for filing their 2024 federal tax return. They need all year-end income documents to help ensure they file a complete and accurate 2024 federal tax return and avoid refund delays.

The Get ready page on IRS.gov offers practical tips and resources to help taxpayers prepare. It highlights key updates and important steps for making tax filing easier in 2025.

Documents

Taxpayers should have all necessary records handy, such as W-2s, 1099s, receipts, canceled checks and other documents that support any income, deductions or credits reported on their tax return.

Most taxpayers should receive income documents including:


Forms W-2, Wage and Tax Statement.
Form 1099-MISC, Miscellaneous Income.
Form 1099-INT, Interest Income.
Form 1099-NEC, Nonemployee Compensation.
Form 1099-G, Certain Government Payments – such as unemployment compensation or state tax refund.
Form 1095-A, Health Insurance Marketplace Statements.














IRS Online Account

An IRS Online Account makes it easy for taxpayers to quickly get the tax planning info they need. With an IRS Online Account, they can:


View key details from their most recent tax return, such as adjusted gross income.
Request an Identity Protection PIN.
Get account transcripts to include wage and income records.
Sign tax forms like powers of attorney or tax information authorizations.
View and edit language preferences and alternative media.
Receive and view notices and letters.
View, make and cancel payments.


People should visit How to register for certain online self-help tools for more information about how to create an IRS Online Account or how to reset the username or password.

More information:


Tax Topic 418, Unemployment compensation
Taxable income
What is taxable and nontaxable income?


Source: IRS.gov
US TAX, U.S. TAX
 

Taxpayers should be aware of gift card scams and take steps to protect themselves. Scammers may target taxpayers by asking them to pay a fake tax bill with gift cards. People should remember that the IRS never asks for or accepts gift cards as payment for a tax bill.
The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. To verify it’s the IRS, go to IRS.gov and verify the form or visit the Let Us Help Youpage to verify tax information with self-service options.

Common schemes
Scammers are always changing their tactics. Recently, the IRS has seen scammers:


Request gift cards over the phone through a government impersonation scam or by sending a text message, email or social media message.
Pose as an IRS agent and call the taxpayer or leave a pre-recorded voicemail stating they are linked to some criminal activity.
Threaten or harass the taxpayer by telling them that they must pay a fictitious tax penalty.
Instruct the taxpayer to buy gift cards from various stores.
Pressure the taxpayer to buy gift cards, then ask the taxpayer to provide the gift card number and PIN.





Who’s calling
Here's how taxpayers can tell it's really the IRS calling. The IRS will never:


Call for immediate payment using a specific payment method such as a gift card, prepaid debit card or over social media. 
Demand a taxpayer pay “or else.”
Threaten to bring in law enforcement or immigration officers to have the taxpayer arrested for not paying.
Take a taxpayers citizenship status, driver’s license or business license.


Identity theft actions
Any taxpayer who suspects they’ve been the victim of a scammer should:


Visit Identity Theft Central page of IRS.gov for next steps.
Contact the Treasury Inspector General for Tax Administration to report a phone scam, and use their IRS Impersonation Scam Reportingwebpage or call 800-366-4484.
Report phone scams to the Federal Trade Commission with the FTC Complaint Assistant on FTC.gov, and add "IRS phone scam" in the notes.



Source: IRS.gov
US TAX, U.S. TAX
 

WASHINGTON — With the 2025 filing season quickly approaching, the Internal Revenue Service encouraged taxpayers to take key steps now to prepare for filing their 2024 federal income tax returns next year.
The IRS continues to improve taxpayer services to help people prepare for tax season with more digital tools and options available. The IRS encourages taxpayers to sign up now for an IRS Online Account to make tax season easier and help safeguard their tax information.
There are a number of things taxpayers can do to get ready as the end of 2024 nears and the start of the 2025 tax season approaches.
The IRS’s Get Ready page on IRS.gov offers practical tips and resources to help taxpayers prepare. It highlights key updates and important steps for taxpayers to consider to make tax filing easier in 2025.
This reminder is part of a series designed to help taxpayers “Get Ready” for the upcoming filing season. Taking action now can reduce stress and ensure a smoother filing process next year.

IRS Online Account Can assist you to check your personal information in IRS
Individuals can create or access their IRS Online Account at Online account for individuals. With an IRS Online Account, they can:


View key details from their most recent tax return, such as adjusted gross income.
Request an Identity Protection PIN.
Get account transcripts to include wage and income records.
Sign tax forms like powers of attorney or tax information authorizations.
View and edit language preferences and alternative media.
Receive and view over 200 IRS electronic notices.
View, make and cancel payments.
Set up or change payment plans and check their balance.


Get an Identity Protection Personal Identification Number (IP PIN)
An IP PIN is a six-digit number that prevents someone else from filing a federal tax return using an individual’s Social Security number or Individual Taxpayer Identification Number. It’s a vital tool for ensuring the safety of taxpayers’ personal and financial information.
New for the 2025 filing season, the IRS will accept Forms 1040, 1040-NR and 1040-SS even if a dependent has already been claimed on a previously filed return, as long as the primary taxpayer on the second return includes a valid IP PIN. This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns.
The best way to sign up for an IP PIN is through the IRS Online Account. If an individual is unable to create an Online Account, alternative methods are available, such as in-person authentication at a Taxpayer Assistance Center. More information is available on how to sign up at Get an identity protection PIN (IP PIN).

Deadline for 2024 last quarterly estimated payment is Jan. 15, 2025
Taxpayers with non-wage income—such as unemployment benefits, self-employment income, annuity payments or earnings from digital assets—may need to make estimated or additional tax payments. The Tax Withholding Estimator on IRS.gov can help wage earners determine if they need to make an additional payment to avoid an unexpected tax bill when filing their return.


1099-K reporting changes
Taxpayers who received more than $5,000 in payments for goods and services through an online marketplace or payment app in 2024 should expect to receive a Form 1099-K PDF in January 2025. A copy of this form will be sent to the IRS as well.
Although the IRS is taking a phased in approach to implementation of the Form 1099-K reporting threshold, there have been no changes to the taxability of income. All income, including proceeds from part-time work, side jobs or the sale of goods and services is taxable. Taxpayers must report all income on their tax return unless it's excluded by law, whether they receive a Form 1099-K or not. The law doesn’t allow taxpayers to avoid taxes on income earned just because they didn’t get a form reporting the payments received.
It is important for taxpayers to understand why they received a Form 1099-K and how to use it along with their other records to figure and report the correct amount of income on their tax return. It is also important for taxpayers to know what to do if they received a Form 1099-K but shouldn't have. In either situation, good recordkeeping is key. Having good records will help make tax filing easier.

Prepare to include digital assets on taxes in 2025
Just like previous filing years, taxpayers must report all digital asset-related income when they file their 2024 federal income tax return. A digital asset is property that is stored electronically and can be bought, sold, owned, transferred or traded. Examples include convertible virtual currencies and cryptocurrencies, stablecoins and non-fungible tokens (NFTs).
If a taxpayer had digital asset transactions last year, they should be sure to keep records that prove their purchase, receipt, sale, exchange or any other disposition of the digital assets and that includes the fair market value, as measured in U.S. dollars of all digital assets received as income or as a payment in the ordinary course of a trade or business.
When filing 2024 federal income tax returns, taxpayers will be asked to answer “Yes” or “No” to the following question:
At any time during the tax year, did you:
(a) receive (as a reward, award or payment for property or services); or
(b) sell, exchange or otherwise dispose of a digital asset (or a financial interest in a digital asset)?
Taxpayers should be prepared to answer the question by reviewing the digital assets landing page and FAQ available on IRS.gov. In addition to checking the "Yes" box, taxpayers must report all income related to their digital asset transactions. Information on how to report digital asset transactions, including calculating capital gain or loss, determining basis and reporting the income on the correct form can also be found on the digital assets landing page.

Understand refund timing and how to avoid delays
Several factors can influence the timing of a refund after the IRS receives a tax return. While the IRS issues most refunds in less than 21 days, taxpayers are advised not to depend on receiving a 2024 federal tax refund by a specific date for major purchases or bill payments. Some returns may require additional review and take longer to process if there are possible errors, missing information, or indications of identity theft or fraud.
Additionally, under the PATH Act, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The IRS must hold the entire refund—not just the portion associated with these credits—until the review is complete.

Gather and organize 2024 tax documents
To make tax time easier, taxpayers should establish an effective record-keeping system, either electronic or paper, to organize all important documents in one place. This includes year-end income forms such as Forms W-2 from employers, Forms 1099 from banks or other payers, Forms 1099-K from third-party payment networks, Forms 1099-NEC for nonemployee compensation, Forms 1099-MISC for miscellaneous income, Forms 1099-INT for interest income and records of all digital asset transactions.
Having all necessary documentation ensures taxpayers can file an accurate return and reduces the likelihood of processing delays or refund issues.

Source: IRS.gov
US TAX, U.S. TAX