Making the most of the new deduction for seniors

Many parents don’t know that the so-called “kiddie tax” exists. Others assume it affects only minor children. But it also can apply to full-time students through age 23 and 18-year-olds even if they aren’t full-time students. When it applies, most of the child’s unearned income may be taxed at the parent’s higher tax rate. The purpose of the kiddie tax is to minimize the ability of parents to significantly reduce their family’s taxes by transferring income-producing assets to their children in lower tax brackets. If your child has investment income from custodial accounts or other assets, understanding these rules can help you avoid unexpected tax consequences. Who it affects The kiddie tax generally applies to most unearned income of individuals who, at the end of the tax year, are: Under age 18, Age 18 (unless they provide more than half of their own support from earned income), or At least age 19 but under age 24 and full-time students (unless they provide more than half of their own support from earned income). So, for a student, the kiddie tax can be an issue until the year that he or she turns age 24. For that year and future years, even full-time students who are still supported by their parents are kiddie-tax-exempt. How it works Earned income from a job or self-employment is never subject to the kiddie tax. And the tax is assessed on a child’s (or young adult’s) unearned income only to the extent that it exceeds the applicable threshold, which is $2,700 for 2026. Unearned income usually means interest, dividends and capital gains. These types of income often come from custodial accounts that parents and grandparents set up and fund for younger children. For 2026, the first $1,350 of unearned income is taxed at 0%. The second $1,350 is taxed at the child’s (or young adult’s) rate. This might also be 0% for some or all of the second $1,350, depending on 1) how much of the unearned income is made up of long-term capital gains and qualified dividends, and 2) whether the child’s (or young adult’s) taxable income is low enough for him or her to qualify for the 0% rate. Then the excess is taxed at the parent’s rate. This could be up to 20% on long-term capital gains and qualified dividends and as much as 37% on interest, short-term capital gains and nonqualified dividends — depending on the parent’s taxable income. When it applies For 2026, Form 8615, “Tax for Certain Children Who Have Unearned Income,” must be filed and kiddie tax paid for any child (or young adult) who: Has more than $2,700 of unearned income, Is required to file Form 1040, As of December 31, 2026, is under age 18, is age 18 and didn’t have earned income in excess of half of his or her support, or is age 19, 20, 21, 22 or 23 and a full-time student and didn’t have earned income in excess of half of his or her support, Has at least one living parent, and Isn’t married and filing a joint return for the year. The kiddie tax threshold is annually adjusted for inflation, but generally only in increments of at least $100. So it doesn’t necessarily go up every year. It didn’t increase for 2026, so it may be more likely to increase for 2027. Planning opportunities The kiddie tax can increase a family’s overall tax liability if investment income is generated in a child’s name. In some situations, it may make sense to review the types of investments owned in custodial accounts and the timing of investment sales. For example, growth-oriented investments that generate little current income may help reduce exposure to the kiddie tax until your child is old enough that this tax no longer applies. At that time, appreciated investments can begin to be sold, with the gains taxed at your child’s own, potentially lower, rate. If you’d like help evaluating your family’s situation, contact us. We can assess potential kiddie tax exposure and suggest tax-efficient investment strategies. © 2026 

If you’re self-employed, you probably have questions about deducting business expenses on your federal income tax return. Here’s a quick overview of the filing requirements for sole proprietors and independent contractors, and five examples of expense deductions that are commonly overlooked or misunderstood. Filing basics Sole proprietors and independent contractors must report their business activity on Schedule C, “Profit or Loss From Business,” of their personal tax returns (Form 1040). Business income includes money earned from customers, side gigs, online sales and other self-employment activities. Income may be reported on Forms 1099-NEC or 1099-K, but you must report all taxable business income, even if you don’t receive a tax form. Although employees can no longer deduct unreimbursed business expenses, self-employed individuals can offset their business income with various deductions for business-related expenses. This is a major tax advantage for the self-employed. When evaluating whether costs are deductible, follow this golden rule: Business expenses must be ordinary (common in your industry) and necessary (helpful and appropriate for the business). Of course, you’ll need to keep detailed records to support your business deductions. Obvious examples of potentially deductible expenses are supplies, materials, and, if you have employees, payroll and benefits. Other business-related expenses may also be deductible on Schedule C, though the rules are sometimes confusing. Below are five common examples. 1. Home office Unlike employees who work remotely, you can deduct the costs for a workspace in your home that’s used regularly and exclusively as your principal place of business. This can include a portion of actual indirect home expenses — such as rent or mortgage interest, insurance, utilities and repairs — based on your business-use percentage. For instance, if you use 10% of your apartment’s square footage for business, you can deduct 10% of your rent. You can also fully deduct direct expenses (for example, the cost of painting your office) and, if you own your home, claim a depreciation allowance under IRS tables. In lieu of tracking your actual expenses, the IRS also offers a simplified method of $5 per square foot for up to 300 square feet. 2. Education The costs of refresher courses, continuing education classes, vocational training and other education programs may be deductible if you’re required to take them to maintain or improve skills required for your current trade or business. Qualifying expenses include tuition, books, supplies and fees, and potentially travel costs to attend education programs. However, costs of education that’s needed to meet the minimum requirements for a trade or business or that qualifies you for a new trade or business generally aren’t deductible. For example, you can’t claim the cost to obtain an undergraduate degree as a business expense. 3. Business meals You generally can deduct 50% of the costs of business meals if they aren’t “lavish or extravagant.” This applies to food and beverages provided to customers, clients, suppliers, employees, agents, partners or professional advisors — whether established or prospective. Although entertainment costs aren’t deductible under current law, food and beverages might be deductible even if they’re provided at a nondeductible entertainment activity. But such a deduction is available only if: The food and beverage items are separately purchased or identified from the entertainment costs on bills, invoices or receipts, and The amount charged for food or beverages reflects the venue’s usual selling price for those items if purchased separately from the entertainment or approximates the reasonable value of those items. Say, for example, that you take a customer to a World Cup match this summer. The ticket costs aren’t deductible. But if you buy the customer popcorn, nachos and drinks while there, you can deduct half of those costs as long as you have proper documentation, such as the itemized receipt, and records showing who attended and the business purpose. 4. Business travel If you travel to a temporary location for business purposes, you can deduct your travel expenses, including round-trip airfare, hotel costs and other incidentals (such as tips and cab fares). However, the primary purpose of your trip must be business related. For instance, you might travel to a different city or country to attend a trade show or educational conference. Beware: Some allocations may be required if a trip combines business and pleasure — for example, if you fly to a location for four days of business meetings and stay for an additional three days of vacation. Only the reasonable cost of lodging and 50% of meals incurred during the business days are deductible. Lodging and meal costs incurred for the personal vacation days aren’t deductible. On the other hand, with respect to the cost of the travel itself (for example, plane fare), if the trip is primarily for business purposes, the travel cost can be deducted in its entirety, and no allocation is required. Conversely, if the trip is primarily personal, none of the travel costs are deductible. If your spouse joins you, his or her travel expenses generally aren’t deductible, unless your spouse is your employee and has a bona fide business reason to be there. But the restrictions apply only to additional costs incurred by having your nonemployee spouse travel with you. For example, the expense of a hotel room or for traveling by car would likely still be fully deductible because the cost to rent the room or travel by car alone vs. with another person would be the same, even in a rented car. 5. Business vehicle expenses If you drive your personal vehicle for business purposes, you may be eligible to deduct some auto-related expenses on Schedule C. The amount of your deduction is based on the percentage of business use. For example, suppose you use your car 60% for business driving in 2026. That means you can deduct 60% of your vehicle costs — such as gas, repairs and insurance — plus a generous depreciation allowance, subject to certain limits for “luxury cars.” And, if you buy the vehicle in 2026, you may also qualify for a Section 179 deduction and 100% bonus depreciation, subject to applicable eligibility requirements and limitations. Be aware that the IRS is a stickler for documentation. Briefly stated, you must keep a contemporaneous log listing every business trip and proof of your expenses. Alternatively, you can cut down on recordkeeping by using the standard mileage rate of 72.5 cents per business mile (plus business-related tolls and parking fees) in 2026. Don’t leave tax savings on the table Many self-employed taxpayers miss legitimate deductions because they fail to keep adequate records or misunderstand the rules. Tracking expenses throughout the year can make tax filing easier, help ensure you don’t miss legitimate deductions and strengthen your position if the IRS questions a deduction. We can help you identify qualifying business expense deductions and establish recordkeeping practices that support them. Contact us to start discussing a tax strategy tailored to your small business. © 2026 

A properly structured grantor retained annuity trust (GRAT) can be a powerful tool for those with estates large enough that gift and estate taxes are a concern. It allows you to transfer wealth to your loved ones at little or no tax cost while continuing to enjoy an income stream for a period of years. However, there are some drawbacks to a GRAT. GRAT benefits A GRAT is an irrevocable trust that allows you, as the grantor, to transfer appreciating assets to beneficiaries while retaining the right to receive fixed annuity payments for a specified term. At the end of the term, any remaining assets pass to the beneficiaries you’ve named, such as your children. The projected value of what will remain in the trust for the beneficiaries after the annuity is paid is generally a taxable gift for federal purposes. This is calculated by assuming the GRAT assets will grow at the Section 7520 rate, regardless of the specific assets’ projected or actual growth rate. For taxpayers with estates that currently exceed the federal gift and estate tax exemption (or that might grow to exceed it in the future), one of the most attractive features of a GRAT is its ability to reduce gift and estate taxes. GRATs are commonly funded with assets that are expected to increase significantly in value, such as closely held business interests, stocks or investment portfolios. Any appreciation of the trust assets above the Sec. 7520 rate, also known as the “hurdle” rate, can pass to beneficiaries free of additional gift or estate tax. Many GRATs are structured as “zeroed-out” GRATs, meaning the present value of the annuity is nearly equal to the value of the assets contributed to the trust. As a result, the taxable gift is minimal or even close to zero. GRAT drawbacks One of the most significant risks of using a GRAT is that the grantor must survive the trust term. If you die before the GRAT expires, some or all of the trust assets may be included in your taxable estate, potentially eliminating the anticipated tax benefits. For this reason, shorter-term GRATs are often preferred, particularly for older individuals or those with health concerns. Also, the investment performance of a GRAT’s assets matters. A GRAT succeeds only if the trust assets appreciate at a rate greater than the hurdle rate. If the assets underperform or decline in value, the GRAT may produce little or no wealth-transfer benefit. While you, as the grantor, generally will still receive the annuity payments, the effort and costs associated with establishing the trust may be wasted. Bear in mind, too, that because a GRAT is irrevocable, you can’t simply change the terms or reclaim the transferred assets once the trust has been established. This lack of flexibility requires careful planning and consideration of future financial needs. Right for you? A GRAT can be a powerful estate planning tool for individuals with large estates and a desire to transfer wealth tax efficiently to future generations. However, it isn’t right for everyone. Factors such as life expectancy, asset performance expectations, cash flow needs and overall estate planning objectives should all be carefully evaluated. We can help you determine if a GRAT is right for you. © 2026 

Ahh, summer! You’re probably looking forward to time off from work — anything from a long-anticipated trip abroad to a U.S. road trip to a “staycation,” where you might enjoy reading a good book with an iced drink in your own backyard. But not everyone takes a summer vacation. In fact, several studies say that only about half of Americans take time off in the warmer months. Despite providing paid time off (PTO) as a fringe benefit, your business may also employ workers who don’t take holiday or sick days. This can be a problem for both workers who lose their valuable benefits and your organization, which may experience lower productivity and higher fraud risk. Let’s look at the problems and some solutions. Too much time in The 2025 FlexJobs Work and PTO Pressure Report found that 23% of U.S. workers didn’t take any days off in the previous year. Other surveys have shown that most employees leave at least some PTO unused at the end of the year. Depending on your business’s policies and applicable state laws, employees could lose unused PTO hours when a new calendar year begins. Unfortunately, your business is also likely to suffer if workers don’t take time off. Overworked employees are generally more stressed, less productive and more prone to making errors. The primary reason workers don’t take time off, according to the FlexJobs survey, is that they feel their workload is too heavy. In addition, some employees fear that taking vacation time makes them look less committed to the job. This can result in poor morale across your organization. Failure to take time off is a major red flag for occupational fraud, too. Employees engaged in fraud schemes typically decline vacations and time off for illness because they fear exposure if others fill in for them. For this reason, your business should consider requiring workers to take a minimum amount of PTO each year. Encouraging time off In addition to establishing an official PTO policy, supervisors should regularly remind their reports to schedule days off. To appease workers who worry about their workload, arrange for other employees or a temporary worker to fill in for them. You might want to tell them that taking accrued time off won’t negatively affect their performance evaluations. After all, the business will likely benefit when workers return from vacation refreshed and newly energized. For supervisors to play this role, they’ll need access to running PTO totals — possibly through your payroll management system. You may also want to engage a third-party provider to send easily digestible wellness content and vacation reminders to employees. Other strategies If some of your workers always end the calendar year with unused PTO, you might want to consider revising your plan to allow them to carry over a certain number of days. Just understand that large amounts of carried-over PTO can add liabilities to your balance sheet. Also, know that some states (including California and Montana) place significant restrictions on PTO forfeiture, which might require you to carry over all or some of your employees’ unused balances. Another option? Establish a PTO contribution program. These programs allow employees with unused vacation hours to convert them to retirement plan contributions. If you offer a 401(k) plan, it can treat these amounts as pretax contributions similar to employee payroll deferrals. Alternatively, the plan can treat the amounts as employer profit sharing. If your 401(k) plan doesn’t already include a PTO contribution arrangement, you’ll need to amend it. You must continue to follow the plan document’s eligibility, vesting, rollover, distribution and loan terms. True cost Contact us for details on creating and administering a tax-advantaged PTO contribution arrangement. We can also help you evaluate your PTO policies, determine the hidden costs of unused PTO, and recommend strategies that support both your workforce and your business goals. © 2026 

If you participate in a company 401(k) plan, you already know that you can make pre-tax contributions up to the annual elective deferral limit to a traditional, tax-deferred account. If your 401(k) plan offers a Roth option, you can use part or all of your limit to make after-tax contributions to a Roth account instead. But you may have a third option, if your 401(k) plan allows it: Make after-tax contributions to a traditional account. Traditional vs. Roth deferrals For 2026, 401(k) elective deferral contributions are generally limited to $24,500. If you’ll be 50 or older at year end, you can make additional elective deferral contributions, called “catch-up” contributions. The 2026 catch-up contribution limit is either $8,000 or $11,250, depending on your age. However, if your 2025 salary exceeded $150,000, any catch-up contributions must be made to a Roth 401(k) account. When you make pre-tax elective deferrals to a traditional 401(k), the contributions aren’t included in your taxable income for the year, but they’re still subject to Social Security and Medicare taxes (collectively called FICA tax). The account funds can grow on a tax-deferred basis, and you’ll owe income taxes on distributions — both those attributable to contributions and those attributable to growth. When you make after-tax Roth 401(k) elective deferrals, the contributions don’t reduce your taxable income. So, they’re subject to both income tax and FICA tax. The payoff is that earnings in your Roth 401(k) account are allowed to accumulate income-tax-free and you can take income-tax-free qualified withdrawals from the account once you meet the requirements. (Generally, qualified distributions are those after age 59½ if the account has been open at least five years.) How after-tax contributions are different If your 401(k) plan allows non-Roth after-tax contributions, they’re treated as part of your taxable wages. Therefore, these contributions are subject to income tax and FICA tax. You may owe state and local income taxes, too. Because they don’t go into a Roth account, they aren’t eligible for all the tax benefits Roth accounts offer. So, you might be thinking, “why would I want to make after-tax contributions?” The answer is to get more money into your 401(k) account, where it can accumulate income and gains without being taxed until you start taking withdrawals. These contributions aren’t subject to the annual elective deferral limit. So you can make them after you’ve maxed out that limit, including catch-up contributions, if applicable. However, there’s still a limit on total additions that can be made each year to your 401(k). Including your elective deferrals (except for any catch-up contributions), your after-tax contributions and any employer contributions, 2026 contributions can’t exceed the lesser of: 1) $72,000 or 2) 100% of your compensation. Also, after-tax contributions create tax basis in your account, which means that the after-tax amount contributed can eventually be withdrawn tax-free. (But withdrawals attributable to growth on that amount will be taxable, a significant difference from qualified Roth distributions.) After-tax contributions in action To illustrate how these contributions work, here’s an example: Let’s say your employer sponsors a 401(k) plan with a 50% company match, your 2026 salary is $150,000 and you’re under age 50. The plan allows employees to make after-tax contributions. You max out your elective deferral limit by contributing $24,500 to your traditional 401(k) account. Your employer makes a matching contribution of $12,250. That means you’re allowed to make up to $35,250 in after-tax contributions ($72,000 – $24,500 – $12,250) this year. You decide to make $10,000 of after-tax contributions. Your $24,500 of elective deferral contributions aren’t included in your taxable wages for federal income tax purposes but they are subject to FICA tax withholding. Your employer’s $12,250 matching contribution is exempt from federal income tax and FICA tax. Your $10,000 after-tax contribution is included in your taxable income and is subject to federal income tax and FICA tax. But it creates $10,000 of tax basis in your 401(k) account, which can be withdrawn tax-free. Be aware that 401(k) plans are subject to complicated nondiscrimination rules intended to prevent plans from operating in favor of highly compensated employees as opposed to rank-and-file workers. In most cases, nondiscrimination rules won’t impact the ability of an employee to make after-tax contributions, but there may be exceptions. Beyond elective deferrals If you’ve been maxing out your elective deferrals, after-tax 401(k) contributions can be a tax-efficient way to add to your retirement nest egg. We can review your situation and help you determine whether you might benefit. © 2026 

Many modern businesses rely on intangible assets, such as goodwill, trademarks and customer lists. But the IRS doesn’t treat all intangibles the same way. Questions about how these assets are taxed often arise when a business is sold, ownership changes hands, or intellectual property is licensed or transferred. Generally, intangibles qualify as capital assets that generate capital gains or losses when sold. This treatment is beneficial because federal long-term capital gains tax rates (typically 15% or 20%) are lower than ordinary income tax rates (which can be as high as 37%). However, certain “self-created” intangibles don’t qualify for this favorable treatment. Here’s an overview of this issue. Close-up on self-created intangibles Under current federal income tax rules, “self-created” means created by the personal efforts of the taxpayer. Specifically, an intangible asset is considered to be created, in whole or in part, by the personal efforts of the taxpayer if: The taxpayer’s efforts affirmatively contributed to the creation of the asset, or The taxpayer directed and guided others in performing the work that created the asset. That’s easy to understand when the taxpayer is a human. It can also extend to corporations, partnerships and limited liability companies (LLCs) that receive contributions of intangible assets from the individuals who created them. Whether a self-created intangible is treated as a capital or noncapital asset depends on the specific type of intangible. Self-created noncapital intangibles When you sell a self-created intangible that’s treated as a noncapital asset for federal income tax purposes, the transaction produces ordinary income or loss rather than capital gain or loss. This unfavorable treatment may apply if, through your personal efforts, you create and personally hold the following types of intangibles: Patents, Inventions, models or designs (patented or not), Proprietary formulas or processes, Copyrights, and Literary, musical or artistic compositions. This treatment also applies to letters, memorandums or similar property prepared or produced for you, even though you didn’t actually “create” them. Substituted basis principle What happens when the self-created noncapital intangibles listed above are contributed to another taxable entity? The same unfavorable treatment applies if the new owner’s tax basis in the noncapital intangible is determined, in whole or in part, by reference to the basis of the person who created it (or who had letters or memorandums prepared or produced). This is referred to as “substituted basis.” For instance, when an affected self-created intangible asset is contributed by the creator to a partnership in a tax-free transaction, the partnership takes over the creator’s tax basis in the asset under the substituted basis principle. In this situation, the asset is treated as a noncapital asset owned by the partnership. The same treatment applies to tax-free contributions of noncapital intangibles to LLCs that are treated as partnerships and corporations. Subsequent sales of affected assets will result in ordinary income or losses rather than capital gains or losses. Self-created capital intangibles The following types of self-created intangibles are treated as favorably taxed capital assets: Goodwill or going concern value, Workforce in place, Business books and records, Business operating systems, Customer-based intangibles, such as client or customer lists and lists of prospective clients or customers, and Supplier-based intangibles, such as favorable supplier contracts. Sales of these assets will result in capital gains or losses, not ordinary income or loss. Often, these intangibles are sold with other business assets, so it’s important to properly allocate the total purchase price among the assets acquired — including both capital and noncapital intangibles — based on their fair market values. These allocations should be well supported and documented because buyers and sellers may have differing tax objectives. The IRS may also scrutinize allocations involving intangible assets. Non-self-created intangibles How an intangible asset is developed and held affects whether it’s considered a self-created intangible and the tax treatment when it’s sold. IRS Revenue Ruling 55-706 addressed a situation involving a corporate taxpayer that held intangible assets created by several of its employees. According to the guidance, the C corporation’s intangibles were not considered to have been created by the taxpayer’s personal efforts. Therefore, the intangibles were capital assets owned by the business. The rules regarding varying tax treatment based on the specific type of intangible that apply to self-created intangibles didn’t come into play. Presumably, the result would be the same for intangibles created and owned by a partnership, an LLC treated as a partnership for tax purposes or an S corporation. Tread carefully The tax rules for self-created intangible assets are complicated. You can’t do much to avoid the unfavorable federal income tax treatment of self-created noncapital intangibles. But many self-created intangibles are treated as favorably taxed capital assets. If you’re planning to sell or transfer intangible assets, we can help you understand how the rules apply to your situation and identify the potential tax implications before a deal is finalized. Contact us to learn more. © 2026 

Many parents assume an estate plan is only necessary for older adults or those with substantial wealth. However, once your child turns 18, he or she legally becomes an adult, and that change can create unexpected complications for your family. Without basic estate planning documents in place, you may be unable to help your child during an emergency when he or she is away at school. If your child recently graduated from high school and is planning to attend college in the fall, consider these estate planning documents before he or she leaves home. Health-care-related documents Perhaps the most critical estate planning document for a college-age child is a health care power of attorney. Because children age 18 or older are usually treated as adults, without a health care power of attorney, you might have no say in your child’s medical treatment should he or she become incapacitated. This document (sometimes referred to as a “health care proxy” or “durable medical power of attorney”) allows your child to appoint someone, such as you, to make health care decisions on his or her behalf. Your child’s health care power of attorney should provide guidance on how to make medical decisions. Although it’s impossible to anticipate every potential scenario, the document can provide guiding principles. Another important health-care-related document for college students is a HIPAA release form. Federal privacy laws, including those under the Health Insurance Portability and Accountability Act, prevent doctors and hospitals from sharing medical information with parents once a child reaches adulthood. If your child is injured in an accident or becomes seriously ill, you may not be able to access information about his or her condition or treatment options. A HIPAA authorization form signed by your child allows you to communicate with his or her health care providers and stay informed during a medical crisis. Financial power of attorney Financial matters are another important consideration. College-age students typically have bank accounts and credit cards, and they may also have car loans, apartments or part-time jobs. If an illness or accident prevents your child from handling financial responsibilities, you may not automatically have the legal authority to step in. A financial power of attorney appoints an individual, such as you, to make financial decisions or execute transactions on your child’s behalf under certain circumstances. For example, a power of attorney might authorize you to handle your child’s affairs while he or she is studying abroad or, in the case of a “durable” power of attorney, incapacitated. Will Speaking of financial matters, it isn’t too early to have a will drawn up for your college-age child. It allows your child to specify how personal belongings, financial accounts and digital assets should be distributed in the event of his or her untimely death. It also gives your child the opportunity to express personal wishes. Without a will, state laws determine how assets are handled. This can create unnecessary complications for your family during an already difficult time. Peace of mind while away from home A simple estate plan for your college-age child can help ensure you can provide support when it matters most. If you have questions about any of the documents discussed, don’t hesitate to contact us. © 2026 

If you’re seeking financing to start or grow a small business, don’t forget to look at loan programs through the U.S. Small Business Administration (SBA). Down payments, interest rates and borrowing fees are typically lower, and application requirements may be more flexible than you’d find elsewhere. Some SBA loans also come with counseling and education, which can be particularly valuable if you’re a first-time business owner. But you’ll want to pay attention to the details because SBA loans may restrict how borrowers can use the funds. Here’s a quick overview of some of the more popular programs. Borrowing basics The SBA guarantees, but doesn’t actually make, its loans. To obtain an SBA loan, you’ll work with a bank, community development organization or other financial institution. Your business generally will need to meet a few criteria to qualify. For example, you generally must operate for profit in the United States or its possessions, and you must have tried to use other financial resources (including your own assets) before applying for a loan. Your business also may need to meet specific income or size criteria. And some types of businesses, such as lenders and life insurance companies, generally aren’t eligible. Although you’ll negotiate your loan’s interest rate with your lender, it can’t exceed maximums established by the SBA. Rates are calculated from a base rate, such as the prime rate (what commercial banks charge their most creditworthy corporate customers), plus a markup. The markup depends on factors such as loan size, repayment terms and your business’s financial profile. Lenders can also charge fees — for example, packaging and legal service fees, as well as out-of-pocket expenses. 7(a) program The SBA’s most popular offering is the 7(a) loan program. Fixed- and variable-rate loans of up to $5 million are available and can be used to buy real estate, buildings, equipment and furniture, and to refinance existing debt, among other uses. The SBA guarantees 85% of loan amounts up to $150,000 and 75% of loan amounts greater than that. To qualify for a 7(a) loan, your business must fall within the SBA’s size standards. In general, this means your business is considered “small” within its industry. Depending on the industry, this may be expressed by either the number of employees or your annual revenue. You’ll typically repay the loan in monthly payments of principal and interest. The SBA also has a 7(a) Working Capital Pilot program designed for growing smaller businesses. Loans are in the form of monitored lines of credit. Borrowers and their lenders receive one-on-one counseling with the SBA’s subject-matter experts. 504 program The 504 loan program provides long-term, fixed-rate loans designed to help borrowers purchase major assets that help promote business growth and job creation. The maximum loan amount is $5.5 million. Your business should be able to repay the loan from projected operating cash flows, generally over a 10-, 20- or 25-year period. Again, you’ll need to meet a few requirements to qualify for a 504 loan. Among them, your business’s tangible net worth must be less than $20 million, and its after-tax net income must have been less than $6.5 million during the preceding two years. 504 loans are available only through Certified Development Companies. Microloan program The microloan program is designed to help small businesses and qualified nonprofit child care centers establish operations and grow. The maximum microloan amount is only $50,000. However, the average microloan is for much less — $13,000. You can use these funds for everything from working capital to inventory to equipment purchases. Interest rates depend on intermediary lenders (certain community-based nonprofit organizations), but they’re usually in the 8% to 13% range. The maximum repayment term allowed by the SBA is seven years. How to apply Most lenders ask for extensive information before they’ll lend a business money, and the SBA is no exception. For instance, to apply for a 7(a) loan, you’ll generally need to supply a current income statement, balance sheet and cash flow projection. In some cases, you’ll also need to provide a personal financial statement. Owners with at least a 20% stake in the business may need to sign a personal guarantee. In addition, larger loans usually require some form of collateral. Get guidance The SBA’s website can guide you through the process of selecting the most appropriate loan program for your situation — or contact us for help. We can advise you on best practices when borrowing money, including calculating how much your business needs and how you’ll repay your loan. © 2026 

Tax scammers continue to target taxpayers through email, text messages, phone calls and regular mail. They often try to create urgency or fear to trick victims into sharing sensitive information or sending money. The IRS warns taxpayers to remain cautious because scammers continually change tactics to steal personal and financial information. IRS impersonation scams First and foremost, know that the IRS will never contact you by email, text or social media channels about a tax bill or refund. Most IRS initial communications are sent through regular mail. So if you get a call or message saying it’s the IRS and asking for your Social Security number, it’s someone trying to steal your identity and defraud you. Remember that the IRS already has your Social Security number. Here are some common impersonation-related schemes to be aware of: Phone calls. AI-generated voices and spoofed caller IDs to impersonate IRS agents are becoming more common. Scammers may leave urgent messages threatening arrest, penalties or legal action unless immediate payment is made. The IRS stresses that it won’t demand immediate payment over the phone. Text messages and emails. Scammers use text messages and emails containing fake IRS links or QR codes to direct taxpayers to fraudulent websites designed to steal personal or financial information. These messages often claim there’s a problem with a refund, tax return or IRS account to try to create panic and pressure taxpayers into responding quickly. Fake IRS notices. One current scheme takes advantage of growing confusion about the IRS CP53E notice. This is a notice related to tax refunds and bank account information. As the IRS shifts from paper checks to direct deposit, it’s mailing these notices to taxpayers who may need to add or update their banking details. Unfortunately, the IRS is sometimes mistakenly sending the notices when a taxpayer has already provided this information, creating confusion. Now fraudsters are sending fake versions of the notice in an attempt to steal taxpayers’ sensitive information. If you receive an IRS CP53E notice, verify its authenticity before acting. Don’t click links or scan QR codes. Malware. In scams to infect computers and phones with malicious software, a phony email claims to come from the IRS. The subject line often states that the message is a notice of underreported income or a refund. There may be an attachment or a link to a bogus web page with your “tax statement.” When you open the attachment or click on the link, malware is downloaded to your device. This malware can give criminals remote access to your device and allow them to search for passwords, banking information and other sensitive data to help them steal your assets or your identity. Other tax scams The IRS recommends that taxpayers create an account to securely access their tax information. The account lets you view your refund status, make payments, check your balance and more. But be cautious. Scammers may offer account setup “help” so they can collect your sensitive data. Or they may use stolen personal information to access your account without authorization. Once inside an account, they may attempt to redirect refunds, obtain tax records or use the information to commit additional identity theft. Create and always access your account directly through IRS.gov, don’t share your information with unsolicited third parties, and check your account regularly. Also watch out for fake online tax deduction calculators. These digital tools are intended to steal personal information and money from unsuspecting users. They’re often accompanied by false promises about new or expanded tax credits and deductions. The IRS says you should use calculators only on sites that end in .gov (such as irs.gov) or of well-known tax software companies. Also, be wary of any calculator that guarantees its result. Legitimate calculators can only produce estimates. And, as always, be suspicious of claims that seem “too good to be true,” such as unusually large tax savings. The IRS also warns taxpayers to avoid other schemes involving questionable refund claims or credits promoted online or through social media. Promoters may encourage taxpayers to file inaccurate forms or claim credits they don’t qualify for. Improper claims can lead to refund delays, audits, penalties and other enforcement actions. Reporting fraud The IRS has launched a “Report fraud” webpage to simplify confidential reporting of suspected tax fraud or scams. It consolidates multiple IRS fraud-reporting options into a single location, allowing taxpayers to report suspected scams, tax evasion or other tax-related misconduct in one place: irs.gov/help/report-fraud .  If you’ve been a victim of identity theft, consider obtaining an Identity Protection Personal Identification Number (IP PIN). Issued by the IRS, this unique six-digit number helps prevent criminals from filing a fraudulent tax return using your Social Security number. It’s valid for one year and is automatically replaced after expiration. You can expect to receive a new one each year in mid-December to early January. You can apply online or get one at a Taxpayer Assistance Center. Once you receive your IP PIN, be sure to safeguard it. Use it only on Forms 1040. Stay alert Tax-related scams continue to evolve, so it’s important to be cautious when receiving unexpected phone calls, messages or even letters involving taxes, refunds or financial information. If you receive a questionable communication related to a tax return we prepared, contact us before responding. We can also answer other questions you have about protecting yourself from tax-related fraud. © 2026