New provisions for 2026 may affect your tax planning

March 10, 2026

The many tax-related provisions that went into effect last year after the One Big Beautiful Bill Act (OBBBA) was signed into law are affecting 2025 federal income tax returns being filed now. However, some OBBBA provisions aren’t taking effect until this year. Plus, some changes under previous legislation are also taking effect in 2026. Here’s an overview of new tax provisions that individuals and businesses need to consider when conducting their 2026 tax planning.


Tax provisions affecting individual taxpayers


Changes going into effect for individual taxpayers this year include:


New charitable contribution deduction for nonitemizers. For 2026 and future years, the OBBBA reinstates the COVID-era deduction for cash donations to qualified charities by taxpayers who claim the standard deduction, subject to an increased annual limit of $1,000, or $2,000 for joint filers. (The limits were $300 and $600, respectively, for 2021 when this nonitemizer deduction was last available.)


The definition of “cash donation” may be broader than you think. It includes gifts made by debit or credit card, check, electronic bank transfer, online payment platform, and payroll deduction. If you make such gifts in 2026, be sure to retain proper substantiation so you can deduct them when you file your return next year.


New floor on charitable deduction for itemizers. Under the OBBBA, if you itemize deductions rather than claiming the standard deduction, your otherwise allowable charitable deductions are limited to the amount that, in aggregate, exceeds 0.5% of your adjusted gross income (AGI). Put another way, your 2026 charitable deduction is limited to the amount that exceeds 0.5% of your 2026 AGI.


If you’ll be affected, you may want to “bunch” donations into alternating years to minimize the negative impact of the new floor. (If you won’t itemize deductions in the nonbunching years, consider making cash donations up to the nonitemizer charitable deduction limit in those years.)


New limit on itemized deductions for taxpayers in the 37% tax bracket. Generally, this OBBBA limitation for 2026 and subsequent years means that the tax benefit from itemized deductions for taxpayers in the 37% bracket will be treated as if they were in the 35% bracket. For 2026, the 37% bracket starts when taxable income exceeds $640,600 for singles and heads of households, $768,700 for married couples filing jointly, and $384,350 for married couples filing separately.


If you may be affected, factor this into your 2026 tax planning so you don’t overestimate the tax savings your itemized deductions will provide.


Alternative minimum tax (AMT) exemption changes. You must pay the AMT if your AMT liability exceeds your regular tax liability. The top AMT rate is 28%, compared to the top regular ordinary-income tax rate of 37%. But the AMT rate typically applies to a higher taxable income base. An AMT exemption is available, but it phases out when AMT income exceeds certain levels.


Under the OBBBA, those thresholds revert to their 2018 levels for 2026 (i.e., removing the inflation adjustments made for 2019–2025), and they’ll be adjusted annually for inflation in subsequent years. Also, the OBBBA effectively phases out the exemption twice as fast beginning in 2026. The 2026 phaseout ranges are $500,000–$680,200 for singles and heads of households and $1,000,000–$1,280,400 for joint filers (half those amounts for separate filers), compared to the 2025 ranges of $626,350–$978,750 and $1,252,700–$1,800,700, respectively. Both changes mean more taxpayers could be subject to the AMT in 2026.


If it’s looking like you’ll be subject to the AMT this year, consider accelerating income and short-term capital gains into 2026. This may allow you to benefit from the lower maximum AMT rate. Also consider deferring expenses you can’t deduct for AMT purposes until next year, such as state and local taxes (SALT). You may be able to preserve those deductions — but watch out for the annual limit on the SALT deduction. Additionally, if you defer expenses you can deduct for AMT purposes to next year, such as charitable donations, the deductions may become more valuable because of the higher maximum regular tax rate.


New tax-advantaged Trump Accounts. Created under the OBBBA, these accounts are available to U.S. citizens under 18. Contributions to a properly established account can begin on July 4, 2026. Generally, up to $5,000 per year can be contributed. Although contributions aren’t tax deductible, the account can grow tax-deferred until the child is 18, when it converts into a traditional IRA.


Eligible children born between January 1, 2025, and December 31, 2028, whose parents have elected to participate in a pilot program, will receive a one-time, tax-free $1,000 federal contribution to their accounts. The $1,000 government contribution doesn’t count against the annual limit. So, if your child (or grandchild) is born this year, up to $5,000 could be contributed to his or her Trump Account in 2026 on top of the $1,000 from the government.


Increase in tax-free 529 plan withdrawal limit for qualified elementary and secondary school expenses. Distributions used to pay qualified expenses are income-tax-free for federal purposes and potentially also for state purposes, making the tax deferral a permanent savings. In recent years, certain elementary and secondary school expenses of up to $10,000 per year per beneficiary have been considered qualified and thus eligible for tax-free treatment.


Only tuition qualified through July 4, 2025. Under the OBBBA, various additional expenses after July 4, such as books, instructional materials and certain fees, also qualify. Beginning in 2026, the annual limit increases to $20,000 per year per beneficiary.


So, you may be able to take advantage of more tax-free funds from your child’s 529 plan to pay his or her elementary and secondary school expenses in 2026. And you may want to increase your contributions to your child’s (or grandchild’s) 529 plan so that funds are available in the account to take advantage of the increased limit in the future.


New Roth requirement for higher-income taxpayers’ catch-up contributions. Beginning in 2026, new rules under the SECURE 2.0 Act (signed into law in 2022) require higher-income participants in 401(k), 403(b) and 457(b) retirement plans to make any catch-up contributions as after-tax Roth contributions. For 2026, this requirement applies to participants with 2025 Social Security wages exceeding $150,000. That threshold will be annually adjusted for inflation.


If you’re subject to this limit, no longer being able to make pretax catch-up contributions could increase your 2026 taxable income. This, in turn, could push you into a higher tax bracket and impact your eligibility for various tax breaks. You may want to consider other steps for reducing your income in 2026, such as minimizing sales of stock or other investments that would generate capital gains income (or offsetting gains by selling other investments at a loss).


Elimination of certain energy-efficiency credits for homeowners. The OBBBA repealed two credits for taxpayers who take steps to make their homes more energy efficient, such as installing energy-efficient windows or adding solar panels: 1) the Energy Efficient Home Improvement Credit for qualified improvements to an existing home and 2) the Residential Clean Energy Credit for both existing and newly constructed homes. The credits aren’t available for any property placed in service after December 31, 2025.


Tax provisions affecting businesses and their owners


Business-related changes going into effect this year include:


Expansion of the income ranges over which the Section 199A qualified business income (QBI) deduction limitations phase in. Under the OBBBA, for 2026 and beyond, instead of the distance from the bottom of the range (the threshold) to the top (the amount at which the limit fully applies) being $50,000, or, for joint filers, $100,000, it’s $75,000, or, for joint filers, $150,000. This will allow larger deductions for some taxpayers.


For 2026, the ranges are $201,750–$276,750 (up from $197,300–$247,300 for 2025), double those amounts for married couples filing jointly. The threshold amounts will continue to be annually adjusted for inflation.


Consider the potential impact of the limit phase-ins on your 2026 QBI deduction. There may be steps you can take to make the most of the significantly expanded phase-in ranges.


Reduction of the threshold for the excess business loss limitation. The deductions for current-year business losses incurred by noncorporate taxpayers generally can offset income from other sources, such as salary, self-employment income, interest, dividends and capital gains, only up to the annual limit. “Excess” losses are carried forward to later tax years and can then be deducted under the net operating loss rules.


The OBBBA makes the limit permanent and reduces the threshold at which the limitation goes into effect. For 2026, the threshold is $256,000 (down from $313,000 for 2025), double that amount for joint filers. The threshold will be adjusted for inflation annually going forward.


If you’ll be affected by this change, you may want to adjust your individual tax planning strategies to help make up for a reduced loss deduction. You also might consider making changes to your business strategy to avoid generating losses that would be suspended until later years because of the lower excess business loss limitation threshold.


New option for claiming the family and medical leave credit. The OBBBA permanently extended the employer tax credit for paid family and medical leave, which was scheduled to expire on December 31, 2025. For 2025, the credit amount ranged from 12.5% to 25% of eligible wages paid to qualifying employees for up to 12 weeks of paid leave.


Beginning in 2026, the OBBBA allows employers to claim the credit for the same percentage of insurance premiums paid or incurred during the tax year for active family and medical leave coverage. You can’t claim the credit for both wages and premiums, however.


If you don’t currently offer paid family and medical leave, consider whether funding it with insurance premiums eligible for the credit would make doing so feasible while helping to achieve other business goals, such as increasing employee retention. If you do offer paid family and medical leave, you’ll need to look at whether claiming the credit for actual wages paid to employees on leave or for insurance premiums will save you more tax. (If you offer paid leave but don’t fund it with insurance, you may want to revisit whether insurance would make sense for your business now that premiums are eligible for the credit.)


Elimination of certain clean energy incentives. The Section 179D deduction for energy-efficient commercial buildings allows owners of new or existing commercial buildings to immediately deduct the cost of certain energy-efficient improvements rather than depreciate them over the 39-year period that typically applies. The base deduction is calculated using a sliding scale, ranging for 2026 from $0.59 per square foot to $5.94 per square foot, depending on energy savings and whether specific prevailing wage and apprenticeship requirements have been met. The OBBBA eliminates the deduction for property that begins construction after June 30, 2026.


The Section 30C alternative fuel vehicle refueling property credit is for property that stores or dispenses clean-burning fuel or recharges electric vehicles. The credit is worth up to $100,000 per item (each charging port, fuel dispenser or storage property). The OBBBA eliminates the credit for property placed in service after June 30, 2026.


If you’re considering one of these clean energy investments, you may want to act soon so you can be eligible for the associated tax break before it’s eliminated.


Begin planning now


All the tax law changes can be overwhelming. If you need help understanding how these provisions might affect your tax strategies, contact us. We can help you develop a plan to reduce your tax liability so you can keep more of your hard-earned income while staying compliant.


© 2026 

Should you make after-tax, non-Roth 401(k) contributions?

June 2, 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 

Beware of potential tax issues when selling self-created intangibles

June 1, 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 

Does your college-age child need an estate plan?

May 28, 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 

Looking for funding? Consider SBA loans

May 27, 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 

Protect yourself from fraudsters impersonating the IRS and other tax scams

By Kayla Kanetake • May 26, 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

Self-employed? Don’t overlook a Roth IRA

May 26, 2026
Some small business owners overlook Roth IRAs because they assume their income is too high for them to qualify to make Roth contributions. Others may think their current tax rate is higher than it will be in retirement, making current tax deductions more valuable than future tax-free distributions. However, if you don’t at least consider contributing to a Roth IRA, you may be missing a potentially valuable tax-saving opportunity. Rules and restrictions Roth IRA contributions aren’t deductible, but they’re beneficial because you reap tax savings on the back end. (More on that later.) For 2026, the annual contribution limit is $7,500 (up from $7,000 for 2025). If you’ll be 50 or older by the end of the tax year, you can make an additional $1,100 catch-up contribution. The same limits apply to traditional IRAs, and your Roth IRA limit is reduced by any traditional IRA contributions you make for the year. But your ability to make Roth IRA contributions is phased out if your modified adjusted gross income (MAGI) exceeds certain levels. For 2026, the phaseout ranges are: $153,000 to $168,000 for single individuals and heads of households, and $242,000 to $252,000 for married couples filing jointly. If your MAGI falls within the range, your contribution limit is reduced. If it equals or exceeds the top of the range, your ability to contribute is eliminated. Married individuals who file separately and live apart for the full year are treated as single individuals for the income limitations. However, separate filers who live together at any time during the year are subject to a phaseout range of $0 to $10,000. Is your income too high to qualify? At first glance, these figures may cause you to assume you’re ineligible for Roth contributions. But take another look. When calculating MAGI for Roth IRA eligibility purposes, self-employed individuals may be able to significantly reduce their taxable income through deductions for: Certain business expenses, such as rent, home office expenses and computer costs, Contributions to a tax-deferred retirement plan, such as a solo 401(k), SEP IRA or SIMPLE, Health insurance premiums, and Self-employment tax. These deductions, along with others, are subtracted when calculating MAGI. Therefore, a self-employed person can have relatively high gross income from his or her business while having a much lower MAGI. The choice between contributing to a Roth IRA or a tax-deferred account isn’t an all-or-nothing proposition. Depending on your situation, you may decide to contribute to both types of accounts, subject to applicable limits. Contributing to a tax-deferred retirement plan provides immediate tax savings. And, because these contributions lower your MAGI, they may put your taxable income below the phaseout limits for Roth IRA contributions. Additional benefits The main upside of contributing to a Roth IRA is that qualified withdrawals won’t be taxed. This can be advantageous if you expect to be in a higher tax bracket in retirement or if tax rates increase. Moreover, withdrawals from Roth accounts aren’t counted when calculating the taxable portion of your Social Security benefits. Another Roth IRA advantage is that you don’t have to take withdrawals at any age, meaning the account can continue to grow tax-free. With a traditional IRA (and other tax-deferred retirement accounts), at age 73, you generally must begin to take required minimum distributions or face a penalty equal to 25% of the amount you should have withdrawn but didn’t. In addition, if your Roth IRA is passed on to your heirs, it can continue to grow tax-free, and their withdrawals generally will be tax-free. However, most nonspouse beneficiaries will be required to deplete the account within 10 years of inheriting it. Bottom line A Roth IRA offers many potential benefits, and self-employed individuals may be more likely to qualify to make Roth IRA contributions than other taxpayers with similar gross incomes. But they aren’t right for every situation. We can help evaluate your eligibility and develop a long-term retirement strategy that aligns with your personal and financial goals. Contact us to learn more. © 2026 

What you can do to protect your business from rising costs

May 20, 2026
For the 12 months ending in April 2026, the U.S. inflation rate was 3.8%, according to the U.S. Bureau of Labor Statistics. Prices for your business’s products, materials and other operating costs may have risen faster in recent months than you anticipated, making planning and forecasting challenging. How can your business counteract inflation? Start by making prudent cost-cutting decisions and acting swiftly when you spot opportunities. First things first Given that periods of elevated inflation are typically temporary, it can be tempting to assume inflation rates will fall in a few months. However, movements in inflation rates have been less predictable since the COVID-19 pandemic began. Waiting it out may work for some businesses, but inaction could also eventually lead to more difficult decisions. For example, delaying pricing adjustments could force you to make steeper increases later. Although it’s always important to monitor expenses, frugal purchasing decisions become even more necessary when prices are rising. If raw material prices jump, consider whether new suppliers might offer discounts. If your cash flow and space can handle it, consider ordering some extra supplies and inventory to help mitigate the impact of future price increases. Also, review your business’s longer-term expenses. If a significant number of employees are working remotely, you might be able to reduce your office footprint or relocate to a less expensive part of the country. Other ideas Your ability to slash expenses and boost cash flow will depend largely on your industry and operations. But here are some ideas that most organizations can implement: Assess the impact. Review the effect of inflation, product line by product line, to help determine whether you need to change your product mix. For instance, it may make sense to boost production or shelf space for items that will appeal to budget-conscious buyers. Rethink prices. Few customers welcome price increases, but many understand the need for them. Be sure to communicate new prices before they take effect so customers can adjust their budgets. Consider credit. If your business anticipates needing additional liquidity, determine if it makes sense to secure a loan or a line of credit now. Adequate cash can provide breathing room and enable you to take advantage of unexpected opportunities. Monitor accounts receivable. If you see customers falling behind on their payments, act quickly. You may need to update your terms and even consider dropping some slow- or nonpaying buyers. Act on the margins. Be on the lookout for small savings. Can you renegotiate your business’s mobile phone package? Is it possible to reuse packaging materials? Can you place a moratorium on overtime work? Little amounts can add up quickly. Surviving and thriving Probably the most important quality for business leaders navigating an inflationary period is flexibility. Be prepared to discontinue lines and strategies if you can no longer contain their costs. Know when to jump on an opportunity that could expand your reach. Remain open to new business partnerships. We can help by reviewing your financial situation and proposing measures that will enable you to survive — and even thrive — in today’s volatile market conditions. © 2026 

Consider your potential charitable deduction before donating artwork

May 19, 2026
If you give artwork to charity, the deduction you can claim depends on several factors, including the type of organization receiving the piece and how it will be used. Special substantiation and appraisal rules may apply as well. Relation to charitable function Your deduction for a donation of art will generally be reduced if the charity’s use of the work is unrelated to the purpose or function that’s the basis for its qualification as a tax-exempt organization. The reduction equals the amount of capital gain you would have realized had you sold the artwork instead of giving it to charity. For example, let’s say you bought a painting a decade or so ago for $6,000 and now it’s worth $10,000. You contribute it to a dog and cat rescue organization to auction off at its annual fundraiser. Your deduction is limited to $6,000 because the organization’s use of the painting is unrelated to its charitable function and you would have had a $4,000 long-term capital gain had you sold it. But what if you donate the painting to an art museum for its collection? In this case, your deduction could potentially be the full $10,000. Other limitations Your current-year deduction generally will be limited to 20%, 30% or 50% of your adjusted gross income (AGI). The percentage varies depending on the type of organization and whether the deduction had to be reduced because of the unrelated-use rule explained above. The amount not deductible because of a ceiling may be deductible in a later year under carryover rules. Beginning in 2026, another limitation applies to charitable contribution deductions. Under the new rule, individuals generally may deduct charitable contributions only to the extent their total donations for the year exceed 0.5% of AGI. The rule can reduce the tax benefit of charitable gifts for taxpayers at all income levels, though the dollar impact will be larger for higher-income taxpayers. Documentation and appraisals There are substantiation rules when you donate a work of art. First, if you claim a deduction of less than $250, you must get and keep a receipt from the charity or, if impractical to get a receipt, keep a reliable written record for each item you contributed. If you claim a deduction of at least $250, but not more than $500, you must get and keep an acknowledgment of your contribution from the charity. The acknowledgment must state whether the organization gave you any goods or services in return for your contribution and include a description and good-faith estimate of the value. If you claim a deduction of more than $500, but not over $5,000, in addition to getting an acknowledgment, you must maintain written records that include information about how and when you obtained the artwork and its cost basis. You must also complete IRS Form 8283, “Noncash Charitable Contributions,” and attach it to your tax return. If the claimed value of the artwork exceeds $5,000, in addition to an acknowledgment and completing Form 8283, you must have an appraisal of the piece. This appraisal must be done by a qualified appraiser no more than 60 days before the contribution date and meet other requirements. You then include this information on Form 8283. If your total deduction is $20,000 or more, you must also attach a copy of the signed appraisal. The IRS may request that you provide a photograph. If an item has been appraised at $50,000 or more, you can ask the IRS to issue a “Statement of Value,” which can be used to substantiate the value. Avoid the unexpected If you’re considering donating artwork or other valuable property, contact us before making the gift. We can help you calculate your deduction, document the donation properly and avoid unexpected tax issues. © 2026 

What’s a “small business,” and why does it matter?

May 18, 2026
Although your business may seem big to you, you may wonder how the government classifies it for tax purposes. If your organization qualifies as a “small business,” you may enjoy several important tax advantages. But the rules for specific tax provisions vary. So, depending on your size, you might be eligible for some so-called small business breaks but not others. Here’s a closer look. No universal definition Under federal tax law, there’s no one definition of a small business. Instead, several definitions apply depending on the context, various criteria and certain thresholds. Criteria may include a business’s: Gross assets, Gross receipts, and Number of shareholders and employees. Even if a criterion such as gross receipts is the same across definitions, different thresholds may apply. Also, for some purposes, the tax code might define a small business in more than one way. Depending on how your performance and operations change over time, you might meet the government’s definition of a small business one year but not the next year. 5 special breaks for certain small businesses The Section 448(c) gross receipts test serves as a common eligibility standard for several tax provisions available to qualifying small businesses. Under this test, your business may qualify for five potential tax breaks if it had average annual gross receipts of $25 million or less for the prior three-year period. This threshold is adjusted for inflation — for 2026, businesses that had average gross receipts up to $32 million are eligible for: 1. Cash accounting. You’re generally permitted to use the cash method of accounting for tax purposes even if you have inventories or use the accrual method for financial reporting. With certain exceptions, larger businesses — particularly those that carry inventory — must use accrual accounting. Using the cash method will likely allow you to defer more taxable income than you could under the accrual method. 2. Inventory simplification. You’re generally exempt from complex inventory accounting rules and may account for inventories by: Treating them as nonincidental materials and supplies, or Conforming to the inventory method you use in your financial statements or books and records. Treating inventories as nonincidental materials or supplies allows you to deduct their cost when they’re “used or consumed.” Final IRS regulations clarify that materials aren’t used and consumed until the inventory is sold. So businesses can’t treat raw materials as used and consumed when converted into work-in-progress or finished goods. 3. Relief from UNICAP rules. You’re exempt from the uniform capitalization (UNICAP) rules, which require taxpayers to capitalize certain direct and indirect production costs to inventory, rather than deduct them when incurred. Not only can these rules increase your tax liability, but they also make tax reporting more complex. 4. Exemption from the business interest deduction limitation. You’re not subject to the cap on business interest write-offs, which generally limits deductions of net business interest expense to 30% of adjusted taxable income. 5. The completed contract method. If your business is in construction, manufacturing or another industry where long-term contracts are common, you may use the completed contract method rather than the percentage-of-completion method to account for long-term contracts expected to be completed within two years. The completed contract method allows you to defer tax until the contract is substantially complete, while the percentage-of-completion method can accelerate the tax. When determining your business’s gross receipts, you may need to include those earned by certain related entities, such as those with common control. Special rules apply to organizations in existence for less than three years. Also, tax shelters, including syndicates, don’t qualify for small business status, even if their gross receipts are below the threshold. Sizing up your business Of course, these five relief measures aren’t the only tax-saving opportunities for small business owners at the federal and state levels. And determining eligibility can be more complicated than it appears. We can help evaluate your eligibility for these breaks and others — and develop a long-term plan that’s tailored to your situation. Contact us to explore the potential tax benefits of small business status. © 2026 

Long-term care insurance can offer peace of mind and help preserve your wealth

May 14, 2026
One of the greatest risks to your estate plan is the chance of incurring substantial long-term care (LTC) costs. These costs, for services such as nursing home stays or home health aides, can quickly erode the savings you want to pass on to your family after your death. One solution is to purchase an LTC insurance policy. Understanding the terms An LTC policy’s terms dictate the amount of benefits you’ll receive each day or month, up to a defined lifetime maximum or number of years. These limits depend on the type of care provided, such as in-home care or a nursing facility. LTC policyholders are typically subject to a waiting period of 30 to 180 days before being eligible for benefits (90 days is generally the norm). Important: The shorter the waiting period, the more expensive the policy. Similarly, you can expect to pay more for a policy with higher maximum benefits. LTC policies generally provide benefits when you can’t perform multiple basic activities of daily living — including bathing, dressing, eating, transferring and managing incontinence — or if you experience cognitive impairment. Generally, once benefits start, premium payments stop. But if you stop paying on the policy first, you usually forfeit any future benefits. Be aware that coverage may be affected by several factors. For example, you may not qualify for coverage because of a pre-existing condition. What to consider before buying insurance Factors to consider before purchasing an LTC insurance policy include your: Financial situation. Do you have the funds to pay for long-term care assistance without jeopardizing your overall financial situation? Take an objective look at your entire financial picture. Estate planning objectives. An LTC policy may make sense if preserving wealth to pass on to your family is a primary estate planning objective. Age and health. As you grow older, LTC insurance premiums may rise. Additionally, if you have a pre-existing condition, you may pay higher rates or even be denied coverage. Applying early may increase the likelihood that you won’t be denied coverage and that you’ll pay lower rates. But you’ll probably be paying premiums for more years. There might be ways to obtain coverage without buying a policy privately. For instance, you may be able to participate in a group policy offered by your employer or another affiliation. This can be especially helpful if health conditions would otherwise cause insurers to charge you high premiums or deny you coverage. Planning for your (and your family’s) future An LTC insurance policy offers financial protection and peace of mind. With the escalating costs of extended care, this coverage can also allow you to leave more to your family. As with any major financial decision, carefully compare policy options, costs and benefits to find the best fit for your needs and goals. We can help you evaluate what’s appropriate for your situation.  © 2026