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Returning Counselor Update

Filing Season 2026

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Today’s Agenda

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  • Changes in IRS forms
  • 2025 Tax Law Updates (see handouts)
  • Items for TY2026 and beyond
  • Other comments
  • Questions and discussion

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Digital Assets Question in Scope Manual

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Vehicle Loan Interest Deduction Requirements

  • Must be a new vehicle
  • Must be a passenger vehicle or pickup under 14,000 lbs.
  • Must be purchased on 1/1/2025 or later
  • Financing may not be obtained from a relative of taxpayer
  • Must have final assembly in the U.S.
  • Leased vehicles not eligible
  • May not duplicate qualified vehicle loan interest deducted on Schedule C
  • Taxpayer must provide valid VIN for vehicle

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IRS Mail-In and Payment

  • No longer Cincinnati for mail-In. Check new address for mail-in.
  • IRS no longer sending paper checks for tax refunds
    • Effective 9/30/25
    • Direct deposit or Debit Cards
  • IRS strongly discourages, but will continue to accept paper checks. Direct debit or online payment is encouraged.

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Items for TY 2026 and Beyond

  • Beginning TY2026, only 90% of gambling losses will be deductible on Sched A.
  • New non-refundable credit for contributions to scholarship-granting organizations ($1700 max/yr per tp)
  • New charitable “add-on” deduction up to $1k (single) and $2k (married) begins in TY2026.
  • SSNs for persons for whom education credit benefits claimed will be required starting in TY2026.

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Items for TY2026 and beyond (cont’d)

  • QBI deduction is extended indefinitely. Starting TY2026, there will be a minimum $400 deduction for TPs who materially participate and have a minimum net profit of at least $1k
  • Private Mortgage Insurance (PMI) will be reinstated as a Sched A interest deduction starting in TY2026.
  • Suspension of Sched A Misc Deductions now made permanent, except for certain educator expenses in athletic programs.
  • Moving expense adjustment only for military and intelligence community permanent change of station (PCS)
  • All excess ACA APTC must be repaid

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Additional Comments

  • TPs will have plenty of questions. Don’t be tempted to offer financial advice.
  • 65+ TPs will be happy about enhanced standard deduction. Tax on Social Security is not affected.
  • Take special care regarding prior-year returns. Be able to access Pubs 4012 & 4491 for prior years.
  • IRS Direct File Program has ended.
  • Tax Day for FS26 is Wednesday, April 15th.

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Additional comments (cont’d)

  • Determining amounts for tip income and overtime deductions
    • Data must be taken from from TP’s tax forms
    • Explaining details in the tax code on these topics.
    • Advise TPs to retain payroll records
  • Reporting Gambling Income
    • Win-Loss statements not official tax documents
    • Data taken from TPs tax forms entered as presented
    • 90% of losses deductible starting in TY 2026

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Additional Comments (cont’d)

  • Digital display of taxpayer information – LC has discretion
  • Lump-Sum on SSA-1099 expected to involve more taxpayers
  • Remember to make relevant notes in TSO file
  • Utilize worksheets for
    • Tip Income Deduction (W-2,1099-MISC, 1099-NEC, 1099-K)
    • Overtime Deduction
    • New Vehicle Loan Interest Deduction
    • Schedule C entries

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QUESTIONS…COMMENTS?