Taxprep1040

04/17/2026

Good Afternoon,

To my clients that are on this page and have a tax liability that was due to be debited from your bank account on April 15th, the IRS is behind in their bank withdrawls by anywhere from 7 to 10 days.
There is a phone number to call. It is 888-353-4537 and there is a number of questions to answer to get the answer.

01/14/2026

Next steps to Get Ready for 2026 tax filing season

Monday, Jan. 26, 2026, is opening day for the 2026 tax filing season. This is when taxpayers can begin filing their 2025 federal tax returns.

Here are a few simple steps taxpayers can take now to prepare for filing:

Create or access their IRS Individual Online Account
IRS Individual Online Accounts are available 24/7, to view account information, make payments, manage communication preferences and protect tax information.

Gather and organize records
Organized tax records make preparing a complete and accurate tax return easier. Some examples of tax records can include:

Forms W-2 from your employer(s)
Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, pension, annuity or retirement plan distributions
Form 1099-K, 1099-MISC, W-2 or other income statement if you worked in the gig economy
Form 1099-INT if you were paid interest
Other income documents and records of digital asset transactions
Review new 2025 tax law changes
The One, Big, Beautiful Bill has brought many changes including new deductions and credits that may reduce tax bills or increase refunds. Beginning in 2025, to be eligible to claim certain credits for other dependents, the taxpayer and their spouse, if filing jointly, must have valid Social Security numbers or Individual Taxpayer Identification Numbers issued on or before the due date of their returns (including extensions).

Understand reporting documents and requirements
Income from part-time work, gig activities or sales of goods and services is generally taxable. Form 1099-K, Payment Card and Third-Party Network Transactions, will be issued by payment card companies for any amount and by payment apps or online marketplaces, also called third party settlement organizations or TPSOs when payments to a payee exceed $20,000 and more than 200 transactions occur for the year.

Additionally, taxpayers who bought, sold or received digital assets, including cryptocurrency, stablecoins or NFT, may be required to report those transactions. Some taxpayers may receive Form 1099-DA from brokers. Whether you receive a Form 1099-DA or not, all taxpayers must answer the digital asset question on Form 1040 and report any related income, gains or losses.

Check the status of individual tax identification number ITIN
An ITIN only needs to be renewed if it has expired and is needed on a U.S. federal tax return. If a taxpayer’s ITIN wasn't included on a U.S. federal tax return at least once for tax years 2022, 2023 and 2024, it would have expired on Dec. 31, 2025, and will need to be renewed.

Use direct deposit
The IRS is phasing out paper tax refund checks, under the executive order Modernizing Payments To and From America’s Bank Account. The IRS encourages taxpayers who do not have a bank account to open one so they can receive refunds by direct deposit.

Call 610-608-0946 to schedule your appointment!

01/10/2026

The IRS will begin accepting efiled tax returns on January 26, 2026. TAXPREP1040 will begin office hours on that date.

Monday 1pm to 430pm
Tuesday 9am to 9pm
Wednesday 9am to 9pm
Thursday 9am to 9pm
Friday 1pm to 7pm
Saturday 10am to 6pm
Sunday 12pm to 5pm

Please call 610-608-0946 to schedule your appointment. You can also email at [email protected].

Double check all your tax paperwork prior to scheduling and make sure you have received it all.

Please keep in mind that some of the OBBB tax codes do not go into effect until the 2026 tax return.

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12/21/2025

Here is the fact sheet information with some of the OBBB changes to the 2025 tax code.
There are income limits for these tax breaks. Consider your concerns keeping that in mind.

FS-2025-03, July 14, 2025

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

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

“No Tax on Tips”
New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137.
“Qualified tips” are voluntary cash or charged tips received from customers or through tip sharing.
Maximum annual deduction is $25,000; for self-employed, deduction may not exceed individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Self-employed individuals in a Specified Service Trade or Business (SSTB) under section 199A are not eligible. Employees whose employer is in an SSTB also are not eligible.
Taxpayers must:
include their Social Security Number on the return and
file jointly if married, to claim the deduction.
Reporting: Employers and other payors must file information returns with the IRS (or SSA) and furnish statements to taxpayers showing certain cash tips received and the occupation of the tip recipient.
Guidance: By October 2, 2025, the IRS must publish a list of occupations that “customarily and regularly” received tips on or before December 31, 2024.
The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and payors subject to the new reporting requirements.
“No Tax on Overtime”
New deduction: Effective for 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay – such as the “half” portion of “time-and-a-half” compensation -- that is required by the Fair Labor Standards Act (FLSA) and that is reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.
Maximum annual deduction is $12,500 ($25,000 for joint filers).
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Taxpayers must:
include their Social Security Number on the return and
file jointly if married, to claim the deduction.
Reporting: Employers and other payors are required to file information returns with the IRS (or SSA) and furnish statements to taxpayers showing the total amount of qualified overtime compensation paid during the year.
Guidance: The IRS will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and other payors subject to the new reporting requirements.
“No Tax on Car Loan Interest”
New deduction: Effective for 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle, provided the vehicle is purchased for personal use and meets other eligibility criteria. (Lease payments do not qualify.)
Maximum annual deduction is $10,000.
Deduction phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
Qualified interest: To qualify for the deduction, the interest must be paid on a loan that is:
originated after December 31, 2024,
used to purchase a vehicle, the original use of which starts with the taxpayer (used vehicles do not qualify),
for a personal use vehicle (not for business or commercial use) and
secured by a lien on the vehicle.
If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.

Qualified vehicle: A qualified vehicle is a car, minivan, van, SUV, pick-up truck or motorcycle, with a gross vehicle weight rating of less than 14,000 pounds, and that has undergone final assembly in the United States.
Final assembly in the United States: The location of final assembly will be listed on the vehicle information label attached to each vehicle on a dealer's premises. Alternatively, taxpayers may rely on the vehicle’s plant of manufacture as reported in the vehicle identification number (VIN) to determine whether a vehicle has undergone final assembly in the United States.
The VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA) provides plant of manufacture information. Taxpayers can follow the instructions on that website to determine if the vehicle’s plant of manufacture was located in the United States.
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
The taxpayer must include the Vehicle Identification Number (VIN) of the qualified vehicle on the tax return for any year in which the deduction is claimed.
Reporting: Lenders or other recipients of qualified interest must file information returns with the IRS and furnish statements to taxpayers showing the total amount of interest received during the taxable year.
Guidance: The IRS will provide transition relief for tax year 2025 for interest recipients subject to the new reporting requirements.
Deduction for Seniors
New deduction: Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law.
The $6,000 senior deduction is per eligible individual (i.e., $12,000 total for a married couple where both spouses qualify).
Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).
Qualifying taxpayers: To qualify for the additional deduction, a taxpayer must attain age 65 on or before the last day of the taxable year.
Taxpayer eligibility: Deduction is available for both itemizing and non-itemizing taxpayers.
Taxpayers must:
include the Social Security Number of the qualifying individual(s) on the return, and
file jointly if married, to claim the deduction.

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04/22/2025

Taxpayers should check their withholding now to prepare for next year

Proper tax withholding now is key to avoiding surprises when taxpayers file next year. Making any needed adjustments early means taxpayers won’t have to make a big change later in the year to catch up

The IRS Tax Withholding Estimator is a free online tool that helps workers, independent contractors and retirees determine if they have the right amount of federal income tax withheld from their paychecks. Using it can prevent taxpayers from having an unexpectedly large tax bill or a substantial refund when they file in 2026.

How the IRS Tax Withholding Estimator helps taxpayers plan ahead
Taxes are pay-as-you-go, which means taxpayers need to pay their tax as they receive their income. They do this through withholding.

For employees, “withholding” refers to the federal income tax portion of each paycheck that an employer takes out for tax purposes. It can also mean the amount from earnings self-employed people and others voluntarily set aside to pay their estimated taxes.

After using the Tax Withholding Estimator, taxpayers can determine if they need to submit an updated Form W-4, Employee’s Withholding Certificate, to their employer or adjust the amount they voluntarily set aside for tax purposes.

By adjusting tax withholding, taxpayers can:

Prevent owing money and potential penalties at tax time.
Adjust withholdings to increase take-home pay instead of waiting for a refund.
Use the tool once a year
By using the estimator once a year, taxpayers can manage their estimates based on any personal life change, such as buying a home, changing jobs, having a child or changing their marital status.

For people who recently completed their 2024 tax return, the IRS advises using the IRS Tax Withholding Estimator to consider all income sources such as full-time wages, side jobs and any sale of services or commodities typically reported on Form 1099-K.

Required documents
For an effective tax withholding estimate, taxpayers will need certain documents including:

All income statements, including those of their spouse if filing jointly
Data from other sources of earnings
Their most recent income tax return
Publication 505, Tax Withholding and Estimated Tax, provides instructions for taxpayers with complex tax situations that are difficult to solve through the IRS Tax Withholding Estimator. These cases may involve taxpayers responsible for the alternative minimum tax or other taxes and those with long-term capital gains or qualified dividends.

03/27/2025

Taxpayers can request a copy of previous tax returns

Taxpayers can access their personal tax records in several ways. Those records are useful and can help with future tax filing. People should generally keep copies of their federal tax returns and any related documents for at least three years after they file.

If a taxpayer wants a copy of their previous tax returns or a transcript of their tax account, they can ask their tax software provider or tax preparer, or they can request their records directly from the IRS.

Get tax records from IRS Online Account

The fastest and easiest way for taxpayers to view their tax records is by logging on to their IRS Online Account. There, they can:

• View, print or download their tax transcripts.
• Find out how much they owe.
• Look at their payment history.
• See their prior year adjusted gross income (AGI).
• View other tax records.

If taxpayers don’t have an IRS Online Account and can’t create one, they still have a few options to get the information they need.

Ask the software provider or tax preparer

Individuals that used a software provider or tax preparer to file should contact them for a copy of their tax return.

Request a transcript from the IRS

If a taxpayer can't get a copy of a prior year federal tax return, they can order a tax transcript from the IRS. The tax transcript shows their basic filing information as well as any changes made after the taxpayer filed. These are free and available for the for up to three years after the IRS has processed the tax return.

People can get their tax transcripts by mail or by phone.

• By mail: Taxpayers can complete and send either Form 4506-T or Form 4506-T-EZ to the IRS to get one by mail. They use Form 4506-T to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing.
• By phone: Taxpayers can call 800-908-9946 to request a transcript by phone. Transcripts requested by phone are mailed directly to the taxpayer.

To protect taxpayers' identities, tax transcripts partially hide personally identifiable information such as names, addresses and Social Security numbers. All financial entries, including the filer's adjusted gross income, are visible.

Request a copy of a tax return

Prior year tax returns are available from the IRS for a fee. Taxpayers can request a copy of a tax return by completing and mailing Form 4506, Request for Copy of Tax Return, to the IRS address listed on the form. There's a $43 fee for each copy. These are available for the current tax year and up to seven years prior.

01/24/2025

Nine states to tax Social Security benefits

Social Security benefits are a vital source of income for many retirees in the United States. However, depending on where you live and your income level, you may have to pay taxes on these benefits. In 2025, nine states will tax Social Security benefits.

Connecticut, Rhode Island, and West Virginia are among the states that will tax Social Security benefits in 2025. The specific rules and income thresholds vary by state. For example, in Connecticut, you are exempt from the tax unless your adjusted gross income (AGI) exceeds $75,000 for single filers or $100,000 for married joint filers.

If you live in one of these states and expect to owe taxes on your Social Security benefits, there are strategies you can consider to minimize or avoid the tax burden. One option is a Roth conversion. Withdrawals from traditional retirement accounts like 401(k)s and IRAs count towards determining if your benefits are taxable, but Roth IRA distributions do not.

Converting traditional retirement assets to a Roth IRA can be beneficial, but it is a taxable event and the full benefits won’t apply until at least five years after the conversion. Another strategy is to be strategic in your timing.

If you can keep your income below the taxable limit, you won’t owe taxes on your Social Security benefits. This might involve delaying your claim for Social Security benefits and withdrawing more from your savings earlier in retirement. Drawing down on investment accounts earlier can help you stay under the income threshold later on.

Delaying claiming Social Security benefits until age 70 will also increase your monthly checks, providing a larger amount of retirement income in the future. This can help you offset smaller investment withdrawals when needed. Maximizing your charitable contributions can also reduce your income and keep it under the exemption threshold.

For those aged 70-and-a-half or older, you may be able to donate your Required Minimum Distribution (RMD) directly to a charity, subject to certain limits and conditions. By exploring these options, you can significantly reduce or even eliminate state taxes on your Social Security benefits. Although relocating to one of the 41 states that don’t tax Social Security benefits is an option, it shouldn’t be the sole factor in choosing where to retire.

It’s important to consult with a tax or financial professional for personalized advice based on your specific situation. They can help you determine a safe withdrawal rate and optimal tax strategy to maximize your retirement income and minimize your tax burden.

TAXPREP1040 will resume in season office hours as of January 27, 20205. Call and schedule your appointment, 610-608-0946 or email, [email protected]

01/11/2025

The 2025 tax filing season will begin on Jan. 27, which marks the first day the IRS will accept and process individual tax returns for 2024, the agency announced on Friday.

01/01/2025

The IRS has issued a stern warning: if you don't activate your tax mailbox, you'll be hit with a penalty. So, you better know how much it is and how to get it activated.

The Internal Revenue Service (IRS) has extended the deadline for all taxpayers to activate their tax mailbox and meet their tax obligations. You have until December 31, 2025 to get it done.

What's the penalty for not activating the tax mailbox?
If you don't activate your tax mailbox, you'll face a penalty as outlined in the Federal Tax Code, ranging from $3,850 to $11,540.

How to activate the tax mailbox?
Activating your tax mailbox is a breeze! Just follow these steps.

Go to irs.gov

Click on the green button labeled tax mailbox
Enter your Tax ID and password or valid e-signature
Select the Configuration option and fill out the contact information form
Register your email address and cell phone number
Confirm your contact details within the next 72 hours


Who needs to activate the IRS tax mailbox?
According to the IRS, individuals and businesses registered in the Federal Taxpayer Registry (FTR) must activate their tax mailbox, except for:

Individuals without tax obligations, no economic activity, and suspended status.
Businesses registered with the FTR in a suspended tax status.
Individuals and businesses registered with the FTR in a canceled tax status.

If you have any questions, call TAXPREP1040 at 610-608-0946, Tuesday or Wednesday from 1pm to 4pm.

12/18/2024

In most cases, RMDs have to be completed before Dec. 31 each year, but there are exceptions to the rule. For instance, the first RMD can be delayed until April 1 of the following year. But individuals that delay the first RMD must still take the second RMD by Dec. 31 of that same year.

Here is what changed in 2024: Individuals born in 1951 or later have to start taking RMDs from tax-deferred retirement accounts annually during the year in which they turn 73. Importantly, the first RMD can be delayed until April 1 of the following year. That means anyone that turned 73 in 2024 has to complete their first RMD by April 1, 2025. However, whether or not the first mandatory withdrawal is delayed until April, the second one must be completed by December 31, 2025.

Here is what changed in 2024: Roth 401(k) and Roth 403(b) plans are no longer subject to RMD rules while the original account holder is alive. But once the account holder dies, the beneficiaries are subject to RMD rules. Additionally, as of 2023, failure to complete an RMD within the allotted time no longer results in a 50% excise tax. Instead, the penalty is 25%, and that figure can be further reduced to 10% if the problem is corrected within two years.