Elliott's Tax Service

Elliott's Tax Service We prepare income taxes, and provide small business accounting in Giles and surrounding counties.

We prepare income taxes, and provide small business accounting in Pulaski TN and Giles County. We also service Farm accounts both small and large. 931-424-3834

01/20/2026

Good MorningIndian tribal governments and the Adoption Credit (Section 70403)
Tax credit for donations to scholarship organizations (Section 70411)

Overview of the credit

Beginning January 1, 2027, individual taxpayers may be able to claim a federal tax credit for certain donations they make.
The credit applies to cash contributions to Scholarship Granting Organizations (SGOs).
An SGO is a nonprofit that awards scholarships to help students pay for elementary and secondary education.
The tax credit is nonrefundable, which means it can reduce your federal tax bill but will not result in a refund if the credit is larger than what you owe.
The maximum credit an individual can claim each year is $1,700.
Important details

A state or the District of Columbia must choose to participate in the program before the credit can be claimed for contributions to SGOs within that state.
States must provide the IRS with a list of qualifying SGOs that meet legal requirements.
The IRS notice asks for input from the public about issues that should be addressed in future rules.
Interested parties may submit comments through the Federal e-Rulemaking portal or by mail by December 26, 2025.
Related resources

States can make an Advance Election to participate in the new federal tax credit for individual contributions to SGOs (IR-2025-121)
Request for comments on implementation of new tax credit for donations to SGOs (IR-2025-115)

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01/13/2026

GOOD MORNING

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01/13/2026

Good morning
Rural Opportunity Zones (Section 70421)

Overview of Opportunity Zones

In 2018, certain economically distressed census tracts in the United States and its territories were designated as Qualified Opportunity Zones (QOZs) by the Treasury Department.
Taxpayers investing in QOZs receive certain tax benefits as an incentive to support economic growth and job creation in these underserved communities.
Rural area definition under the One, Big, Beautiful Bill Act

A rural area is any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to such a city or town.
This definition applies to states, the District of Columbia and U.S. territories.
Changes to substantial improvement requirements

Beginning July 4, 2025, The Act reduced the substantial improvement threshold from 100 percent to 50 percent for required additions to the basis for property located entirely in rural QOZs.

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01/12/2026

WASHINGTON — The Internal Revenue Service announced Monday, January 26, 2026, as the opening of the nation’s 2026 filing season. This year, several new tax law provisions of the One, Big, Beautiful Bill become effective, which could impact federal taxes, credits and deductions.

Taxpayers have until Wednesday, April 15, 2026, to file their 2025 tax returns and pay any tax due. The IRS expects to receive about 164 million individual income tax returns this year, with most taxpayers filing electronically.

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01/12/2026

Good Morning
Rural Opportunity Zones (Section 70421)

Overview of Opportunity Zones

In 2018, certain economically distressed census tracts in the United States and its territories were designated as Qualified Opportunity Zones (QOZs) by the Treasury Department.
Taxpayers investing in QOZs receive certain tax benefits as an incentive to support economic growth and job creation in these underserved communities.
Rural area definition under the One, Big, Beautiful Bill Act

A rural area is any area other than a city or town with a population greater than 50,000, and any urbanized area contiguous and adjacent to such a city or town.
This definition applies to states, the District of Columbia and U.S. territories.
Changes to substantial improvement requirements

Beginning July 4, 2025, The Act reduced the substantial improvement threshold from 100 percent to 50 percent for required additions to the basis for property located entirely in rural QOZs.

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01/09/2026

Good Morning...here is another update for you:

Passenger vehicle loan interest transition relief for 2025

Transition relief overview

IRS provides transitional relief for tax year 2025 for lenders and other recipients of qualified interest who must file information returns with the IRS and provide statements to borrowers showing the total amount of interest received on qualified passenger vehicle loans and other relevant information

How the relief applies for 2025

Applies to reporting requirements under the One, Big, Beautiful Bill for qualified passenger vehicle loans.
Lenders and other payors should refer to Notice 2025-57 and other related guidance to determine how the 2025 reporting rules apply.

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01/08/2026

Update for Business
Passenger vehicle loan interest transition relief for 2025

Transition relief overview

IRS provides transitional relief for tax year 2025 for lenders and other recipients of qualified interest who must file information returns with the IRS and provide statements to borrowers showing the total amount of interest received on qualified passenger vehicle loans and other relevant information

How the relief applies for 2025

Applies to reporting requirements under the One, Big, Beautiful Bill for qualified passenger vehicle loans.
Lenders and other payors should refer to Notice 2025-57 and other related guidance to determine how the 2025 reporting rules apply.

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01/05/2026

Elliott's Tax Service is now open to serve you! Call for your appointment to apply for you advance and walk out with a check today.

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01/05/2026

Families and dependents
Trump Accounts under the Working Families Tax Cuts (Section 70204)

Overview of Trump Accounts

Parents, guardians, or others can establish a Trump Account for an eligible child.
Trump Accounts cannot be funded before July 4, 2026.
The federal government will make a one-time $1,000 contribution for each eligible child’s account.
Authorized contributions from individuals and employers are allowed up to $5,000 per year.
Employers can contribute up to $2,500 per year toward an employee’s or dependent’s Trump Account without it counting as taxable income for the employee.
Funds must be invested in certain mutual funds or exchange-traded funds that track a U.S. stock index such as the S&P 500.
Withdrawal and use

Generally, money cannot be withdrawn before the year the child turns 18.
After that point, the account is treated like a traditional IRA with similar tax rules.

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12/30/2025

Mileage Rate Update IR-2025-128, Dec. 29, 2025

WASHINGTON — The Internal Revenue Service today announced that the optional standard mileage rate for business use of automobiles will increase by 2.5 cents in 2026, while the mileage rate for vehicles used for medical purposes will decrease by half a cent, reflecting updated cost data and annual inflation adjustments.

Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable, and medical purposes. Additionally, the optional standard mileage rate may be used to calculate the deductible costs of operating vehicles for moving purposes for certain active-duty members of the Armed Forces, and now, under the One, Big, Beautiful Bill, certain members of the intelligence community.

Beginning Jan. 1, 2026, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

72.5 cents per mile driven for business use, up 2.5 cents from 2025.
20.5 cents per mile driven for medical purposes, down a half cent from 2025.
20.5 cents per mile driven for moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community), reduced by a half cent from last year.
14 cents per mile driven in service of charitable organizations, equal to the rate in 2025.
The rates apply to fully-electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

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

Under the law, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses, except for certain educator expenses. However, deductions for expenses that are deductible in determining adjusted gross income remain allowable, such as for certain members of a reserve component of the Armed Forces, certain state and local government officials, certain performing artists, and eligible educators. Alternatively, eligible educators may claim an itemized deduction for certain unreimbursed employee travel expenses. In addition, only taxpayers who are members of the military on active duty or certain members of the intelligence community may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.

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

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

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

Notice-2026-10 PDF contains the optional 2026 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate plan. The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2026 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.

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12/29/2025

The One, Big, Beautiful Bill Act significantly affects federal taxes, credits and deductions. It was signed into law on July 4, 2025, as Public Law 119-21, and takes effect in 2025.

Individuals
Tax inflation adjustments (Sections 70101, 70102, 70106, 70107, and 70401)

Standard deduction increases

Tax year 2026

$32,200 for married couples filing jointly
$16,100 for single filers and married individuals filing separately
$24,150 for heads of household
Tax year 2025

$31,500 for married couples filing jointly
$15,750 for single filers and married individuals filing separately
$23,625 for heads of household
Marginal rates for tax year 2026

37% for income over $640,600 (single) or $768,700 (married filing jointly)
35% for income over $256,225 (single) or $512,450 (married filing jointly)
32% for income over $201,775 (single) or $403,550 (married filing jointly)
24% for income over $105,700 (single) or $211,400 (married filing jointly)
22% for income over $50,400 (single) or $100,800 (married filing jointly)
12% for income over $12,400 (single) or $24,800 (married filing jointly)
10% for income up to $12,400 (single) or $24,800 (married filing jointly)
Alternative minimum tax exemption amounts for tax year 2026

$90,100 for single filers (phased out at $500,000)
$140,200 for married couples filing jointly (phases out at $1,000,000)
Estate tax exclusion for tax year 2026

Basic exclusion amount is $15,000,000
Up from $13,990,000 for 2025 decedents
Adoption credit limits for tax year 2026

Maximum adoption credit is $17,670, which is higher than the $17,280 limit for 2025.
Up to $5,120 of this credit may be refundable.
Employer-provided childcare credit expansion for tax year 2026

Maximum amount increases from $150,000 to $500,000
Maximum increase to $600,000 if employer is an eligible small business
Related resources

2026 tax inflation adjustments (IR 2025-103)
Deduction for seniors (Section 70103)

Overview of the deduction

Effective 2025 through 2028, individuals age 65 and older may claim an additional $6,000 deduction.
This is in addition to the standard deduction for seniors available under existing law.
Applies per eligible individual (or $12,000 for a married couple if both spouses qualify).
Phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).
Who qualifies

You must be age 65 on or before the last day of the tax year.
Available for eligible taxpayers (both itemizing and non-itemizing).
How to claim the deduction

Include your Social Security number on the return.
File jointly, if you’re married.
Related resources

Tax deductions for workers and seniors (FS-2025-03).
No tax on tips (Section 70201)

Overview of the deduction

Effective 2025 through 2028, employees and self-employed individuals may deduct qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips” on or before December 31, 2024, and are reported on a Form W-2, Form 1099, another statement furnished to the individual, or on Form 4137 if the individual directly reports the tips.
“Qualified tips” include voluntary cash or charged tips received from customers, including shared tips.
Maximum annual deduction is $25,000.
For self-employed individuals, deduction cannot exceed net income (before this deduction) from the trade or business where tips were earned.
Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Who qualifies

Individuals who:

Have a Social Security number (SSN)
Claim itemized or non-itemized deductions
Who doesn’t qualify

Individuals who are:

Self-employed in a Specified Service Trade or Business (SSTB) under Section 199A
Employees of an employer in an SSTB
How to claim the deduction

Include your Social Security number on the return
File jointly if you’re married
Reporting requirements

Employers and other payors must report certain cash tips and the occupation of the tip recipient on IRS (or SSA) information returns.
Treasury and IRS will provide penalty relief for tax year 2025.
Related resources

Individuals who received tips or overtime during tax year 2025 (IR-2025-114)
Penalty relief for 2025 tip and overtime reporting (IR-2025-110).
Proposed regulations for tipped occupations and qualified tips.
No tax on overtime (Section 70202)

Overview of the deduction

Effective 2025 through 2028, individuals may deduct the portion of qualified overtime pay that exceeds their regular rate of pay (for example, the “half” portion of “time-and-a-half”).
Overtime must be reported on Form W-2, Form 1099, another statement furnished to the individual, or directly by the individual.
Maximum annual deduction is $12,500 ($25,000 for joint filers).
Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Who qualifies

Taxpayer who:

Have a Social Security number (SSN)
Claim itemized or non-itemized deductions
How to claim the deduction

Include your Social Security number on the return.
File jointly if you’re married.
Reporting requirements

Employers and other payors must report qualified overtime compensation on IRS (or SSA) information returns.
Treasury and the IRS will provide transition relief for tax year 2025.
Related resources

Individuals who received tips or overtime during tax year 2025 (IR-2025-114)
Penalty relief for 2025 tip and overtime reporting (IR-2025-110).
No tax on car loan interest (Section 70203)

Overview of the new deduction

Effective 2025 through 2028, individuals may deduct interest paid on a loan used to purchase a qualified vehicle for personal use that meets other eligibility criteria. Lease payments do not qualify.
Maximum annual deduction is $10,000.
Phases out for taxpayers with modified adjusted gross income over $100,000 ($200,000 for joint filers).
What counts as qualified interest

Interest must be paid on a loan that:

Originated after December 31, 2024
Was used to purchase a vehicle originally used by the taxpayer
Was secured by a lien on the vehicle
Was for a personal-use (nonbusiness) vehicle
If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.

​​​What counts as a qualified vehicle

A qualified vehicle is a car, minivan, van, SUV, pickup truck or motorcycle that:

Has a gross vehicle weight rating of less than 14,000 pounds
Underwent final assembly in the United States.
To verify final assembly, check one of these:

The vehicle label at the dealership
The vehicle identification number (VIN)
The National Highway Traffic Safety Administration, NHTSA VIN Decoder (verify vehicle assembly location)
Who qualifies

Available to both itemizing and non-itemizing taxpayers.
You must include the VIN on your return for any year you claim the deduction.
Reporting requirements

Lenders or other recipients of qualified interest must file information returns with the IRS and provide statements to taxpayers showing the total amount of interest received during the taxable year.
Related resources

Notice 2025-57, Transitional Guidance Regarding Returns Relating to Certain Interest on Specified Passenger Vehicle Loans Received in a Trade or Business (PDF) PDF

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02/07/2025

Now taking new and returning clients. Feel free to call and make an appointment.

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Pulaski, TN
38478

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