Income Tax Wizard

10/14/2026

Sold a house you inherited? Step-up in basis, explained (NEW — added Sat Oct 10)
One of the most common — and costly — misunderstandings I see every year: someone inherits a parent's house, sells it, and assumes they owe capital gains on the difference between the original purchase price and the sale. If a parent bought the home decades ago, that sounds terrifying. Here's the good news: it doesn't work that way.
When you inherit property, your cost basis "steps up" to the fair market value on the date of death. That's the number you start from — not what your parents paid. Sell it shortly after for about that value, and there's often little or no taxable gain. The property being in a revocable living trust doesn't change this — for tax purposes it's treated as the decedent's property, so the step-up still applies.
Three practical points if this applies to you:
Get a date-of-death appraisal (or a solid FMV estimate) as early as you can — that becomes your new basis.
Improvements you pay for after inheriting add to basis, so keep the receipts.
Don't "shortcut" estate planning by being added to the deed while a parent is still alive — a lifetime gift carries over the parent's original basis, and the step-up is lost. That difference can be enormous.
Since a sale like this in 2026 is a current-year filing question, it's worth sorting out before your return — not after.
https://www.trustlaw.com/resources/blog/capital-gains-tax-tips/
https://www.financialsamurai.com/step-up-in-cost-basis-and-the-estate-tax-threshold/

The step-up in cost basis removes double taxation and helps households with estate values above the estate tax threshold.

10/14/2026

New W-2/1099 formats for tips & overtime; IRS moving to IRIS
Two changes to watch for January filing season. With tax-free tips and tax-free overtime now law, expect revised W-2s and 1099s that break out this income — qualified tips will appear on W-2 line 12 with code TP, and you'll need a valid tip classification in box 14b to claim the tax-free treatment, so keep an eye on your pay stubs now. Separately, the IRS is moving W-2, 1099, and payroll 94x filings to a new system called IRIS — a major change that could bring early-season hiccups, so filing information returns early this January is the smart play.

Here are recent changes as announced by the IRS that will impact most of us.

10/14/2026

TAS Act: passed the Senate, now waits on the House (update)
Update on the big IRS reform bill: on September 30 the Senate unanimously passed the Taxpayer Assistance and Service (TAS) Act — 65 bipartisan reforms to modernize the IRS, strengthen taxpayer rights, and improve service (expanded electronic access to taxpayer records, digitized correspondence, better online accounts, more callback technology).
The catch: the House left town for the pre-midterm recess and isn't expected back for regular votes until November 9. The Senate substantially changed the bill text, so both chambers must agree before anything goes to the President. So for now — the bill waits. One of the most significant IRS modernization efforts in years is one House vote away from moving forward.
https://www.taxgirl.com/2026/10/02/irs-reform-bill-clears-senate-without-objection-waits-for-house/
https://ohiocpa.com/for-the-public/news/2026/10/02/u.s.-senate-passes-tas-act-to-modernize-the-irs

The U.S. Senate on Sept. 30 unanimously approved the Taxpayer Assistance and Service (TAS) Act, a bipartisan package of 65 tax administration reforms aimed at modernizing the IRS, strengthening taxpayer rights, and improving taxpayer service.

09/25/2026

With the huge explosion in popularity of online gaming, this is big news worth paying attention to

The House Ways and Means Committee just voted 38–5 to restore the 100% gambling loss deduction, reversing the change that would have capped it at 90% starting January 1, 2027. Under the cap, a gambler who won and lost $100,000 could only deduct $90,000 — paying tax on $10,000 of phantom income. It still needs a full House vote and Senate passage, and the House may not return until after the November midterms — worth watching before year-end planning.

Gambling loss tax deduction changes could be repealed as a House panel approves a measure to restore full 100% loss write-offs for US bettors.

01/15/2026

ATTENTION BUSINESS OWNERS

1099s and W-2s are due to be submitted and sent out on Jan 31.

If you have subcontractors that you need to issue 1099 forms to, I now have access to the new IRS Information Return Intake System (IRIS).
Just reach out and I can get you set up to eFile all of your forms and print copies to distribute to the payees.

For W-2 Forms, I can also get you set up on full service payroll that will automatically complete the quarterly and annual filings and pay the appropriate tax authorities.

https://www.incometaxwizard.com

01/10/2026

The IRS will being processing returns through their Modernized e-File system (MeF) later this month.
Business returns will begin being accepted starting on Jan 15.
Individual returns will begin being accepted on Jan 27.

Filing deadlines remain unchanged (March 15 for Corporate and Partnership Returns, April 15 for Individuals)

I have begun contacting each of my clients individually to confirm personal data, answer any questions and get a tentative appointment scheduled, if applicable. Due to the compressed timeline and the numerous tax law changes, I will be filing extensions for all of my clients as a proactive measure in order to avoid late filing issues. This extension will give you an additional 6 months to meet the filing deadline. However, if you anticipate owing taxes, you must still pay your estimated tax due by the original deadline. To avoid penalty, your total payments must be within 10% of total liability (Safe Harbor Rule).

Please contact me by phone or text with any questions and I will do my best to respond asap. Additional information will be provided on my website as it becomes available. I look forward to talking to you all in the next few months. Happy New Year!

Income Tax Wizard was founded in 2001. We are dedicated to providing exceptional personal service that is tailored to your unique individual requirements.