Filing Window
Tax season 2026 began January 26, 2026. File federal returns by April 15, 2026. This cycle covers earnings from the 2025 calendar year. Late filings incur penalties. Request extensions if necessary. Use the MCG Service tax portal to track deadlines.
OBBB Overview
The One, Big, Beautiful Bill (OBBB) passed July 4, 2025. It dictates current tax logic. Many provisions apply retroactively to 2025 income. Understand these changes immediately. The IRS continues to release finalized guidance. Stay updated on implementation timelines.
Standard Deductions
Standard deduction amounts increased for the 2025 tax year (filed in 2026).
2025 Tax Year
- Single: $15,750
- Married Filing Separately: $15,750
- Married Filing Jointly: $31,500
- Head of Household: $23,625
2026 Tax Year (Projected)
- Single: $16,100
- Married Filing Separately: $16,100
- Married Filing Jointly: $32,200
- Head of Household: $24,150
Compare these rates against itemized expenses. Choose the higher value. Maintain records in a professional business organizer for accuracy.
Senior Benefits
Taxpayers aged 65 and older receive enhanced deductions. Claim an additional $2,000 for single filers. Claim $1,600 per spouse on joint returns. These amounts double for taxpayers who are both 65+ and blind.
The OBBB introduced a $6,000 enhanced senior deduction.
- Eligibility: Must be 65 or older.
- Status: Available for standard or itemized filers.
- Phases Out: Starts at $75,000 Adjusted Gross Income (Single) or $150,000 (Joint).
Schedule 1-A
The IRS introduced Schedule 1-A. This form is mandatory for specific new OBBB deductions. Use it to claim tips, overtime, and auto loan interest. Verify employer reporting before filing. Many payroll systems lack updated fields for these categories. Cross-reference your personal records.
Tip Income
Tax-free treatment now applies to specific tip earnings.
- Occupations: Restricted to approximately 70 specific service roles.
- Reporting: Employees must report all tips to employers.
- Claiming: Use Schedule 1-A.
- Limitations: Check latest IRS list for eligible job titles.
Overtime Pay
New deductions apply to overtime earnings.
- Status: Only for W-2 employees.
- Classification: Must be non-exempt under the Fair Labor Standards Act.
- Verification: Ensure pay stubs clearly separate base pay from overtime.
- Audit Risk: High for this category. Keep precise time logs.
Auto Interest
Deduct interest on car loans under OBBB.
- Vehicle Origin: Must be manufactured in the United States.
- Purchase Date: Check specific 2025 purchase windows.
- Documentation: Retain VIN and loan agreements.
- Use: Business or personal use eligibility varies.
LLC Compliance
Small business owners must maintain strict compliance.
- Entity Status: Verify active status with the Secretary of State.
- Registered Agent: Ensure current registered agent service is in place.
- Mail: Use mail forwarding services to avoid missing IRS notices.
- Updates: Report changes in business structure immediately.
Estate Taxes
The Estate Tax Exemption increased.
- 2025 Exemption: $13,990,000
- 2026 Exemption: $15,000,000
- Annual Gift Exclusion: $19,000 per person.
- Spousal Gift (Non-Citizen): $194,000.
Review succession plans. Consult with a senior position consultant for high-net-worth strategies.
Alternative Minimum Tax
The AMT exemption amounts have risen.
- Unmarried Individuals: $90,100 (Phaseout starts at $500,000).
- Married Jointly: $140,200 (Phaseout starts at $1,000,000).
Calculate AMT to determine final liability. Higher exemptions reduce the number of taxpayers affected by this tax.
Other Credits
Several credits saw adjustments under the OBBB.
- Adoption Credit: Maximum $17,670. Refundable amount is $5,120.
- Foreign Earned Income Exclusion: $132,900 for 2026.
- Child Tax Credit: Increased limits apply. Check qualifying age thresholds.
- Mortgage Interest: Deductible up to $750,000 of debt.
- SALT Deductions: The $10,000 cap is now higher. Review local tax payments.
Filing Strategy
Prioritize efficiency and speed.
- E-file: Use electronic filing for 40th-anniversary benefits.
- Direct Deposit: Request refunds via direct deposit.
- IRS Online Account: Monitor balances and payment history.
- Organization: Use a 2026 agenda planner to track documentation.
Verification Steps
- Collect Forms: Gather W-2s, 1099s, and 1098s.
- Confirm Eligibility: Review the 70 tip-eligible occupations.
- Check Vehicle VIN: Confirm US manufacture for car loan interest.
- Complete Schedule 1-A: Attach to Form 1040.
- Audit Defense: Save all receipts for business expenses.
Compliance Checklist
- Review OBBB retroactive impacts.
- Calculate senior enhanced deductions if 65+.
- Update Registered Agent details.
- Review LLC annual report status.
- Confirm overtime non-exempt status.
- Execute estate planning transfers.
IRS Contact
Access the IRS website for official forms. Use the MCG Service contact page for professional consulting. Avoid phone scams. The IRS does not initiate contact via social media or text.
Final Deadlines
- January 26: Filing opens.
- April 15: Tax deadline.
- October 15: Extension deadline.
Submit returns early. Prevent identity theft. Ensure all data matches Social Security records. Use additional services for complex filings.
Summary of Changes
The 2026 season introduces significant complexity via the OBBB. Standard deductions are higher. Specific income types like tips and overtime receive new treatment. Schedule 1-A is the central form for these updates. Senior filers benefit from higher thresholds. Compliance for LLCs remains critical. Utilize professional tools and services to navigate these changes. Stay informed. File accurately.
Visit MCG Service for more business consulting resources.