Author: Slattery & Holman, P.C.

Tax filing season is still months away, but the decisions you make before January 1, 2027, can significantly affect your 2026 federal income tax bill. Year-end tax planning matters more than usual this year because new provisions of the One Big Beautiful Bill Act (OBBBA), passed in 2025, take effect for 2026. You may also still be getting used to the OBBBA changes that started last year.

Here are five year-end tax strategies to consider before the calendar turns to 2027.

1. Compare the 2026 standard deduction with itemizing

Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing saves tax when your total deductions are higher than the standard deduction, but it makes filing more complicated.

For 2026, the standard deduction is:

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

Taxpayers who are 65 or older, or blind, can claim an additional standard deduction of $2,050 ($1,650 per spouse if married). If you are both 65 or older and blind, the additional amount doubles.

With such large standard deduction amounts, you may not think much about itemizing. However, certain temporary OBBBA provisions (covered below) could make itemizing worthwhile for some taxpayers this year.

High earners, take note: the OBBBA’s new limit on itemized deductions begins with the 2026 tax year. For taxpayers in the top 37% bracket, it effectively caps the value of itemized deductions at 35 cents per dollar, down from 37 cents.

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2. Maximize the new senior deduction

Through the 2028 tax year, taxpayers who are 65 or older by the end of the tax year may qualify for an additional $6,000 senior deduction ($12,000 for joint filers if both spouses qualify). You can take this tax break whether you itemize or claim the standard deduction, and it is in addition to the existing extra standard deduction for seniors.

The senior deduction phases out once modified adjusted gross income (MAGI) exceeds $75,000 for single filers or $150,000 for joint filers. This deduction is reduced by 6% of MAGI exceeding these thresholds. Married taxpayers must file jointly to qualify, and each eligible individual must have a valid Social Security number.

How to reduce MAGI before year end:

• If you’ve already taken your required minimum distribution (if applicable) and your budget allows, consider cutting back on taxable retirement plan distributions for the rest of 2026.
• If you’re still working, increase your 2026 retirement plan contributions.
• Whether you’re working or retired, tax loss harvesting (see Strategy 5) and other investment-related strategies can also lower MAGI.

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3. Plan around new charitable giving deduction rules

A new charitable deduction for non-itemizers

Before the OBBBA, taxpayers who didn’t itemize generally couldn’t deduct charitable gifts. Starting in 2026, non-itemizers can deduct up to $1,000 in qualifying cash donations ($2,000 for joint filers).

The deduction generally applies to cash gifts made directly to qualifying public charities. Gifts to donor-advised funds, most private foundations and noncash donations are not eligible.

“Cash donations” include not just actual cash but gifts made by check, debit or credit card, payment app, or payroll deduction. If you plan to claim this deduction, be sure to substantiate your cash donations. They must be:

• Supported by a bank record, receipt or written communication from the charity if under $250, or
• Acknowledged in writing by the charity if $250 or more.

A new 0.5% floor for itemizers

The OBBBA also added a limit for taxpayers who itemize. Starting in 2026, only charitable contributions above 0.5% of adjusted gross income (AGI) are deductible. For example, if your 2026 AGI is $100,000, the first $500 of your donations is not deductible.

Amounts disallowed by this floor generally can’t be carried forward, unless you also have contributions above the percentage-of-AGI limits. (For example, deductions for cash gifts to public charities generally can’t exceed 60% of AGI.)

Consider “bunching” your donations

These changes make bunching charitable contributions into a single tax year worth considering. Taxpayers have traditionally used bunching to push itemized deductions above the standard deduction in alternating years. Now, concentrating donations in one year may also help reduce the impact of the 0.5%-of-AGI floor. However, the potential benefits depend on your income, your other itemized deductions and the timing of your gifts.

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4. Take advantage of the higher SALT cap in 2026

The OBBBA temporarily raised the limit on state and local tax deductions (the SALT cap) through the 2029 tax year. For 2026, taxpayers who itemize can deduct up to $40,400 ($20,200 for married couples filing separately). Deductible expenses include:

• State and local real estate taxes
• Qualifying personal property taxes, and
• Either state and local income taxes or general sales taxes, but not both.

The SALT cap is scheduled to drop back to $10,000 ($5,000 for separate filers) in 2030.

Depending on your SALT expenses and MAGI, the higher cap could mean substantial savings. For 2026, the cap is reduced by 30% of MAGI above $505,000 ($252,500 for separate filers), but it can’t fall below $10,000 ($5,000 for separate filers). Both the higher cap and the income threshold are scheduled to rise 1% each year through 2029.

Year-end move: If your 2026 SALT expenses are below the applicable cap, consider accelerating payments into 2026. For example, you might pay property taxes before year end (if they’ve already been assessed) or make eligible state estimated income tax payments.

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5. Use tax loss harvesting to offset gains

Economic conditions have been mixed in 2026, but the stock market has generally performed well. If you hold underperforming investments in your taxable portfolio, consider selling them before year end to harvest capital losses that can offset gains you’ve already realized.

If your losses exceed your gains, you can generally deduct up to $3,000 of the excess against ordinary income ($1,500 for separate filers). Unused losses carry forward to future years.

Harvesting losses may also help reduce or eliminate the 3.8% net investment income tax (NIIT). The NIIT applies to some or all net investment income when MAGI exceeds $200,000 ($250,000 for joint filers and $125,000 for separate filers). Because these thresholds aren’t annually indexed for inflation, more taxpayers are subject to the tax each year.

Watch the wash-sale rule. It generally disallows a loss if you buy substantially identical securities within 30 days before or after the sale. The rule can also apply to purchases by your spouse or in an IRA. In most cases, a disallowed loss is added to the tax basis of the replacement securities, so the tax benefit is deferred rather than eliminated.

 

 

Frequently asked questions about year-end tax planning for 2026

What is the standard deduction for 2026?

For 2026, the standard deduction is $16,100 for single filers and married couples filing separately, $24,150 for heads of household and $32,200 for married couples filing jointly.

Who qualifies for the new $6,000 senior deduction?

Taxpayers who are 65 or older by the end of the tax year may qualify, through 2028. It begins to phase out when MAGI exceeds $75,000 (single) or $150,000 (joint). Married couples must file jointly.

Can I deduct charitable donations if I don’t itemize?

Yes, starting in 2026. Non-itemizers can deduct up to $1,000 ($2,000 for joint filers) in qualifying cash donations made directly to public charities.

What is the SALT cap for 2026?

For 2026, itemizers can deduct up to $40,400 in state and local taxes ($20,200 for married filing separately). The cap is reduced for MAGI above $505,000 but can’t fall below $10,000.

When should I complete year-end tax planning?

Before December 31, 2026. Most of these strategies, including charitable gifts, tax prepayments and loss harvesting, must be completed by year end to count for 2026.

 

 

© 2026

Indiana National Guard photo by Staff Sgt. Christopher Estrada.

The IRS has announced tax relief for individuals and businesses affected by the severe storms, straight-line winds, tornadoes, and flooding that began on August 11, 2026, in parts of Indiana.

For eligible taxpayers, certain federal tax filing and payment deadlines that fall on or after August 11, 2026, and before February 1, 2027, have been postponed to February 1, 2027.

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Who Qualifies?

The relief currently applies to individuals who live, and businesses whose principal place of business is located, in the following counties:

Carroll, Dearborn, Decatur, Delaware, Fayette, Franklin, Hamilton, Hancock, Henry, Lake, LaPorte, Madison, Marion, Morgan, Porter, Pulaski, Randolph, Rush, Tipton, Union, and Wayne.

Taxpayers outside the covered counties may also qualify in certain circumstances if necessary tax records are located in the disaster area.

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Why This Matters for Tax Filings

The IRS typically uses the postmark date to determine whether you’ve met a filing or payment deadline. If there’s a mismatch between when you mailed your documents and when they were postmarked, you could face penalties or interest charges—even though you mailed everything on time.

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What Is Extended?

For eligible taxpayers, the relief generally includes:

• 2025 individual, partnership, S corporation, corporate, and fiduciary returns that have a valid extension
• 2026 estimated tax payments originally due September 15, 2026, and January 15, 2027
• Certain quarterly payroll and excise tax returns
• Other qualifying federal tax filing, payment, and time-sensitive obligations

Not every tax deadline is extended. The relief generally does not apply to information returns such as W-2s and 1099s or to most employment and excise tax deposits. In addition, payments that were due with extended 2025 tax returns on April 15, 2026 are not eligible for this relief.

Affected taxpayers may also qualify for additional relief, including the ability to claim certain disaster-related casualty losses and other provisions related to disaster assistance.

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What Should You Do?

If you are in a covered disaster area but were not directly affected, we encourage you to file and make payments on time, as scheduled, to avoid potential penalties with the taxing authorities.

If you need to take advantage of this relief, please contact our office so we can help determine how it may apply to your specific situation.

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We will continue to monitor additional guidance from the IRS and Indiana Department of Revenue.

 

A Trump Account under IRC section 530A is a new tax-favored account for children. Contributions cannot be made before July 4, 2026. Some children qualify for free seed money from the federal government or from the Dell Foundation.

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Does My Child Qualify?

Any child under 18 with a Social Security number can have a Trump Account. Two separate programs also offer free contributions:

Federal $1,000  –  U.S. Treasury (one-time)

• U.S. citizen
• Valid Social Security number
• Born January 1, 2025 – December 31, 2028
• Family files the required IRS election (Form 4547)

Dell Foundation $250  –  for older children who miss the federal window

• Age 10 or younger (born before 2025)
• Lives in a ZIP code where the area median household income is below $150,000

Check Dell Foundation eligibility here: investamerica.org/dell

Note: The Dell Foundation program is private philanthropy, not a federal benefit. Funding is limited and given to younger children first if demand is high.

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How to Open an Account (Step-by-Step)

Step 1:  Go to InvestAmerica.org

The primary hub for this is investamerica.org. You can open the account and request the $1,000 federal contribution (if eligible) all in one place.

Step 2:  Sign in with ID.me

The IRS requires identity verification through ID.me. You’ll need:

• Your own ID.me account (or create one at no cost)
• Your child’s Social Security number
• Your child’s date of birth and address

Step 3:  Complete IRS Form 4547

This is the official election form. Use it to:

• Open the Trump Account
• Request the $1,000 federal contribution (if your child was born 2025–2028)

The form can be submitted online through the portal. Do not attach it to an amended return (Form 1040-X).

Step 4:  Wait for Treasury Confirmation

After your election is accepted, Treasury will send instructions to activate the account. The $1,000 (if eligible) will be deposited after July 4, 2026.

Step 5:  Start Contributing

Once the account is active, anyone can contribute. Parents, grandparents, other family, and friends can add up to $5,000 per year combined. Employers can also contribute up to $2,500 per year, which counts toward that same $5,000 limit. Donors and state or local governments can contribute as well and are treated as additional support which do not count against the annual cap.

Important: Contributions must be made within the calendar year. Unlike IRAs, there is no April 15 extension.

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What Exactly Is a Trump Account?

Think of it as a traditional IRA for children with special rules during the “growth period” (before the child turns 18):

• Investments are limited to qualifying U.S. index funds/ETFs
• Withdrawals are generally restricted until adulthood
• Contributions are not tax-deductible
• After age 18, standard traditional IRA rules apply (taxes on withdrawals, required distributions, etc.)

Trump Account vs. 529 Plan

If your primary goal is college savings, a 529 plan may still be better (qualified education withdrawals are tax-free, and many states offer deductions). Trump Accounts are more suited for long-term wealth building. They can complement a 529, but shouldn’t automatically replace it.

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Quick Summary

Child born 2025 – 2028?

Go to investamerica.org, complete Form 4547, claim the $1,000.

Child 10 or younger, born before 2025?

Open the account at investamerica.org and check Dell Foundation eligibility at investamerica.org/dell.

Child older than 10?

They can still have a Trump Account but won’t receive the $1,000 or the Dell $250. Families and others can still contribute up to $5,000/year.

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Questions? We Can Help.

Trump Accounts are brand new, and IRS guidance is still evolving. If you’d like help determining whether your family qualifies, how a Trump Account fits alongside your 529 or estate plan, or what contribution strategy makes sense, please contact our office.

 

This communication is for educational purposes only and is not tax, legal, or financial advice. Information believed accurate as of June 2026 and subject to change.

The United States Postal Service has clarified its postmarking policies in ways that could affect taxpayers who mail their tax returns, payments, or other time-sensitive documents to the IRS. Understanding these changes can help you avoid potential issues with filing deadlines.

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What Changed?

The USPS has formally defined what constitutes a postmark and clarified an important point: the postmark date does not necessarily indicate the first day that the Postal Service had possession of a mailpiece. This means the date stamped on your envelope might not match the day you actually dropped it in the mail.

Most mail is postmarked automatically at regional processing centers, not at your local post office. The date on these automated postmarks shows the date of the first automated processing operation performed on that mail piece. Depending on how long it takes your mail to get from the local post office to one of these centers, that postmark could be a day or two later than when you mailed it.

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Why This Matters for Tax Filings

The IRS typically uses the postmark date to determine whether you’ve met a filing or payment deadline. If there’s a mismatch between when you mailed your documents and when they were postmarked, you could face penalties or interest charges—even though you mailed everything on time.

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What You Can Do

Here are practical steps to protect yourself:

1. Mail Early: The simplest solution is to mail tax documents well before any deadline. Don’t wait until the last day.
2. Request a Manual Postmark: If you’re mailing close to a deadline, visit any Post Office location and request a manual (local) postmark at the counter when you drop off your mail. This service is free of charge and the date on that postmark aligns with the date on which the Postal Service first accepted possession of the mail piece.
3. Get Proof of Mailing: Consider purchasing a Certificate of Mailing, which provides an official receipt showing the date you handed your documents to USPS. For added security, you might use Certified Mail, which includes tracking and proof of delivery.
4. Go Digital When Possible: When possible, file and pay electronically through IRS.gov or approved tax software. Electronic submissions are timestamped immediately and eliminate postmark concerns entirely.
5. Keep Documentation: If you request a manual postmark or purchase a Certificate of Mailing, keep this documentation with your tax records.

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The Bottom Line

The USPS changes don’t reduce your mail options—they simply clarify how postmarks work. By planning ahead and taking advantage of manual postmarks when needed, you can ensure your tax mailings are properly documented and meet IRS deadlines without worry.

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If you have questions about how these IRS mail date changes may affect your tax filings or payments, please contact our office. We’re happy to help you choose the safest and most timely filing option.

 

The IRS has released the inflation-adjusted contribution limits for 2026 (Notice 2025-67). While the increases are generally more modest than in recent years, most major retirement savings limits will still rise, giving many taxpayers especially business owners and higher-earning individuals — additional opportunities to strengthen their long-term savings strategy.

Below is a snapshot of the updated limits for 2026:

2026 Retirement Plan Contribution Limits

Type of Limitation	2025 Limit	2026 Limit
Elective deferrals to 401(k), 403(b), and 457 plans	$23,500	$24,500
Annual benefit limit for defined benefit plans	$280,000	$290,000
Total contributions to defined contribution plans	$70,000	$72,000
SIMPLE contributions	$16,500	$17,000
Traditional and Roth IRA contributions	$7,000	$7,500
Catch-up contributions (age 50+) for 401(k), 403(b), and 457 plans*	$7,500	$8,000
Catch-up contributions (ages 60–63) for 401(k), 403(b), and 457 plans*	$11,250	$11,250
SIMPLE catch-up contributions (age 50+)	$3,500	$4,000
SIMPLE catch-up contributions (ages 60–63)	$5,250	$5,250
IRA catch-up contributions (age 50+)	$1,000	$1,100
Compensation limit for qualified plans and SEPs	$350,000	$360,000
Minimum compensation for SEP coverage	$750	$800
Highly compensated employee threshold	$160,000	$160,000

*Beginning in 2026, SECURE 2.0 requires catch-up contributions for higher-income taxpayers to be treated as Roth (after-tax) contributions. This generally applies to individuals with prior-year wages over $150,000. However, new final regulations give plans until December 31, 2026 to adopt the required amendments — meaning plans may continue to accept non-Roth catch-up contributions during 2026 without adverse consequences.

 

How MAGI Affects IRA Contribution Eligibility

Your modified adjusted gross income (MAGI) may limit your ability to contribute to — or deduct contributions from — traditional and Roth IRAs. The good news: all MAGI phaseout ranges will increase for 2026.

Traditional IRA Deduction Phaseouts (2026)

If you or your spouse participates in an employer-sponsored retirement plan, MAGI limits determine whether your traditional IRA contributions are deductible:

• Married filing jointly
  • For the spouse who participates in a workplace plan:
    $129,000 – $149,000 (up $3,000)
  • For the spouse who doesn’t participate:$242,000 – $252,000 (up $6,000)
• Single or head of household (participating in a workplace plan)
  • $81,000 – $91,000 (up $2,000)

Taxpayers within these ranges can deduct a partial traditional IRA contribution, while those above the range cannot deduct any contributions. However, even if your deduction is reduced or eliminated, you may still make nondeductible traditional IRA contributions. The $7,500 contribution limit for 2026 (plus a $1,100 catch-up contribution, if eligible, and reduced by any Roth IRA contributions) continues to apply.

Roth IRA MAGI Phaseouts (2026)

Employer plan participation does not affect Roth IRA eligibility, but MAGI limits do:

• Married filing jointly:
  $242,000 – $252,000 (up $6,000)
• Single or head of household:
  $153,000 – $168,000 (up $3,000)

If your MAGI falls within the phaseout range, you may make a partial contribution; above the range, Roth contributions are not allowed.

Note: Married couples filing separately are subject to significantly lower phaseout ranges.

Time to Revisit Your Retirement Strategy

The updated 2026 limits offer an excellent opportunity to reassess your retirement planning — especially with the upcoming SECURE 2.0 Roth catch-up requirement and rising IRA thresholds.

If you’d like help evaluating your current plan, maximizing your contributions, or considering tax-efficient strategies, our team is here to help.

 

© 2025

 

As the year winds down, it’s time to look for last-minute opportunities to trim your federal income tax bill. This year’s planning is especially important because the One Big Beautiful Bill Act (OBBBA) introduces sweeping tax law changes that could significantly impact your 2025 return. Here are four key strategies to consider before December 31.

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Strategy #1. Reevaluate the Standard Deduction

Taxpayers can either itemize deductions or claim the standard deduction, whichever provides the greater tax benefit. The OBBBA increases standard deductions for 2025 as follows:

• $15,750 for single filers and married individuals filing separately
• $23,625 for heads of household
• $31,500 for married couples filing jointly

Taxpayers age 65 or older – or blind – can claim an additional deduction of $2,000 per person ($1,600 per spouse if filing jointly).

However, other OBBBA provisions may make itemizing worthwhile again. For example, the expanded state and local tax (SALT) deduction could push your itemized total above the standard deduction threshold (see Strategy #2 below). If so, you might benefit by accelerating deductible expenses into 2025, such as:

• Qualified medical and dental expenses exceeding 7.5% of adjusted gross income (AGI)
• Home mortgage interest (generally on up to $750,000 of eligible debt)
• Casualty losses from federally declared disasters
• Charitable contributions (see Strategy #3 below)

If you’re in the top tax bracket (37%), note that beginning in 2026, the value of itemized deductions will be capped at 35 cents per dollar. Consider accelerating itemized deductions into 2025 while the full benefit still applies.

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Strategy #2. Maximize the Expanded SALT Deduction

The OBBBA temporarily quadruples the SALT deduction cap to $40,000 ($20,000 for separate filers) from 2025 through 2029, with 1% annual increases. This deduction covers property taxes (on homes, vehicles, and boats) and either income or sales taxes, but not both.

Starting in 2030, the cap reverts to $10,000 ($5,000 for separate filers).

There are income phaseouts: the allowable deduction is reduced by 30% of the amount your modified adjusted gross income (MAGI) exceeds $500,000 ($250,000 for separate filers). Once MAGI reaches $600,000 ($300,000 for separate filers), the $10,000 cap applies again.

Tip: If your 2025 SALT expenses exceed $10,000 but you’d still fall below the standard deduction, consider “bunching” expenses. For instance, if you receive your 2026 property tax bill before year-end, pay it in 2025 to deduct both years’ taxes. Similarly, you could prepay estimated state or local income taxes (if applicable).

In 2026, return to taking the standard deduction, then bunch again in 2027.

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Strategy #3. Plan Ahead for Charitable Giving Changes

Charitable donations remain one of the most flexible tax-saving tools, but the rules are changing. Beginning in 2026, the OBBBA imposes a 0.5% of AGI “floor” on charitable deductions. That means only donations above 0.5% of your AGI will be deductible. For example, if your AGI is $100,000, the first $500 of contributions won’t be deductible.

To maximize the current rules:

• Consider “bunching” your 2026 donations into 2025 to avoid the new floor.
• Donate appreciated stock instead of cash to avoid capital gains tax and still deduct the stock’s fair market value.

If you don’t itemize, you may prefer to delay donations until 2026, when a new permanent non-itemizer deduction begins: up to $1,000 for individuals and $2,000 for married couples filing jointly. Note that this applies only to cash contributions to public charities (not private foundations or donor-advised funds).

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Strategy #4. Manage Your Modified Adjusted Gross Income (MAGI)

MAGI determines eligibility and phaseouts for many tax benefits, including several new ones under the OBBBA.

For example, taxpayers age 65 or older can claim a new temporary “senior deduction” of $6,000, on top of the standard or itemized deduction. However, this begins to phase out at MAGI above $75,000 ($150,000 for joint filers).

Other provisions – such as the enhanced SALT deduction, the Child Tax Credit, and new temporary deductions for qualified tips, overtime pay, and car loan interest – are also tied to MAGI limits.

To reduce your MAGI, you might:

• Spread Roth IRA conversions over multiple years
• Maximize contributions to traditional retirement plans and Health Savings Accounts (HSAs)
• If age 70½ or older, make qualified charitable distributions (QCDs) directly from your IRA, which count toward your required minimum distribution but are excluded from MAGI

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Don’t Wait to Plan

Year-end tax planning can have a big impact, especially under the new OBBBA rules. The best strategies depend on your income, deductions, and personal goals.

At Slattery & Holman, P.C., we can help you identify and implement year-end opportunities to reduce your 2025 tax bill.

Contact us today to schedule a personalized planning session.

 

© 2025

Quick Takeaways

• The SALT deduction cap temporarily increases to $40,000 in 2025 ($20,000 for married filing separately) before returning to $10,000 in 2030.
• High-income taxpayers may see their deduction reduced if income falls between $500,000–$600,000 MAGI (the “SALT torpedo”).
• Strategic moves like boosting retirement contributions can help reduce MAGI and preserve deductions.
• Pass-through business owners should review PTET elections, which may still provide benefits under OBBBA.

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Background on the SALT Deduction

Less than a decade ago, eligible state and local tax (SALT) expenses were generally 100% deductible if a taxpayer itemized. This was especially valuable in states with higher income or property taxes.

The Tax Cuts and Jobs Act (TCJA) of 2018 changed that by imposing a $10,000 deduction cap ($5,000 for married filing separately), scheduled to expire after 2025.

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What’s Changing Under the OBBBA?

The One Big Beautiful Bill Act (OBBBA) modifies SALT deductions starting in 2025:

• Cap increases to $40,000 ($20,000 if married filing separately).
• The cap increases by 1% annually through 2029.
• In 2030, the cap reverts back to $10,000.
• Deductions are reduced once MAGI exceeds $500,000 (halved for separate filers), with a 30% reduction of the excess over the threshold.

Baseline savings example (no phaseout): A single taxpayer in the 35% bracket with $40,000 of SALT expenses and MAGI under $500,000 would save an additional $10,500 in 2025 compared with the prior $10,000 cap. [35% x ($40,000 – $10,000)]

Phaseout mechanics example (2025): If MAGI is $560,000—that’s $60,000 over the threshold—the SALT cap is reduced by 30% × $60,000 = $18,000. The allowable SALT deduction becomes $22,000 ($40,000 − $18,000), which is still more than twice the old $10,000 cap.

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The “SALT Torpedo” Explained

When MAGI moves from $500,000 toward $600,000, you don’t just add income—you also lose SALT deduction due to the phaseout. This combination can cause a sharp increase in effective marginal tax rate, sometimes called the “SALT torpedo.”

Illustrative example (2025): MAGI rises from $500,000 to $600,000, SALT expenses are $40,000, and other itemized deductions are $35,000.

SALT torpedo impact as MAGI increases

	MAGI $500,000	MAGI $600,000
SALT deduction	$40,000	$10,000
Other itemized deductions	$35,000	$35,000
Total itemized deductions	$75,000	$45,000
Taxable income (illustrative)	$425,000	$555,000

The $100,000 rise in MAGI increases taxable income by $130,000 because you also lose $30,000 of SALT deduction (from $40,000 to $10,000). At a 35% marginal rate, that’s $45,500 of additional tax—an effective 45.5% marginal rate on that $100,000 increase.

Even with SALT reduced to $10,000, you may still benefit from itemizing if your total itemized deductions exceed your standard deduction; otherwise, the standard deduction will produce a lower tax.

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Tax Planning Strategies to Consider

Taxpayers can manage their Modified Adjusted Gross Income (MAGI) to maximize SALT deductions:

• Boost pre-tax 401(k) or HSA contributions.
• If self-employed, use retirement plans that allow larger deductible contributions.
• Avoid moves that increase MAGI, such as Roth IRA conversions, unnecessary asset sales, or large mutual fund distributions.
• Consider pre-paying property taxes (if already assessed) in years when your MAGI is below thresholds.

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Pass-Through Entity Tax (PTET) Considerations

Many states enacted PTET elections after the TCJA to help business owners bypass the SALT cap. The OBBBA keeps these workarounds intact, though some state PTET laws may expire after 2025.

Business owners should review their state’s rules annually to see if PTET elections remain advantageous.

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SALT Deduction and the Alternative Minimum Tax (AMT)

SALT expenses are not deductible under the AMT. The OBBBA makes TCJA’s higher AMT exemptions permanent but tightens phaseout rules for joint filers after 2026.

High-income taxpayers with large SALT deductions should run projections to avoid being caught by the AMT.

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What This Means for You

The OBBBA’s SALT deduction changes offer opportunities for tax savings but also introduce new risks, especially for high-income earners. Planning ahead can make the difference between maximizing deductions and getting caught in the “SALT torpedo.”

Our CPA team can help you:

• Evaluate whether itemizing or the standard deduction will save you more.
• Plan retirement and compensation strategies to reduce MAGI.
• Review PTET elections for pass-through businesses.
• Project your AMT exposure and create a tax-efficient strategy.

 

Updated for 2025 tax year – © 2025

Starting September 30, 2025, the federal government will eliminate paper checks for most tax refunds and benefit payments. The IRS, U.S. Treasury Department, and Social Security Administration (SSA) are moving to an all-electronic payment system in an effort to reduce fraud, speed up transactions, and cut administrative costs.

This shift will affect millions of taxpayers, including those who are unbanked or living abroad. Now is the time to prepare.

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Why Is the IRS Ending Paper Checks?

Many Americans still receive paper checks for IRS tax refunds, Social Security benefits, and other federal payments. Under an executive order signed by President Trump, this option will no longer be available after September 30, 2025.

According to the order, paper checks are 16 times more likely to be lost, stolen, or altered than direct deposit payments. Transitioning to electronic payments helps:

• Prevent identity theft and check fraud
• Speed up processing time
• Save taxpayer dollars

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What If You Don’t Have a Bank Account?

Roughly 6 million U.S. households remain “unbanked”, meaning they don’t have a checking or savings account. This creates a challenge for the transition.

To address this, the federal government may:

• Issue tax refunds on prepaid debit cards
• Encourage banks and credit unions to offer low-fee or no-fee accounts
• Promote the Direct Express® card for federal benefit recipients

If you’re unbanked, it’s wise to open a U.S.-based account soon to avoid refund delays in the 2025 tax season.

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3 Key Changes Taxpayers Should Expect

Here’s how this change may affect you:

1. Bank account required: You must have a U.S. bank or credit union account to receive tax refunds and federal benefits.
2. Faster refunds: Direct deposit eliminates mail delays, so you’ll likely receive your refund more quickly.
3. Lower fraud risk: Electronic payments are more secure than paper checks.

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Special Concerns for U.S. Citizens Abroad

If you live overseas, take note: foreign bank accounts generally won’t work for IRS direct deposit.

This presents a challenge for expatriates. The government may offer limited exceptions or partner with services that offer U.S.-based banking solutions. Expats should:

• Consider opening a U.S. account now
• Follow IRS updates on refund delivery options for non-residents

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Estate and Trust Filings: An Overlooked Issue

The American Institute of CPAs (AICPA) has raised concerns for estate executors and trustees. Current IRS forms don’t allow for electronic refund details when dealing with estates or trusts, and mismatches in taxpayer names vs. account names can block refunds.

Professionals and fiduciaries should monitor guidance from the IRS and plan accordingly.

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Social Security Payments

The SSA reports that less than 1% of beneficiaries still receive paper checks. If you’re one of them, you can:

• Enroll in direct deposit using your bank or credit union
• Sign up for the Direct Express® debit card to receive your benefits

Visit ssa.gov for instructions.

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What Taxpayers Should Do Now

To avoid disruption, all taxpayers should:

• Open a U.S.-based bank account (if you don’t have one)
• Update your direct deposit info with the IRS or SSA
• Watch for future guidance from the IRS
• Contact your tax professional with questions

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Questions About the IRS Refund Process?

At Slattery & Holman, we help clients stay ahead of tax law changes that impact refunds, benefits, and planning. If you’re unsure how the paper check phaseout will affect you or your loved ones, reach out to our team for guidance.

Contact us today to ensure you’re prepared before the 2025 deadline.

 

© 2025

For months, Republican lawmakers and former President Trump have voiced opposition to clean energy tax benefits introduced under the Inflation Reduction Act (IRA). With the recent passage of the One, Big, Beautiful Bill Act (OBBBA), several of those incentives are being repealed or significantly reduced.

Here’s a breakdown of the clean energy tax credits affected by the OBBBA — and what individuals and businesses need to know before they expire.

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Clean Energy Tax Credits for Individuals

Several tax credits aimed at homeowners and consumers will sunset earlier than expected. However, the OBBBA provides short grace periods, offering a limited window for action.

Energy Efficient Home Improvement Credit (IRC Sec. 25C)

• Old expiration: 2032
• New expiration: December 31, 2025
• What it covers: 30% credit for improvements like energy-efficient windows, doors, insulation, and home energy audits.

Residential Clean Energy Credit (IRC Sec. 25D)

• Old expiration: 2034
• New expiration: December 31, 2025
• Applies to: Solar panels, geothermal systems, wind, biomass, and other clean energy installations.

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Clean Energy Tax Incentives for Businesses

Several business credits have also been shortened or eliminated, especially those related to commercial property and clean manufacturing.

Alternative Fuel Vehicle Refueling Property Credit (IRC Sec. 30C)

• Old expiration: 2032
• New deadline: Property must be placed in service by June 30, 2026
• Credit: Up to $100,000 per item (charging port, storage tank, etc.)

Energy Efficient Commercial Building Deduction (IRC Sec. 179D)

• Eliminated for: Projects that begin construction after June 30, 2026
• Note: This deduction was significantly enhanced under the IRA before being repealed.

Wind and Solar Incentives (IRC Secs. 48E, 45Y)

• Eliminated: Clean Electricity Investment & Production Credits
• Cutoff: Facilities placed in service after 2027 unless construction begins before July 4, 2026

Advanced Manufacturing Production Credit (IRC Sec. 45X)

• Wind energy components ineligible after 2027
• New rule: Adds metallurgical coal to eligible materials
• Phaseout for others: From 2031 to 2033
• Metallurgical coal credit ends after 2029

Note: You can still transfer clean energy tax credits before they expire, though restrictions apply for transfers involving “specified foreign entities.”

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Clean Vehicle Tax Credits — Ending Soon

Thinking about buying an electric vehicle? You’ll want to act fast. Several consumer and business EV incentives will expire much earlier than expected under the OBBBA.

Clean Vehicle Credit (IRC Sec. 30D)

• Old expiration: 2032
• Now ends: September 30, 2025
• Credit: Up to $7,500 for new EVs meeting mineral and battery sourcing rules

Used Clean Vehicle Credit (IRC Sec. 25E)

• Ends: September 30, 2025
• Credit: Lesser of $4,000 or 30% of sale price for qualifying used EVs

Commercial Clean Vehicle Credit (IRC Sec. 45W)

• Now limited to: Vehicles acquired before September 30, 2025
• Credit: Up to $7,500 (light vehicles) or $40,000 (heavy vehicles)

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Other Limitations: Foreign Entities and Domestic Content Rules

The OBBBA also tightens the rules on remaining clean energy incentives by:

• Prohibiting credits tied to “foreign entities of concern”
• Imposing stricter domestic content requirements

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Don’t Wait Until It’s Too Late

Whether you’re a homeowner considering solar panels, a business upgrading commercial property, or a taxpayer looking to purchase an EV, now’s the time to act. With shortened expiration dates and increased restrictions, proper planning is more critical than ever.

Need help navigating these changes? Our tax professionals can help you make informed, strategic decisions.

Contact us today to explore how these expiring clean energy credits affect you.

 

© 2025