Summary
The IRS is advising Americans to start preparing for the 2026 tax filing season due to upcoming changes in tax laws. New rules impacting deductions, credits, and reporting requirements could affect how much people owe or receive in refunds. The changes are connected to President Trump's recent legislative act, which includes various updates and new tax options.
Key Facts
- The IRS suggests early preparation for 2026 tax filing due to new tax law changes.
- The changes are part of President Trump's One Big Beautiful Bill Act.
- New deductions include exempting up to 250 hours of overtime pay from federal income tax.
- Service workers earning under $150,000 pay no federal tax on up to $25,000 in tip income.
- The Child Tax Credit increases to $2,200 for 2025 and will adjust annually for inflation.
- Taxpayers are encouraged to use direct deposit as the IRS phases out paper refunds.
- "Trump Accounts" offer a new savings option for children under 18 with up to $5,000 in annual contributions.
- Income from part-time work, gig jobs, and online sales must be reported, regardless of Form 1099-K issuance.
- Taxpayers dealing with digital assets must report related transactions and income on tax forms.
