Your comprehensive guide to the latest IRS updates and the One Big Beautiful Bill Act
Last Updated: February 28, 2026
The 2026 tax filing season is now open. The IRS expects about 164 million individual tax returns for tax year 2025 to be filed ahead of the April 15 deadline. Here are the latest developments:
The IRS launched a new web page allowing taxpayers to confidentially report suspected tax fraud, scams, evasion, or other tax-related illegal activities. Internal improvements will enhance how these referrals are used to stop illegal activity.
Treasury and IRS issued Notice 2026-16 providing interim guidance on the special depreciation allowance for qualified production property under the One, Big, Beautiful Bill. Until official regulations are issued, taxpayers may follow existing depreciation rules with updated dates and percentages.
New FAQs address changes to the Adoption Tax Credit under OBBBA, including up to $5,000 (indexed for inflation) of the credit now being refundable for tax years beginning after Dec. 31, 2024. Indian tribal governments can now make Special Needs Determinations.
The IRS expanded Tax Pro Account with business-level digital capabilities for tax professionals working in tax-preparation companies, accounting firms, or other organizations.
Effective immediately, the IRS will no longer issue paper tax refund checks per Executive Order 14247. All refunds must be received via direct deposit. Taxpayers without bank accounts should open one before filing or use prepaid debit card options.
The IRS expects most Earned Income Tax Credit and Additional Child Tax Credit refunds to be available in bank accounts by March 2, 2026, for taxpayers who chose direct deposit. Federal law requires the IRS to hold EITC-related refunds until at least Feb. 21, 2026.
A new retirement savings vehicle called "Trump Accounts" is available for children under age 18 with valid Social Security numbers. A pilot program offers a $1,000 contribution for U.S. citizen children born between January 1, 2025, and December 31, 2028. Visit trumpaccounts.gov for details.
For tax year 2025, Form 1099-K will be issued by payment apps and online marketplaces only when payments exceed $20,000 AND more than 200 transactions occur.
Need help navigating these changes? Contact us to schedule a consultation.
The One Big Beautiful Bill Act (OBBBA), signed by President Trump on July 4, 2025, represents the most significant tax legislation since the 2017 Tax Cuts and Jobs Act. The bill permanently extends many TCJA provisions that were set to expire at the end of 2025 and introduces several new tax benefits.
The OBBBA makes permanent the seven tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%), increases the standard deduction, raises the child tax credit to $2,200, permanently increases the estate tax exemption to $15 million, and introduces new temporary deductions for tips, overtime, and seniors.
The OBBBA creates several new above-the-line deductions available to both itemizers and non-itemizers:
The OBBBA added an extra 5% increase to the inflation-adjusted standard deduction for 2025:
| Filing Status | 2025 | 2026 |
|---|---|---|
| Single | $15,750 | $16,100 |
| Married Filing Jointly | $31,500 | $32,200 |
| Head of Household | $23,625 | $24,150 |
| Married Filing Separately | $15,750 | $16,100 |
Additional Standard Deduction for Seniors (65+) and Blind:
A new retirement savings vehicle for children under 18. The federal government will contribute $1,000 for U.S.-born citizen children born between January 1, 2025 and December 31, 2028. Parents can file Form 4547 with their tax return to enroll.
The OBBBA permanently increases the estate, gift, and generation-skipping transfer (GST) tax exemption to $15 million per individual ($30 million for married couples) starting in 2026. This replaces the TCJA provisions that were set to sunset, which would have dropped the exemption to approximately $7 million.
| Year | Individual Exemption | Married Couple |
|---|---|---|
| 2025 | $13,990,000 | $27,980,000 |
| 2026 | $15,000,000 | $30,000,000 |
| 2027+ | Indexed for inflation | Indexed for inflation |
The OBBBA temporarily increases the SALT deduction cap:
For taxpayers with modified adjusted gross income over $500,000 ($250,000 for married filing separately), the deduction phases out but will not be reduced below $10,000 ($5,000 MFS).
| Account Type | 2025 Limit | 2026 Limit |
|---|---|---|
| 401(k), 403(b), 457 | $23,500 | $24,500 |
| 401(k) Catch-up (Age 50+) | $7,500 | $8,000 |
| 401(k) Super Catch-up (Age 60-63) | $11,250 | $11,250 |
| Traditional/Roth IRA | $7,000 | $7,500 |
| IRA Catch-up (Age 50+) | $1,000 | $1,100 |
| SIMPLE IRA | $16,500 | $17,000 |
| HSA (Self-only) | $4,300 | $4,400 |
| HSA (Family) | $8,550 | $8,750 |
High-income earners (those who earned more than $150,000 in the prior year) must make all catch-up contributions on a Roth (after-tax) basis only. Pre-tax catch-up contributions will no longer be permitted for these individuals.
For the first time since 1977, the IRS has increased the slot machine jackpot reporting threshold from $1,200 to $2,000. This threshold will be indexed for inflation starting in 2027.
Important Change: Beginning in 2026, gambling losses can only offset up to 90% of gambling winnings (down from 100%). This means even gamblers who break even may owe taxes on 10% of their winnings.
Example: A taxpayer with $100,000 in gambling winnings and $100,000 in losses can only deduct $90,000, leaving $10,000 subject to tax.
Starting in 2025, the IRS has implemented Form 1099-DA for digital asset transactions. Centralized crypto exchanges like Coinbase will report your crypto transactions to both you and the IRS.
Reminder: All cryptocurrency transactions are taxable and must be reported, whether or not you receive a 1099-DA.
| Year | Exclusion Amount |
|---|---|
| 2025 | $130,000 |
| 2026 | $132,900 |
International reporting requirements remain unchanged:
The new clean vehicle tax credit (up to $7,500) and used clean vehicle credit (up to $4,000) have been accelerated to expire. Neither credit is available for vehicles purchased after September 30, 2025.
The tax landscape is more complex than ever. Our experienced team at Vega & Company CPAs can help you navigate these changes and develop strategies to minimize your tax burden while maintaining compliance. Contact us to schedule a consultation.
Tax law changes can significantly impact your financial situation. Let our experts help you make the most of new deductions and credits while avoiding costly mistakes.