G&G Income Tax

IRS Expands Business Tax Account To Include More Kinds Of Entities The IRS has once again expanded access to its IRS.gov online platform, allowing business organizations like partnerships to access digital services.

It's extension season!!!

IRS will open many of its Taxpayer Assistance Centers (TACs) from 9 a.m. to 4 p.m. on select Saturdays through June 2026 to offer in-person help.

New Auto Loan Interest Deduction: A 2025 Guide for Taxpayers

Starting with loans originated after December 31, 2024, the "One Big Beautiful Bill Act" offers a significant opportunity for individuals planning to purchase a vehicle. For tax years 2025 through 2028, taxpayers may be eligible to deduct interest paid on loans for qualified, American-assembled passenger vehicles.

Who Qualifies for the Deduction?
This temporary relief is designed for individuals, certain trusts, and estates. Unlike many other breaks, this is a "below-the-line" deduction. This means you can reduce your taxable income regardless of whether you itemize or take the standard deduction. However, high-income earners should be aware of the phaseout thresholds:
Income Limits: The benefit begins to phase out for taxpayers with a modified AGI exceeding $150,000 (or $250,000 for married filing jointly).
Annual Cap: You may claim up to $10,000 per return annually. Notably, those married filing separately can each claim up to the full $10,000 limit.

Vehicle and Loan Eligibility
Not every car on the lot will qualify. The deduction applies strictly to new passenger vehicles (cars, SUVs, trucks, minivans, motorcycles) with a gross vehicle weight rating under 14,000 pounds. Crucially, the vehicle must be assembled in the United States. You can verify the final assembly point using the vehicle's VIN here: Welcome to VIN Decoding : provided by vPIC.

Loan Requirements
To claim this deduction on your new Schedule 1-A (Form 1040), the financing must meet specific standards:
Secured Loans Only: Personal loans qualify only if they are secured by a lien on the vehicle.
No Family Loans: Borrowing from a relative disallows the deduction; funds must come from an independent lender like a bank or credit union.
No Leases: Interest paid on leased vehicles is not deductible.
Refinancing: If you refinance, only interest on the outstanding balance at the time of refinancing is eligible.

Personal Use and Documentation
The IRS requires that you anticipate using the vehicle for personal purposes more than 50% of the time when you buy it. If you have a mixed-use vehicle (business and personal), you must prorate the interest. You can claim the business portion as a business expense and the remainder under this new personal deduction, provided the personal use requirement is met.

Lenders are required to file the new Form 1098-VLI if you paid at least $600 in interest, though for 2025, a standard statement may be issued instead.

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IRS Proposes Rules For Trump Accounts—What Families Need To Know The proposed regulations explain how to open the accounts, who can request the federal $1,000 pilot contribution, and how the money will end up in your account.

Trump Accounts: A Strategic Wealth-Building Opportunity for the Next Generation

With the enactment of the Working Families Tax Cuts Act—often referred to as the One Big Beautiful Bill Act (OBBBA)—President Trump introduced a significant new financial instrument for American families: Trump Accounts. These accounts represent a new frontier in generational wealth planning, offering tax-advantaged savings for children under age 18.

Perhaps most notable is the pilot program attached to these accounts: a government-funded seed contribution of $1,000 for children born between January 1, 2025, and December 31, 2028. As tax professionals dedicated to helping you navigate complex IRS regulations, we want to ensure you understand how to leverage this opportunity for your family’s financial future.

What Are Trump Accounts?
Think of a Trump Account as an innovative hybrid savings vehicle, sharing DNA with Individual Retirement Accounts (IRAs). The primary goal is to foster wealth accumulation from the moment a child is born. For eligible children born during the 2025–2028 window, the account opens with the potential for a one-time $1,000 federal grant.

Beyond the initial seed money, these accounts allow for ongoing investment. Families can contribute up to $5,000 annually (adjusted for inflation) until the year before the child turns 18. To ensure consistent growth and mitigate risk, funds within Trump Accounts are mandated to be invested in low-cost, broad-market stock index funds.

Eligibility and Contribution Rules
The barrier to entry is intentionally low to encourage broad participation. Any child under the age of 18 with a valid Social Security number is eligible to be the beneficiary of a Trump Account. A parent or guardian manages the assets until the child reaches adulthood.

1. Who Can Contribute?
These accounts are designed to be inclusive. Contributions can originate from a variety of sources, creating a community-based approach to the child's financial well-being:

Diverse Contributors: Parents, grandparents, other relatives, friends, and even the children themselves can contribute. The annual cap is currently set at $5,000 per child, subject to future inflation adjustments.

Tax Treatment of Contributions: Generally, contributions are not tax-deductible for the donor.

Employer Incentives: A unique provision allows employers to contribute up to $2,500 annually toward the $5,000 limit. Crucially, the employer receives a tax deduction for this contribution, and it is considered a tax-free benefit for the employee.

Safeguarding the Cap: Because contributions can come from multiple sources, strict safeguards are required to prevent exceeding the $5,000 annual limit. The system relies on centralized record-keeping to track inflows in real-time. Contributors may be required to register planned contributions to flag potential overages before they occur. Automated alerts will notify account holders as they approach the threshold. These compliance measures are vital to maintaining the tax-advantaged status of the account.

2. Qualified Class Contributions
The legislation also empowers charitable organizations and government entities (state, local, or tribal) to make broad-based contributions. These entities cannot pick and choose individual favorites; they must designate a "qualified class" of beneficiaries.

For example, a charity could fund accounts for all children born in a specific year within a designated geographic region. This structure allows for large-scale philanthropic investment in the next generation.

Real-World Example: The Michael & Susan Dell Foundation has pledged $6.25 billion to seed Trump Accounts. They plan to provide $250 to 25 million children aged 10 and under (born before Jan. 1, 2025) living in ZIP codes with a median income of $150,000 or less.

The $1,000 Government Seed Contribution
For families welcoming new children in the coming years, the federal government offers a financial jumpstart. This $1,000 seed contribution is a one-time grant designed to harness the power of compound interest over nearly two decades.

Criteria for the Government Seed:

Birth Date Window: The child must be born on or after January 1, 2025, and before January 1, 2029.

Citizenship Status: The beneficiary must be a U.S. citizen with a valid Social Security number.

Affirmative Election: The government does not open these accounts automatically. A parent or guardian must elect to open the Trump Account.

One-Time Event: This is a singular deposit of $1,000; it is not recurring.

Impact on Limits: This $1,000 grant does not count toward the $5,000 annual private contribution cap.

Tax Status: While it grows tax-deferred, the $1,000 seed (and its earnings) is considered pre-tax money. It will be taxed as ordinary income upon withdrawal after age 18.

Note: Children born before 2025 are still eligible for Trump Accounts and third-party contributions (like the Dell Foundation example), but they will not qualify for this specific $1,000 federal grant.

Investment Strategy: Simplicity and Growth
To protect inexperienced investors and minimize costs, Trump Accounts operate under strict investment mandates. Funds must be allocated to broad U.S. equity index funds. These funds are prohibited from using leverage and must charge minimal fees. This "set it and forget it" approach aims to capture the long-term growth of the American economy while ensuring transparency.

Tax Implications and Distribution Rules
As Enrolled Agents, we cannot stress enough the importance of understanding the tax mechanics of these accounts. They function similarly to a Traditional IRA regarding earnings, but with specific rules for withdrawals.

Prior to Age 18: No distributions are permitted. The funds are locked to ensure they serve their purpose of long-term wealth building. (Provisions exist to transfer the account to a designated survivor or estate in the tragic event of a beneficiary's death).

After Age 18: Once the beneficiary reaches adulthood, withdrawals are treated in two parts:

• Return of Basis: After-tax contributions made by parents or family can be withdrawn tax-free.

• Taxable Portion: Investment earnings, the $1,000 government seed, and employer/charitable contributions are taxed as ordinary income.

The Early Withdrawal Penalty: Similar to retirement accounts, a 10% penalty applies to taxable distributions taken before age 59½. However, the law provides significant exceptions where this penalty is waived:

Higher Education: Tuition, books, and fees.

First-Time Home Purchase: Up to $10,000 for a down payment.

Birth or Adoption: Up to $5,000 for related expenses.

Disability: Costs related to beneficiary disability.

Hardship: Specific scenarios like terminal illness or disaster recovery.

Strategic Account Management and Filing
Opening a Trump Account requires proactive filing. Guardians must use IRS Form 4547, Trump Account Election(s). Alternatively, an online application at trumpaccounts.gov is expected to launch in mid-2026.

Key Dates:

Filing: Form 4547 can be filed with your 2025 tax return.

Contributions: Accounts cannot begin accepting contributions until July 4, 2026.

While accounts are initially held with a Treasury agent, they are portable. Once established, you can transfer the account to a preferred brokerage, giving you the flexibility to integrate it with your broader family financial portfolio.

CRITICAL FILING INSTRUCTION

If you intend to open a Trump Account for your children, Form 4547 must be filed with your tax return. The form allows for elections for up to two children (multiple forms can be attached). You will need the parent/guardian's name and SSN, as well as the child's name, SSN, DOB, and address.

Most Importantly: You must check the specific box on the form to claim the $1,000 government contribution for eligible children (born Jan 1, 2025 – Jan 1, 2029). Missing this checkbox could mean forfeiting the seed grant.

Navigating new tax legislation requires precision. If you need assistance filing Form 4547 or have questions about how Trump Accounts fit into your tax planning, please contact our office. We are here to help you resolve tax complexities and secure your family's financial future.

The IRS has announced that the 2026 tax filing season will officially begin on January 26, 2026. That date marks when the IRS will begin accepting paper and electronic tax returns filed by individuals.

The tax agency expects about 164 million individual tax returns to be filed by Tax Day, April 15, 2026. More than half of all returns are expected to be filed this year with the help of a tax professional.

Many software companies and tax preparers will accept tax returns before opening day. For clarity, that doesn't mean your tax return will be filed early (or that refunds will be issued early). The IRS will begin processing returns when the season officially opens.

The tax filing deadline will be April 15, 2026.

How To Open A Trump Account In 2026: What To Know About IRS Form 4547 The IRS has released Form 4547, allowing parents to register eligible children for Trump Accounts when filing 2025 tax returns. Here's what you need to know.

The IRS Isn’t Taxing Your Bonus More, It Just Feels Like It Every December, workers blame the IRS for shrinking bonuses. But bonuses aren’t taxed differently than your regular paycheck—the amount of withholding may be different.

G&G Income Tax wishes you a wonderful Thanksgiving and a joyous time with family and friends

https://www.forbes.com/sites/kellyphillipserb/2025/11/05/irs-kills-off--popular-free-direct-file-option-for-the-2026-tax-filing-season/?fbclid=IwY2xjawN5wl5leHRuA2FlbQIxMQBzcnRjBmFwcF9pZBAyMjIwMzkxNzg4MjAwODkyAAEefZMlz-M90KEq9o2b8Si1ZjgZm0R2qt2w9XVbC39gk2qI2XgZwouiu0a-r_o_aem_MmCstMaN4c0lRQgbv2yNLQ

IRS Kills Off Popular Free Direct File Option For The 2026 Tax Filing Season While the IRS hasn’t officially confirmed that the program is dead, the website indicates that the program is closed—and states have been notified that it will not be in place for 2026.