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Normally, certain inflation-adjusted numbers affect taxpayers’ estate plans every year. One is the federal gift and estate tax exemption. But for 2026, the One Big Beautiful Bill Act (OBBBA) permanently increases the exemption amount to $15 million (up from $13.99 million for 2025). That amount will be adjusted annually for inflation for 2027 and beyond. Without the OBBBA, the exemption would have returned to an inflation-adjusted $5 million for 2026. The generation-skipping

If you own a business, the Sec. 179 expensing election allows you to deduct the cost of purchasing eligible assets rather than depreciating them over multiple years. An annual expensing limit applies, which begins to phase out dollar-for-dollar when acquisitions for the year exceed the phaseout threshold. For qualifying property placed in service in 2025, the One Big Beautiful Bill Act (OBBBA) doubles the expensing limit to $2.5 million. The 2025 phaseout threshold is $4 mill

Teachers and other educators should be glad to know that the above-the-line tax deduction they can claim for unreimbursed educator expenses will soon rise. Currently $300 per year, in 2026 the maximum deduction will increase to $350. It will be adjusted for inflation in the future. Married educators who file a joint return can each take the credit. Examples of qualified expenses include books, classroom supplies, computer equipment and professional development tuition. To qua

Employers seeking ways to attract and retain top talent may want to consider providing child care services to staff. A significantly enhanced tax credit can make this more feasible. For 2025, the maximum credit is $150,000. For 2026, it will increase to $500,000 ($600,000 for eligible small businesses). The 2026 credit will equal 40% of the employer’s eligible child care expenses (up from 25% in 2025), or 50% for eligible small businesses. Qualifying expenses include the purc

If you want to expand your family by adopting a child, you’ll be pleased to know that a federal tax credit is available to help adoptive parents offset some of the costs. In 2025, the credit is for up to $17,280 of qualified expenses, with phaseouts for higher-income parents. New in 2025, up to $5,000 of the credit is refundable. You generally can carry forward any nonrefundable amount for up to five years. In 2026, the maximum credit will increase to $17,670, and the refunda

Employers and employees, take note: The IRS has released 2026 inflation-adjusted limits for employee health benefits. Workers who defer earnings to health Flexible Spending Accounts (FSAs) can contribute as much as $3,400 in 2026 (up from $3,300 in 2025). And for FSAs that allow carryovers of unused amounts, the 2026 carryover maximum will be $680 (up from $660 in 2025). The 2026 contribution limits for Health Savings Accounts (HSAs), which are available only to taxpayers wit

The American Institute of Certified Public Accountants (AICPA) has asked the IRS to retain full staffing during the current government shutdown. However, the IRS has furloughed approximately half of its workers. In an Oct. 9, 2025, letter to the U.S. Treasury Secretary, the AICPA recalled the negative effects of past shutdowns, including the issuance of automatic collection notices when staff weren’t available to assist taxpayers. During the current shutdown, the AICPA recomm

The IRS has announced its annual inflation-adjusted income tax brackets and other amounts. For 2026, the highest rate (37%) will apply to taxable income over $640,600 for individuals ($768,700 for married filing jointly and $384,350 for married filing separately). The standard deduction is increasing to $16,100 for individuals and married taxpayers filing separately ($32,200 for married couples filing jointly and $24,150 for heads of households). Single filers age 65 or older

Employers who’re responsible for collecting payroll tax and remitting it to the IRS can face a penalty equal to 100% of the unpaid amount if they willfully fail to do so. The Trust Fund Recovery Penalty (TFRP) can be assessed personally against those deemed to be “responsible.” In one case, the owners of four staffing companies didn’t collect or pay more than $1.3 million in payroll taxes due. The IRS Criminal Investigation unit found the owners, who controlled the financial

As the year winds down, you may be hoping to combine smart estate tax planning with tax savings using the annual gift tax exclusion. For 2025 and 2026, this exclusion is $19,000, which you may give in cash or property to any number of family members or friends, without gift tax implications. Married couples may be able to give up to $38,000 to any recipient. Generally, married taxpayers can also gift an unlimited amount to their spouse without gift tax implications. However,