Practical tax tips and deduction strategies for individuals and small business owners. Actionable advice to help you minimize liability and maximize returns.
Who qualifies for the new $25,000 federal tip deduction? The tip deduction 2026 is an above-the-line deduction for workers in customarily tipped jobs — waiters, bartenders, stylists, rideshare drivers and roughly 70 other IRS-listed occupations — worth up to $25,000 of qualified tips for tax years 2025 through 2028, subject to income phaseouts. For decades,…
When is a California resident beneficiary of a discretionary trust actually taxed on trust income? Only when the trustee decides to distribute. In its new Legal Ruling 2026-01, the FTB confirmed that California discretionary trust tax under R&TC section 17742 hinges on whether the beneficiary’s interest is “contingent” — and while the trustee holds sole…
What are the new 2026 tips and overtime deduction rules for employers? For tax years 2025 through 2028, employees can deduct up to $25,000 of qualified tips and up to $12,500 of qualified overtime pay ($25,000 for joint filers). The tips and overtime deduction is claimed on the employee’s return, but it creates new payroll…
Do you owe tax when you rent out your vacation home? It depends on how many days. Understanding vacation home rental tax starts with one number: 14. Rent the place 14 days or fewer a year and the income is tax-free; rent it more and the income is taxable — but you can deduct expenses,…
What rights do you have when dealing with the IRS? Ten of them. The Taxpayer Bill of Rights groups long-standing protections in the tax law into ten fundamental rights — from the right to be informed to the right to a fair and just tax system. They are adopted in Internal Revenue Code § 7803(a)(3)…
Can you defer tax when you sell investment property? Often, yes. A Section 1031 exchange lets you defer capital gains tax when you swap real property held for business or investment for like-kind real property. The trade-off: strict deadlines — 45 days to identify a replacement and 180 days to close — and, since 2018,…
Are the Opportunity Zone rules changing? Yes. In IRS Notice 2026-40, the Treasury Department and the IRS announced that they intend to issue proposed regulations on Qualified Opportunity Zones under Internal Revenue Code §§ 1400Z-1 and 1400Z-2, as amended by the One, Big, Beautiful Bill Act (OBBBA). The notice provides transitional guidance for investments made…
Is the SALT deduction cap going away in 2026? No. Federal courts continue to uphold the SALT deduction cap, with a New Jersey federal court dismissing another constitutional challenge in May 2026. But there is relief: the One Big Beautiful Bill raised the cap from $10,000 to $40,000 beginning in 2025, with a 1% annual…
What are the federal student loan caps 2026 effective July 1? The Department of Education’s final rule eliminates unlimited borrowing under the Graduate PLUS Program effective July 1, 2026. Eleven designated “professional” degrees (law, medicine, dentistry, etc.) face $50K annual / $200K aggregate caps. All other graduate fields — including accounting, engineering, and nursing —…
How can I tell if an IRS letter is real or a scam in 2026? The IRS’s paper-check phase-out has triggered an unprecedented wave of legitimate letters asking taxpayers for bank account information — which looks suspiciously like a scam. Always verify by logging into your IRS online account at IRS.gov, where every real notice…
