January 08, 2026 | by Atherton & Associates, LLP

Happy 2026! Let’s take a look at the practical considerations the new year brings. The IRS and Congress have enacted tax law changes and regulatory updates that take effect this month and will impact individual taxpayers, employers, retirement plan sponsors, and businesses of all sizes. From tax filing to retirement planning, here are a few key things you should know about what’s new this year:

1. Inflation adjustments and key tax amounts

The IRS makes yearly adjusts to tax rates, deduction amounts, and threshold to account for the effects of inflation. For the 2026 tax year (reflected on the returns you’ll file in 2027), notable changes include these items:

• Standard deduction increases: The standard deduction for 2026 increases to $16,100 for single filers and $32,200 for married couples filing jointly.
• Tax bracket thresholds: Adjusted income brackets help taxpayers keep more income out of higher tax rates, though the top marginal rate remains 37%.
• Alternative minimum tax (amt) exemptions: AMT exemption amounts are also updated, potentially reducing AMT exposure for many taxpayers.
• Other adjustments: Limits for benefits like healthcare flexible spending accounts, foreign earned income exclusion, and gift tax exclusions have also been increased to offset inflation. Find details here.

These changes all have an impact on various aspects of tax planning, including withholding estimation, year-end deduction planning, and quarterly estimated payments. Need help? Reach out to our team.

2. Mandatory Roth catch-up rules for retirement plans

One of the most impactful regulatory developments for employers and retirement plan participants is the SECURE 2.0 Act catch-up contribution rules. Here’s a synopsis of changes beginning in 2026:

Most of the SECURE 2.0 catch–up rules stay the same (age 50+ catch–ups and the higher “super” catch–ups at ages 60–63), but high–earning participants will generally be required to make their catch–up contributions on a Roth (after–tax) basis instead of pre–tax. The key change is how catch–ups are taxed for certain workers, not whether catch–ups are allowed.

Starting with plan years beginning after December 31, 2025, any participant age 50 or older who had prior–year FICA wages above an indexed threshold (around $150,000 for 2026) with the same employer must make all 401(k), 403(b), or governmental 457(b) catch–up contributions under Roth rules. This applies to age–50+ and age 60–63 “super” catch–up contributions in 401(k), 403(b), and governmental 457(b) plans, but not to SIMPLE IRAs or to special “service–based” 403(b) and 457(b) catch–ups.

Effect on employers and plan design

If a plan does not offer a designated Roth option and has participants who would be subject to the Roth–only rule, the plan will effectively be unable to accept those participants’ catch–up contributions unless the sponsor adds a Roth feature.?

What doesn’t change in 2026

Age–based eligibility remains: workers can still make catch–ups starting the year they turn 50, and plans may still offer higher “super catch–up” limits for ages 60–63, subject to annual IRS dollar limits. Participants under the wage threshold may continue to choose pre–tax or Roth catch–ups (if the plan allows both), just as before; the new rule only forces Roth treatment for the higher–earning group.

Plan sponsors should adjust their payroll systems and plan documents to reflect these requirements and communicate the changes to participants as early as possible.

3. Higher reporting thresholds for miscellaneous forms

As part of broader tax reform, the IRS has increased reporting thresholds for certain informational returns. Starting January 1, Form 1099-MISC and 1099-NEC reporting thresholds will increase to $2,000 (up from $600). This means fewer small payments will trigger reporting requirements, easing compliance for many small businesses and payors.

It’s important to note, however, that while IRS reporting requirements change, the law still requires taxpayers to report all taxable income, even if they don’t receive a 1099 form.

 4. New 1% remittance tax on certain transfers

Under new legislation called the “One Big Beautiful Bill,” a 1% excise tax will apply to certain remittance transfers to foreign countries starting January 1. A remittance transfer is an electronic money transfer, often by migrant workers, from their country of residence to family or individuals in another country. These are also commonly referred to as international money transfers or international wires.

This excise tax is assessed on electronic transfers of funds for personal, family, or household purposes. Financial institutions and remittance providers will be responsible for collecting, depositing, and reporting this tax to the IRS. Businesses and individuals who regularly send remittances will be wise to consult professional tax advisors to understand compliance obligations and potential planning strategies.

5. Planning tactics for individuals and businesses

For individual taxpayers:

• Review your tax withholdings and estimated payments in light of the higher standard deductions and tax bracket changes taking effect in 2026.
• Adjust your retirement contributions, considering Roth catch-up rules.
• Track all your income sources, even if they’re not reported on a 1099, to account for increased 1099 reporting thresholds.

For employers and plan sponsors:

• Update payroll and human resources systems to reflect Roth catch-up rules and other SECURE 2.0 requirements.
• Communicate retirement plan changes and eligibility thresholds to employees.
• Ensure accurate reporting and withholding systems for remittance tax and other new compliance requirements.

For Businesses:

• Assess how 1099 reporting threshold increases affect accounts payable and vendor management.
• Adjust your internal tax reporting practices to align with updated IRS filing thresholds. Call on our team to help you.

6. Get a jump on 2026 filings

Because these changes and regulatory updates will affect the tax preparation process and timelines, the IRS is encouraging taxpayers to get an early start on preparing for the 2026 filing season. (After taking care of 2025, of course.) Reach out to our staff after this year’s April filing deadline to plan and prepare early for next year. Knowing how 2026 changes will impact you and planning accordingly will reduce surprises during the next filing cycle. Our team is here to help!

Nothing is permanent, except change

The IRS changes effective January 2026 bring a mix of inflation adjustments, structural tax law reforms, and regulatory updates that will impact both individuals and businesses. Given the scope of these changes—including mandatory Roth catch-up contributions, higher informational reporting thresholds, and a new remittance tax—early planning is essential. Partnering with our team can help you navigate these updates, identify opportunities, and stay compliant. If you have questions about how any of these updates affect your specific situation, reach out to us.

December 08, 2025 | by Atherton & Associates, LLP

Individual Tax Saving Strategies

As the calendar year draws to a close, now is the time to take a proactive look at your finances and explore ways to reduce your tax liability. By leveraging available deductions, contributing to retirement accounts, and strategically managing the timing of income and expenses, you can lower your taxable income and keep more of what you earn.

Maximize Retirement Contributions

Contributing to retirement accounts is one of the most effective ways to reduce your taxable income—and the IRS gives you incentives to do it.

• 401(k) and 403(b) Plans (Employer-Sponsored) – These contributions are made pre-tax, which means they reduce your taxable income for the year. If you haven’t maxed out yet, consider increasing your paycheck contributions before year-end.

o   2025 Contributions Limit: $23,000

o   Catch-Up (Age 50+): Additional $7,500

o   Deadline: Contributions made via payroll deduction by December 31

• Traditional IRA

o   2025 Contributions Limit: $7,000 (or $8,000 if age 50+)

o   Tax Benefit: Contributions may be deductible depending on your income and access to a workplace retirement plan

o   Deadline: You have until April 15, 2026, but contributing before year-end can help with immediate tax planning.

 

Make Charitable Donations

If you itemize deductions, charitable contributions can be a powerful way to reduce your taxable income.

• How to Maximize the Deduction:

o   Donate to IRS-qualified charities by December 31.

o   Keep documentation for all gifts (receipts, letters of acknowledgment).

o   Consider donating appreciated stock or assets. This allows you to avoid capital gains taxes and still deduct the full market value of the asset.

 

Time Income and Expenses Strategically

If you have control over when you receive income or pay expenses —such as through a side business — you may be able to shift taxable income to the most advantageous year. This strategy works best when income varies year-to-year or you’re close to a deduction threshold (e.g., medical expenses exceeding 7.5% of adjusted gross income).

• Strategies:

o   Defer income: Delay invoicing or payment collection until January if you expect to be in a lower tax bracket this year.

o   Accelerate deductions: Pay deductible expenses now (like medical bills, property taxes, or mortgage interest) to claim them in 2025.

Harvest Capital Losses

If you have investments in a taxable account that have lost value, consider selling them to offset capital gains elsewhere in your portfolio. Be mindful of the wash-sale rule, which disallows a loss if you repurchase the same or similar security within 30 days.

• Tax-Loss Harvesting Benefits:

o   Offsets current capital gains, reducing your tax liability.

o   Up to $3,000 of net capital losses can be deducted against ordinary income.

o    Unused losses can be carried forward to future tax years.

Use Up Flexible Spending Accounts (FSAs)

If you have a health or dependent care FSA through your employer, use any remaining funds before year-end to avoid losing them.

• Tips:

o   Schedule medical, dental, or vision appointments now.

o   Buy eligible items like prescriptions, glasses, or first-aid supplies.

 

Consider Education and Health-Related Deductions

If you’re paying for education or managing high healthcare costs, you may qualify for additional savings.

•  Education Credits:

o   Lifetime Learning Credit or American Opportunity Tax Credit may apply if you or a dependent is enrolled in eligible courses.

o   Make tuition payments before year-end to claim the deduction for 2025.

• Medical Deductions:

o   If unreimbursed medical expenses exceed 7.5% of your AGI, the amount above that threshold may be deductible.

o   Consider bundling procedures or payments into one tax year to surpass the threshold.

Gift Strategically

Want to give money to family members or others? Take advantage of the annual gift tax exclusion. Consider gifting appreciated assets to individuals in lower tax brackets—they may pay no capital gains tax when selling.

• 2025 Limit: $19,000 per recipient ($38,000 per couple)
• Gifts within this limit are not taxable and do not require a gift tax return

Final Thoughts

Year-end tax planning is about more than checking boxes—it’s about making strategic financial decisions that help you maximize savings, minimize taxes, and set yourself up for success in the year ahead.

By contributing to retirement accounts, timing your income and expenses, donating to charity, and taking advantage of available credits, you can significantly reduce your 2025 tax bill. But the key is to act before December 31—many of these strategies are time-sensitive.