Introduction

From the green sea turtle no longer being classed as endangered, to renewable energy replacing coal’s status as the number one source of electricity in the beginning half of the year, the year of 2025 was filled with wide-ranging changes in the world. Equally as interesting, the One Big, Beautiful Bill Act was signed into law on July 4th, 2025 which created several notable changes to the United States tax landscape.

Phasing Out Paper Checks

Paper checks are going to disappear from your list of refund payment options. The initial change started on September 30th, 2025, but many taxpayers won’t notice the change until they start doing their taxes this upcoming tax season. The main reason they are doing away with paper checks is to help combat the inefficiencies that paper checks cause as well as to combat fraud. According to the IRS website, “Paper checks are over 16 times more likely to be lost, stolen, altered, or delayed than electric payments.” With the IRS losing approximately 26% of their workforce in 2025, they are going to need all the additional time they can get.

TRUMP Accounts

TRUMP Accounts are the newest custodial investment accounts that will become available starting July 5th, 2026. These accounts will become available to every child who has not turned 18 before the end of the calendar year and has a valid social security card. Along with being able to open these accounts, every child born between January 1st, 2026 and December 31st, 2028 who is a U.S. citizen with a valid social security number will be able to receive a contribution of $1,000 to their custodial account.

The beginning contribution limits for these accounts will start off at $5,000 per child per year. Unlike custodial IRA’s, which require the child to have a form of earned income, TRUMP accounts won’t have this stipulation. Keep in mind, there are several other ways to save for your child’s future including accounts such as Coverdell ESA accounts, 529 plans, or Custodial IRA accounts that could provide additional benefits.

Changes to Retirement Account Contribution Limits

There were several increases involving retirement accounts, including:

• IRA Contributions: Increased from $7,000 to $7,500 with an additional $1,100 catch-up contribution if you are 50 and above.
• 401(k) Contributions: Increased from $23,500 to $24,500 with an additional $8,000 catch-up contribution if you are 50 and above.
• SIMPLE IRA Contributions: Increased from $16,500 to $17,000 with an additional $4,000 catch-up contribution amount if you are above 50 to 59 and then a super catch-up contribution amount of $5,250 if you are 60 to 63 which then reverts back to the $4,000 amount when you turn 64 and above.

Notable Tax Changes

• Tax year 2026
  • $32,200 for married couples filing jointly
  • $16,100 for single filers and married individuals filing separately
  • $24,150 for heads of household
• Tax year 2025
  • $31,500 for married couples filing jointly
  • $15,750 for single filers and married individuals filing separately
  • $23,625 for heads of household

No tax on tips is effective from 2025 to 2028 for employees and self-employed individuals. Eligible participants can deduct a maximum of $25,000 of qualified tips and phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers). This deduction is available for both itemized and standard deductions.

No tax on overtime is effective from 2025 to 2028 for individuals who have qualified overtime for a maximum annual deduction of $12,500 ($25,000 for joint filers). The deduction phases out for taxpayers with a modified adjusted gross income over $150,000 ($300,000 for joint filers). This deduction is available for both itemized and standard deductions.

This deduction is effective from 2025 to 2028 and allows taxpayers to deduct interest paid on a loan for a qualified vehicle. Individuals are allowed a maximum annual deduction of $10,000 which phases out for taxpayers with a modified adjusted gross income over $100,000 ($200,000 for joint filers). The qualifiers to get this deduction are:

• Loan originated on or after January 1st, 2025
• The taxpayer is the original purchaser of the car (no used vehicles)
• Is only used for personal use and not for business or commercial purposes
• Secured by a lien
• Must be a qualified vehicle which means it is under 14,000 pounds and has undergone final assembly in the United States

The deduction for seniors is effective from 2025 to 2028 for individuals who are 65 and older and allows them to claim an additional deduction of $6,000 ($12,000 for joint filers who are both eligible). The deduction phases out for taxpayers with a modified adjusted gross income over $75,000 ($150,000 for joint filers). This deduction is available for both itemized and standard deductions.

There are a few tax credits that are leaving, including:

• New Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025
• Used Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025
• Qualified Commercial Clean Vehicle Credit: Not allowed for any vehicle acquired after September 30, 2025
• Energy Efficient Home Improvement Credit: Not allowed for any property placed in service December 31st, 2025
• Residential Clean Energy Credit: Not allowed for any expense made after December 31st, 2025

Form 1099-K is used by third party settlement organizations such as online auctions, seller websites such as Etsy, or money transfer companies such as Venmo. For a time, there was some back and forth on what the threshold would be which, at one point, dropped all the way down to $600. The threshold has since been amended to be $20,000 and the number of transactions exceeds 200 moving into tax year 2026.

SALT stands for State and Local Tax. The increase to SALT deductions increased from $10,000 to $40,000 for tax year 2026. This amount begins to phase out once a taxpayer gets a modified adjusted gross income exceeding $500,000. The SALT deduction is only for filers who itemize their taxes which allows them to subtract the deduction from their federal taxable income.

The Alternative Minimum Tax (AMT) is for taxpayers with higher tax brackets to determine their tax liability. The 2026 tax year minimum tax exemption is $90,100 for individuals and $140,200 for joint filers. The AMT has higher earners calculate their tax liability two times: first using the typical tax rules and second using AMT Form 6251. After determining the tax liability from both, you must then pay whichever is the higher amount for your taxes.

Conclusion

Every new year brings new changes, and that is certainly the case heading into 2026. Between the phasing out of paper checks, the creation of TRUMP accounts, and the changes to SALT, the tax landscape is looking vastly different under the One Big, Beautiful Bill Act. Staying on top of these changes can be a lot for even the hardest-working individual, which is why Volpe Consulting & Accounting is here to help with navigating the tax landscape!