Category: Taxes Made Simple
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Itemizers can’t write off the first 0.5% of their income in charitable gifts starting this year, a new floor in Trump’s tax law
Charitable gifts have always been worth a deduction only to households that itemize. This year, a new hurdle sits in front of that deduction. Under Trump’s tax law, itemizers cannot write off the first 0.5 percent of their income in charitable gifts, so a household with a $200,000 income gives away the first $1,000 without…
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Gamblers who itemize can deduct only 90% of their losses starting this year, so breaking even can still mean a tax bill
A gambler who wins $10,000 over a year and loses $10,000 has, on paper, gone nowhere. Starting with tax year 2026, that person can still owe tax. For gamblers who itemize, the deduction for losses is now capped at 90 percent of the losses, while every dollar of winnings stays in income. Breaking even can…
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The child care tax credit can now cover up to 50% of costs for lower-income parents, up from 35%, under Trump’s tax law
Parents paying for child care so they can work can claim a bigger slice of the bill back on their 2026 tax return. Under Trump’s tax law, the child care tax credit, formally the credit for child and dependent care expenses, can now reach up to 50 percent of qualifying costs, up from a 35…
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Homeowners who itemize can deduct mortgage insurance premiums again for 2026 under Trump’s tax law, after the break had lapsed
Homeowners who pay mortgage insurance and itemize their deductions can write those premiums off again for tax year 2026. The break disappeared for premiums paid after 2021 and could not be claimed on 2025 returns. IRS Publication 505 for 2026 now says the election is permanent, a change that arrives through the 2025 tax law…
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The IRS wrongly billed 28,929 taxpayers who had already paid, a watchdog found
Households that paid a tax bill when they filed in mid-April 2025 were not supposed to hear from the IRS again about that balance. For 28,929 taxpayers, a notice arrived anyway, saying the payment had not been received. The Treasury Inspector General for Tax Administration, the agency’s independent watchdog, documented the mistake in a report…
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More than 300,000 taxpayers got permission to keep receiving paper IRS refund checks, a watchdog found
Not every taxpayer went along with the IRS’s move away from paper refund checks. More than 300,000 of them, 300,537 to be exact, got permission to keep receiving a check in the mail instead of a direct deposit, according to a new watchdog report. The number, current as of March 30, 2026, shows how large…
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The IRS fielded nearly 352,000 calls about ending paper refund checks by late March, a watchdog says
The IRS’s toll-free line for paper-check questions rang nearly 352,000 times in the months after a new round of notices went out, according to a watchdog report. The Treasury Inspector General for Tax Administration tracked the calls through March 28, 2026, as the agency moved to end most paper tax refund checks under a federal…
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The IRS keeps charging 7% interest on unpaid taxes through December
The IRS says the interest rate on individual tax underpayments and overpayments will hold at 7% a year, compounded daily, for the fourth quarter of 2026, October through December, unchanged from the rate that has applied all year. The rate, announced Aug. 21 in IR-2026-98, means a tax bill left unpaid past its due date…
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Paying a household worker $3,000 or more in 2026 triggers payroll taxes
A family that pays a nanny, a home health aide, or a regular housekeeper $3,000 or more in cash wages during 2026 becomes an employer for tax purposes under IRS rules. Once wages to that one worker reach the $3,000 threshold for the year, Social Security and Medicare taxes apply to the full amount paid,…
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IRS offers in compromise are automatically accepted after two years without a decision
An offer in compromise that the IRS neither accepts nor rejects within two years of receiving it becomes automatically accepted, under a provision spelled out on the agency’s own offer-in-compromise page. The two-year clock starts on the date the IRS receives a complete offer, not the date it was mailed. Submitting one costs $205 upfront…