2026 Important Tax Information
2025 Tax Year Update: What You Need to Know Before Filing
The 2025 tax year brings some of the most significant changes we have seen in years. With the passage of the One Big, Beautiful Bill Act (OBBBA) and several administrative shifts at the federal level, proactive planning and complete documentation are more important than ever.
Below is a consolidated overview of the key tax law updates, filing deadlines, and practical issues we have been flagging for clients throughout the past year. This guide is intended to help you understand what has changed, what documentation we will need, and where early planning can materially reduce risk and improve outcomes.
Key 2025 Tax Filing Deadlines
Please mark the following deadlines on your calendar:
Individual income tax returns: Due April 15, 2026
Partnerships & S corporations: Due March 15, 2026
C corporations: Due April 15, 2026
W-2s and 1099s: Must be filed and issued by January 31, 2026
Even when extensions are filed, taxes owed are still due by the original deadline. Extensions protect against late-filing penalties, not interest or late-payment penalties.
One Big, Beautiful Bill Act (OBBBA): Major Law Changes
Signed into law on July 4, 2025, OBBBA introduced sweeping tax changes that affect both individuals and businesses. Importantly, the Act also made permanent several provisions that were previously scheduled to expire at the end of 2025, including:
Lower individual tax brackets
The enhanced Child Tax Credit
Continued limitations on certain itemized deductions
These permanent changes provide more long-term planning certainty but also introduce new compliance considerations starting with the 2025 tax year.
Expanded SALT Deduction: A Major Planning Opportunity
One of the most impactful changes under OBBBA is the increase in the State and Local Tax (SALT) deduction cap, which rises from $10,000 to $40,000 for many taxpayers.
This change can significantly affect whether you benefit more from:
The standard deduction, or
Itemizing deductions
Even if you have taken the standard deduction in recent years, it is critical that you provide:
Mortgage interest statements
Charitable contribution records
Medical expenses
State income and property tax payments
This allows us to evaluate whether itemizing now produces a better result.
Clean Vehicle Credits Eliminated Mid-Year
At the start of 2025, three clean vehicle credits were available:
New clean vehicle credit
Previously owned clean vehicle credit
Clean commercial vehicle credit
OBBBA eliminated all three credits for vehicles acquired after September 30, 2025.
If you purchased an electric or clean vehicle in 2025, eligibility depends heavily on:
The purchase date
Vehicle specifications
Income limitations
Dealer reporting compliance
Timing is critical here, and documentation will be required to support any credit claimed.
New Deductions Beginning in 2025
OBBBA introduces several new deductions, including:
$6,000 personal exemption deduction for taxpayers age 65 and older
New deductions for:
Tips
Overtime compensation
Certain car loan interest
While new reporting requirements apply beginning in future years, the IRS has eased documentation rules for 2025. That said, early communication is essential so we can confirm eligibility and gather the right records before filing.
IRS Phasing Out Paper Refund Checks
As of September 30, 2025, the IRS began phasing out paper refund checks for individual taxpayers.
Refunds are increasingly issued via direct deposit
Payments are still accepted by check, but mandatory electronic payments are likely coming
We strongly recommend ensuring your direct deposit information is current to avoid refund delays.
Real Estate Transactions: Documentation Matters
If you sold real estate in 2025, please provide all escrow and withholding documents, including:
Final settlement / escrow statements
Loan Estimate
Closing Disclosure
California Form 593 – Real Estate Withholding Tax Statement
State withholding errors are increasingly common and can delay refunds or trigger notices if not handled correctly.
1099s, K-1s, and the Rise of Corrected Forms
We are seeing a growing number of corrected 1099s and K-1s issued after initial deadlines. Because of this:
Your return may be extended to avoid amendments
Filing too early can increase the risk of:
Additional preparation costs
IRS or state notices
Penalties tied to underreported income
Patience and accuracy often produce better long-term results than filing early.
New IRS Forms: 1099-DA and 1098-VLI
Two new forms may appear for the first time this filing season:
Form 1099-DA – Reports gains and losses from digital asset transactions
Form 1098-VLI – Reports interest paid on eligible vehicle loans tied to the new car loan interest deduction
If you traded cryptocurrency or financed a qualifying vehicle after December 31, 2024, expect these forms to be issued separately from traditional brokerage or bank statements.
Foreign Asset Reporting: Increased Enforcement
Foreign asset reporting continues to expand, applying to both individuals and businesses.
Examples of reportable assets may include:
Foreign bank accounts
Foreign investment or securities accounts
Certain foreign business interests
Assets held through U.S. brokerage accounts generally do not require separate reporting, but many other holdings do. Penalties for non-compliance remain severe, so if there is any uncertainty, it is best to discuss the asset before filing.
Final Thoughts: Preparation Protects You
The tax law is becoming more complex, enforcement is increasing, and documentation standards are tightening. Careful preparation allows us to:
Identify new deductions and planning opportunities
Avoid preventable penalties and audits
Reduce the need for amended returns
Completing your organizer thoroughly and submitting documentation early gives us the best chance to protect your interests and take full advantage of the changes now embedded in the law.
If you believe any of the updates above apply to your situation, or if you have questions about how these changes affect your planning for 2025 and beyond, we encourage you to reach out early so we can address them proactively.