Click on the links below to jump to each section in this article:
Get Ahead With a Midyear Tax Review
Life changes can affect your tax picture more than you might expect. Taking time now to review key areas can reduce the risk of certain penalties and uncover tax savings opportunities.
Start by reviewing your withholding and estimated tax payments. If your income has changed, you may need to update your Form W-4 so that your withholding accurately reflects your current circumstances. If you’re self-employed or have significant income not subject to withholding (such as dividends or capital gains), you may need to make quarterly estimated tax payments to avoid underpayment penalties.
Next, revisit deductions and credits. Changes in your filing status, dependents, education expenses or homeownership can affect eligibility. Additionally, increased charitable giving may create tax-saving opportunities. Keep organized records of charitable contributions, medical expenses, and, if you’re self-employed, business costs to substantiate claims and maximize benefits.
It’s also a good time to reevaluate retirement contributions. Increasing contributions to employer plans or IRAs can reduce taxable income and strengthen long-term savings. If you’re eligible to contribute to a Health Savings Account, consider funding it as well to take advantage of its triple tax benefits (deductible contributions, tax‑deferred growth and tax‑free withdrawals for qualified medical expenses).
Contact the office if you need guidance.
IRS Penalties During the Pandemic Could Be Refundable
A landmark court ruling, Kwong v. United States, found that the IRS improperly assessed certain penalties and interest during the COVID-19 pandemic. If you were charged penalties or interest for missing tax filing or payment deadlines from Jan. 20, 2020, through July 10, 2023, you may be eligible for a refund or abatement. But further litigation is expected, and other courts could interpret the law differently.
For affected taxpayers, filing a protective claim by July 10, 2026, is critical to preserving their rights while pending cases are resolved. Contact the office to review your eligibility and next steps.
Employers Face New Limits on Meal Expense Deductions
Does your business provide complimentary on-site food and beverages for employees? The rules for deducting certain business meals have changed. Beginning in 2026, employers generally can’t deduct 1) meals treated as de minimis fringe benefits, or 2) employer-provided meals that are excludable from an employee’s income and provided for the employer’s convenience on business premises.
For the 2025 tax year, generally, the former were 100% deductible, and the latter were 50% deductible. Contact the office to discuss how this change may affect your business and how to plan accordingly.
