Tax Season Preparation Tips
As tax season draws near, it’s a good idea for taxpayers to start preparing, even though it’s early to file returns. The Internal Revenue Service (IRS) has shared some tips that can help individuals understand the changes they might face when filing their 2026 taxes.
Here are some important topics to consider:
Use Direct Deposit
Last year, President Trump directed the Treasury Department to eliminate paper checks in almost all business functions — including tax refunds. Because of this, the IRS recommends ensuring you have a bank account for receiving payments via direct deposit.
If you don’t have a bank account, there are various payment options available. However, the IRS still advocates for direct deposit as the preferred method.
New Tax Law Changes for 2025
Several new credits and deductions were added with the passage of significant legislation last year. Depending on your specific filing situation, these changes could notably affect your tax filing. It’s wise to review these alterations to see if you qualify for them when submitting your 2026 return.
New Trump Account for Eligible Children
Introduced last year, the Trump Account serves as a retirement savings option for children under the age of 18. To be eligible, a child must be born on or after January 1, 2025, and possess a valid Social Security number. Accounts begin with an initial deposit of $1,000.
Report Income from Payment Apps and Online Sales
If you earn digital payments for gigs, part-time work, or selling goods in 2025, you’re required to report that income. These payments often come through platforms like PayPal, Venmo, or CashApp. The IRS notes that 1099-K forms are issued by payment card companies and apps when total payments exceed $20,000 and more than 200 transactions occur within a year.
Digital Asset Reporting Requirements
For those who bought, sold, or received digital assets such as cryptocurrencies, stablecoins, or NFTs in 2025, all transactions must be reported. While a form may be provided by your broker, you’re still responsible for reporting your income, gains, and losses on Form 1040.
Please check the IRS’s digital assets page for additional details.
The IRS has yet to specify when it will start accepting 2026 tax returns. Last year, that began on January 27.
