Temple Bookkeeping & Taxes

Temple Bookkeeping & Taxes Bookkeeping Services for Individuals and Small Businesses
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02/12/2026

New and enhanced deductions for individuals

There are several new tax deductions that have been introduced for the 2026 filing season. A deduction is an amount subtracted from the taxpayer’s income when filing. Deductions lower the taxable income resulting in lowering the federal income tax obligation.

New deductions for 2026 filing season

Seniors age 65 and older may be eligible to claim an additional $6,000 deduction
Tipped workers may be eligible to deduct up to $25,000 for qualified tips
Individuals may be eligible to deduct up to $12,500 ($25,000 for joint filers) for qualified overtime
Individuals may deduct up to $10,000 in qualified passenger vehicle loan interest

All new or enhanced deductions are available for both itemizing and non-itemizing taxpayers. Each of these deductions phase out based on income level for individual and joint filers and have specific eligibility requirements. This information can be found on the One, Big, Beautiful Bill provisions page for individuals and workers.

Standard deduction amounts for tax year 2025
The standard deduction is a flat amount based on federal income tax filing status (single, married filing separately, married filing jointly, head of household, or qualifying surviving spouse). The IRS adjusts the standard deduction annually for inflation.

$15,750 for single or married filing separately
$31,500 for married couples filing jointly or qualifying surviving spouse
$23,625 for head of household

Most people take the standard deduction. However, some may not be eligible to take it or if deductible expenses and losses are more than the standard deduction, taxpayers have the option to itemize deductions. Itemized deductions are subject to certain dollar limitations. They can include amounts paid during the taxable year for: state and local income or sales taxes, real property taxes, personal property taxes, mortgage interest, disaster losses, gifts to charities, certain gambling losses, and medical and dental expenses.

Taxpayers are reminded that they need documents to show expenses or losses they want to deduct. Tax software will calculate deductions and enter them in the right forms. Taxpayers who earned less than $89,000 in 2025 can use Free File guided tax software to prepare and electronically file their 2025 federal income tax returns for free. All taxpayers can use Free File Fillable Forms regardless of income level. The IRS Interactive Tax Assistant can help a person decide if they're eligible for many popular tax credits and deductions.

02/10/2026

Quick tips for picking a tax pro

By now, people should have received most of their tax documents so it’s time to get ready to file their federal tax returns. More than one half of taxpayers use a paid tax professional to help prepare their return. Regardless of who prepares the tax return, the taxpayer is responsible for all the information on it. This is why it’s important to choose a tax pro carefully.

Tips for choosing a tax professional:

Availability: Choose a preparer that’s available after filing season in case questions come up after filing.
Service fees: Ask about the preparer’s service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund.
IRS e-file: Ensure their preparer offers IRS e-file. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit and file a complete and accurate return.
Records and receipts: Good preparers ask to see these documents to complete the return accurately.
Qualifications: Understand the preparer's credentials and qualifications. Check their history for complaints or disciplinary actions.
Review before signing: Always review the tax return before signing it. Ask questions if something is unclear or appears incorrect. Never sign a blank or incomplete return.
Accurate account information: Make sure any refund goes directly into the taxpayer's bank account – not into the preparer's bank account. Review the routing and bank account number on the completed return to confirm it's accurate.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid preparer tax identification number. Paid preparers must sign and include their PTIN on any tax return they prepare. Not signing a return, promising an unusually large refund or charging fees based on the size of the refund are red flags that the preparer may be looking to make a quick profit. Taxpayers should avoid these preparers.

02/10/2026

Hourly Regular Rate of Pay.

$1,402.56 / 52 hours = $26.97.
FLSA Overtime Pay.

Straight Time Rate of Pay x All Overtime Hours Worked.
$24.18 x 12 hours = $290.16.

One-half x Hourly Regular Rate of Pay x All Overtime Hours Worked.
0.5 x $26.97 = $13.49.
$13.49 x 12 hours = $161.88.

Total FLSA Overtime Pay = $452.04 ($290.16 + $161.88).
Weekly Pay.

Basic Pay = $967.20.
Night Pay = $96.80.
Sunday Premium Pay = $48.40.
FLSA Overtime Pay = $452.04.

Total Weekly Pay = $1,564.44 ($967.20 + $96.80 + $48.40 + $452.04).

02/10/2026

Computation

Multiply the straight time rate of pay by all overtime hours worked PLUS one-half of the employee’s hourly regular rate of pay times all overtime hours worked. (See 5 CFR part 551, subpart E.)
Example

Follow the steps below to compute FLSA overtime pay. The example below is based on a GS-7, step 1, annual rate of basic pay of $50,460. (See Salary Table 2026-RUS.)

Total Hours of Work: 52 hours.
Overtime Work: 12 hours.
Nightwork: 40 hours.
Sunday Work: 8 hours.

Hourly Rate of Basic Pay (Straight Time Rate of Pay).

$50,460 / 2,087 hours = $24.18.
Total Remuneration.

Basic Pay (40 hours).
$24.18 x 40 hours = $967.20.

Night Pay (40 hours).
$24.18 x .10 = $2.42.
$2.42 x 40 hours = $96.80.

Sunday Premium Pay (8 hours).
$24.18 x .25 = $6.05.
$6.05 x 8 hours = $48.40.

Straight Time Pay.
$24.18 x 12 hours = $290.16.

Total Remuneration =$1,402.56 ($967.20 + $96.80 + $48.40 + $290.16).

02/10/2026

What is the deduction amount? Are there limits to the deduction?

A4. The deduction is up to $12,500 of qualified overtime compensation earned for the year per return ($25,000 in the case of a joint return). The deduction is reduced if a taxpayer’s modified adjusted gross income (MAGI) for the tax year exceeds $150,000 ($300,000 for joint filers). See Notice 2025-69 PDF for more information on how to calculate MAGI for this purpose.

02/10/2026

Treasury, IRS issue FAQs to address the new deduction for qualified overtime compensation under the One, Big, Beautiful Bill

IR-2026-10, Jan. 23, 2026

WASHINGTON – The Department of the Treasury and the Internal Revenue Service today issued frequently asked questions in Fact Sheet 2026-01 related to the new deduction for qualified overtime compensation under the One, Big, Beautiful Bill.

For tax years 2025 through 2028, individuals who receive qualified overtime compensation may deduct the amount that exceeds their regular rate of pay (generally, the “half” portion of “time-and-a-half” compensation) and is reported on a Form W-2 or Form 1099.

These FAQs contain additional information about the deduction, provide resources for employees (including federal employees) to assist them in determining whether they received qualified overtime compensation under the Fair Labor Standards Act, and contain useful information regarding the differences in reporting requirements for tax year 2025 and 2026-2028.

Treasury and IRS previously issued Notice 2025-62 providing penalty relief to employers and other payers for tax year 2025 regarding new information reporting requirements for qualified overtime compensation; and issued Notice 2025-69 for workers eligible to claim the deduction for overtime compensation for tax year 2025.

02/10/2026

Reminders for taxpayers about digital assets

Taxpayers are starting to receive their 2025 tax documents, such as W-2s, Forms 1099 or other income documents. People who sold or disposed of digital assets using a broker might receive a new Form 1099-DA from those brokers.

Examples of digital assets include

Convertible virtual currencies and cryptocurrencies such as Bitcoin
Stablecoins
Nonfungible tokens

Brokers must send taxpayers a copy of the same information they report to the IRS on Form 1099-DA by Feb. 17,2026. These are different from some other tax statements taxpayers may receive. Most of these statements will not include the basis for DA transactions in 2025 and taxpayers will have to calculate basis to determine their gain or loss.

Every taxpayer must report any related income, gains, or losses, whether they receive a Form 1099-DA or not.

Also, when people file their taxes, they must answer “yes” or “no” to the digital asset question whether they have digital assets or not. Taxpayers can use this questionnaire to help determine how to answer the digital assets question

02/10/2026

By law, the IRS must wait until at least Feb. 21, 2026, to issue refunds to taxpayers who claim the Earned Income Tax Credit. Taxpayers can check Where’s My Refund for their personalized refund date.

02/10/2026

Earned Income Tax Credit: A valuable credit that supports millions of families

The Earned Income Tax Credit helps communities by supporting hard working low to moderate income families. The EITC helps millions of eligible workers and families each year by reducing the amount of taxes owed and possibly increasing a refund.

It’s estimated that about one in five taxpayers who are eligible for EITC don’t claim this valuable credit. The average EITC amount received nationwide for tax year 2024 was $2,916.

Who qualifies
Several factors such as income, family size and filing status affect the EITC credit. In general, to be eligible the taxpayer must meet the following criteria:

Have earned income from working for someone or working themselves. Certain disability income may qualify, as well
Income level is low to moderate
A valid social security number by the due date of the return
Be a U.S. citizen or resident alien all year

Military and clergy have special qualifying EITC rules, because using this credit could affect other government benefits.

The IRS EITC Assistant can help taxpayers with seeing if they qualify for the credit.

Timeline for EITC refunds
If the return was filed online, the taxpayer chose to receive their refund by direct deposit and there are no issues with the return, it’s anticipated that most refunds would be received by March 2, 2026.

02/10/2026

Review key information before filing

To help avoid delays, taxpayers should:

Confirm their Identity Protection PIN and Social Security numbers are accurate.
Ensure each dependent’s name and SSN match their Social Security cards when claiming EITC or ACTC.
Verify each dependent’s credit selection is correctly marked in the Dependents section.
Review the entire return, even if someone else prepared it.

02/10/2026

Access tax information with IRS Individual Online Account

With an IRS Individual Online Account, taxpayers can securely access and view tax account information, check refund information, manage payments, and interact with the IRS at any time.

02/10/2026

Speed tax refunds with direct deposit

The IRS is phasing out paper tax refund checks. Direct deposit remains the fastest and most secure method to receive a refund. Refunds sent by mail may take six weeks or longer to arrive.

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