Donations
If you own a traditional IRA and are 70½ or older, consider doing a QCD… qualified charitable distribution. The tax law allows you to transfer up to $111,000 in 2026 from your IRA directly to charity. These QCDs can count as all or part of your annual required minimum distribution, but unlike other IRA distributions, they are not taxable and are not included in your adjusted gross income.
Tax Fraud
Paying a mistress with company funds eventually lands a lawyer in jail. He’s guilty of criminal tax fraud. The lawyer had an affair with a dancer for 20 years and used funds from his wholly owned company to pay her expenses and a bimonthly allowance. He directed his bookkeeper to treat these payments on his company’s financials as loans and advances on commissions. The company deducted some of the payments on its corporate return. On audit, the revenue agent reclassified the amounts paid to the mistress or for her benefit as disguised dividends from the corporation to the lawyer. The case went to trial in 2024, and a jury convicted him of criminal tax charges and sentenced him to 30 months in prison. An appeals court has now affirmed the criminal convictions (Abramson, 7th Cir.).
Identity Theft
IRS takes too long to process identity-theft cases, Treasury inspectors say. In fiscal years 2023-25, taxpayers waited 20 months on average for IRS to process their identity-theft cases. This is far longer than the agency’s stated goal, which is to resolve these types of cases within 120 days of receipt. The long delays burden taxpayers, whose refunds are held until the Service can process their case. A lot of these identity-theft cases sat for over a year in IRS’s unassigned inventory before being assigned to a representative. As a result, there is a large buildup of cases in IRS’s current inventory…315,740 as of Sept. 30, 2025. Part of the backlog is because of loss of manpower at the agency. In 2025, IRS lost 20% of employees who worked on identity-theft cases through retirement, resignation or layoffs. IRS officials say that while the agency is making progress on cutting processing times, it could do more to further reduce the time taxpayers have to wait for a resolution.
Payroll Taxes
The Social Security wage base will rise in 2027 to $192,300, a $7,800 hike. The Social Security tax rate on employers and employees stands pat at 6.2%. Both will continue to pay the 1.45% Medicare tax on all compensation, with no cap. Self-employeds will pay 12.4% Social Security tax on self-employment earnings up to the cap and 2.9% Medicare tax on total self-employment earnings, with no cap. Individuals are also hit with the 0.9% Medicare surtax on the amount of their wages and self-employment income over $250,000 for joint filers and $200,000 for others. The nanny tax threshold is $3,100 in 2027, a $100 uptick from 2026.
Social Security
Social Security recipients get a 3.6% increase in their benefits for 2027. And the earnings test limits rise. People who reach full retirement age in 2027 won’t lose any benefits if they earn $67,920 before reaching that age. People younger than full retirement age can make up to $25,560 before they start to lose benefits. There is no earnings cap once you reach full retirement age.
Tax Payments
The process for paying taxes by credit or debit card will be getting easier. Now, taxpayers who want to pay their federal taxes by credit or debit card are required to use an IRS-approved processor and pay fees charged by the processor. IRS’s final regulations let the agency directly collect credit and debit card payments. Taxpayers using this method will still pay a fee, but the amount should be less.
Tax Preparers
IRS does a poor job tackling ghost preparers and other unethical preparers, government auditors say in a new report. Ghost preparers are individuals who prepare returns for clients for money, but who don’t sign the completed returns or who falsely include a stolen preparer tax identification number on the return. Many ghost preparers facilitate refund fraud by inflating deductions and credits or stealing taxpayer refunds. While the Service has some measures to identify and address ghost preparers, it lacks a comprehensive paid-preparer strategy and hasn’t developed objectives on how to best detect and stop ghost preparers. IRS says it will work to create a coordinated strategy on addressing paid preparers. A Senate-passed bill would increase penalty amounts for ghost preparers.
Giving Back: Supporting the Lyles Brothers Foundation
Making a Difference, Together
We believe that making a difference goes beyond the work we do every day. It's also about supporting organizations that are dedicated to strengthening our communities and creating opportunities for others.
That's why we're proud to support the Lyles Brothers Foundation and its efforts to make a positive and lasting impact.
We invite our clients, friends, and community partners to learn more about the Foundation and consider joining us in supporting its mission. Whether through a donation, participation, or simply spreading the word, every act of generosity can help make a difference.
Together, we can help turn generosity into meaningful change.