"Tax Talk: Money Lessons That Actually Make Sense"
Hey friends! Tax season is in full swing, and this month's newsletter is packed with stuff that could put real money back in your pocket — or save you from a nasty surprise. Let's dig in.
Good News First: Refunds Are UP This Year
The average tax refund so far this filing season? $3,742. That's up from $3,382 at the same point last year — about a $360 bump.
Why? The "One Big Beautiful Bill" (yes, that's its real name) passed last July and loaded up 2025 tax returns with some sweet new breaks:
- Higher standard deductions for everyone
- $6,000 extra deduction if you're 65+ ($12,000 if both spouses are 65+)
- Up to $25,000 deduction on tips (more on that in a sec)
- Up to $12,500 deduction on overtime pay
- Up to $10,000 deduction on new car loan interest
- SALT deduction cap raised to $40,000 for itemizers
If you haven't filed yet, make sure your tax preparer knows about ALL of these. Don't leave money on the table!
Heads up though: If you owe money to ANY federal agency — back taxes, student loans, child support, even state income tax — the IRS can grab your refund before it ever hits your bank account. Log into your IRS account at IRS.gov to check if any debts could reduce your refund BEFORE you file.
Do You Work for Tips? This Is HUGE for You.
Hairstylists. Restaurant servers. Rideshare drivers. Delivery workers. Listen up!
The new law lets certain tipped workers deduct up to $25,000 of their tips from their taxable income. That's potentially thousands of dollars you won't owe tax on.
The catch? The tips need to show up on a tax form (W-2, 1099-K, 1099-NEC, or 1099-MISC). If nobody sent you a form that includes your tips, you can't claim the deduction. So if you're self-employed, have a conversation with whoever pays you about getting the right paperwork.
This deduction is temporary — it runs through 2028 — so take advantage while you can!
Sold Stuff on eBay or Facebook Marketplace? Read This.
Did you sell some old furniture, a guitar, or Grandma's china online last year? Here's what you need to know:
The old $600 reporting threshold (which would have triggered a 1099-K for practically everyone) was permanently killed by the new law.
The new threshold: You only get a 1099-K if you had more than 200 transactions AND received over $20,000 in payments through platforms like PayPal, Venmo, or eBay.
BUT — and this is important — even without a 1099-K, you still owe tax on any profit you made. If you bought a couch for $800 and sold it for $300, no gain = no tax. If you bought a vintage guitar for $200 and sold it for $900, you owe tax on that $700 gain. Keep your receipts!
Business Owners: Big Vehicle Tax Breaks in 2026
If you use a vehicle for business, the tax code is very generous right now:
- New or used car (with bonus depreciation): Write off up to $20,300 in year one
- Heavy SUV used 100% for business: Write off the entire purchase price
- Big truck used for business: Same deal — 100% expensed
Leasing instead of buying? If your leased car is worth more than $62,000, there's a special IRS rule that limits part of your deduction. Talk to your tax advisor before you sign that lease!
Is Your Loved One in a Memory Care Facility? You May Have a Deduction.
This one hits close to home for a lot of families. If a spouse or parent has dementia or Alzheimer's and lives in a long-term care facility, the food, lodging, and medical costs may all be deductible as medical expenses — not just the doctor bills.
To qualify, the person needs to be considered "chronically ill" (unable to do basic daily activities without help, or needing constant supervision due to cognitive decline) and the care must follow a doctor's plan.
The limitation: Medical expenses are only deductible if you itemize, and only the amount above 7.5% of your income counts. Still — for families paying $5,000-$10,000+ per month for care, this deduction can be significant. Ask your tax advisor!
AI in the Courtroom: A Cautionary Tale
This one's almost too wild to believe. A lawyer recently cited court cases in a tax dispute — cases that were completely made up by AI. The Tax Court publicly scolded him in its written opinion (and his clients lost their case).
The lesson? AI can be a powerful tool, but it's no substitute for a qualified professional who actually knows the law. When it comes to your taxes, work with real humans.
What's Coming Next? A Few Things to Watch...
- Retirement savings match: President Trump proposed having the government match up to $1,000/year in retirement contributions for people without a workplace plan. Details are still fuzzy, but it could be a big deal for millions of Americans.
- More tax legislation? Probably not a lot before the midterm elections. Congress is distracted, and the math is tricky. Don't hold your breath for another big tax bill in 2026.
- IRS staffing: The IRS is stretched thin. Website traffic is up 50% year-over-year — likely because people can't get through on the phone. If you need help, IRS.gov actually has a pretty solid interactive tax assistant tool now.
Your March Tax Checklist:
- File (or extend) by April 15 for individual returns
- Already filed? Check your refund status at IRS.gov
- Tipped worker? Make sure your 1099 forms show your tips
- Sold things online? Report any gains, even without a 1099-K
- Caring for a chronically ill family member? Ask about the medical expense deduction
- Business owner with a vehicle? Review your depreciation options NOW
Have questions about any of this? That's what we're here for. Hit reply, leave a comment, or give us a call. Tax law is complicated — you shouldn't have to figure it out alone.
Disclaimer: This is educational content about tax law changes, not personal tax advice. For your specific situation, especially around itemizing vs. standard deduction, consult a qualified tax professional who can run the numbers for your unique circumstances.