Congress returned to work this morning. The first thing on their agenda is a spending bill that would keep the government open through December.
However, several tax bills are in the works that may affect year-end planning. Those bills include…
1 – An Increase In the Capital Gains Exclusion
Since 1997, individuals who own and use a home as their primary residence for at least two of the five years before the sale can exclude up to $250,000 of the gain from taxable income. The exclusion is $500,000 for joint filers.
These figures have never been adjusted for the appreciation in residential real estate during this tax break’s 30-year history.
The proposed change would increase the exclusion to $1M for joint filers and $500K for others. The bill would also index these amounts to inflation each year.
2 – The Senior Accessible Housing Tax Credit Act of 2026
This would give individuals aged 60 and older a nonrefundable tax credit of up to $10K per year for the cost of specific home improvements that include…
Widening doorways
Replacing toilets and faucets
Installing non-slip flooring
Putting in chair lifts and wheelchair ramps
Installing handrails and shower seats
Putting in furniture risers
The credit would begin to phase out at incomes over $200K for joint filers and $100K for single filers.
3 – The Taxpayer Assistance and Service Act
This bill has over 60 proposals covering 10 broad topics, including…
Tax administration and customer service
U.S. citizens who live abroad
Streamlining judicial review for filers who challenge IRS in court
Tax return preparers
IRS’s Taxpayer Advocate’s office
IRS’s appeals office
Whistle-blowers
U.S. citizens held hostage overseas
Small businesses
One of the sections would let the IRS regulate unenrolled paid tax return preparers. An unenrolled preparer is someone who prepares tax returns for money, but is not a CPA, lawyer, or enrolled agent. Studies have shown that the majority of the tax fraud is currently done by this group of non-regulated preparers.
Under the bill, unenrolled preparers would have to meet various requirements to apply for or renew a Preparer Tax Identification Number (PTIN) each year. These preparers would need to provide information about their competence and character, pass criminal background and tax compliance checks, and take up to 18 hours of continuing education courses.
Under the proposal, the IRS would be able to deny, revoke or suspend PTINs for unenrolled preparers who don’t comply with the rules.
Giving the IRS power to regulate unenrolled preparers has been tried before. Since 2014, after an appeals court struck down the IRS’s administrative oversight rules for unenrolled preparers, the IRS’s National Taxpayer Advocate, Treasury inspectors, government auditors and tax practitioner groups have pleaded with Congress to let the IRS regulate unenrolled preparers.
We’ll see what happens this time.
4 – Losses From Natural Disasters
Before the Senate left Washington for its August recess, it approved a House-passed bill. We expect the President to sign it soon.
The legislation provides deductions for personal disaster losses identical to those given to victims of disasters in 2018 through July 4, 2025. The relief applies to losses incurred in federally declared disasters that begin before January 1, 2027.
Individuals can deduct these disaster losses in excess of a $500 threshold without regard to the 10%-of-adjusted-gross-income offset that generally applies. The relief is available for filers who claim standard deductions and for individuals who itemize on Schedule A of Form 1040.
Let me leave you with this…
As we go into September, please remember that if you have a Partnership or S Corp return on extension, you have until Tuesday, September 15th of this year to file without incurring a Failure To File Penalty. The extension does not extend the due date of any payments that might be due with the return.
That payment date was March 15th, 2026. If you owe tax with your extended return, you may be subject to a Failure To Pay Penalty.
S Corp and Partnership Returns must be completed before your Personal Income Tax Return. If yours was extended, it is due no later than Thursday, October 15th of 2026.
We tend to get busy near the extension due dates, so please send your work in today.
And as always, if you’re having problems with your accounting and tax work, please contact me today. I’d love to help.
We’re all going to get through this. Let’s get through it together..
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, Accounting and Tax Work, Tax Planning, or Tax Representation, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.AccountingSolutionsLtd.com
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