June 2026 Tax Updates

ATS Tax Pros · June 2026

June 2026 IRS Tax Updates for Individuals and Small Businesses: New Deductions, Deadlines & Scam Alerts

A busy month for taxpayers — new deductions from the One Big Beautiful Bill are now in effect, a critical June 15 estimated tax deadline is approaching, and the IRS is warning about evolving scams targeting individuals and small businesses.

This month we cover: new deductions for tips, overtime, and car loan interest; a $6,000 bonus deduction for seniors; updated 2026 tax brackets and standard deductions; the permanent QBI deduction with a new minimum benefit for small businesses; the June 15 estimated tax deadline; and the IRS's top scam warnings for 2026.

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Federal · 2026 Tax Year

Your 2026 Standard Deduction Just Got Bigger

As you start planning for the 2026 tax year, one of the most immediate changes to know about is an increase to the standard deduction. According to the IRS, the standard deduction for 2026 rises to $32,200 for married couples filing jointly, $16,100 for single filers and married individuals filing separately, and $24,150 for heads of household. These increases come from the One Big Beautiful Bill Act, signed into law on July 4, 2025, layered on top of regular inflation adjustments.

The law also made several other structural changes permanent — including keeping the top marginal rate at 37% (kicking in above $640,600 for single filers and $768,700 for married filing jointly) and locking in the existing seven-bracket structure. For most households, the practical effect is straightforward: a higher standard deduction means less of your income is subject to tax if you don't itemize, which is the case for the vast majority of filers. The IRS has also updated its Tax Withholding Estimator to reflect all of these changes, so now is a good time to check your withholding if you haven't done so recently.

What this means for you

• → If you're a W-2 employee, revisit your withholding using the IRS Withholding Estimator — the updated brackets may mean your current withholding is too high or too low.
• → If you've been on the fence about itemizing versus taking the standard deduction, the higher threshold makes the standard deduction even more likely to be the better choice in 2026.
• → Talk to your tax advisor if you're close to a bracket boundary — a small adjustment to retirement contributions or deductible expenses could make a real difference.

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Federal · New Deduction 2025–2028

No Tax on Tips: What Tipped Workers and Self-Employed Individuals Need to Know

One of the most talked-about provisions of the One Big Beautiful Bill is the new deduction for qualified tips, effective for tax years 2025 through 2028. If you work in an occupation that the IRS has identified as one that customarily and regularly receives tips — think restaurant servers, hair stylists, hotel staff, and similar roles — you may now be able to deduct up to $25,000 in tips per year. This deduction is available whether you itemize or take the standard deduction, which is a meaningful benefit for lower and middle-income workers.

There are some important details to keep in mind. The deduction phases out for taxpayers with modified adjusted gross income above $150,000 (or $300,000 for joint filers), so higher earners will see a reduced benefit or none at all. The tips must be voluntary — mandatory service charges don't qualify. And if you're self-employed, the deduction can't exceed your net income from the business where the tips were earned. The IRS has finalized regulations listing which occupations qualify, so it's worth checking whether your specific job is on the list if you're not sure.

What this means for you

• → Keep thorough records of your tip income — both tips reported on your W-2 and any tips you report yourself using Form 4137.
• → If you're self-employed in a tipped occupation, confirm your business qualifies before claiming the deduction — self-employed workers in "specified service trades or businesses" under Section 199A do not qualify.
• → This deduction applies retroactively to 2025, so it will show up on the return you filed (or still need to file) this spring.

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Federal · New Deduction 2025–2028

No Tax on Overtime: A New Break for Hourly Workers

If you earn overtime pay, the One Big Beautiful Bill delivers another new deduction: you can now deduct the "premium" portion of your overtime — that is, the extra half of time-and-a-half. For example, if your regular rate is $20/hour and you earn $30/hour for overtime, the deductible portion is that $10 premium. This deduction is capped at $12,500 per year (or $25,000 for joint filers) and applies for tax years 2025 through 2028.

Like the tips deduction, this one phases out for taxpayers with modified adjusted gross income above $150,000 ($300,000 for joint filers). Your employer is required to report your qualified overtime separately on your W-2 or other information statement, so you should see it clearly when tax time comes. The IRS has issued detailed FAQs on this deduction, and transition relief is in place for employers still updating their payroll systems for the 2025 reporting year.

What this means for you

• → Check your 2025 W-2 for a separate line showing qualified overtime — if it's missing, ask your employer or payroll provider.
• → If you worked significant overtime in 2025 and this deduction wasn't captured on your return, it may be worth filing an amended return (Form 1040-X).
• → If you expect significant overtime in 2026, factor this deduction into your estimated tax calculations — it could meaningfully reduce what you owe.

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Federal · New Deduction 2025–2028

New Car Loan Interest Deduction for U.S.-Assembled Vehicles

Buying a car has gotten a little more tax-friendly, at least if you financed it after December 31, 2024. Under the One Big Beautiful Bill, you can now deduct up to $10,000 in interest paid on a loan for a qualifying personal-use vehicle — as long as that vehicle was finally assembled in the United States. This applies to cars, minivans, vans, SUVs, pickup trucks, and motorcycles under 14,000 pounds gross vehicle weight. Importantly, lease payments do not qualify, and neither do vehicles used for business (those have their own deduction rules).

To claim the deduction, you'll need to include the vehicle's VIN on your tax return — the IRS uses this to verify U.S. assembly. You can check whether your vehicle qualifies using the NHTSA's VIN decoder tool online. The deduction phases out for taxpayers with MAGI above $100,000 (or $200,000 for joint filers). If you later refinance a qualifying loan, interest on the refinanced amount generally still qualifies. Your lender is required to send you a statement each year showing the total interest paid, similar to the mortgage interest statement you may already receive.

What this means for you

• → If you financed a new personal vehicle in 2025, look up the VIN to confirm U.S. assembly and save your lender's interest statement for your 2025 return.
• → This deduction is available whether or not you itemize, making it accessible to most filers.
• → If you're in the market for a new vehicle and U.S. assembly is a toss-up, this deduction adds a real financial incentive to choose the domestically assembled option.

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Federal · New Deduction 2025–2028

Extra $6,000 Deduction for Taxpayers Age 65 and Older

If you or your spouse is age 65 or older, there's meaningful new tax relief to be aware of. The One Big Beautiful Bill created an additional $6,000 deduction for individuals who are 65 by the last day of the tax year. For qualifying married couples where both spouses are 65 or older, that doubles to $12,000. This deduction is on top of the existing standard deduction and the existing additional standard deduction for seniors — so the stacking effect can be significant.

The deduction is available to both itemizers and non-itemizers, which is the norm for many of the new provisions in this law. It phases out for taxpayers with modified adjusted gross income above $75,000 (or $150,000 for joint filers). You must include your Social Security number to claim it. Like the other new provisions, this runs from tax year 2025 through 2028, so it's a four-year window — worth planning around if you're in or approaching retirement. If your income is close to the phase-out threshold, strategies like delaying income or accelerating deductions may help preserve the full benefit.

What this means for you

• → If you turned 65 in 2025, this deduction applies to your 2025 return — check with your tax preparer if it wasn't claimed.
• → Retirees with income near the phase-out range ($75K single / $150K joint) should talk to their advisor about strategies to stay under the threshold — Roth conversions, for example, increase MAGI.
• → Even if you've always taken the standard deduction without thinking much about it, the combined effect of all the new senior provisions makes it worth a closer look this year.

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Small Business · Sole Props, Partnerships, S-Corps

QBI Deduction Is Now Permanent — With a New Minimum Benefit in 2026

If you're a sole proprietor, partner in a partnership, or S-corporation shareholder, the qualified business income (QBI) deduction under Section 199A is here to stay. The One Big Beautiful Bill made the 20% QBI deduction permanent — it had been set to expire at the end of 2025, which would have been a significant tax increase for millions of small business owners. No longer a concern. The deduction allows eligible pass-through business owners to deduct up to 20% of their qualified business income, reducing their effective tax rate considerably.

Starting in 2026, there's an additional wrinkle worth knowing: a new minimum deduction of $400 for taxpayers who have at least $1,000 in qualifying QBI. This is a small but meaningful change for lower-income business owners who might have otherwise received a negligible benefit. The rules around phase-ins and limitations for specified service trades or businesses (SSTBs) have also been expanded, though that nuance is worth walking through with your tax advisor since the specifics depend on your income level and business type. For most small business owners, the headline is simply: this deduction is now a permanent fixture in your tax planning toolkit.

What this means for you

• → If you were holding off on business structure decisions (like electing S-corp status) while waiting to see if QBI would survive, you can now plan with certainty.
• → Review whether your business qualifies for the full deduction or is subject to SSTB limitations — lawyers, doctors, consultants, and financial advisors face different phase-out rules than other businesses.
• → If you use our S-corp or small business tax services, we can help you model how the permanent QBI deduction affects your overall tax picture.

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Deadline Reminder · June 15

Q2 Estimated Tax Payment Due June 15 — Don't Miss It

If you're self-employed, a sole proprietor, a partner in a partnership, or an S-corporation shareholder, June 15 is a date you need on your calendar. That's the due date for your second-quarter 2026 estimated tax payment. The IRS requires taxpayers who expect to owe at least $1,000 in taxes (after withholding and credits) to make quarterly payments throughout the year — missing them can result in underpayment penalties, even if you pay everything owed when you file.

Estimated payments cover income tax and, for self-employed individuals, self-employment tax as well. The four payment due dates for 2026 are April 15, June 15, September 15, and January 15, 2027. You can pay online through IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by mailing a check with Form 1040-ES. If you're not sure how much to pay, a common rule of thumb is to pay at least 100% of last year's tax liability (110% if your prior-year AGI exceeded $150,000) — this generally protects you from penalties regardless of what you end up owing.

What this means for you

• → Mark June 15 in your calendar now and set a reminder a few days before — payments must be submitted by the deadline to avoid penalty.
• → If your income has changed significantly in 2026 (new clients, a windfall, or a slow quarter), recalculate your payment rather than using last year's number automatically.
• → The new deductions for tips, overtime, and car loan interest may reduce what you owe for 2026 — factor those in when estimating your liability.

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Scam & Fraud Alert · 2026 Dirty Dozen

IRS Releases 2026 Dirty Dozen: AI Scams, Fake Websites, and Social Media Tax Myths

Each year the IRS releases its "Dirty Dozen" list of the most prevalent tax scams, and the 2026 list reflects how quickly fraud is evolving. The most concerning new entrant: AI-enabled phone scams. Fraudsters are now using computer-generated voice technology and spoofed caller ID to impersonate IRS agents. The calls can sound surprisingly convincing, but the IRS reminds taxpayers that it initiates contact by mail — not by phone — and never demands immediate payment, threatens arrest, or asks for gift cards or wire transfers.

Email and text impersonation continue to be common, with scammers sending alarming messages directing taxpayers to fake IRS websites to "verify" accounts or claim refunds. Small businesses are being targeted by "new client" scams, where a fake prospective client attempts to get a business owner to open a malicious attachment. And the IRS flags misleading social media tax advice as a growing problem — viral "tax hacks" often encourage people to file returns with false information or claim credits they don't qualify for, which can result in audits, penalties, and repayment of fraudulently claimed refunds. Another persistent scheme: "Offer in Compromise mills" that charge steep fees to taxpayers who don't actually qualify for the program.

What this means for you

• → If you get an unexpected call from someone claiming to be the IRS, hang up — then call the IRS directly at 1-800-829-1040 if you want to verify whether there's actually an issue.
• → Be skeptical of any "tax tip" you see on social media — if something sounds too good to be true (like claiming a credit you've never heard of), check with a qualified tax professional before acting on it.
• → Report suspected IRS impersonation emails or texts to [email protected].

Questions about any of these topics? Whether you're navigating the new One Big Beautiful Bill deductions, making sure your estimated payments are on track, or just want a second opinion on your 2026 tax picture, we're here to help. Reach out to our team — we're happy to walk through what applies to your specific situation. This post is for general informational purposes only and is not a substitute for personalized tax advice.

Sources

• IRS — One Big Beautiful Bill: Provisions for Individuals and Workers
• IRS — Tax Year 2026 Inflation Adjustments (IR-2025-103)
• IRS — Estimated Taxes for Small Businesses and Self-Employed
• IRS — Dirty Dozen Tax Scams for 2026
• Taxpayer Advocate Service — Small Business Tax Highlights (May 2026)
• Journal of Accountancy — QBI Deduction Made Permanent; Business Tax Account Expansion (April 2026)