📅 2026 Update: Key Tax Changes Impacting Auto Transit Cases

Since the earlier article was written, there have been significant updates to U.S. tax laws that could impact individuals and businesses. These changes affect how taxpayers file their returns, claim deductions, and report income. The details of the original article continue further down this page.

💰 Standard Deduction Changes

The standard deduction for the 2026 tax year has increased. Single filers and married individuals filing separately can now claim $16,100, up from $15,000 in 2025. Married couples filing jointly or qualifying widows/widowers can claim $32,200, increased from $30,000.

Heads of household now have a standard deduction of $24,150, up from $23,000.

🙌 New Charitable Deductions

In a new provision, taxpayers who take the standard deduction can deduct up to $1,000 for single filers and $2,000 for married couples filing jointly for cash donations to qualified charities. This applies to donations made to 501(c)(3) public charities and is effective from 2025 through 2028.

👴 Senior Tax Benefits

Individuals aged 65 and older are eligible for an additional $6,000 federal tax deduction. This deduction is available regardless of whether the taxpayer itemizes deductions and applies through 2028. This change aims to provide more financial relief for seniors.

🍽️ Tax Changes for Tipped Workers

Starting in 2025, tipped workers will no longer pay federal income tax on their tips. This change aims to lessen the tax burden for those who rely heavily on tips as a source of income, which may be crucial for individuals working in the service industry.

💼 New Deductions for Tips and Overtime

The "One Big, Beautiful Bill Act" (OBBBA), enacted on July 4, 2025, introduced new deductions for qualified tips and overtime pay. Taxpayers can now deduct up to $25,000 for qualified tips and $12,500 for overtime pay. These deductions are available for tax years 2025 through 2028, helping workers maximize their tax returns.

📌 Key Points to Remember

  • 💵 Standard deduction increased for all filing statuses.
  • 🎗️ New charitable deduction available for non-itemizers.
  • 👵 Extra deduction for seniors aged 65 and older.
  • 💰 Tipped workers no longer taxed on tips.
  • 🏢 New deductions introduced for tips and overtime.

💡 Practical Tips for Navigating Tax Changes

Review the details of your personal situation with your attorney to ensure you understand how these tax changes apply to you.

📋 Keep Up with Deduction Limits

Stay updated on the standard deduction and any additional deductions available. Knowing the current limits can help you maximize your tax return.

🧾 Track Charitable Donations

Record cash donations to qualified charities throughout the year. This will help you benefit from the new charitable deduction if you choose to take the standard deduction.

📅 Plan for Senior Deductions

If you or your spouse are 65 or older, make sure to claim the additional $6,000 deduction. This is available whether you itemize or not, so it can significantly affect your tax outcome.

💳 Understand Tipped Income

If you work in a job that relies on tips, note that you will not have to pay federal income tax on them starting in 2025. This can lead to a more favorable tax situation.

💼 Make Use of New Deductions

If you receive tips or overtime pay, keep track of them to take advantage of the new deductions created by the OBBBA. This can increase your potential refund.

📆 File on Time

Be mindful of the tax filing deadline for the 2025 tax year, which is April 15, 2026. Prepare your documents early to avoid any last-minute issues.

🏆 Tax Preparation Services Ranked by User Reviews (2026)

This section lists various tax preparation services that fit the topic of tax filings and deductions, as they can assist individuals and businesses with their tax needs. The order follows Trustpilot ratings checked in October 2026. Ratings can change over time, and it’s important to consider that unhappy customers often leave more reviews, which can skew perceptions.

🥇 1. 1040.com

1040.com has been rated 4.5. This service is known for its user-friendly interface and flat-rate pricing, making it accessible for many taxpayers. However, some users report navigation challenges and occasional technical glitches during the filing process.

🥈 2. efile4Biz

efile4Biz holds a 4.7 rating. It is recognized for easy online filing and affordable services, making it a popular choice among small business owners. Nevertheless, some users mention occasional navigation issues and limitations in customer support.

🥉 3. TaxSlayer

TaxSlayer averages a 4.2 rating. This service is known for its affordable pricing and effective online tax preparation tools. However, some users have expressed concerns about occasional technical issues and pricing transparency.

🆓 Free Tax Assistance Programs

The IRS offers free programs like Free File, which provides online tax preparation for eligible taxpayers with an adjusted gross income of $73,000 or less. Additionally, Volunteer Income Tax Assistance (VITA) offers free help to those making $60,000 or less, while Tax Counseling for the Elderly (TCE) specializes in providing assistance for seniors.

🔎 What to Compare When Choosing Tax Services

  • 🏷️ User ratings and reviews.
  • 💸 Pricing structure and hidden fees.
  • ⏳ Processing times for tax returns.
  • 🛠️ Availability of customer support.
  • 📋 Range of services provided.

❓ Frequently Asked Questions

❓ What is the standard deduction for 2026?

The standard deduction for single filers in 2026 is $16,100, while married couples filing jointly can claim $32,200.

📅 When is the tax filing deadline for 2025?

The deadline to file individual tax returns for the 2025 tax year is April 15, 2026. This date may shift if it falls on a weekend or holiday.

🧓 Who qualifies for the additional senior tax deduction?

Individuals aged 65 and older qualify for an additional $6,000 federal tax deduction. This applies regardless of whether they itemize deductions.

💵 Can I deduct charitable contributions if I take the standard deduction?

Yes, taxpayers who take the standard deduction can deduct up to $1,000 for single filers and $2,000 for married couples filing jointly in cash donations to qualified charities.

💼 What is the "One Big, Beautiful Bill Act"?

The "One Big, Beautiful Bill Act" (OBBBA) introduced new deductions for qualified tips and overtime pay, effective for tax years 2025 through 2028.

🏢 Is there free tax help available?

Yes, the IRS offers free tax help through programs like Free File, VITA, and TCE, catering to various groups including low-income individuals and seniors.

⚖️ Recent Cases Related to Tax Law

Recent court rulings have addressed various aspects of tax law, including deductions, income reporting, and audits. These rulings can provide insights into how tax laws are interpreted and enforced.

For more recent rulings, you can browse more rulings on the news page.

End of October 2026 Update





Introduction


Estate tax, also known as inheritance tax, is a tax imposed on the transfer of property from the deceased to the beneficiaries. The estate tax can be one of the most significant expenses for many families. In the United States, estate tax is levied by the federal government and some states. The tax rate is progressive, with rates ranging from 18% to 40%. Thankfully, there are a number of exemptions to estate tax that can help families reduce their tax burden. This article will discuss the exemptions to estate tax and help families understand how to take advantage of them.

Exemption on Spousal Transfers


One major exemption to estate tax applies to spousal transfers. When a husband or wife dies, their entire estate is transferred to the surviving spouse without incurring any estate taxes. The exemption is not limited to cash transfers but includes other property such as homes, investments, and other valuables. However, this exemption does not fully eliminate estate tax. The surviving spouse can only use their share of the unified estate tax credit to exempt a certain amount of their estate from tax liability.

Unified Estate Tax Credit


The unified estate tax credit serves as a credit that can be applied against the estate tax for individuals and couples. This exemption helps to reduce the amount of estate tax that would otherwise be due. The unified estate tax credit was brought into effect under the Tax Cuts and Jobs Act, 2017 (TCJA). Under this act, the estate and gift tax exemption increased from $5.49 million in 2017 to $11.4 million for individuals and $22.8 million for married couples. These values are adjusted for inflation, and for 2021, the exemption stands at $11.7 million for individuals and $23.4 million for couples.

Portability of the Unified Estate Tax Credit


Portability of the unified estate tax credit is a feature that stands to benefit spouses in a more significant way. Before portability of the unified estate tax credit was introduced, married couples had to set up trusts or other arrangements to keep the exemption separate. With portability, a spouse can transfer any unused portion of their estate tax exemption to their surviving spouse. This allows the surviving spouse to have a higher exemption, allowing them to transfer more property without incurring any estate tax.

Charitable Contributions


Charitable contributions made during an individual's lifetime or through their estate can be used to reduce the taxable value of their estate. By making charitable contributions, families can reduce the amount of estate tax they have to pay. One thing to keep in mind is that the charitable organization must be a qualified 501(c)(3) organization. The estate will also receive a tax deduction for the contribution.

Qualified Family-owned Business Interest (QFOBI) Deduction


This exemption applies to families who own businesses that have been passed down from generation to generation. A Qualified Family-owned Business Interest (QFOBI) deduction is a deduction an estate can claim for a portion of the value of a family-owned business. To qualify, the family member who owns the business must have at least a 50% interest in the business prior to death. Additionally, the business must have been in existence for five years and must continue to exist for another five years after the owner's death. The maximum deduction allowed is $1.58 million.

Exemption on Life Insurance Proceeds


Life insurance is a popular way for people to ensure that their loved ones are taken care of after they pass away. Most people are not aware that life insurance proceeds are generally income tax-free, and estate tax-free under certain circumstances. The IRS does not include the proceeds of a life insurance policy in the calculation of an estate's gross value, as long as the policy was not owned by the decedent at their time of death. If the policy is owned by the decedent, the proceeds are included in their taxable estate. One way to avoid this scenario is by transferring ownership of the policy to a loved one, an irrevocable trust or a business entity hence avoiding being part of an estate.

State Estate Tax Exemptions


Finally, some states have their estate tax, separate from the federal estate tax. The estate taxes in these states come in the form of estate taxes, inheritance taxes, or both. California, Tennessee, Florida, and Nevada, among others, have no state estate taxes. New Jersey and Oregon have some of the highest state estate tax rates in the country which starts from 14.8% to 16%. State estate taxes usually have lower exemption thresholds than the federal exemption. Review referring to the relevant state government from time to time is crucial to keep the tax planning updated with the latest changes.

Conclusion


In conclusion, estate tax can be a significant expense for many families. However, by taking advantage of the exemptions discussed above, families can reduce their tax burden. Portability of the unified estate tax credit and qualified family-owned business interest deductions are just two examples of the exemptions that can be used to reduce the taxable value of an estate. Additionally, families should seek to understand state estate tax laws as these taxes come on top of the federal estate tax when applicable. By working with tax planning professionals, families can better understand the exemptions available to them and develop a plan that will help them minimize estate tax liability.

Complete Auto Transit was a company that transported vehicles between states. Mississippi was one state that the company travelled through, and one in which they delivered vehicles. Mississippi levied a tax on Complete Auto Transit because they were taking part in interstate and intrastate transit. The tax was based on the "privilege of doing business in the state."

Complete Auto Transit was based in Michigan and was obviously conducting interstate business. However, they disagreed with the tax and took the case to court. Complete Auto Transit v. Brady, included a ruling that would change interstate and intrastate transit forever. The courts ruled that companies that conducted business in more than one state, should be responsible for a portion of each state's tax burden.

Complete Auto Transit v. Brady set a precedent for other states to begin charging a similar tax.  However, it has been claimed that  the decision in Complete Auto Transit v. Brady, may violate the Commerce clause because of the tax on interstate activity.  Similar taxes are continuously challenged in courts. Many companies insist that those taxes are not allowed because of the Commerce Clause. In fact, those taxes may discourage companies from conducting business in more than one state.

The ruling in Complete Auto Transit v. Brady, laid out specific rules for taxes on interstate commerce. Business conducted must be connected to the state that is imposing the tax. In other words, the tax can not be imposed on business conducted in another state.Those taxes must be fair and apply to all business in the same manner. The taxes must not discriminate against any type of company, or individual.

Complete Auto Transit v. Brady, demonstrated the ambiguity of the Commerce Clause. The clause can be interpreted in number of ways, in order to benefit the individual that is interpreting the clause. In this case, Mississippi claimed that they were simply imposing a sales tax. However, it was seen by many, including the company, as a privilege tax, imposed simply for having the privilege of doing business in that state. A similar ruling was seen in Commonwealth Edison v. Montana. In both cases, the courts ruled that companies doing business in any state, would be responsible for a portion of the tax burden because they received services from that state, such as police protection. Contributing to a state,s tax burden, is meant to finance any benefits a company received while conducting business in that specific state.