📅 2026 Update: Changes in Federal and State Tax Regulations

Since the original article was written, there have been significant updates in U.S. tax regulations affecting federal and state income tax, IRS rules, and various deductions. This includes changes to the standard deduction amounts and new tax deductions for gig economy workers. The earlier article continues further down the page.

💵 Standard Deduction Increases

The One, Big, Beautiful Bill Act (OBBBA), enacted on July 4, 2025, made permanent the temporary increases in the standard deduction amounts. For taxable years starting after December 31, 2024, the new amounts are:

  • $15,750 for single filers and married individuals filing separately
  • $23,625 for heads of household
  • $31,500 for married individuals filing jointly and surviving spouses

📉 Tax Rate Permanency

The OBBBA also made the existing tax rate tables permanent. This affects individual taxpayers for taxable years beginning after December 31, 2017, and before January 1, 2026. The seven tax rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37% remain in effect.

👷 Gig Economy Worker Deductions

A new deduction for gig economy workers allows them to deduct up to $25,000 in qualified tips from their taxable income. This deduction is applicable for tax years 2025 through 2028 and aims to support those who earn income through platforms like ridesharing or food delivery.

📄 Form and Filing Changes

Changes in IRS filing requirements include the need for partners receiving Form 8986 from a pass-through entity to file Form 8978. This form reports any additional tax resulting from their share of reviewed year adjustments.

📌 Key Points Summary

  • Standard deduction amounts have increased significantly.
  • Tax rate tables are now permanent.
  • Gig economy workers can deduct qualified tips.
  • New IRS form requirements affect partners in pass-through entities.

💡 Tips for Managing Your Taxes

It is essential to review your tax situation with an attorney to ensure compliance and maximize your benefits.

📝 Review Your Deductions

Make sure you understand the new standard deduction amounts. Depending on your filing status, you may benefit from a higher deduction than in previous years.

⏰ Keep Track of Deadlines

Remember that the IRS generally has three years to assess additional taxes after you file. This is important to keep in mind when planning your tax strategy.

📊 Utilize Online Resources

Access your IRS online account to view your tax records, make payments, and check the status of your return. This can help you stay organized and informed.

🎯 Know Your Rights

As a taxpayer, you have the right to finality when working with the IRS. Be aware of when the IRS has completed an audit so you can move forward.

💬 Seek Help If Needed

The Taxpayer Advocate Service (TAS) can assist you with IRS-related issues. They are an independent organization within the IRS that aims to resolve taxpayer problems.

🏆 Tax Services Ranked by User Reviews (2026)

This section covers tax services relevant to federal and state income tax regulations, based on Trustpilot ratings as of October 2026. These services help with tax planning, preparation, and audit representation. Trustpilot ratings are just one way to assess a service, as customer experiences can vary widely.

🥇 1. Tax Hive

Tax Hive holds a Trustpilot score of 4.8. It is known for providing tax planning and strategy services, particularly aimed at entrepreneurs. However, some reviewers have noted limited information regarding customer service responsiveness.

🥈 2. Expatfile - US Expat Taxes Made Simple

Expatfile also has a score of 4.8. It specializes in tax preparation for expatriates and offers tax consultation services. Some users mention that prices can be higher compared to competitors, which could affect budget-conscious clients.

🥉 3. TaxAudit

TaxAudit has a Trustpilot rating of 4.7. This service is recognized for its IRS audit representation and tax debt relief assistance. However, some customers report slow response times, which may be a concern for those needing immediate help.

🆓 Free Government Assistance

The IRS offers free resources through the Taxpayer Advocate Service (TAS). This service helps resolve issues with the IRS and can provide guidance for taxpayers facing challenges. Additionally, taxpayers can access their accounts online to manage their tax affairs efficiently.

🔎 What to Compare When Choosing a Tax Service

  • 📊 Services offered: audit representation, tax planning, or preparation
  • ⭐ Trustpilot ratings and number of reviews
  • 💬 Customer feedback on responsiveness and service quality
  • 💰 Pricing structures and potential hidden fees
  • 📅 Availability of free resources or assistance programs

❓ Frequently Asked Questions

❔ What is the current business standard mileage rate?

The IRS has set the 2026 business standard mileage rate at 72.5 cents per mile, which is an increase of 2.5 cents from the previous year.

💼 How long does the IRS take to process Form 1023?

For applications submitted on or before January 12, 2026, the IRS issues 80% of Form 1023 application determinations within 191 days.

⏳ What is the Collection Statute Expiration Date (CSED)?

The IRS typically has 10 years from the date your tax was assessed to collect the tax, along with any associated penalties and interest.

🏢 Where can I get assistance with my taxes?

The Taxpayer Advocate Service (TAS) provides independent assistance to taxpayers facing issues with the IRS. They can help resolve problems and advocate for taxpayers' rights.

📅 What is the Compliance Assurance Process (CAP)?

To be eligible for the CAP program, a taxpayer must have no more than two open years under examination on the first day of the CAP year.

📝 Can gig economy workers benefit from new deductions?

Yes, gig economy workers can now deduct up to $25,000 in qualified tips from their taxable income for tax years 2025 through 2028.

⚖️ Recent Court Cases Related to Taxes

Recent court rulings have addressed various aspects of tax law, including federal and state income tax regulations and IRS audits. These rulings can significantly impact taxpayers and their obligations.

For more details, feel free to browse more rulings on the news page.

End of October 2026 Update





Introduction


Accounting is a crucial tool for any business or organization that wants to understand and manage its finances effectively. Accounting auditing is a vital aspect of accounting, as it determines the accuracy and reliability of financial statements produced by businesses. It is essential to ensure that financial statements are complete, accurate, and comply with accounting principles, standards, and regulations. Accounting auditing is a process that involves independent and objective analysis of financial statements.

This article explores the facts on accounting auditing, including its definition, importance, and benefits. It also provides up-to-date information on the topic using government resources. The article is divided into the following sections:

1. What is Accounting Auditing?
2. The Importance of Accounting Auditing
3. Benefits of Accounting Auditing
4. Types of Accounting Auditing
5. The Relationship between Auditing and Accounting
6. The Auditing Process
7. Government Regulations and Standards on Accounting Auditing
8. Conclusion

1. What is Accounting Auditing?


Accounting auditing is the process of evaluating financial records and statements produced by businesses to determine their accuracy, reliability, and compliance with accounting principles, standards, and regulations. An audit is conducted by independent and objective auditors who are experts in accounting and have no vested interest or bias towards the company or organization they are auditing.

The objective of accounting auditing is to provide stakeholders with independent and objective assurance that the financial statements are reliable, complete, and accurate. It also helps to identify any errors, omissions, or fraud in the financial records of a company or organization.

2. The Importance of Accounting Auditing


Businesses and organizations that produce financial statements need to conduct accounting auditing to ensure that their financial statements are reliable and accurate. Accounting auditing helps to:

1. Identify Errors and Fraud


Accounting auditing helps to identify errors, omissions, and fraud in financial statements. Auditors are trained to detect any irregularities or discrepancies in financial records that could indicate fraud or financial mismanagement.

2. Provide Assurance to Stakeholders


Accounting auditing provides stakeholders with independent and objective assurance that the financial statements are reliable, complete, and accurate. This assurance helps to build trust and confidence in the business or organization and its financial reporting.

3. Fulfill Regulatory Requirements


Regulatory bodies, such as the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), require businesses and organizations to conduct accounting auditing. Compliance with regulatory requirements helps to avoid legal and financial penalties.

4. Improve Financial Management


Accounting auditing helps businesses and organizations to improve their financial management practices. The audit process can identify areas where financial management can be improved, such as internal controls and record-keeping practices.

3. Benefits of Accounting Auditing


Accounting auditing provides businesses and organizations with several benefits, including:

1. Enhanced Credibility


Accounting auditing enhances the credibility of financial statements produced by businesses and organizations. Independent and objective auditing gives stakeholders confidence in the reliability and accuracy of financial statements.

2. Improved Financial Management


Accounting auditing can identify areas where financial management can be improved, such as internal controls, record-keeping practices, and financial reporting processes. Improving financial management practices can help businesses and organizations to minimize financial risks and improve financial performance.

3. Compliance with Regulations


Regulatory bodies, such as the SEC and PCAOB, require businesses and organizations to conduct accounting auditing to comply with regulatory requirements. Compliance with regulations helps to avoid legal and financial penalties.

4. Identifying Opportunities for Growth


Accounting auditing can identify opportunities for growth, such as expanding product lines or entering new markets. Auditors can analyze financial records to identify areas where businesses and organizations can capitalize on growth opportunities.

4. Types of Accounting Auditing


There are two main types of accounting auditing:

1. Internal Auditing


Internal auditing is conducted by the internal audit department of a business or organization. The internal audit department is responsible for evaluating the effectiveness of internal controls, risk management practices, and compliance with regulations.

2. External Auditing


External auditing is conducted by an independent, outside firm or individual. External auditors are contracted by businesses and organizations to provide independent and objective assurance that financial statements are reliable, complete, and accurate.

5. The Relationship between Auditing and Accounting


Accounting and auditing are interrelated and complementary. Accounting is the process of recording and classifying financial transactions, preparing financial statements, and providing financial information to stakeholders. Auditing is the process of evaluating and verifying financial records and statements to provide independent and objective assurance to stakeholders.

The audit process involves analyzing financial records to verify their accuracy and completeness. Auditors use analytical procedures to identify any discrepancies, irregularities, or fraud in financial records. They also evaluate internal controls to ensure that financial records are reliable and accurate.

Accounting and auditing work together to ensure that financial statements are reliable, complete, and accurate. Accounting provides the basis for financial statements, and auditing provides the assurance that the financial statements are reliable and accurate.

6. The Auditing Process


The auditing process involves several steps, including:

1. Planning and Preparation


The first step in the auditing process is planning and preparation. Auditors gather information about the organization, its operations, and financial records. They also identify the scope of the audit, the audit objectives, and the audit team.

2. Risk Assessment


The next step in the auditing process is risk assessment. Auditors analyze financial records to identify areas where financial risks exist, such as fraud or mismanagement. They also evaluate internal controls to assess the effectiveness of financial management practices.

3. Analytical Procedures


Analytical procedures involve analyzing financial records, such as balance sheets and income statements, to identify any discrepancies, errors, or inconsistencies. Auditors use analytical procedures to check the accuracy and completeness of financial records.

4. Fieldwork


Fieldwork involves visiting the organization and conducting a detailed examination of financial records. Auditors collect and analyze financial records, such as bank statements, invoices, and receipts, to verify their accuracy and completeness. They also interview staff and management to gather information about the organization and its financial records.

5. Reporting


The final step in the auditing process is reporting. Auditors prepare a report that includes their findings, conclusions, and recommendations. The report provides stakeholders with independent and objective assurance that financial statements are reliable, complete, and accurate.

7. Government Regulations and Standards on Accounting Auditing


Government bodies, such as the SEC and PCAOB, regulate and set standards for accounting auditing. The following are some of the government regulations and standards on accounting auditing:

1. Sarbanes-Oxley Act (SOX)


SOX, enacted in 2002, requires businesses and organizations to establish and maintain internal controls to ensure the accuracy and completeness of financial statements. SOX also requires businesses and organizations to provide independent and objective assurance that financial statements are reliable, complete, and accurate.

2. Public Company Accounting Oversight Board (PCAOB)


PCAOB is a nonprofit corporation created by the Sarbanes-Oxley Act to oversee audits of publicly traded companies. PCAOB sets auditing standards and conducts inspections of auditing firms to ensure compliance with auditing standards.

3. Generally Accepted Auditing Standards (GAAS)


GAAS are a set of auditing standards developed by the American Institute of Certified Public Accountants (AICPA). GAAS provides a framework for auditing companies and organizations to ensure the accuracy and completeness of financial statements.

8. Conclusion


In conclusion, accounting auditing is a vital aspect of accounting that helps to ensure the accuracy and reliability of financial statements produced by businesses and organizations. Accounting auditing is a process that involves independent and objective analysis of financial statements. Businesses and organizations must conduct accounting auditing to comply with regulatory requirements, improve financial management practices, and build trust and confidence among stakeholders.

Accounting and auditing are interrelated and complementary. Accounting provides the basis for financial statements, and auditing provides the assurance that the financial statements are reliable and accurate. The audit process involves planning and preparation, risk assessment, analytical procedures, fieldwork, and reporting.

Government bodies, such as the SEC and PCAOB, regulate and set standards for accounting auditing. Compliance with government regulations and standards helps to avoid legal and financial penalties and ensures the accuracy and completeness of financial statements.

An operational audit is an audit that tests a thoroughly checks a company’s internal systems and procedures. This is done to see what types of goods and/or services the company provides and sells to their consumers.  An operation audit is also used to ensure that the company is operating efficiently and effectively. Operation audit can be conducted by employees of the company or by an outsourced company.

A quality audit is a systematic examination of the quality of a specific company or organization. Carried out by either a company’s employee or an outsourced auditor, a quality audit is an important aspect of a company because it helps to ensure an effective management system and instill a specific quality system to be used by the company.

Generally a quality audit is scheduled so that the management of the company can use their internal system which in turn will help to determine if the company is complying with the said rules and regulations that they are supposed to be following.

A tax audit is an investigation of tax returns that have been submitted. A tax audit can be done on random sampling or due to certain questions the tax agency may have after looking at the tax return. A tax audit can help to uncover hidden incomes and other fraudulent acts regarding money.

Regardless of what type of audit one is experiencing, audits can be a key management tool and can help to determine that the necessary actions of the company are actually happening. Often business, small and large, loose site of different things and tend to misplace or misuse important documents and/or funds. An audit can refocus a company and help aid them back on track.