Tax law continues to evolve, and several recent federal changes could have a significant impact on both individuals and businesses. From updated clean vehicle credit rules to expanded IRS reporting through payment apps and new charitable deduction limitations, taxpayers must stay alert.
Missing a deadline, failing to report income correctly, or misunderstanding new thresholds can lead to audits, penalties, and unnecessary stress. Here are three important changes that deserve your attention for the upcoming tax filing season and beyond.
1. Federal Clean Vehicle Credit Deadlines and Eligibility Rules
Taxpayers claiming a federal clean vehicle credit for new, used, or commercial vehicles must carefully follow updated acquisition and placement rules.
According to the Internal Revenue Service:
- The vehicle must be placed in service for you to be eligible to claim the credit.
- If the vehicle is placed in service after September 30, 2025, you must have acquired the vehicle on or before September 30, 2025, to be eligible.
- Acquisition can be demonstrated by entering into a binding written contract and making a payment on or before September 30, 2025.
- A vehicle is considered placed in service when you take possession of it.
This means timing and documentation are critical. If you purchased a qualifying vehicle near the deadline, you must ensure you have proper written agreements and proof of payment. Waiting too long or misunderstanding the placement rules could cost you the credit entirely. Note, this Clean Vehicle Credit is not available for vehicles aquired after September 30, 2025.
2. Payment Apps, Form 1099-K, and Increased IRS Oversight
Business owners who accept payments through platforms such as Cash App, PayPal, or Venmo should be aware of reporting requirements.
Form 1099-K is an information return used to report payments received from:
- Credit cards, debit cards, or stored-value cards
- Payment apps or online marketplaces for goods or services
You may receive a Form 1099-K if you sold goods or provided services and were paid through a payment app or online marketplace, and your gross payments exceed the reporting threshold, or you accepted payment card transactions.
Payment apps and online marketplaces send a copy of Form 1099-K to the IRS. If your tax return does not match the income reported on that form, it can trigger scrutiny.
If you are a business owner and you are not reporting all incoming revenue from third-party payment platforms, you could find yourself in the crosshairs of the IRS. Proper bookkeeping, accurate reconciliation, and proactive tax planning are essential.
3. Charitable Deduction Changes for Individuals and Businesses
Charitable contribution rules are also changing, and both individuals and businesses should understand how these updates affect their deductions.
For Individuals
Currently, charitable contributions are deductible only if you itemize deductions on Schedule A of Form 1040, and those deductions may be limited.
Beginning with tax year 2026:
- A new 0.5 percent of adjusted gross income floor will apply to itemized charitable deductions.
- If you do not itemize, you may deduct up to $1,000 in cash contributions, or $2,000 if filing jointly.
This means some taxpayers who previously benefited from itemized deductions may see reduced deductibility, while non-itemizers may gain limited new opportunities.
For Businesses
Charitable deductions apply differently depending on the entity structure. There are other changes and updates for businesses, but most notably:
- Pass-through entities such as partnerships and S corporations generally pass charitable contributions through to owners, where the deduction is subject to individual limitations.
- C corporations will face a new 1 percent floor on charitable contribution deductions beginning in 2026.
This change may reduce the immediate tax benefit of corporate charitable giving if contributions do not exceed the new threshold. Careful documentation and verification of an organization’s status remain essential when claiming charitable deductions.
Are You Experiencing Tax Issues?
These changes affect certain individuals, small business owners, and corporations. If you are an individual or a business and need experienced tax guidance, contact Michael Lapidus at The Lapidus Law Firm.
Michael is a graduate of Columbia University, where he earned a B.A. in mathematics. He received his law degree from Washington College of Law and earned an advanced law degree, an LL.M. in taxation, from Georgetown University Law Center.
In addition to his extensive experience representing clients injured in motor vehicle collisions, pedestrian accidents, fallen injury incidents, and bed bug injury claims, Michael has a strong background in tax law. His tax practice includes representing individuals, businesses, and organizations in IRS disputes, income tax collection matters, employment tax issues, offers in compromise, and penalty abatement cases.
Michael takes a personal, hands-on approach with every client. Whether advocating for a taxpayer before the IRS or guiding a business through a complex tax issue, his focus is on achieving practical, favorable results.
If you have questions about how these federal tax changes affect you, do not wait. Contact Michael Lapidus at The Lapidus Law Firm today to protect your rights and ensure you are fully compliant.