What You Need to Know for Upcoming Tax Filings and Payments
Beginning December 24, 2025, the U.S. Postal Service (USPS) implemented a significant change to how postmark dates are determined. While this change does not alter tax law itself, it can affect whether mailed tax forms and payments are considered timely filed. This update is especially important for taxpayers who still rely on mailing paper returns, extension requests, or tax payments.
What Changed?
Historically, a postmark generally reflected the date you dropped mail in a USPS mailbox or handed it to a postal employee. Under the new rule, the postmark date now will reflect the date the item is first processed at a USPS sorting facility, which can occur one or more days after mailing.
Why This Matters for Taxes
The IRS and many state taxing authorities rely on the postmark date to determine whether a tax return, extension, or payment was submitted on time. This is known as the “mailbox rule.”
With the new USPS process:
- A return mailed on the due date (such as April 15) may receive a postmark dated after the deadline.
- Payments that appear late based on the postmark could be subject to penalties and interest, even if you mailed them on time.
- Extension requests, estimated tax payments, amended returns, and refund claims may also be affected.
Common Situations at Risk
You may be impacted if you mail:
- Individual or business income tax returns
- Extension requests (Forms 4868 or 7004)
- Estimated tax payments
- Balance due payments with a paper return
- State or local tax filings that rely on postmarks
How to Protect Yourself
To reduce the risk of late filing or payment issues, we recommend the following best practices:
- Consider Electronic Filing and Payment: E-filing and electronic payments provide immediate confirmation and eliminate postal timing concerns entirely.
- Use Certified or Registered Mail: These options provide proof of mailing and an acceptance date, which can be critical if a deadline is questioned.
- Request a Counter Postmark: If you mail time sensitive documents, take them to a USPS counter and request a same day postmark.
- Obtain a Certificate of Mailing: This inexpensive USPS service provides official proof of the date you mailed an item.
- Mail Early: Avoid mailing tax documents on the due date. Send them several days in advance to allow for processing time.
Our Recommendation
If possible, electronic filing and electronic payment methods are the safest and most reliable options under the new USPS rules. If you prefer mailing documents, planning ahead is now more important than ever.
If you have questions about how this change may affect your specific situation, or if you would like help transitioning to electronic filing or payments, please call us at (401) 921-2000 or contact us here.
The IRS has released the updated retirement plan contribution limits for 2026, effective January 1, 2026. These annual cost-of-living adjustments give taxpayers the opportunity to increase retirement contributions and strengthen long-term financial planning. Below are the most important changes to consider as you prepare for the upcoming year.
401(k), 403(b), and Most 457 Plans
The employee contribution limit for 401(k), 403(b), and most 457 plans will increase to $24,500 in 2026 (up from $23,500 in 2025).
While a $1,000 bump may appear modest, it still provides:
More tax-advantaged space to save
Additional room to build long-term retirement security
Catch-Up Contributions (Age 50 and Over)
For individuals aged 50 and older, the catch-up contribution limit increases to $8,000, allowing a total contribution of $32,500 to a 401(k), 403(b), or 457 plan in 2026.
Special Catch-Up Rule for Ages 60–63
Under the SECURE 2.0 Act, individuals aged 60, 61, 62, and 63 get an even higher catch-up amount:
$11,250 in 2026 (instead of $8,000)
Designed to maximize savings during peak earning years
IRA Contribution Limits
The annual IRA contribution limit will rise to $7,500 in 2026. IRAs remain a strong tool for building tax-deferred or tax-free (Roth) retirement savings outside of employer plans.
IRA Catch-Up Contributions
Individuals aged 50 and over may contribute an additional $1,100, bringing their total IRA limit for 2026 to $8,600.
This long-standing catch-up allowance is especially beneficial for taxpayers looking to accelerate savings in the years leading up to retirement.
Higher Income Limits for the Saver’s Credit
The IRS has raised the income thresholds for the Saver’s Credit, helping more low- and moderate-income taxpayers qualify for this valuable retirement incentive. These expanded limits may increase eligibility and make retirement savings more accessible.
What These Changes Mean for You
The 2026 updates show the IRS’s continued commitment to ensuring retirement savings options keep pace with inflation. This means:
Current savers can boost contributions and take advantage of increased limits.
New or returning savers may benefit from expanded credits and catch-up provisions.
Now is an excellent time to review and adjust your retirement strategy ahead of the new limits.
If you’d like help evaluating your retirement plan or maximizing contribution opportunities, please call us at (401) 921-2000 or contact us here.
Overview
Rhode Island’s 2026 Budget Bill introduces a new statewide tax on non-owner-occupied residential properties, widely referred to as the “Taylor Swift Tax.”
The nickname stems from Taylor Swift’s well-known Watch Hill mansion, a high-value Rhode Island vacation home that is typically unoccupied for much of the year. State legislators designed the tax to ensure that owners of luxury homes who do not primarily reside in them contribute more toward municipal and state services funded by real estate taxes.
Beginning July 15, 2025, and for every tax year thereafter, the State of Rhode Island will identify properties that meet the new criteria. The tax officially begins on July 1, 2026, requiring additional planning, record keeping, and financial strategy for affected owners.
Why the New Tax Was Created
According to the statute, owners of high-value, non-owner-occupied properties:
Do not always contribute a proportionate share of state and local service costs
Benefit from essential services funded by real estate taxes
Should be encouraged to use their properties in ways that prevent deterioration and support viable housing stock
The law is designed to incentivize productive use of properties and increase revenue from luxury homes not serving as primary residences.
Who Is Subject to the “Taylor Swift Tax”?
Not all non-owner-occupied properties qualify. To fall under the tax, a property must meet all of the following:
Qualifying Criteria
Assessed value exceeds $1,000,000, adjusted annually for CPI
Not used as the owner’s primary residence
Not occupied by the owner for at least half of the year
Example: If the property is rented for more than 183 days, the tax does not apply, and landlord-tenant rules govern instead
Tax starts July 1, 2026
Tax Rate and Example Calculation
Tax Rate
$2.50 per $500 of assessed value above $1,000,000
This tax is in addition to existing property taxes
Example
Assessed value: $3,000,000
$3,000,000 − $1,000,000 = $2,000,000
$2,000,000 ÷ $500 = 4,000 units
4,000 × $2.50 = $10,000 annual tax due
Payment Schedule
Paid quarterly, beginning March 15 of each taxable year
As of now, the State has not yet released regulations or forms, so further guidance is expected.
Preparing for the New Tax
If you own multiple properties or high-value vacation homes, this law could affect your long-term tax planning. Early preparation will help you understand eligibility, calculate potential tax impact, and explore planning opportunities.
Our team can help you evaluate your properties and prepare for compliance. For guidance, please call us at (401) 921-2000 or contact us here.
Expanded Deductions for Standard Deduction Filers
Beginning in 2026, the One Big Beautiful Bill Act makes it easier for individuals to support charitable organizations while receiving meaningful tax benefits.
Taxpayers can now claim a charitable deduction even if they take the standard deduction, with the following annual limits:
$1,000 for individuals
$2,000 for married couples filing jointly
This provides new flexibility and rewards taxpayers who want to give back without needing to itemize.
Higher AGI Limit for Cash Contributions
The law also raises the limit on cash contributions to public charities:
Previous cap: 50% of Adjusted Gross Income (AGI)
New cap: 60% of AGI
This increase gives taxpayers more room to make larger charitable gifts and potentially reduce their taxable income even further.
Encouraging Generosity Through Tax Savings
These updates are designed to:
Support nonprofit organizations
Encourage greater charitable giving
Offer meaningful tax savings to donors
Whether you’re planning small donations or larger year-end contributions, these changes can help you structure your giving more strategically.
Need Help Planning Your Charitable Giving?
If you’re planning donations or want to align your charitable goals with your tax strategy, our team is ready to assist.
For guidance, please call us at (401) 921-2000 or contact us here.
Immediate Expensing Begins in 2025
Starting in 2025, the One Big Beautiful Bill Act allows businesses to immediately deduct domestic Research and Development (R&D) expenses. This marks a major shift from the prior rules, which required companies to amortize R&D costs over multiple years.
This change:
Simplifies tax treatment
Reduces up-front tax burdens
Improves cash flow
Supports ongoing innovation and development
The provision applies through 2029 and benefits companies investing in new products, technologies, and process improvements.
Cash Flow Benefits and Accounting Considerations
With immediate expensing restored, businesses with eligible R&D activities should:
Review current accounting methods
Update expense tracking procedures
Confirm documentation supports qualification
Prepare to claim the full deduction once the law takes effect
Proactive planning ensures smooth implementation and maximized tax benefits.
Treatment of Previously Capitalized R&D Costs
The Act also provides relief for expenses incurred in earlier years. All taxpayers may elect to deduct their remaining unamortized R&D expenses beginning in tax years after December 31, 2024, over a one- or two-year period.
Additionally, certain small taxpayers may file amended returns for 2022–2024 to deduct R&D expenses that were previously required to be capitalized.
Get Guidance for Your R&D Tax Strategy
If you need help evaluating your R&D costs, adjusting accounting methods, or planning for these changes, our advisors are ready to assist.
For support, please call us at (401) 921-2000 or contact us here.
Overview
Beginning in 2025, the One Big Beautiful Bill Act significantly increases the cap on the State and Local Tax (SALT) deduction: from $10,000 to $40,000, with annual inflation adjustments through 2029.
This change provides long-awaited relief for taxpayers in high-tax states, who were previously limited under the old $10,000 cap.
Who Benefits from the Expansion
The increased deduction is expected to help:
Homeowners who pay high property taxes
Taxpayers in states with above-average income or sales taxes
Families who itemize deductions rather than take the standard deduction
However, the benefit phases out for higher-income taxpayers with Modified Adjusted Gross Income (MAGI) above $500,000.
What This Means for You
With the higher cap, itemizing deductions may once again make sense for many taxpayers who previously chose the standard deduction.
If you live in a high-tax state, this adjustment could translate into thousands of dollars in potential tax savings depending on your income level, home ownership status, and other deductible expenses.
Plan Ahead for 2025
Tax planning will be key to maximizing this new opportunity. Consider reviewing your 2024 and 2025 income, property tax, and state tax obligations early to see how the expanded cap might impact your filing strategy.
If you’d like help running the numbers or determining whether itemizing is the right move for you, please call us at (401) 921-2000 or contact us here.
What is the One Big Beautiful Bill (Public Law 119-21)?
On July 4th of 2025, Congress signed the One Big Beautiful Bill Act (OBBBA) into law. The bill introduced many tax changes impacting federal individual, trust, estate and corporate taxation.
Key Features of the OBBBA:
- New tax treatment of overtime and voluntary tips (Learn more about “No tax on tips and overtime”)
- Temporary additional deduction for seniors (Learn more about additional deduction for seniors)
- Deduction for qualified car loan interest paid
- Ability to fully expense certain business property
- Ability to fully expense domestic research and experimental expenditures
- Modification of limitation on business interest
- Extension and enhancement of deduction for qualified business income
- Increased dollar limitations for expensing of certain depreciable business assets
While Massachusetts typically adopts changes to the provisions of the federal tax code, there are some exceptions to its conformity. On October 21, 2025, the Massachusetts Department of Revenue issued a Working Draft (DRAFT) of a Technical Information Release (TIR) on whether the Massachusetts tax law will conform or not to the OBBBA.
Key Differences between Massachusetts and Federal Tax Code
Massachusetts has chosen to decouple from the Internal Revenue Code (IRC) and not adopt the new tax treatment of overtime and tips, nor will it be implementing the deduction for qualified car loan interest paid. They also will not be following the full expensing of business property or the deduction for qualified business income (QBI). However, Massachusetts will be conforming to the full expensing of domestic research and development expenses and modification of limitation of business interest. Additionally, the state will follow federal provisions for many of the changes in treatment of depreciable assets, including, but not limited to, the increased dollar limitations for expensing Section 179 property and bonus depreciation for qualified production property.
Keep in mind that this TIR is issued in DRAFT form and is subject to change.
Federal and state tax codes can be complex, but it is important to understand the differences and how they affect you and your business. If you need assistance in navigating these new changes to federal and state tax laws, our team is committed to helping you prepare for the upcoming tax season and your long-term tax outlook. For guidance, please call us at (401) 921-2000 or contact us here.
Overview
Beginning in 2025, the One Big Beautiful Bill Act introduces a temporary deduction that allows taxpayers to deduct up to $10,000 in auto loan interest paid per year.
To qualify, the vehicle must:
Be new and for personal use
Be assembled in the United States
Weigh under 14,000 pounds
Leased or used vehicles, as well as those used for business or fleet programs, do not qualify.
Eligibility and Reporting Requirements
This deduction is available to all taxpayers, whether you itemize deductions or take the standard deduction.
Additional requirements include:
The loan must be secured by a lien on the vehicle.
Lenders must report interest of $600 or more using a new IRS form.
Borrowers must include the vehicle identification number (VIN) on their tax return to verify eligibility.
Income Limitations
The deduction begins to phase out once your Modified Adjusted Gross Income (MAGI) exceeds:
$100,000 for single filers
$200,000 for joint filers
Even if you don’t qualify for the full $10,000 deduction, this provision could still offer valuable savings for eligible car buyers.
Plan Ahead for Potential Savings
If you’re considering purchasing and financing a new car in the next few years, review your eligibility now. This deduction could be a useful tax planning opportunity that lowers your taxable income while helping offset borrowing costs.
For guidance on how this deduction fits into your broader financial strategy, please call us at (401) 921-2000 or contact us here.
Overview
On March 25, 2025, President Trump signed Executive Order 14247, “Modernizing Payments To and From America’s Bank Account.”
Beginning September 30, 2025, the federal government will no longer issue paper checks for payments, including individual tax refunds.
For taxpayers filing 2025 tax returns in 2026, this means direct deposit information must be provided or refund processing could be delayed.
Why Is This Happening?
The Executive Order was created to achieve three main goals:
- Protect taxpayers
- Speed up refunds
- Cut administrative costs
Protecting Taxpayers
As our society becomes increasingly paperless, mailed paper checks are viewed as a higher security risk compared to electronic payments.
- Paper checks are over sixteen times more likely to be lost, stolen, or altered than direct deposits or secure electronic transfers.
- Check fraud cases have nearly doubled in recent years.
- Executive Order 14247 aims to reduce these risks by requiring government payments via direct deposit.
While the IRS intends to eventually require all tax payments to be made electronically, final regulations have not yet been issued.
In the meantime, taxpayers are encouraged to use existing IRS electronic payment options for faster, more secure transactions.
Speeding Up Refunds
Starting September 30, 2025, the IRS will stop issuing paper refund checks. Direct deposit remains the fastest and most reliable way to receive your refund.
Although certain exceptions may apply (to be clarified by the IRS), taxpayers who file without banking information will:
- Receive a follow-up letter from the IRS, and
- Experience delays as their refund is processed manually.
To ensure smooth processing:
- Include your bank account and routing numbers when filing your tax return.
- If you do not currently have a bank account, visit:
- FDIC.gov/GetBanked
- MyCreditUnion.gov
These resources help you find low-cost or no-cost banking options that accept direct deposit.
Cutting Costs
Ending paper checks will also help the government save taxpayer money.
In 2024 alone, the cost of maintaining the infrastructure for digitizing paper records exceeded $657 million nationwide, according to the White House.
Reducing these expenses allows more funds to be directed toward improving electronic systems and fraud prevention.
What Should You Do Next?
Executive Order 14247 represents a major step toward a fully digital payment system for taxpayers. Preparing now will help you avoid refund delays and ensure compliance with new federal requirements.
If you have questions or need guidance on setting up direct deposit or preparing for these changes, please call us at (401) 921-2000 or contact us here.
What the New Law Means for Businesses
The One Big Beautiful Bill Act restores 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025. Prior to this law change, bonus depreciation was set to phase out completely over the next couple of years. The deduction is now permanent at the favorable 100% rate. This means many businesses can immediately deduct the full cost of machinery, equipment, and other eligible assets, which frees up capital and reducing tax liability in the year of purchase.
State Non-Conformity and Tax Planning
Several states, including Rhode Island, do not conform to this law – meaning they do not allow the 100% deduction. We can work with you to maximize your tax savings between bonus depreciation and 179 expense.
If your business is planning a purchase or expansion, we can help structure your investments for maximum tax efficiency. Contact our team today at (401) 921-2000 to get started.