As the 2026 tax season approaches, the IRS has released key updates that will affect individuals, small business owners, and tax professionals alike. Coupled with insights from the AICPA’s tax advocacy efforts, these developments shape how you should prepare for filing your 2025 tax return in early 2026. Understanding these changes now can help you optimize tax planning, avoid costly mistakes, and get the best outcomes for your clients or business.
1. Prepare to File: IRS Guidance & Essential Prep Steps
The IRS has officially encouraged taxpayers and preparers to start preparing early for the 2026 filing season, particularly for returns covering tax year 2025. Highlights from the IRS guidance include:
- Set up or access your IRS Online Account — This allows secure, 24/7 access to tax transcripts, communication preferences, payment history, and refund status — critical tools for both individuals and tax professionals. IRS
- Direct deposit is now essential — The IRS is phasing out paper refund checks as part of a broader modernization effort, so providing accurate bank information is more critical than ever. IRS
- Review new 2025 law changes — Key deductions, credits, and reporting requirements from recent legislation will impact 2025 returns filed in early 2026. IRS
Action Item: Make sure clients have up-to-date banking details and online IRS accounts well before filing season begins.
2. Major Tax Code Changes for 2026
The IRS released tax inflation adjustments for the 2026 tax year — changes that will apply when returns are filed in 2027 but that affect planning and withholding throughout 2026:
✔ Standard Deduction & Rates
- Standard deductions are increasing again — for example, married filing jointly rises to $32,200 in 2026. IRS
- Tax rate brackets have been adjusted for inflation, helping many taxpayers avoid “bracket creep.” IRS
✔ Other Key Adjustments
- Earned Income Tax Credit (EITC) maximums increased. IRS
- Higher limits for qualified transportation fringe benefits and Health Flexible Spending Accounts. IRS
- Foreign earned income exclusion has risen. IRS
Tax Planning Tip: These changes can affect estimated payments and withholding — tax professionals may need to adjust client withholdings early in the year.
3. IRS No Longer Offers Free Direct File (Big Filing Shift)
In late 2025, the IRS announced the end of its Free Direct File program for the 2026 season — a free government-run tax filing service used by hundreds of thousands of taxpayers. While the IRS still supports Free File through private partners, Direct File has been discontinued.
This affects many filers who relied on the simplicity of a government platform and could increase demand for professional tax services. Investopedia
Client Advisory: If clients previously used Direct File, recommend alternatives and explain their options early.
4. Standard Mileage & Business Deductions Updates
The IRS updated the business standard mileage rate for 2026:
72.5¢ per mile — up from previous years. The Tax Adviser
This means higher deductible amounts for business vehicle use — a topic many small business clients ask about as they plan expenses and estimated taxes.
📣 5. AICPA’s Role: Advocacy & Tax Planning Support
The AICPA (American Institute of CPAs) continues to provide advocacy, guidance, and practitioner resources to help tax professionals navigate complex tax reform and IRS operational changes. Their focus for 2026 includes:
- Improving IRS taxpayer service and IRS administrative processes. journalofaccountancy.com
- Helping CPA firms prepare for reporting changes and compliance issues.
Authority Boost: Incorporating guidance and resources from the AICPA strengthens your firm’s credibility and shows clients you’re aligned with leading professional standards.
Frequently Asked Questions: IRS & AICPA 2026 Tax Updates
What are the biggest IRS tax changes for 2026?
The Internal Revenue Service has adjusted tax brackets, standard deductions, credits, and contribution limits for inflation. These changes affect withholding, estimated payments, and overall tax planning throughout 2026.
Do 2026 IRS tax changes affect my Q1 filing?
Yes. While some changes apply to income earned in 2026, many IRS updates affect how you prepare and file 2025 returns during Q1 of 2026, including filing methods, refund processing, and documentation requirements.
Is the IRS Free Direct File program still available in 2026?
No. The IRS discontinued its Direct File program for the 2026 tax season. Taxpayers now must use IRS Free File partners, commercial software, or work with a professional tax advisor.
Why does the AICPA matter for tax changes?
The American Institute of CPAs advocates for taxpayers and accounting professionals, provides technical guidance, and works with the IRS to improve tax administration and compliance standards.
What should small business owners do before Q1 tax season?
Business owners should:
Review 2025 financial records early
Confirm estimated tax payments
Track mileage and deductible expenses
Update banking information for refunds
Consult with a tax professional about 2026 planning strategies
Should I adjust my withholding or estimated payments for 2026?
In many cases, yes. Inflation-adjusted brackets and deduction limits may impact your tax liability. Reviewing withholding and estimated payments early can help prevent underpayment penalties.
How can RMW Accounting help with 2026 tax planning?
RMW Accounting helps individuals and businesses:
Interpret IRS and AICPA updates
Optimize deductions and credits
Ensure compliance
Prepare accurate, timely filings
Plan proactively for the year ahead
