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Federal Income Tax Update 2026/2025 #491826

Course Overview

Credit

Amount

CPA

CFP^®

EA / OTRP

Course Author: Danny Santucci, J.D. Field of Study (CPA): Taxes Field of Study (CFP): Tax Planning Field of Study (EA/OTRP): Federal Tax Law Update

Course Description

Publication/Revision Date: This course was updated on 1/9/2026.

This mini-course examines key individual, business, retirement, and estate tax provisions recently enacted or indexed for inflation in an overview format that is easy to reference. The emphasis is on quick access to major tax changes that have special meaning to the tax practitioner and return preparer. The course is a great resource and a way for professionals and staff alike to easily get the “big chunks” and bring their professional knowledge up to speed.

Table of Contents

Individual1

Income Tax Rates - §1	1
Marriage Penalty - Mostly Gone	3
Capital Gain & Qualified Dividend Rate	3
Installment Reporting of Farmland Sales - §1062	4
Digital Asset Reporting - §6050I	4
Excise Tax On Remittance Transfers - §4475	5
Tip Income - §61	6
Eligibility	6
Overtime Pay - §61	6
Eligibility	7
Standard Deduction - §63	7
Dependent Limit - §63(c)(5)	7
Additional Senior Deduction	8
Personal & Dependency Exemptions (Repealed) - §151	8
Deemed Personal Exemption for Related Incorporating Provisions	8
$500 (Family Tax) Credit for Certain Dependents - §24(h)(4)(A)	9
Final Regulations of Qualifying Relatives - TD 9913	9
Limitation on Itemized Deductions (Repealed) - §68	9
Itemized Deductions Subject to 2% Floor (Repealed) - §62	10
Children's Income - §63, §73 & §6012	10
Earned Income	10
Unearned Income	11
"Kiddie" Tax - §1(g)	11
Application, Threshold & Impact	11
Election to Report on Parents' Return - §1(g)(7)(A) [Form 8814]	12
AMT - §55	12
Exemption Amounts - §55(d)(1)	13
AMT Exemption Phaseout - §55(d) & §59(j)	13
AMT & Personal Credits	14
AMT Exemption for Children - §59(j)	14
Modified Inflation Adjustment Calculation Method	14
Wage Base for Social Security & Medicare Taxes	15
Earned Income Tax Credit - §32	15
Disqualified (Excessive Investment) Income - §32(i)	16
Means-Tested Programs	16
Child Tax Credit - §24	18
Earned Income	19
AGI Phaseout	19
Child & Dependent Care Expenses Tax Credit - §21	19
Alimony Payment Deduction Repealed - §62 & §215	20
Moving Cost Deduction & Reimbursement (Repealed) - §217	21
State and Local Taxes (SALT) Limit - §164	21
$10,000/$40,000 Exception	22
Charitable Contributions - §170	22
Cash Contributions - 50/60 Percent Limitation	22
College Athletic Event Seating Rights Repealed	23
Substantiation Exception for Donee Reported Contributions Repealed	24
Mortgage Interest Deduction Limited - §163(h)	24
Home Equity Indebtedness	25
Auto Loan Interest - §163(h)	25
Qualified Interest	25
Qualified Vehicle	26
Eligibility	26
Securities Rollover Into SSBICs Repealed - §1044	26
Educator Expenses - §62(a)	26
Protective Items Safe Harbor - R.P. 2021-15	27
Higher Education Tuition Deduction Repealed - §222	27
Tax on Net Investment Income - §1411	27
Reduced Home Sale Exclusion For Nonqualified Use - §121	28
Computation	28
Nonqualified Use	29
Post-May 6, 1997 Depreciation	29
Surviving Spouse Home Sale Exclusion - §121	29
Residential Mortgage Debt Relief Extended - §108	29
Deductible Mortgage Insurance Premiums Expired - §163	30
Insubstantial Benefit Charitable Contribution Limitation - §513	30
Household (Domestic) Employees - §3121	31
Adoption Credit - §23 & §137	31
Education Savings Accounts - §530 & §529	31
Child Investment ("Trump") Accounts - §530A	34
American Opportunity Tax (former Hope) & Lifetime Learning Credits - §25A	36
American Opportunity Tax Credit - §25A(b)(1)	37
Phase Out - §25A(d)	37
Refundable Portion	37
Lifetime Learning Credit - §25A(a)(1)	37
Phase Out - §25A(d)(2)	38
Educational Savings Bonds - §135	38
Student Loan Interest Deduction - §221	38
Qualified Student Loan	38
Qualified Education Expenses	39
Phase Out	39
Discharge Of Student Loan Indebtedness Expanded - §108	39
Death or Disability	39
American Rescue Plan Act Forgiveness (Repealed)	40
Foreign Earned Income Exclusion - §911	40
Rehabilitation Credit Modified - §47	41
Final Regulations of Rehabilitation Credit	41
Grandfathered Archer Medical Savings Accounts - §220	42
Medical Expense Deduction - §213	42
Personal Casualty & Theft Losses - §165(c) & §165(h)(5)	43
Wagering Losses Limited - §165(d)	43
Health Savings Accounts (HSAs) - §223	44
High Deductible Health Plan (HDHP)	44
Annual Limit On Contributions	44
Interaction with Obamacare	44
Long-Term Care Premiums - §213(d)(10)	45
Long-Term Care Payments - §7702B(d)(4)	45
ABLE Accounts - §529A	45
Eligible Individual	46
Qualified ABLE Program	46
Final Regulations (TD 9923)	47
Contributions	48
"ABLE to Work" Contribution	48
Investment Direction	48
Distributions	48
Rollovers	49
Affordable Care Act ("Obamacare")	49
Mandates	49
Individual - Repealed	49
Health Plan Coverage Credit - §36B & Form 8941	50
Employers	51
Small Employers - Fewer Than 50 Employees	51
Penalties - §4980H	51
Large Employers - 50 or More Full-time Employees	52
Marketplaces & Protecting Affordable Coverage for Employees Act	54
Expatriation - §877A	54
Private Activity Bonds Volume Cap - §146(d)	54
Loan Limits on Agricultural Bonds - §147(c)	54
Failure to File Tax Return - §6651	55
Penalties Regarding Preparing Others' Tax Returns - §6695	55
Attorney's Fees - §7430(c)(1)	55

Energy58

Energy-Efficient Home Improvement Credit Termination - §25C	58
OBBBA Change	58
Residential Clean Energy Credit Termination - §25D	58
OBBBA Change	58
Previously-owned Clean Vehicle Credit Termination - §25E	58
BBB Change	59
Clean Vehicle Credit Termination - §30D	59
OBBBA Change	59
Advanced Nuclear Production Tax Credit - §45J	59
Energy Efficient Home Credit Termination - §45L	60
OBBBA Change	60
Renewable Energy Credits	60
Prevailing Wage & Apprenticeship Requirements	60
Prevailing Wage & Apprenticeship Guidance	60
Prevailing Wage – IRA Act §13101(f)(7)	61
Apprenticeship – IRA Act §13101(f)(8)	61
Additional Increases to "Base" & "Bonus" Credits – IRA Act §13103	62
Domestic Content	62
Energy Communities	62
Low-Income Communities - §48(e) & §48E	63
Energy Tax Credits As Payments - §6417	63
Alternative Fuel Refueling Property Credit Termination - §30C	64
OBBBA Change	64
Extension of Credits for Alternative Fuels (Expired)- §40A et al	64
Sustainable Aviation Fuel (SAF) Credit (Expired) - §40B	65
Production Tax Credit (PTC) (Expired) - §45	65
Carbon Capture & Sequestration Credit Enhancements - §45Q	65
New Zero-Emission Nuclear Power Production Tax Credit - §45U	66
Clean Hydrogen Production Tax Credit - §45V	66
OBBBA Changes	66
Qualified Commercial Clean Vehicles - New §45W	66
Advanced Manufacturing Production Credit - §45X	67
OBBBA Changes	67
Clean Electricity Production Credit - §45Y	68
OBBBA Changes:	68
Clean Fuel Production Credit - §45Z	68
OBBBA Changes	69
Investment Tax Credit (ITC) - §48	69
Advanced Energy Project Credit - §48C(e)	70
Advanced Manufacturing Investment Credit - §48D	71
Clean Electricity Investment Credit - §48E	71
OBBBA Changes	71
Energy Efficient Commercial Building Deduction Termination - §179D	72
OBBBA Change	72

Business74

Business Income of Individuals - 20% Deduction - §199A	74
Limitations	74
Deduction Amount	75
Minimum Deduction	75
Qualified Trade Or Business	75
Final Regulations & Guidance	76
Corporate Tax Rate - §11(b)	77
21% Rate	78
Corporate Alternative Minimum Tax - §55	78
Reinstatement of AMT for Certain Larger Corporations - §55(b)(2)	78
Adjusted Financial Statement Income	79
Application of Tax	80
Notice 2025-27 Guidance	80
Qualified Small Business Stock Gain Exclusion - §1202	81
OBBBA Changes	81
Dependent Care Assistance - §129	81
Small Business Exceptions - §448	82
Excessive Employee Remuneration Deduction Limit - §162(m)	84
TCJA & OBBBA Changes	85
Qualified Equity Grants - §83(i)	85
TCJA Changes	86
Entertainment Activities & Facilities Deduction Repealed - §274	87
Facilities	87
Exceptions to Disallowance	88
Final Regulations on Meal & Entertainment Deductions - TD 9925	88
Transportation Fringes - §132(f) - Excludable but Not Deductible	88
Food, Beverage & Meal Expenses	89
Eating Facilities	89
Business Interest Limited - §163(j)	90
Final Regulations on Business Interest	91
Rural Real Property Loan Interest - §139L	91
Limitation on Non-corporate Losses - §461(l)	91
Disallowance Of Excess Business Losses	92
Excess Business Loss	92
Net Operating Loss Deduction - §172	93
Employer-Provided Child Care Credit - §45F	94
Family & Medical Leave Credit - §45S	95
OBBBA Changes:	96
Uniformed Services Differential Wage Credit - §45P	96
Health Care Coverage	97
Small Employer Health Insurance Credit - §45R	97
Reporting - §6051(a)(14)	98
Small Employer HRA - §9831(d)(2)	98
Notice 2018-18	98
Bonus (or Additional First-year) Depreciation - §168(k)	98
OBBBA Changes:	100
Qualified Property - §168(k)(2)	100
Depreciation Limits on Business Vehicles - §168(k)(2)(F)	100
Nonqualified Property - §168(k)(2)	101
Vehicle Depreciation "Caps" - §280F(a)	101
Vehicle Bonus (or Additional First-year) Depreciation - §168(k)	102
$25,000 SUV Limit - §179(b)(5)(A)	102
Expensing - §179	102
Eligible Property	103
Business Use & Acquisition	104
General Business Credit - §38	104
Film, TV & Live Theatrical Productions Deduction - §181	104
Estimated Tax Payments - §6654	105
Standard Mileage Rates	105
Social Security, Medicare & FUTA (or Payroll) Taxes	108
FICA - §3101, §3111 & §3121	109
Employment Tax Liability	109
SECA - §1401	110
Wage Base	110
Final Regulations on Wage Withholding & W-4 (T.D. 9924)	110
Additional Hospital Insurance Tax On Certain High-Income Individuals	110
FUTA - §3301 & §3306	111
Employee Retention Credit Audits- §3111	111
Research Credit - §41 [Form 6765]	111
Qualified Expenses	112
Base Credit Amount	112
Alternative Simplified Credit	113
Credit Toward Payroll Tax	113
Qualified Small Business	113
Amortization or Deduction of Research & Experimentation - §174	113
TCJA Changes	114
OBBBA Changes - §174A	114
Low-Income Housing Tax Credit - §42	114
Rate Freeze	114
Basis Amount	115
OBBBA Changes	115
Cafeteria Plans - §125(i)	115
Employer-Provided Educational Assistance - §127	115
Student Loans	116
Cents-per-Mile Valuation Method - §61	116
Employee Achievement Awards Exclusion Modified - §74	116
Moving Expense Reimbursement Exclusion Repealed - §132	117
Travel Per Diem Rates - §162 & §274	117
Work Opportunity Tax Credit (WOTC) Expired - §51	118
Qualified Improvement Property - §168(e)(6)(A)	118
Recovery Period & Depreciation Method - §168(b)(3)(G)	119
Qualified Improvement Property - §168(e)(6)(A)	119
Final Distribution Regulations - §385	119
Recovery Period Of Certain Farm Property - §168	120
Like-kind Exchanges Limited to Real Property - §1031	120
Real Property Defined for Like-Kind Exchanges – TD 9935	121
Inherently Permanent Structures: Buildings and Machinery	121
Inherently Permanent Structures: Structural Components	122
Unsevered Natural Products are Real Property	122
Intangible Assets as Real Property	122
Incidental Personal Property and Qualified Intermediaries	123
Domestic Production Activities Deduction (Repealed) - §199	123
Qualified Opportunity Zone - §1400Z	123
OBBBA Changes	123
New Markets Tax Credit - §45D	124
Qualified Equity Investment	124
Qualified Low-Income Community Investments	124
Qualified CDE	124
Credit Amount	125
Motorsports Entertainment Complexes (Expired) - §168(i)(15)	125
Imputed Interest Small Transaction Exception - §1274A	125
Denial of Deduction for Certain Fines - §162(f)	126
Denial of Sexual Harassment Settlement Deductions - §162(q)	126
Technical Termination Of Partnerships - §708	127
Disguised Sales - §707	127
OBBBA Changes	127
Increased Holding on Partnership Profit Interests - §1061(a)	127
Limitation On Allowance Of Partner's Share Of Loss - §704(d)	129
Built-In Loss Definition On Partnership Interest Transfer - §743	129
Foreign Person Sale of U.S. Partnership Interest - §864(c)	129
S to C Corporate Conversion Rules - §481(d)	130
S Corporation Built-In Gain Period - §1374	131
Beneficiaries Of An Electing Small Business Trust - §1361	131
Charitable Deduction for Electing Small Business Trust - §641	132
Small Life Insurance Company Deduction Repealed - §806	132
UBIT Separately Computed - §512	132
UBTI Increased by Taxable Fringe Benefits - §512	133
Repurchase of Corporate Stock - §4501	133
Inflation Reduction Act	134
Application Exceptions	134
Tax-Exempt Organization Executive Compensation Tax - §4960	135
Final Regs On Tax Exempt-Organization Executive Compensation	136
OBBBA Changes	136
Backup Withholding Percentage Reduced to 24% - §3406	136
Private College And University Investment Income - §4968	137
Final Regulations on Collegiate Net Investment Income - TD 9917	138
Information Reporting & Penalties - §6721 et al	138
Corrections Resulting in Reduced Penalties	139
Small Businesses	139
Reasonable Cause	139
Electronic Filing Requirement	139
Beneficial Ownership Information Reporting – Legal Limbo	139
Failure to File Partnership Return - §6698	140
Failure to File S Corporation Return - §6699	140
Implementation of Form 1099-K - §6050W	141
OBBA Changes	141
Forms 1099–MISC & 1099-NEC - §6041	141

Retirement Plans144

Defined Benefit Plans - §415(b)(1)(A)	144
Defined Contribution Plans - § 415(c)(1)(A)	144
Rollover Period For Plan Loan Offset Amounts Extended	144
Compensation Limit - §401, §404 & §408	144
IRA Contribution Limit - §219	145
Catch-up Contribution for IRAs- §219(b)(5)(B)	145
IRA AGI Phaseout Limits - §219	145
Individual Taxpayer is an Active Plan Participant	145
Spouse is an Active Plan Participant	145
Qualified Charitable Distributions from IRAs - §408(d)(8)(A)	146
Roth Contribution Limit - §408A(c)(2) & §219	147
PLESAs - Designated Roth accounts	147
Roth AGI Phaseout Limits - §408A(c)(3)	147
Rollovers to Roth IRAs	148
In-Plan Rollovers to Roth Accounts	148
Roth IRA Conversions for Retirement Plans	148
Special Roth IRA Recharacterization Repealed - §408A	149
§401(k), §403(b) & §457 Elective Deferral & Catch-up Limits	149
Roth Treatment of Catch-up Contributions – Secure Act §603	150
Super Catch-up for §401(k), §403(b), and §457 plans	150
"Rothification" or After-Tax Roth Contribution Rules	150
Deemed Roth contribution	150
SIMPLE Plans	151
Simplified Employee Pensions (SEPs)	151
Contribution Limit	151
Compensation Limit	151
Retirement Savings (Saver's) Contributions Credit - §25B(b)	152
Nonspouse Rollovers - §402	152
10-Year Rule	153
Final Regs on Withholding on Periodic Retirement Payments	153

Estate, GST & Gift Taxes - §2001, §2601 & §2501153

Estate Tax - §2001	153
Applicable Exemption (or Exclusion) Amount - §2010	154
Basis of Inherited Property - §1014	154
Portability - §2010(c))	154
State Death Tax Credit Replaced with Deduction - §2058	154
Final Regulations on Estate and Trust Deductions - TD9918	155
Real Property Valuation - §2032A	155
Interest on Estate Tax Installments - §6166 & §6601	155
Estate & Trust Income Tax Rates - §1(e)	155
Consistent Basis Reporting Between Estate & Heirs - §6035	156
GST Tax - §2601	156
Rates	156
Applicable Exemption Amount for GST - §2010	157
Gift Tax - §2501	157
Applicable Exemption Amount for Gift Tax - §2505	157
Annual Exclusion for Gifts - §2503	157
Noncitizen Spouse Exclusion - §2523(i)(1)	157
Notice of Large Gifts Received from Foreign Persons - §6039F	158

Course Details

Author: Danny Santucci, J.D.

Danny earned his Bachelor of Arts in Political Science from the University of California at Irvine in 1969. He received his Juris Doctorate from Boalt Hall School of Law, University of California at Berkeley in 1972, at which time he began practice as a tax attorney in Southern California. His legal career was initiated with the business and litigation firm of Edwards, Edwards and Ashton. Later he joined the Century City entertainment firm of Bushkin, Gaims, Gaines & Jonas working for many well-known celebrities. In 1980, Danny established the law firm of Santucci, Potter and Leanders, in Irvine, California. With increasing lecture and writing commitments, Danny went into sole practice in 1995. His practice emphasizes business taxation, real estate law and estate planning. Danny has been an officer and active member in various organizations including the Glendale Bar Association, Century City Bar Association, Orange County and Los Angeles County Bar Associations, California State Bar Association, Toastmasters and Lions Club. He also avidly supports the American Association for the Advancement of Science. He has been admitted to practice before all California and federal courts including the United States Tax Court and the United States Supreme Court. Serving as a lecturer for the Continuing Education of the Bar of California, Golden Gate University, and numerous state C.P.A. societies, Danny teaches a variety of tax, business and real estate courses. Danny has been in demand all across the country as a speaker for all levels of professional and civic organizations and numerous major seminar circuits. Danny spoke to over 2,000 people per month and traveled more than 150,000 miles annually. In 2015, he withdrew from the lecture circuit to devote himself to tax research and writing. The author of numerous texts, he is listed in "Who’s Who in Creative Real Estate" and is admitted to the American Exchangor’s Hall of Fame.

Publication/Revision Date: 1/9/2026

Course Exam Questions (online): 30 (multiple-choice)

Program Delivery Method: Self-Study (NASBA QAS Self-Study)

Available Formats of Course Text: Downloadable PDF, Printed/Mailed

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None
CFP®	Overview	None	None
EA/OTRP	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors I.D.: 107615

CFP Board Sponsor I.D.: 1008 — Course I.D.: 345037

IRS Qualified Sponsor I.D.: FWKKO — Course I.D.: FWKK0-U-00729-26-S

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Recognize the various issues affected by inflation and recent tax law developments, especially as they relate to individual tax brackets, exemptions & deductions, the AMT, the child tax credit, alimony, HSAs, education plans, and energy credits.
Determine the key business tax issues affected by inflation adjustments and recent legislative changes, including corporate tax rates, entertainment expenses, tax credits & deductions, bonus depreciation, expensing, standard mileage rates, employment taxation, low-income housing tax credit, §1031 exchange property, partnership taxation, insurance deductions, excessive compensation, and investment income.
Specify differences between various retirement plans, including inflation-adjusted contribution limits and phaseout limits, and determine estate taxes by identifying trust income tax rates and determining applicable exclusion amounts.

Online Book, Online Exam

$54.00

Hardcopy Book, Online Exam

$69.00