December 27, 2025

Prepare for Upcoming Tax Law Changes in Louisville

Louisville, December 27, 2025

As the tax season approaches, taxpayers in Louisville are being urged to prepare for significant changes in tax laws coming in 2026. These modifications could impact returns, making it crucial for individuals and small business owners to get organized and informed about new deductions and credits. Local experts emphasize early preparation to ensure smooth filing processes and maximize potential benefits. Understanding these updates is essential for financial planning, especially as some deductions and incentives are set to expire soon.

Louisville, KY – Prepare for Upcoming Tax Law Changes in 2026

As the 2026 tax season approaches, local experts in Louisville are urging taxpayers to kickstart their preparations early. With significant changes on the horizon, these updates could potentially alter returns, making it essential for individuals and small business owners alike to stay informed. The Internal Revenue Service (IRS) has emphasized the importance of organizing financial records now to facilitate a smooth filing process while maximizing the benefits of new deductions and credits.

This proactive approach mirrors the resilience and innovative spirit of Kentucky entrepreneurs who continuously adapt to market shifts. As federal reforms aim to simplify tax codes and encourage economic growth, taxpayers can find opportunities for savings and strategic planning by familiarizing themselves with these upcoming changes.

Key Tax Law Changes for 2026

The One Big Beautiful Bill Act (OBBBA) introduces several noteworthy alterations to the tax landscape:

New Tax Deductions: Taxpayers can now take advantage of deductions including no tax on tips, overtime, and car loan interest. Additionally, a temporary deduction for seniors will be available.
Standard Deduction Increases: The standard deduction for married couples filing jointly will be $30,000 for 2025, which is an increase of $800 from the prior year. For single filers, the standard deduction will rise by $400 to $15,000.
Expiration of Clean Energy Tax Incentives: Important clean energy tax incentives, such as the Residential Clean Energy Credit and the New Clean Vehicle Credit, are set to expire after December 31, 2025.

IRS Recommendations for Early Preparation

The IRS is stressing that early tax preparation is integral to filing complete and accurate returns. Errors in submissions can lead to delays in refunds, which can be particularly challenging for small businesses relying on cash flow. Organizing records and being fully aware of new legislation is vital as taxpayers gear up for the changes impacting federal taxes, credits, and deductions.

Additional Considerations

Taxpayers should also note the IRS’s transition to phase out paper refund checks starting late 2025, shifting towards direct deposit to streamline the refund process. This move aims to modernize the system and reduce inefficiencies—an approach that aligns well with the overall trend towards deregulation and straightforward business practices that can ultimately benefit the Kentucky economy.

FAQ

What are the key tax law changes for 2026?

The One Big Beautiful Bill Act (OBBBA) introduces several notable changes, including new tax deductions such as no tax on tips, overtime, and car loan interest, as well as a temporary deduction for seniors. Additionally, the standard deduction for 2025 is $30,000 for married couples filing jointly, an increase of $800 from the previous year. For single filers, it increased by $400 to $15,000. Several clean energy tax incentives, including the Residential Clean Energy Credit and the New Clean Vehicle Credit, are set to expire after December 31, 2025.

Why is early tax preparation important?

Early preparation helps taxpayers file complete and accurate returns, avoiding errors that could delay refunds. Organizing tax records now is crucial, especially with the implementation of new legislation affecting federal taxes, credits, and deductions.

How will refunds be issued starting late 2025?

The IRS is phasing out paper refund checks starting late 2025, with most refunds now arriving via direct deposit.

Key Features of the Upcoming Tax Changes

Feature	Description
New Tax Deductions	No tax on tips, overtime, and car loan interest; temporary deduction for seniors.
Standard Deduction Increase	Standard deduction for 2025 is $30,000 for married couples filing jointly, an increase of $800 from the previous year; for single filers, it increased by $400 to $15,000.
Expiration of Clean Energy Tax Incentives	Several clean energy tax incentives, including the Residential Clean Energy Credit and the New Clean Vehicle Credit, are set to expire after December 31, 2025.
Phase-Out of Paper Refund Checks	IRS is phasing out paper refund checks starting late 2025; most refunds will arrive via direct deposit.

As we prepare for the 2026 tax season, it’s vital for both individuals and Louisville small business owners to stay ahead of these tax law changes. By organizing records and understanding new deductions, taxpayers can not only ease their filing process but also capitalize on potential savings. Supporting local businesses and embracing innovation today can help foster economic growth in Kentucky for years to come.