Tax rules and IRS guidance change quickly. Below are five timely updates for individuals—written in plain English, with a quick “what to do next” for each item.
1) Are your medical expenses deductible?
You may be able to claim a tax deduction for unreimbursed medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). Eligible expenses can include medical and dental care, prescription medications and insulin, medical equipment and supplies, certain health insurance premiums, and transportation necessary to receive medical care. Expenses paid for yourself, your spouse, or your dependents may qualify.
What to do next: This is an itemized deduction, so it generally only helps if you itemize on Schedule A (Form 1040) instead of taking the standard deduction. Keep organized records and confirm what qualifies before year-end.
2) Disaster tax relief bill advances
On Aug. 7, the U.S. Senate passed the Doug LaMalfa Federal Disaster Tax Relief Certainty Act. Once signed into law, recipients of qualified wildfire relief may be able to exclude those payments from taxable gross income. Qualified payments cover wildfire-related losses, expenses, and damages. This relief would apply to disasters declared 2015 through 2026, regardless of when payments are received.
Once signed, the law would also allow individuals with qualified net disaster losses in federally declared zones to deduct the net amount of personal casualty loss. This provision would apply to disasters starting Dec. 28, 2019, through Dec. 31, 2026.
What to do next: If you received wildfire-related payments or had disaster losses, keep documentation and confirm whether your event qualifies once the law is finalized.
3) New scam targets crypto holders
Cryptocurrency holders should be alert for a new IRS impersonation scam. Fraudsters are mailing fake IRS letters directing recipients to a bogus “Digital Asset Compliance Portal.” The letters instruct recipients to scan a QR code that leads to a fraudulent website designed to look like IRS.gov. The site may ask for personal information, cryptocurrency wallet details, or exchange account credentials that criminals can use to steal identities or digital assets.
What to do next: If you receive one of these letters, don’t respond and don’t scan the QR code. Verify any IRS communication independently before taking action.
4) Saver’s Match program rules take shape
The IRS issued Notice 2026-48 outlining anticipated rules for the Saver’s Match program. Signed into law as part of the SECURE 2.0 Act of 2022, the program will apply to tax years beginning after Dec. 31, 2026. Eligible low- and moderate-income taxpayers may receive a federal match of up to 50% on the first $2,000 of contributions made to qualified employer-sponsored retirement plan or IRA (up to $1,000 annually). Taxpayers generally will claim the match on their tax return.
Saver’s Match will replace the Saver’s Credit for qualifying retirement contributions, though the credit will remain available for ABLE account contributions.
What to do next: If you may qualify, retirement contributions could become even more valuable starting in 2027. Consider building this into your longer-term savings plan.
5) What happens to your IRA in a divorce?
Divorce can have important IRA tax consequences. If you’re divorced or legally separated by year end, you generally can’t deduct contributions you make to your former spouse’s traditional IRA. Taxable alimony and separate maintenance payments typically count as compensation for IRA contribution limit purposes. To divide IRA assets tax-free, the transfer generally must be made under a divorce or separation decree as an IRA-trustee-to-IRA-trustee transfer (or transfer incident to divorce). Withdrawing funds from your own IRA to pay a divorce settlement may trigger income tax and, if you’re under age 59½, may be subject to a 10% early distribution penalty.
What to do next: Coordinate early with your tax advisor and attorney so IRA transfers are structured correctly and avoid unnecessary tax or penalties.
Bottom line
These topics range from deductions to fraud prevention to retirement planning. If any of these items apply to you—especially medical deductions, disaster relief payments, retirement contributions, or IRA issues in divorce—Hedman Partners LLP can help you understand what’s relevant and how to document it properly. Visit our Tax Center for more resources: https://www.hedmanpartners.com/tax-center/