Tax Law Office of Luis E. Vasquez

04/28/2026

💰 In 2026, the 12% tax bracket for married filing jointly covers income up to $100,800. For a single filer, it covers income up to $50,400. That difference alone can push a surviving spouse into the 22% bracket on the same income the couple was paying 12% on.

The standard deduction drops from $32,200 to $16,100. Pensions, RMDs, and investment income do not change when a spouse dies, but the deduction shielding that income from tax is nearly halved.

Social Security taxation thresholds have not been adjusted since 1984. For a joint filer, combined income above $32,000 triggers taxation of benefits. For a single filer, that threshold is $25,000. A surviving spouse with a pension and one Social Security check can cross the 85% taxable threshold faster than the couple did with two checks and higher thresholds.

The surviving spouse can file jointly in the year of death. A surviving spouse with a dependent child may also qualify for qualifying surviving spouse status for up to two additional years, which preserves joint-filer brackets and the higher standard deduction.

IRMAA surcharges are based on income from two years prior. A surviving spouse may not see the Medicare premium increase until the second or third year after the death, when the return is filed as single against the prior year's income. The 2026 IRMAA threshold is $109,000 for single filers versus $218,000 for joint filers.

Roth conversions before a spouse dies can reduce the surviving spouse's future RMDs and taxable income in single-filer years. The year of death is often the last year the couple can convert at joint-filer brackets.

The OBBBA added a senior tax deduction of up to $6,000 for taxpayers 65 and older for 2025 through 2028, but it phases out for single filers with modified AGI over $75,000, a threshold many surviving spouses will exceed.

04/15/2026

Its April 15th and its the end of the day. We are outta here!

04/15/2026

📊 Gifts you receive are not taxable income regardless of amount. The $19,000 annual exclusion determines whether the giver must file a gift tax return (Form 709).

Even above $19,000, no gift tax is owed until the giver exceeds the $15 million lifetime exemption. The recipient never owes income tax on a gift.

Inheritances now includes the caveat that inherited retirement accounts are taxed on withdrawal. An inherited Traditional IRA is taxable as ordinary income when distributions are taken. An inherited Roth IRA is generally tax-free if the original account met the 5-year rule.

Tips and overtime are now correctly framed as federal income tax deductions under the OBBBA, not full exclusions. The income is still reported, still subject to Social Security and Medicare payroll taxes, and still potentially subject to state income tax. The deduction applies to federal income tax only, for 2025 through 2028.

Social Security was the most-asked-about omission across all three versions of this post. It is not on the list because it is not fully tax-free. Up to 85% of Social Security benefits can be taxed depending on combined income. Taxation begins at $25,000 combined income for single filers and $32,000 for married filing jointly.

The 0% long-term capital gains rate applies based on taxable income, not gross income. The 2026 standard deduction ($16,100 single / $32,200 MFJ) reduces your AGI before the threshold is applied.

VA disability benefits have been excluded from federal income tax for decades. The prior version incorrectly labeled this as new.

04/15/2026

In case all the number-crunching makes you want a snack.

04/15/2026

With just one week left in the tax filing season, the IRS has finalized regulations for the new, temporary, $25,000 tip deduction, with more examples of who qualifies.

04/13/2026

Three day countdown for the end of Tax Season. If you are a current client and need an extension you must contact us.

03/26/2026

Yes you can clam this investment account for your newborn even if you file an extension.

Michael Dell just pledged $6.25 BILLION to fund investment accounts for kids.

And every parent needs to understand what's actually happening here.

These are called Trump Accounts. They were created by federal law as part of the One Big Beautiful Bill Act. Here's how they work:

• Every child born between 2025 and 2028 gets a $1,000 seed deposit from the U.S. Treasury, invested in low-cost U.S. stock index funds from day one
• Families can add up to $5,000 per year starting July 2026, with no earned income requirement
• The account is tax-deferred and locks until age 18
• At 18 it converts to a traditional IRA the child controls
• Funds can be used for college, a home, or retirement savings

Now here's where it gets interesting.

A child who receives the $1,000 deposit plus maximum annual contributions could end up with more than $191,000 by the time they turn 18.

With maximum contributions and strong returns, the account could be worth more than $300,000 at 18 and potentially over $1 million by age 28.

To be fair, those projections assume consistent contributions AND solid market returns over 18 years. Real life is messier than that. Some financial advisors note these figures reflect best-case outcomes, not guarantees.

But even the conservative scenario matters. With no additional contributions at all, the $1,000 seed deposit alone could grow to around $5,800 by age 18 based on medium return projections.

Free money that compounds for 18 years is still free money.

Dell's $6.25 billion commitment funds $250 deposits for 25 million kids age 10 and under in zip codes with average household income under $150,000. Uber, Mastercard, BlackRock, and Visa have also committed to participate.

To claim the $1,000 seed deposit, file IRS Form 4547 with your 2025 tax return or register at trumpaccounts.gov. Accounts go live July 5, 2026.

This is the kind of head start most of us never got. Don't let the paperwork be the reason your kid misses it.

03/26/2026

More than 1.3 million taxpayers may be owed refund for the 2022 tax year. The window to claim that money closes on April 15, 2026.

03/26/2026

The has published Schedule 1-A along with updated instructions taxpayers will use with their 2025 federal tax returns to claim new deductions created by the One, Big, Beautiful Bill. This new schedule explains how to calculate and claim deductions that may help reduce your taxable income, including:
✅ Deduction for qualified tips earned on the job
✅ Deduction for overtime compensation
✅ Deduction for car loan interest on eligible vehicles
✅ Enhanced deduction for seniors (age 65+)

🔗Read more: https://ow.ly/vA2J50YoIfg

03/26/2026

It is best to have a professional do your tax return.

Being anxious at tax time is normal but a simple slip-up can lead to a delayed refund, penalty fees and increased scrutiny from the IRS.

03/15/2026

Corporation tax returns are due on Monday. If you are a current client with a Corp please contact us for an extension.