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The Best Ways to Create a Budget You Can Live By
Personal Finance
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It takes little more than a passing understanding of the United States economy to understand that the next recession might be right around the corner. In fact, people have already begun to talk about how it may be arriving sooner rather than later. Recent economic forecasts predict that the economy will not only slow down across 2019, but it will continue to do so into 2020... pointing to the fact that trouble may be just over the horizon. If you’re worried about the next great recession and are still haunted by memories of 2007 and 2008, you have every right to be. But you also need to learn from the mistakes of the past. Things got so bad the last time because many, many people were caught off-guard. Based on that, your course of action is clear: You need to start preparing for this possibility, and you need to start doing so today. This means getting real about a personal or family budget, which, thankfully, is a lot more straightforward than you might have thought. Your Keys to Building a Better Budget To build the most accurate and forward-thinking budget that you can, you first need actionable information to work from. That means figuring out your after-tax income, so you know how much money you’re talking about. If you get a regular paycheck from your employer, for example, sit down and consider not only your taxes but also automatic deductions for things like health and life insurance and your 401(k). Do this for every member of your household and add all those totals together to get a better idea of the total amount of money you’re actually working with. At the same time, you also need to get an accurate idea of what your monthly expenses look like. For the best results, don’t consider your spending habits just yet this early in the process. Instead, simply list everything that you ‒ and your loved ones ‒ spend money on to maintain the lifestyle you’ve grown accustomed to. List absolutely everything, including not only the essentials like utilities but also streaming service subscriptions, the amount of money you spend eating out in a month, and more. Don’t hold anything back ‒ it won’t benefit you at all to pretend like you don’t spend $50 a month on coffee runs if you absolutely know that you do. If you need to, go through your credit card statements. A variety of smartphone apps are available that will help you get a granular look at your expenses moving forward.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
