In recent years, the financial landscape has seen tremendous shifts, with rising participation in the gig economy and increased online sales activities. Accompanying these changes is the heightened need for transparent income reporting. One tool designed to aid in this pursuit is Form 1099-K, which has become a crucial part of tax documentation for many individuals and businesses.

As we navigate the opening weeks of the 2026 tax filing season here in Coral Gables, the initial data from the IRS tells an interesting story. We are seeing a distinct upward trend in average refunds, a shift that is catching the eye of taxpayers and financial professionals alike. Currently, the average refund sits at $2,476, up from $2,169 at this time in 2025. While this 14.2% increase is welcome news for household cash flow, it hasn't quite hit the $1,000 surplus that some policymakers originally projected.

However, it is vital to remember that we are still in the early innings. As more complex returns are processed, these averages will likely shift. The current boost is largely attributed to the sweeping changes introduced by the One Big Beautiful Bill Act (OBBBA), and understanding these provisions is key to maximizing your outcome this year.

New Deductions Driving the Numbers

The OBBBA has introduced a suite of specific deductions and credits designed to lower tax liability for working families and individuals. At NR CPAs & Business Advisors, we are closely monitoring how these apply to our clients:

• Overtime Premium Pay Deduction: The Act now allows for the deduction of the "half" component of "time-and-a-half" pay mandated by the FLSA. This is capped at $12,500 for single filers and $25,000 for married couples filing jointly.
• Tips Tax Deduction: For those in designated service occupations, up to $25,000 of "qualified tips" can now be deducted. Note that for both overtime and tips, benefits phase out starting at a Modified Adjusted Gross Income (MAGI) of $150,000 ($300,000 for joint filers) and disappear completely at $275,000 ($550,000 for joint filers).
• Auto Loan Interest Deduction: If you purchased a new, U.S.-assembled vehicle for personal use after 2024, you may deduct up to $10,000 in loan interest. This applies whether you itemize or take the standard deduction, provided the loan is secured by the vehicle and not from a friend or relative. Income phase-outs apply here as well, starting at $100,000 MAGI ($200,000 for joint filers).
• Enhanced Standard Deductions: The standard deduction has jumped to $31,500 for married couples filing jointly and $15,750 for singles. Additionally, a new "Senior Bonus" offers an extra $6,000 for taxpayers aged 65+, subject to income limits.
• Expanded Child Tax Credit: The credit has increased to $2,200 per child. This benefit remains available for joint filers with income up to $400,000.
• Increased SALT Limit: A significant change for many homeowners, the State and Local Tax (SALT) deduction cap has been raised from $10,000 to $40,000 ($20,000 for married filing separately), though high earners (MAGI over $500,000) will see this cap phase back down.

Behind the Scenes: Withholding and Processing

Beyond the legislation, other mechanical factors are influencing refund sizes. Because many of these tax cuts were enacted mid-year, the IRS withholding tables were not immediately updated to reflect the lower tax obligations. Consequently, many employees had more tax withheld from their paychecks than necessary, resulting in larger refunds now.

Furthermore, inflation adjustments to tax brackets are helping to prevent "bracket creep," ensuring that cost-of-living raises don't inadvertently push taxpayers into higher tax rates. We also note that a portion of the Adoption Tax Credit (up to $5,000) is now refundable, meaning it can be paid out even if no tax is owed.

Navigating IRS Challenges

While the potential for refunds is positive, the logistics of the 2026 season present hurdles. The IRS is currently operating with a reduced workforce and a lingering backlog of returns. We have observed a slight dip in processing speeds compared to previous years. This makes accuracy on your initial return more critical than ever to avoid delays.

If you are hesitant to file because the changes seem overwhelming, do not let that delay your refund. Led by Nischay Rawal, our team at NR CPAs & Business Advisors is fully versed in every nuance of the OBBBA. We combine the depth of a large firm with the agility of a boutique partner to ensure you capture every credit you are owed. Contact us today to ensure your 2025 return is accurate, compliant, and optimized.

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A new tax-advantaged savings vehicle is now available for children under 18: Trump Accounts, established under the One Big Beautiful Bill Act (OBBBA).

Here’s what matters:

This may be one of the earliest long-term investing opportunities ever created for American children.

And when it comes to building wealth, time is the most powerful variable.

Let’s break it down clearly — what it is, who qualifies, how it grows, and whether it belongs in your family’s financial plan.

What Is a Trump Account?

A Trump Account is a tax-advantaged investment account opened for a child under age 18.

Think of it as a “starter retirement account” that:

• Can be opened for any U.S. citizen child under 18 with a valid Social Security number
• Allows up to $5,000 per year in after-tax contributions (indexed for inflation)
• May qualify for a $1,000 one-time government seed contribution
• Must be invested in low-cost, broad U.S. equity index funds
• Automatically converts into a traditional IRA at age 18

This is not a college-only account.
It’s not a savings account.

It’s designed for long-term compounding.

The $1,000 Government Seed Contribution (2025–2028 Birth Window)

Children born between January 1, 2025 and December 31, 2028 may qualify for a one-time $1,000 federal contribution.

Key details:

• It is a one-time deposit
• It does not count toward the $5,000 annual limit
• It grows tax-deferred
• It is taxed as ordinary income when withdrawn
• Parents must elect the account by filing Form 4547

No election = no seed contribution.

Why Starting at Birth Changes the Math

Let’s talk about compounding.

Assume:

• $1,000 government seed at birth
• $5,000 contributed annually from birth to age 17
• 7% average annual return
• No additional contributions after age 18

By age 18, the account could potentially grow to approximately $175,000–$190,000.

If left untouched and continuing to grow at the same assumed rate:

• Age 40: ≈ $600,000+
• Age 50: ≈ $1 million
• Age 60: ≈ $2 million

That’s the impact of starting at age zero instead of age thirty.

Important Note on Projections

The examples above are for illustrative purposes only. They assume a hypothetical long-term average rate of return and do not predict or guarantee future market performance. Investment results will vary, and markets fluctuate.

These figures are shown solely to demonstrate the power of long-term compounding within a tax-advantaged account.

How Trump Accounts Are Taxed

Trump Accounts combine elements of both Roth and traditional IRAs.

Before Age 18

• No withdrawals permitted (except in limited situations such as death or disability)

After Age 18
The account converts into a traditional IRA.

Withdrawals include:

• After-tax contributions→withdrawn tax-free
• Government seed, employer contributions, and investment earnings→taxed as ordinary income

Withdrawals before age 59½ may incur a 10% penalty unless an exception applies.

Penalty Exceptions After Age 18

The 10% early withdrawal penalty may be waived for:

• Qualified higher education expenses
• First-time home purchase (up to $10,000)
• Birth or adoption expenses (up to $5,000)
• Certain medical or disability-related expenses

Ordinary income tax still applies to pre-tax portions.

Trump Account vs. 529 Plan: What’s the Difference?

Families often ask how Trump Accounts compare to 529 college savings plans.

529 Plan

• Designed specifically for education
• Tax-free withdrawals for qualified education expenses
• Limited flexibility for non-education use

Trump Account

• Not limited to education
• Converts to a traditional IRA at 18
• Designed primarily for lifetime retirement compounding
• Allows penalty exceptions for education and first home use

In many cases, this isn’t an either/or decision.

A 529 may fund college.

A Trump Account may quietly build long-term retirement security in the background.

Employer Contributions: A Hidden Opportunity

Employers may contribute up to $2,500 per year toward an employee’s child’s Trump Account.

• Counts toward the $5,000 annual cap
• Deductible to the employer
• Not taxable to the employee

This could become an increasingly valuable workplace benefit.

Risks and Long-Term Considerations

As with any investment strategy:

• Market returns are not guaranteed.
• Tax laws can change in the future.
• Withdrawals of pre-tax portions are taxable.

Additionally, long-term retirement systems face demographic and funding pressures, making early private savings more important than ever.

Starting early isn’t about politics.

It’s about mathematics and time.

How to Open a Trump Account

To establish a Trump Account, Form 4547 must be filed to make the election.

For children born between January 1, 2025 and December 31, 2028, the $1,000 government seed contribution must be specifically authorized on the form.

Accounts cannot begin accepting contributions until July 4, 2026.

If this is something you would like to consider, let us know during your next tax appointment so we can review eligibility and handle the filing properly.

The Bottom Line

A child who enters adulthood with a six-figure investment account has options.

Options to:

• Let it grow into retirement wealth
• Help fund education
• Assist with a first home
• Or simply start adulthood ahead

That’s not about politics.

It’s about giving your child a measurable financial head start.

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If you forgot to file your 2022 tax return, the window to claim your money is rapidly closing. The IRS estimates that over a million taxpayers leave approximately $1.5 billion on the table annually due to unfiled returns. For the 2022 tax year, you have a strict three-year deadline to act. If your paperwork is not properly submitted by April 15, 2026, your unclaimed tax refund becomes the permanent property of the U.S. Treasury.

What You Lose By Ignoring Unfiled Returns

At NR CPAs in Coral Gables, we see taxpayers miss out on more than standard wage withholdings. Overlooking a past-due return often means forfeiting valuable refundable credits. Low-to-moderate-income earners might miss out on the Earned Income Tax Credit (EITC), a vital financial lifeline. Additionally, families could lose access to the refundable portions of the Child Tax Credit or valuable education credits.

Strict Paper Filing Rules for 2022 Returns

Filing a late tax return to claim a refund does not incur a failure-to-file penalty, but the logistics require precision. You cannot electronically file a 2022 return at this stage. It must be printed, mailed, and officially postmarked by the April 15, 2026 deadline. Do not simply drop it in a blue USPS bin on the final day, as it may not receive a timely postmark. We highly recommend taking it directly to the postal counter early to secure certified proof of mailing.

Keep in mind that the IRS will hold your 2022 payout if your 2020 or 2021 returns remain unfiled. Your funds may also be redirected to offset existing federal debts, unpaid child support, or defaulted student loans.

Let Our Coral Gables Team Help

Led by Nischay Rawal, our team brings the depth of a large firm and the personalized agility of a boutique practice to resolve your unfiled tax returns. Time is required to gather documents, prepare the paperwork, and ensure a certified mailing. Contact NR CPAs & Business Advisors today to secure the refund you rightfully earned.

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You rely on your team to keep your operations running smoothly. Most of the time, that confidence is well-placed. However, running a company based on trust without establishing proper financial controls leaves you dangerously exposed.

We routinely see cases where long-time, trusted employees manipulate payroll or doctor company records to siphon hundreds of thousands of dollars. These are rarely massive corporations; they are often local small businesses right here in South Florida. Internal theft does not require a criminal mastermind. It merely takes access, opportunity, and weak oversight.

Why Small Businesses Carry the Highest Risk

Large enterprises utilize multiple layers of review. Small businesses usually operate leaner. A single employee might enter daily transactions, reconcile bank accounts, process payroll, and approve vendor payments. While this setup feels efficient, concentrating that much financial authority makes detecting discrepancies incredibly difficult. Owners are not careless; they are just busy running their companies.

Recognizing the Most Common Fraud Schemes

Understanding the mechanics of financial theft is your first line of defense. Pay attention to these frequent tactics:

• Check Tampering: Unauthorized checks written to personal accounts or disguised as legitimate vendor payments.
• Expense Fraud: Inflated reimbursements, duplicate submissions, or fake receipts.
• Ghost Employees: Non-existent staff added to the payroll system to funnel compensation.
• Digital Transfers: Unauthorized ACH or wire transfers executed without dual-approval protocols.

Red Flags You Cannot Afford to Ignore

Financial manipulation rarely begins with massive sums. Watch for subtle shifts, such as an employee who outright refuses to take a vacation, acts defensive when questioned about financial records, or displays lifestyle changes far exceeding their known compensation. If your bank reconciliations are consistently delayed month after month, consider that a major warning sign.

Implementing Practical Internal Controls

At NR CPAs & Business Advisors, we emphasize that preventing fraud is about structure, not suspicion. Here are several safeguards that effectively reduce your risk:

1. Separate Financial Duties
Never let one individual control an entire financial cycle. If one person enters transactions, another must review them, and a third should authorize payments.

2. Review Bank Statements Directly
Have your original bank statements delivered straight to you before anyone else touches them. A quick five-minute scan of cleared checks and ACH payments can reveal suspicious payees before the data is altered in your accounting software.

3. Enforce Timely Reconciliations
Ensure bank and credit card accounts are reconciled every single month. Timely review catches small anomalies before they become catastrophic losses.

4. Require Dual Approvals
Wire transfers are fast and notoriously difficult to reverse. Mandate two separate approvals for outbound wires and set up instant alerts for transfers exceeding a specific dollar amount.

Partner With a Coral Gables Financial Expert

Sometimes, the best defense is an independent set of eyes. A periodic external review provides an objective layer of oversight to spot patterns internal staff might miss. Internal controls do more than protect your cash flow; they protect your good employees from unwarranted suspicion.

If you are unsure whether your current bookkeeping practices offer enough protection, our team in Coral Gables is here to help. Led by Nischay Rawal, NR CPAs & Business Advisors offers the depth of a large firm with the agility of a boutique practice. Whether you need an internal controls audit, fractional CFO services, or comprehensive business consulting, contact us today to evaluate your financial setup and secure the future of your business.

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Navigating 2026 Charitable Tax Deductions

Significant updates to philanthropic tax planning are on the horizon. Starting in 2026, the Omnibus Budget Reconciliation Act of 2021 (OBBBA) reshapes how charitable contributions are treated.

For taxpayers who itemize, a new floor requires donations to exceed 0.5% of your Adjusted Gross Income (AGI) before yielding tax benefits. Conversely, if you take the standard deduction, the OBBBA introduces a cash contribution deduction up to $1,000 for single filers and $2,000 for joint returns.

Tax Planning in Coral Gables

Led by Nischay Rawal, our team at NR CPAs & Business Advisors helps Florida residents adapt to these shifting rules. Reach out today to align your charitable goals with smart tax strategies.

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