From the AICPA Tax Advisor

The IRS on Friday released a draft of Schedule 1-A (Form 1040), Additional Deductions, which includes sections for calculating four deductions allowed under H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act, on a single form.

The form sections lay out the calculations of the deductions for tips, overtime, and car loan interest, as well as the calculation of the enhanced senior deduction. Taxpayers calculate the amount of the deductions that apply to them, add the amounts together, and include the total on line 13b of their Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Income Tax Return for Seniors; or line 13c of Form 1040-NR, U.S. Nonresident Alien Income Tax Return.

The form also includes a section for calculating the taxpayer’s modified adjusted gross income amount that is used in calculating the four deductions.  It’s an efficient way for the IRS to handle four deductions that expire after 2028, said Annette Nellen, Esq., CPA, CGMA, professor in the Department of Accounting and Finance at San José State University and a past chair of the AICPA Tax Executive Committee. “That just makes a little bit neater because these are temporary provisions in there for four years,” Nellen said. “Instead of creating four new forms, … they just put them all on one. From the IRS perspective, it’s not just what’s easy for us (taxpayers), but they’ve got to program their system to take all of this as well.”

While the Schedule 1-A draft seems to be designed to make filing taxes easier, the provisions of H.R. 1 regarding these deductions have restrictions and phaseouts that may cause some taxpayers who think they get the deduction to not qualify, she said. For example, taxpayers can deduct overtime required by the federal Fair Labor Standards Act only, but overtime required only by a state law could not be deducted, she said.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.

Treasury posted a preliminary list of occupations that customarily and regularly receive tips for purposes of the “no tax on tips” provision of H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act.  The official proposed list of such occupations will be part of forthcoming proposed regulations. The IRS anticipates that the official proposed list will be substantially the same as the preliminary list.

In addition to requiring that qualified tips must be received in an occupation that customarily and regularly received tips on or before Dec. 31, 2024, under the “no tax on tips” provision, tips do not qualify for the deduction if they are received in the course of certain specified trades or businesses — including the fields of health, performing arts, and athletics.

The provision in H.R. 1 allows workers in certain occupations to claim the deduction of up to $25,000 for qualified tips from tax year 2025 through tax year 2028.

08 September 2025
Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is reissuing a modified Geographic Targeting Order (GTO) to combat illicit cartel and other criminal activity, including money laundering, along the southwest border of the United States. As modified, the GTO requires certain money services businesses to file Currency Transaction Reports with FinCEN for cash transactions between $1,000 and $10,000 occurring in specific counties and ZIP codes. The terms of this GTO are effective September 10, 2025, through March 6, 2026.

News Release: https://www.fincen.gov/news/news-releases/fincen-issues-modified-southwest-border-geographic-targeting-order

Copy of the GTO: https://www.fincen.gov/system/files/2025-09/September-2025-SWB-GTO-Order-FINAL-508C.pdf

Frequently Asked Questions: https://www.fincen.gov/system/files/2025-09/FAQs-FINAL-508C.pdf

DRAFT 2026 FORM W-2 INCLUDES BOES & CODES FOR TIPS & OVERTIME!!

 

A draft version of Form W-2, Wage and Tax Statement, for 2026 includes boxes and codes for reporting qualified tips and qualified overtime compensation that can be deducted temporarily under the provisions of H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act.  For more information,see the file labeld 2026 draft w2

The AICPA has become aware of the following from members’ communication and have passed this information on to the Internal Revenue Service:

IRS CP504B erroneous intent to levy and CP161 erroneous notices to trusts on Form 1041, individuals on Form 1040 and corporations on Form 1120 on correctly paid estimated payments based on 100% of prior year liability

For more information, see the file labeled Erroneous IRS Notices Update. 

Issuance of a Geographic Targeting Order Imposing Additional Recordkeeping and Reporting Requirements on Certain Money Services Businesses Along the Southwest Border

FinCEN is issuing notice of a Geographic Targeting Order, requiring certain money services businesses along the southwest border of the United States to report and retain records of transactions in currency of more than $200 but not more than $10,000, and to verify the identity of persons presenting such transactions.

For more information:  https://www.federalregister.gov/documents/2025/03/14/2025-04099/issuance-of-a-geographic-targeting-order-imposing-additional-recordkeeping-and-reporting

FAQs Released for FinCEN Geographic Targeting Order Impacting California and Texas Border Region Money Services Businesses

The GTO dramatically lowered the Currency Transaction Report (CTR) threshold to just $200 for MSBs operating in specific ZIP codes along the southwest border. This represents a substantial change from the standard $10,000 CTR reporting requirement that most financial institutions follow.

 

For tax professionals in the affected zip codes, this order specifically impacts clients operating in:

1. Imperial County, California: 92231, 92249, 92281, 92283;
2. San Diego County California: 91910, 92101, 92113, 92117, 92126, 92154, 92173;
3. Cameron County, Texas: 78520, 78521;
4. El Paso County, Texas: 79901, 79902, 79903, 79905, 79907, 79935;
5. Hidalgo County, Texas: 78503, 78557, 78572, 78577, 78596;
6. Maverick County, Texas: 78852; and
7. Webb County, Texas: 78040, 78041, 78043, 78045, 78046.

The Following Types Of Businesses Are Likely To Be Affected:

 

 Money Services Businesses (MSBs) specifically mentioned in the order:

• Currency exchangers/money exchangers
• Check cashers
• Money transfer businesses (like Western Union, MoneyGram)
• Money order issuers and sellers
• Prepaid access providers and sellers

Other financial service providers in the affected ZIP codes:

• Convenience stores offering money transfer services
• Grocery stores with check cashing or money order
• services
• Small independent financial service providers
• obile payment service providers with cash-in/cash-out capabilities

Tax professionals with clients in the affected areas should immediately begin preparing for implementation. The drastically lower reporting threshold will likely result in a significant increase in filing requirements for MSBs in these regions. Questions about the GTO should be directed to FinCEN through their website.

Executive Order Mandating Electronic Federal Tax Refunds and Payments for Taxes

Beginning as early as September 30, 2025, the president’s March 25, 2025, executive order “Modernizing Payments To and From America’s Bank Account”  mandates all payments to and from the US Treasury be paid electronically. This includes federal tax payments and federal tax refunds.

Here is the link to the Executive Order