e-News for Tax Professionals 2026-01

As we welcome 2026, it’s time to get ready for filing season. IRS.gov/GetReady includes useful tips tax professionals can share with their individual clients.

One step the IRS recommends is for individual taxpayers to use IRS individual online accounts to access their latest federal tax information. Tax professionals can submit authorizations, view clients’ information and act on behalf of their clients through Tax Pro Account, or set up an account if they haven’t already. Tax professionals can also suggest their business clients create Business Tax Accounts.

2. Guidance on the New Deduction for Car Loan Interest

The Department of the Treasury and the Internal Revenue Service provided guidance on the “No Tax on Car Loan Interest” provision enacted under the One, Big, Beautiful Bill.

The proposed regulations relate to a new deduction for interest paid on vehicle loans incurred after Dec. 31, 2024, to purchase new made-in-America vehicles for personal use. This new tax benefit applies to both taxpayers who take the standard deduction and those who itemize deductions.

To help tax professionals and their clients take advantage of this new tax benefit, the guidance addresses important eligibility criteria, including:

Providing rules relating to new vehicles eligible for the deduction, including for determining if the final assembly of a vehicle occurred in the United States;
Providing rules for determining which vehicle loans qualify and the amount of interest paid on a loan that may be deductible;
Providing rules for determining if a new vehicle is purchased for personal use; and
Identifying taxpayers who can take the deduction and clarifying the $10,000 annual deduction limit.

The IRS previously announced transition guidance for certain lenders and other taxpayers receiving interest for vehicle loans in 2025. In general, those persons must file information returns with the IRS to report interest received during the tax year and other information related to the loan. These information returns enable taxpayers to claim the benefits of the vehicle loan interest deduction. To help lenders implement these information reporting requirements, the proposed regulations clarify:

Which lenders and other interest recipients are required to report and the time and manner for this reporting; and
What information must be included on the form provided to the IRS and to taxpayers.

Treasury and the IRS invite comments from the public on these proposed regulations by Feb. 2, 2026. Tax professionals can submit comments through Regulations.gov. The proposed regulations include instructions for submitting comments.

For more information, see One, Big, Beautiful Bill provisions on IRS.gov.

3. 2026 Standard Mileage Rates

The optional standard mileage rate for business use of automobiles will increase by 2.5 cents in 2026, while the mileage rate for vehicles used for medical purposes will decrease by half a cent, reflecting updated cost data and annual inflation adjustments.

Tax professionals and their clients can opt to use standard mileage rates to calculate the deductible costs of operating vehicles for business, charitable and medical purposes. Additionally, they may use the optional standard mileage rate to calculate the deductible costs of operating vehicles for moving purposes for certain active-duty members of the Armed Forces, and now – under the One, Big, Beautiful Bill – certain members of the intelligence community.

Beginning Jan. 1, 2026, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

72.5 cents per mile driven for business use, up 2.5 cents from 2025.
20.5 cents per mile driven for medical purposes, down a half cent from 2025.
20.5 cents per mile driven for moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community), reduced by a half cent from last year.
14 cents per mile driven in service of charitable organizations, equal to the rate in 2025.
Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Notice 2026-10 contains additional information.

4. Draft Forms, Instructions and Publications Available on IRS.gov

The IRS continues to post early release versions of various tax forms and instructions to IRS.gov. Tax professionals can review the draft instructions for Form 1040 along with updated draft instructions for Form 1040 Schedule C, Schedule D, Schedule E, Schedule F and other schedules. Tax professionals can also find draft instructions for Form 941, Form 990, Form 1120, Form 1120-S and many others.

Tax professionals should not file draft forms and not rely on information in draft instructions or publications.

The IRS welcomes comments on tax products.

5. 2025 Nationwide Tax Forum Online: Partnerships and Non-resident Alien Withholding

One highlight of the IRS Nationwide Tax Forum Online (NTFO) is the seminar Partnerships and Non-resident Alien Withholding: Sections 1446(a) and 1446(f). This session explains what partnerships with a foreign partner need to know the withholding, reporting and other requirements. It also explains what partnerships should do when the foreign partner sells its interest in the partnership.

All NTFO self-study seminars cost $29 each. Tax pros can earn one continuing education credit for each NTFO self-study seminar or audit a presentation for free. For more information, visit irstaxforumonline.com.

6. Tax Relief for Taxpayers Impacted by Severe Storms, Straight-Line Winds, Flooding, Landslides and Mudslides in the State of Washington

Tax professionals with clients in the State of Washington should be aware of a recent announcement by the Internal Revenue Service. The announcement provides tax relief for individuals and businesses in the State of Washington affected by severe storms, straight-line winds, flooding, landslides, and mudslides that began on Dec. 9, 2025. These taxpayers now have until May 1, 2026, to file various federal individual and business tax returns and make tax payments.

Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households that reside or have a business in Benton, Chelan, Clallam, Grays Harbor, Jefferson, King, Kittitas, Lewis, Mason, Pierce, Samish, Skagit, Snohomish, Thurston, Wahkiakum, Whatcom, and Yakima counties qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area.

See the IRS announcement for further details, including the types of tax returns, payments and deposits eligible for tax relief.

Thank you for subscribing to e-News for Tax Professionals an IRS e-mail service.

If you have a specific concern about your client's tax situation, call the IRS Practitioner Priority Service 1-866-860-4259.

This message was distributed automatically from the mailing list e-News for Tax Professionals. Please Do Not Reply To This Message

To subscribe to or unsubscribe from another list, please go to the e-News Subscriptions page on the IRS Web site.

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need your email address to log in. If you have questions or problems with the subscription service, visit subscriberhelp.govdelivery.com.

This service is provided to you at no charge by the Internal Revenue Service (IRS).

This email was sent to [email protected] by: Internal Revenue Service (IRS) · Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington, D.C. 20535