Goossen CPA PC

📢 Major Tax Updates (IRS & Kansas) – What Changed for 2025–2026 Filing

There have been significant tax updates since November, largely driven by the new federal law (Public Law 119-21). Here are the key items individuals and small businesses should be aware of:

Federal (IRS):

• New deductions: Tips & Overtime (2025–2028)
Workers may now deduct certain tip income and overtime pay. For 2025, forms won’t show this separately—so good recordkeeping (paystubs, logs) is critical.

• 1099 & reporting changes
– 1099 reporting threshold increasing from $600 → $2,000 (starting 2026 payments)
– 1099-K reverting to $20,000 + 200 transactions
– Proposed rules align backup withholding with those same thresholds

• Car loan interest deduction (proposed)
Up to $10,000/year of interest may become deductible on certain new vehicle loans (pending final rules).

• HSA expansion (starting 2026)
More plans (including some bronze/catastrophic plans and certain direct primary care arrangements) will qualify for HSA contributions.

• Adoption credit update
Now partially refundable (up to ~$5,000), with expanded treatment for certain situations.

• Business updates
– 100% bonus depreciation restored for qualifying property
– Interest expense rules (163(j)) loosened, allowing more deductions in many cases

• Other practical items
– 2026 filing season opened Jan 26 (deadline April 15)
– Mileage rates updated for 2026
– IRS interest rates changed between Q1 and Q2 2026
– IRS withholding estimator updated for new law changes

Kansas (DOR):

• Personal exemption changes (Notice 25-07)
– Expanded benefits for Head of Household
– Increased exemption for disabled veterans
– New exemption for newborns / stillbirth situations

• Food sales tax credit ended (Notice 25-08)
This credit cannot be claimed on 2025 returns (filed in 2026).

• Sales tax rate updates (ongoing)
– Changes effective Jan 1, 2026
– Additional changes effective April 1, 2026
Businesses should ensure systems are updated for correct local rates.

What to do now:

• Save documentation if you earn tips or overtime
• Review withholding (IRS estimator was updated)
• Businesses: update 1099 processes and sales tax rates
• Kansas filers: don’t claim the food sales tax credit for 2025

Tax rules are shifting quickly—these changes will affect how 2025 returns are prepared and what to expect going forward.

Kansas Department of Revenue - Local Sales Tax Information - Quarterly Updates Official Website of the Kansas Department of Revenue

I have been seeing a few memes and comments about players “losing money” by winning the Super Bowl because of high taxes in California. That is not how this actually works.

A few important clarifications.

First, almost every state has some version of what is commonly called the “jock tax.” When a professional athlete plays a game in another state, that state taxes the portion of the athlete’s annual compensation that is attributable to the days worked there. California is not unique in this. If the Super Bowl were in New York, Arizona, or almost anywhere else with an income tax, the same concept would apply.

Second, the state does not tax the bonus by itself. It taxes a fraction of the player’s entire annual salary based on duty days.

For example (round numbers):

Assume a player earns $10,000,000 for the season.
Assume he has 200 total duty days for the year.
Assume 5 of those days are in California for Super Bowl week.

California’s share of income:

$10,000,000 × (5 ÷ 200) = $250,000 of California sourced income.

California then applies its nonresident tax rates to that $250,000. Even at a high marginal rate (roughly 10 to 13 percent), that produces California tax of about $25,000 to $32,000, not hundreds of thousands.

Third, the Super Bowl bonus is simply additional income. If the player receives a $178,000 bonus, that amount is added to his already multimillion dollar salary. Federal tax applies regardless of location, and state tax applies based on sourcing rules. The bonus does not stand alone for tax purposes.

Fourth, and this part is critical: the player normally receives a credit on his home state return for taxes paid to California. This prevents double taxation. California may get a slice, but the player’s resident state reduces its tax by the same amount. The total state tax bill usually changes very little. It is mostly a question of which state receives it.

So the viral claim that someone “lost $71,000 by winning” assumes:

• California taxed more than the bonus itself
• none of that tax would have existed otherwise
• no resident state credit applied

All three assumptions are incorrect.

Bottom line: winning the Super Bowl does not create a net tax loss. It increases income. The game location only determines which state receives part of the state tax, not whether the player somehow loses money for winning.

If anyone would like a simplified example using their own situation (multi state income, remote work, travel days), I am happy to walk through it.

TAX UPDATE – LATE OCTOBER 2025

A few important IRS and Kansas tax updates for individuals and businesses:

IRS UPDATES

• Extended Filing Deadline Reminder: If you filed a federal extension for 2024, your return was due October 15, 2025. The government shutdown did not delay tax deadlines.

• IRS Still Operating (Partially): During the current funding lapse, the IRS continues processing e-filed returns and payments. Refunds are limited. Most IRS offices are closed, but online tools are working.

• ERC Claim Restrictions: Under new law, ERC refund claims for Q3 and Q4 2021 are disallowed if filed after January 31, 2024. Businesses should check the IRS’s new FAQs if affected.

• Form 1099-K Threshold Restored: Starting in 2025, third-party platforms (like PayPal, Venmo) will only issue a 1099-K if gross payments exceed $20,000 and there are over 200 transactions. The lower $600 threshold has been repealed.

KANSAS UPDATES

• No Change in Income Tax Rates: Kansas’s automatic rate reduction was not triggered. 2026 rates will remain unchanged.

• Disaster and Combat Zone Relief: Kansas will follow the IRS’s extended filing deadlines for those affected by designated disasters or military service abroad.

Let me know if you have questions about any of these changes, or if you need help staying compliant.

Big Change to U.S. Immigration Rules 🚨

Today President Trump announced a new $100,000 annual fee for H-1B visa applications — the main program U.S. companies use to bring in skilled workers from overseas.

👉 What does this mean?

For U.S. businesses, hiring foreign talent just got a lot more expensive.

For Canadian professionals, this is a major advantage. TN visas under USMCA remain in place, with far lower costs and faster processing.

For Canadian companies, it helps level the playing field — U.S. competitors can no longer rely on undercutting wages by hiring mass H-1B workers.

✅ Bottom line: Canadian professionals are now some of the most attractive international hires for U.S. businesses, and Canadian companies gain new strength in competing for top talent.

If you’d like to explore how this change impacts your business or career opportunities, feel free to reach out.