Barry's Bookkeeping & Services

02/19/2026

📋 The overall IRS audit rate is just 0.4%. But that number hides a lot.

Certain patterns on your return raise your odds dramatically. Millionaires get audited at 10x the average rate. EITC claimants at nearly double.

The most common trigger is not fraud. It is a mismatch. The IRS receives copies of every W-2, 1099, 1099-R, and 1099-B filed in your name. When the income on your return does not match what they already have, their system flags it automatically.

For retirees, two of the biggest risks are missed RMDs and incorrect cost basis on investment sales. The IRS knows your account balances from custodian reporting. A skipped required distribution is one of the easiest flags for their computers to catch.

The round numbers issue trips up more people than you would expect. IRS auditors have said they can tell immediately when a taxpayer estimated their expenses instead of using actual records.

New for 2026: gambling losses are now capped at 90% of reported winnings, down from 100%. That change alone will generate mismatches for anyone still deducting losses the old way.

None of this means you should be afraid to claim legitimate deductions. It means your records need to match what the IRS already has.

02/19/2026

📋 Your 2025 tax return has more changes than any year since 2017.

The standard deduction went up. The SALT cap quadrupled from $10,000 to $40,000. There is a brand new $6,000 deduction for people 65 and older that works whether you itemize or not. And new deductions for tip income, overtime pay, and car loan interest all hit at once.

These changes are retroactive to January 1, 2025. They apply to the return you are filing right now.
The SALT increase matters most for joint filers in high-tax states who have been stuck at the $10,000 cap since 2018. If your state income taxes plus property taxes exceed $10,000, run the numbers on itemizing this year. It may beat the standard deduction for the first time in seven years.

The senior bonus deduction phases out starting at $75,000 for single filers and $150,000 for joint filers. It disappears entirely at $175,000 and $250,000 respectively. It is temporary through 2028.

One thing to watch: the new deductions for tips, overtime, and car loan interest require a new Schedule 1-A. Tax software should handle it. Paper filers need to download the new form.

IRS Direct File is not available this year. If you used it last year, you will need a different option.

02/19/2026

I very strongly recommend that business owners use a CPA to file their taxes. People with a good understanding of the system might feel comfortable filing their personal tax returns.

📋 IRS Direct File is gone.

If you used it last year, the URLs now return "page not found."

Direct File launched in 2024 as a government-built, no-cost filing tool. Close to 300,000 people used it in its second year across 25 states. The Treasury Department shut it down in November 2025, citing $225 per return in operating costs.

Free File is a separate program. It has been running since 2003 and is still available. For the 2026 filing season, the income limit jumped to $89,000 AGI, up $5,000 from last year. That is one of the largest annual increases in the program's history. Over 70% of taxpayers now qualify.

One detail people miss: you have to start at IRS.gov/freefile. If you go directly to a partner's commercial website, you may get bumped into a paid tier for the same software that would be free through the IRS portal.

VITA is the best option for people who want a human to prepare their return. It is free, in-person, and staffed by IRS-trained volunteers. The income limit is about $67,000. Call 800-906-9887 to find a location.

If you are 60 or older, Tax Counseling for the Elderly is specifically designed for retirement-related tax situations. Pensions, Social Security, RMDs. Same concept as VITA but with volunteers trained on senior-specific issues.

Free File Fillable Forms have no income limit but also no guidance. They are digital versions of paper forms. If you are not comfortable filling out IRS forms from scratch, this is not the right option.