Mileage Rate Increase
Driving for work? Your deduction just went up.
The IRS has increased the standard mileage rate for miles driven between 7/1/26 and 12/31/26 to 76 cents per mile. Medical mileage rate increased to 23.5 cents per mile. Anyone who tracks their mileage for tax purposes (such as self-employed individuals, real estate investors and other business owners) will need to report their mileage separately for the period January 1 – June 30 and July 1 – December 31 for their 2026 taxes.
IRS Notices
You can now respond to them via your own online account. This is often the preferred and fastest method according to the IRS. If you need assistance setting up your own online account, please reach out to your service team.
IRS introduces Automatic Penalty Relief for Eligible Taxpayers
This new system replaces the first-time abatement penalty relief used by taxpayers in the past. Formerly, taxpayers had to ask the IRS to apply the statute to obtain relief from a failure-to-file, -pay or -deposit penalty. Now, relief will automatically be applied to eligible returns if the taxpayers have filed and paid three years of taxes on time or 12 successive quarters for payroll taxes. The new process is in effect now, applying to 2026 forward returns.
Conservation Easements
For over a decade, “syndicated conservation easements” let investors buy into partnerships that purchased land, obtained inflated appraisals, and donated a conservation easement to claim a charitable deduction many multiples larger than their actual investment. Many of these have been challenged by the Tax Court, despite being “vetted” by attorneys and accountants. The Tax Court has consistently sided with the government, disallowing deductions on valuation grounds and imposing steep 40% gross valuation misstatement penalties.
Congress effectively ended new syndicated deals through SECURE 2.0, which limits deductions to 2.5 times an investor’s basis for contributions made after December 29, 2022.
The IRS has now opened its fifth settlement window, for taxpayers who overinflated their conservation easement deductions, warning that terms will only get worse for taxpayers who wait to potentially lose in court.
Taxes and financial planning are complex, but you don’t have to navigate them alone. A financial advisor can help you stay informed about tax law changes, optimize your savings and investments, and avoid costly mistakes. If you need tailored guidance, our team is here to help. Talk to an advisor or call (603) 589-8010 to integrate tax planning into your comprehensive financial strategy.
Disclaimer:
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
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