QUICK TAX TIDBITS & FINANCIAL FLASH:

• Last Call for October 15th Deadline: If we do not have your information by October 9th, we cannot guarantee timely filing. Please contact your TFG accountant ASAP, or email CPA@Fuoco.com.

• Catch-Up Contributions Must be Roth: Starting in 2026, catch-up contributions must be made on an after-tax Roth basis for high-income employees, aged 50 or older, whose prior-year FICA wages from the employer exceeded $150,000. If you earned below this amount, you can still choose pre-tax catch-up contributions. The new rule applies to workplace plans like 401(k), 403(b), and does not apply to traditional or Roth IRAs. Your employer's plan must offer a designated Roth option to allow catch-up contributions for high earners. If the plan does not have a Roth component, affected high earners cannot make catch-up contributions at all. Tax impact is that Roth catch-up contributions use after-tax dollars, meaning you lose the upfront tax deduction now in exchange for tax-free growth and withdrawals later.

• Tax Break for Teachers Expanded: With the start of a new school year, teachers including pre-school teachers, should be aware of the educator expense deduction. Teachers can deduct up to $350 in 2026 for their unreimbursed costs. The cap is $700 for joint filers who are both teachers. It’s only for early childhood education teachers, and K-12 educators who work 900 or more hours during a school year in a school. Homeschooling parents don’t get it. Claim the write-off on Schedule 1, you don’t have to itemize on Schedule A. Professional development fees, books and supplies, any materials for the classroom, and computer software, are among eligible expenses.

• Deducting Medicare Premiums: Did you know that self-employeds can deduct their Medicare premiums without itemizing on Schedule A? Medicare premiums paid by a self-employed individual are included in the deduction for health insurance on Schedule 1 of Form 1040. The deduction can’t exceed the taxpayer’s net profit from his or her business. This also applies to partners and LLC members, provided the firm reimburses them for the premiums and reports the amounts as guaranteed payments taxed as income. Similar rules apply to S corporation shareholders who own more than 2% of the firm when the shareholder pays the premiums and then gets reimbursed by the S corp. Note that the premiums must be included as wages on the shareholder’s W-2 form.

• For Restricted Stock Units IRS Withholding Falls Short: The IRS sets a flat 22% federal withholding rate for supplemental wages like Restricted Stock Units (RSUs) under $1 million, which often creates an "underwithholding gap" for high earners in the 32%, 35%, or 37% tax brackets. It's easy to end up under-withheld without doing anything wrong if you have a vesting event, or get a bonus etc. Your actual tax rate on RSU income is whatever your marginal bracket is, NOT the flat rate your employer withholds. What to do about it? To estimate your real RSU tax bill, start with the fair market value of the vested shares multiplied by the number of shares vesting — that's your taxable income for the event. Multiply that by your actual marginal tax rate, not the 22% withholding rate, to estimate what you'll really owe.

• IRS New Form 1040 for 2026 Tax Returns! The 2026 Form 1040 will look a little different. Among the changes:

• There’s a new line for charitable donations of cash claimed by nonitemizers of up to $1,000…$2,000 for joint filers.

• IRS adds a box asking about citizenship status. The question is “At the time you file your return, are you, and your spouse if filing jointly, a U.S. citizen, U.S. national or an alien lawfully authorized to work in the U.S.?”

• Schedule A is expanded to two pages to reflects some changes in last year’s OBBB that began in 2026, and the “other itemized deductions” section now spells out specific itemizations.

• Florida Minimum Wage Increased on 9/30: Effective September 30, 2026, the minimum wage in Florida increased to $15.00 an hour, and the required cash wage for tipped employees increases to $11.98. New York minimum wage was increased in January to $17.00 per hour in New York City, Long Island, and Westchester County and $16.00 per hour for the rest of New York State. New increases are planned for NY in 2027.