2026 Summer Newsletter

Change is inevitable and this year brought a large one with the loss of my father, after 35 years of leading the firm. Obviously there will be some changes, not the least of which is that there is a new author writing the newsletters. While I am sure many are already eager to see how the holiday newsletter will look this year, I have been focused on our annual summer newsletter. Dad always liked to share some amusing tax items in the summer. So, in honor of Dad, I thought I would kick things off by talking about some of his favorite foods. It may surprise you to know that, at the state and local level, food is the center of some of the quirkiest tax rules.

There is a well-known internet conundrum “Is a hot dog a sandwich?” NYS famously weighed in on the question back in 2019 to clarify that a hot dog is a sandwich. Don’t worry, NY did not stop there. They also clarified that in a bagel shop that makes the bagels from scratch, it’s the slicing of the bagel that makes it “prepared food”. This means both items can be subject to sales tax. Thanks NY, for answering these important questions. NY gets a bad rap for its taxes but, in this case, they are in the same food fight as everyone else.

In California, fruit from a grocery store is free from sales tax, but not so when you buy the same fruit from a vending machine. I’m not sure I’ve ever seen fruit in a vending machine, but it must be popular in the golden state. Although with sales tax on top I would think twice about flattening out a bill for that. It’s quite the upcharge for old fruit.

In Illinois, the frugal buyer of candy should avoid Snickers. Apparently in the eyes of the state of Illinois the use of flour makes sweet treats into regular groceries. So, while Snickers is subject to the candy tax, Twix and Kit Kats are not. Unlike the fruit vending machine in sunny CA, this one may be worth the cost if you really have a craving.

Last but not least, ice cream. Dad was an avid fan of frozen custard and was a frequent patron of Abbott’s and Rita’s here in Rochester. In Maryland, however, he would have paid a premium for a cold treat with the grandkids. Ice cream and similar treats are only subject to sales tax in quantities under a pint. Guess it’s a quart of ice cream for everyone!

Silly tax trivia aside, if you have not already heard it from me, I would just like to say thank you for continuing with us into this next chapter of GSK. I know some of you have been here since before Alan and Albert brought my father in to lead the firm 35 years ago. We look forward to many more years of growth and success alongside you in this next era!

– Daniel Greenebaum, CPA

Office Communication

Remember, we are here year-round!

• Summer is an ideal time for many services we offer outside of tax preparation! If you would like to meet and dig into planning and advising on personal or business tax or other business matters, don’t hesitate to reach out!
• Make sure to update us on address, phone, email changes.
• If you start a new business or form any new entities, please let us know ASAP (tax deadlines vary so we need to know in advance to help you stay compliant)
• If we filed an extension for you, please make sure to send in any remaining documents ASAP. If you are unsure what is missing, give us a call.

Tax Notices And Audit Letters

Inevitably the IRS and States send out their letters every year. Whether it was a missing 1099, a curious deduction, or they just want to go fishing in a random taxpayer’s pockets, always forward such mail to us. We will make sure it is legitimate and not a scam and assist in determining the best response.

We stand by the work we do on your taxes and will defend it as necessary.

Personal Tax Updates

*Additional 401K contributions are allowed of $8,000 for those 50 or older, although it is increased to $11,250 for those age 60-63. Those ages 50 or older can make an additional $1,000 catch-up contribution to IRAs.

**For those 55 and over, an additional $1,100 can be contributed to HSA plans

Major Change For Our Corporate Clients For Whom We File Payroll

New York has made it much more difficult to pay the amounts due on NY payroll by check. We are finding that attempting to do so is much more likely to create issues involving letters from the state and it is time consuming to resolve in a way that avoids penalties and interest for what they deemed to be late or missing payments. While we were able to resolve these issues this year in most cases, we have determined all state payroll expenses (including states other than NY) will need to be paid through ACH/Direct Debit payments moving forward.

Please be prepared to provide, or confirm if we already have it on file, bank account information for your business in your fall planning meetings this year.

Charitable Deductions – Big Changes From Last Year’s Tax Bill!

Last year’s major tax bill introduced some significant changes to the deductions related to your charitable gifts. Since 2017, when itemizing became much less common, many people have been left out of the tax savings for their charitable giving. Beginning with 2026 those who do not itemize will be able to deduct monetary donations to directly to charities of up to $1,000 for single filers or $2,000 for joint filers.

For those who do itemize, there is now a “floor” on the charitable donations you can deduct. A floor is a threshold that excludes the first portion of a deduction. Some of you may be familiar with the floor that applies to deductions for medical expenses. This floor is much smaller at 0.5% of AGI. However, there are some ways to restructure your giving. The most common is a “bunching” strategy. Let’s say you earn $200K per year and donate $15K per year to charity. In that scenario you would only be able to use $5k on your itemized deductions each year, or $10k in any two-year period. If you change the timing of your donations to donate $30K every two years, you would be deducting $20K in the donor years, which means for the same donation you are doubling your tax benefit.

If you want to map out strategies for this, let us know and we can help.

Update On The IRS Move Away From Refunds By Check

Last year we shared the update that, due to an Executive Order, the IRS was eliminating paper checks for tax refunds. If you received a “CP53E” notice from the IRS, know that you are not alone. Many taxpayers, including those who had no issue with direct deposits to that same account in past years, received this notice. If you receive this notice, you can simply log onto the IRS website and confirm account info, then they will attempt to deposit your refund again. If you do nothing, they will mail you a refund check. We are hoping they will work out the technical issues in the 2026 tax season, but it does not seem that the mandate is going away so we will still be required to set direct deposit for federal refunds.

Estimated Taxes – What Are They?!

You may or may not know, income taxes are due throughout the year. Your tax return is actually just meant to be a settling of the bill. For most people, this is managed entirely through withholding. However, when your income does not have withholding, the government requires you to make quarterly estimated tax payments. They work exactly like withholding; if they are low, you will owe the government when we file your tax return and if they are high, you will get a refund back.

For those who are required to pay estimated taxes and don’t there is a penalty charged on the return, more or less equivalent to interest on the amounts that should have been paid. When we complete a return and determine it is subject to these rules, we calculate “safe harbor” estimated tax amounts for you. This is a technical way of saying a safe minimum payment to avoid penalties even if your income is much higher than the previous year.

If you are new to estimated payments, want to consider adjusting them for the year ahead, or have any other questions on the topic, don’t hesitate to reach out!

STAR Program – New York  Only

As always whether you are a new homeowner who could be receiving the STAR credit or already receiving the STAR credit/exemption and turned 65 by the end of 2026 it is worth reviewing the STAR and enhanced STAR criteria. If you are not receiving the appropriate benefit, you can find instructions to apply on this this page: https://www.tax.ny.gov/pit/property/star/

Basic Star Criteria

• The property is your primary residence.
• Your income is $500,000 or less (the same limit applies to combined income for spouses)

Additional Enhanced STAR Criteria

• At least one owner is 65 or older
• Income of $107,300 or less (applies to combined income of owners and any owner’s spouses who reside on the property)

Current Basic STAR recipients will need to verify income with the city/town assessor the first time they are eligible to receive Enhanced STAR. Forms can be found here: https://www.tax.ny.gov/pit/property/star/ivp.htm

Keep an eye on the news tab of our website. As we see topics coming up more or changes of the tax/business landscape we will be posting information there and sharing out via email.

As always, we hope you are enjoying these warm summer months. Please reach out if we can answer questions or aid in your tax planning in any way. Now is the best time to come to us with your big questions!

Summer Firm Hours

Monday – Thursday                             8:00 am – 4:00 pm

Saturday, Sunday, Holidays                Closed

Fridays – June & July                           Closed

Fridays –  August & September          8:00 am – Noon