Federal Tax News for Individuals: July 2026

IRS Warns of CP53E Scams

Confusion about IRS CP53E notices is growing — and scammers are taking advantage. CP53E is an official IRS notice related to tax refunds and bank account information.

As the IRS shifts from paper checks to direct deposit, it's mailing these notices to taxpayers who may need to add or update their banking details. The IRS warns that fraudsters are sending fake versions of the notice in an attempt to steal taxpayers' sensitive information.

If you receive one, verify its authenticity before acting. Do not click links or scan QR codes. The IRS communicates by mail, not digitally. Visit IRS.gov to verify and respond. Have questions? Your tax advisor can help.

Section 530A Accounts Go Online

Taxpayers can now access their Section 530A accounts (also known as "Trump Accounts") and submit and view the status of Form 4547, "Trump Account Election(s)," through their IRS individual online accounts.

A Sec. 530A account can be set up for any U.S. citizen who'll be under age 18 at the end of the tax year and who has a Social Security number.

Generally, annual contributions of up to $5,000 can be made until the year the beneficiary turns age 18. U.S.-citizen children born from January 1, 2025, through December 31, 2028, can potentially qualify for an initial $1,000 government-funded deposit. Contributions aren't deductible, but earnings grow tax-deferred as long as they're in the account.

The Tax Side of Home Renovations

Home renovations can improve a residence's comfort, functionality, aesthetics and resale value. They might also provide tax benefits.

You may be able to deduct mortgage interest on debt used to substantially improve your home. Certain improvements can also increase your tax basis, potentially reducing taxable gain when you sell. Medically necessary modifications may qualify as deductible medical expenses, subject to limits.

If you overlooked claiming now-expired credits for qualifying energy-efficient home improvements you made in 2025, an amended return may be worth considering. Contact your tax advisor before or after a home renovation.

Summer Jobs and Tax Benefits

Many teens are starting summer jobs and may earn tips. Tips are a nice bonus because they're extra cash before payday. They can also result in a tax deduction.

Employees who earn tips from jobs like waiting tables, delivering food or other eligible occupations may be able to deduct up to $25,000 of qualified tips income (subject to an income-based phaseout) on their federal tax return through 2028. Payroll and any applicable state taxes still apply.

Tip earners must keep detailed records and ensure all tips income is properly reported on their wage or information statement and on their tax return. Need guidance? Your tax advisor is available.

Disaster-Proof Your Documents

Emergencies can strike your home at any time, whether it's a natural disaster, such as a hurricane or wildfire, or another event, such as an electrical fire or burst pipe. Preparation can help minimize disruption.

Create (or update, if needed) your emergency plan today to protect your financial and tax records. Consider making secure electronic copies of important documents and keeping detailed records of valuables to support insurance or tax-related claims.

Taking these steps now can make recovery smoother should the unexpected happen. If you have questions about protecting your records or navigating the tax implications after a disaster, your Porte Brown tax advisor can assist.