Anyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later with vague instructions. The whole thing should have been fixed a long time ago.
The IRS is finally doing something about it. Notice 2026-49 puts out four sample forms and a five-step procedure meant to bring some consistency to direct rollovers. Plans do not have to use them, and there is no safe harbor, but you can see where this is going.
The Problem Worth Solving
When you leave a job, you have to figure out what to do with your 401(k). You can cash it out and take the tax hit. You can leave it sitting there. Or you can roll it into a new employer’s plan or an IRA.
A direct rollover is usually the way to go. The money travels straight from the old plan to the new one without ever hitting your bank account, which keeps things clean and avoids the 60-day deadline you face if you take possession yourself.
The trouble is that every plan does things differently. A 2024 GAO study found that roughly one in three people doing rollovers ended up with a paper check in hand that they were supposed to forward themselves. Checks get lost. They sit on the counter for weeks. And the whole time, that money is not invested anywhere.
How the New System Works
Here is what Treasury is proposing. You fill out Form 1 and give it to the plan or IRA that will be receiving your money. That form lets the receiving plan reach out to your old plan and handle the transfer on your behalf. The two plans swap Forms 2 through 4 to make sure everything is in order. If something goes sideways, the receiving plan has to tell you.
The IRS wants this done electronically whenever possible. When electronic is not an option, the old plan should write a check payable to the receiving plan for your benefit and mail it directly there. No more sending checks to participants and hoping they take it from there.
Tax Rules Stay the Same
None of this changes how rollovers are taxed. Eligible distributions that complete a proper rollover still stay out of income. You still cannot roll over a required minimum distribution. Pre-tax money stays pre-tax. Roth stays Roth. This is about the plumbing, not the tax code.
IRA-to-IRA transfers are not covered here. Those already go through the ACATS electronic system, so Treasury left them alone.
No Safe Harbor Yet
Plans can use these forms, change them, or ignore them completely. Right now, there is no reward for following along.
That could change. Treasury says it is thinking about offering safe harbors down the road. A receiving plan that uses the standard forms might eventually be allowed to assume the rollover is valid unless something looks off. That would give administrators a real incentive to adopt the new process.
Conclusion and What Comes Next
The IRS has hinted at bigger changes. Future guidance might require electronic transfers across the board, kill off the practice of mailing checks to participants, and get rid of some of the procedural friction that slows things down.
For now, the sample forms are sitting in the appendix of Notice 2026-49. They are there if you want them. If you have ever spent weeks tracking down a check that went to the wrong address or trying to explain one plan’s process to another plan’s administrator, you understand what Treasury is trying to fix. They want rollovers to be faster, simpler, and harder to mess up. This is a start.
Alan F Burke CPA
Rolling Over Your 401(k) Just Got Less Painful – Here’s What the IRS Changed
October 1, 2026 · Blog, Tax and Financial News
⏱ 4 min read
Anyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later with vague instructions. The whole thing should have been fixed a long time ago.
The IRS is finally doing something about it. Notice 2026-49 puts out four sample forms and a five-step procedure meant to bring some consistency to direct rollovers. Plans do not have to use them, and there is no safe harbor, but you can see where this is going.
The Problem Worth Solving
When you leave a job, you have to figure out what to do with your 401(k). You can cash it out and take the tax hit. You can leave it sitting there. Or you can roll it into a new employer’s plan or an IRA.
A direct rollover is usually the way to go. The money travels straight from the old plan to the new one without ever hitting your bank account, which keeps things clean and avoids the 60-day deadline you face if you take possession yourself.
The trouble is that every plan does things differently. A 2024 GAO study found that roughly one in three people doing rollovers ended up with a paper check in hand that they were supposed to forward themselves. Checks get lost. They sit on the counter for weeks. And the whole time, that money is not invested anywhere.
How the New System Works
Here is what Treasury is proposing. You fill out Form 1 and give it to the plan or IRA that will be receiving your money. That form lets the receiving plan reach out to your old plan and handle the transfer on your behalf. The two plans swap Forms 2 through 4 to make sure everything is in order. If something goes sideways, the receiving plan has to tell you.
The IRS wants this done electronically whenever possible. When electronic is not an option, the old plan should write a check payable to the receiving plan for your benefit and mail it directly there. No more sending checks to participants and hoping they take it from there.
Tax Rules Stay the Same
None of this changes how rollovers are taxed. Eligible distributions that complete a proper rollover still stay out of income. You still cannot roll over a required minimum distribution. Pre-tax money stays pre-tax. Roth stays Roth. This is about the plumbing, not the tax code.
IRA-to-IRA transfers are not covered here. Those already go through the ACATS electronic system, so Treasury left them alone.
No Safe Harbor Yet
Plans can use these forms, change them, or ignore them completely. Right now, there is no reward for following along.
That could change. Treasury says it is thinking about offering safe harbors down the road. A receiving plan that uses the standard forms might eventually be allowed to assume the rollover is valid unless something looks off. That would give administrators a real incentive to adopt the new process.
Conclusion and What Comes Next
The IRS has hinted at bigger changes. Future guidance might require electronic transfers across the board, kill off the practice of mailing checks to participants, and get rid of some of the procedural friction that slows things down.
For now, the sample forms are sitting in the appendix of Notice 2026-49. They are there if you want them. If you have ever spent weeks tracking down a check that went to the wrong address or trying to explain one plan’s process to another plan’s administrator, you understand what Treasury is trying to fix. They want rollovers to be faster, simpler, and harder to mess up. This is a start.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Picture two couples, each with a baby born this year, each routing $2,500 of salary into that child’s Trump Account through an employer’s payroll system. One couple sits in the 35% bracket. The other, at roughly $65,000 of taxable income, is in the 12% bracket. Both contributions escape federal income tax. The first couple’s bill shrinks by $875. The second couple’s bill shrinks by $300. Same account, same dollars, nearly three times the benefit for the household that needed it less.
That arithmetic is the quiet story inside what has been presented as a workplace convenience.
Congress Built the Benefit – The IRS Just Wrote the Manual
The One Big Beautiful Bill Act already let employers put up to $2,500 a year into an employee’s or a dependent’s Trump Account without adding to the worker’s income, and it already allowed a company to run that contribution through a Section 125 cafeteria plan so the employee funds a child’s account out of pre-tax salary. Employers could begin on July 4, 2026. What Treasury and the IRS published on Aug. 11 is the operating manual: how to structure the program, how nondiscrimination testing works, and a safe harbor for companies that want to match the government’s $1,000.
The Break Stops at the Income Tax Line
It is easy to overstate what “pre-tax” buys here. The exclusion applies to federal income tax only. The money stays wages for Social Security, Medicare, and unemployment tax purposes. So, the savings amount to nothing more than the sum deferred multiplied by the filer’s top income tax rate, which is precisely why $2,500 is worth $875 to a 35% taxpayer and $300 to a 12% taxpayer.
Postponed for Decades, Not Years
Nor is the tax forgiven. Nothing can be withdrawn throughout the rule’s growth period, which runs until January 1 of the year the child turns 18. From that date, the account behaves like any other traditional IRA, meaning a 10% additional tax on distributions taken before age 59½ unless an exception applies, on top of ordinary income tax. The realistic horizon is four decades or more, not the college fund some families picture.
On the basics: Trump Accounts, Section 530A of the code, came out of last year’s OBBBA. A child who is a U.S. citizen born from 2025 through 2028 can receive a one-time $1,000 federal deposit, though it is not automatic. A parent has to open the account and elect the deposit on Form 4547, and the child needs a Social Security number. Contributions from all sources top out at $5,000 a year at current levels, indexed for inflation after 2027. The money must sit in a fund tracking a broad index of mostly U.S. stocks, with no leverage and fees capped at a tenth of a percent.
Taxation on the way out follows the money’s path in. Dollars contributed with after-tax income create basis and come back untaxed. Everything else, meaning the federal $1,000, employer contributions, pre-tax payroll elections and all investment earnings, is ordinary income when withdrawn.
Not Every Parent Will Get the Chance
Access tilts the same direction. Mercer surveyed close to 350 employers in April and found roughly 4% expecting to launch a contribution program in 2026 or 2027, with about two-thirds ruling it out. Adoption skews toward large firms with real benefits infrastructure, the same employers already offering generous 401(k) matches. A parent at a small company may never see the option. Anyone self-employed is excluded by rule: partners, sole proprietors, and more-than-2% S corporation shareholders cannot make the pre-tax election even if their own company sponsors a program for its common-law employees.
There is a planning burden, too. Households with finite savings already ration dollars across retirement accounts, 529 plans and emergency reserves. A pre-tax Trump Account election adds another comparison, and the families most likely to get it right are the ones who can afford advice.
Conclusion
The regulations are proposals. Written comments close Sept. 25, and a hearing is set for Oct. 15, so the final text could shift. Employers may rely on the proposed rules in the meantime. What is unlikely to shift is the underlying arithmetic. The $1,000 from Treasury lands identically in every eligible child’s account. The pre-tax payroll option does not, and its value climbs with the parent’s bracket.
Alan F Burke CPA
New Trump Account Updates
September 1, 2026 · Blog, Tax and Financial News
⏱ 4 min read
Picture two couples, each with a baby born this year, each routing $2,500 of salary into that child’s Trump Account through an employer’s payroll system. One couple sits in the 35% bracket. The other, at roughly $65,000 of taxable income, is in the 12% bracket. Both contributions escape federal income tax. The first couple’s bill shrinks by $875. The second couple’s bill shrinks by $300. Same account, same dollars, nearly three times the benefit for the household that needed it less.
That arithmetic is the quiet story inside what has been presented as a workplace convenience.
Congress Built the Benefit – The IRS Just Wrote the Manual
The One Big Beautiful Bill Act already let employers put up to $2,500 a year into an employee’s or a dependent’s Trump Account without adding to the worker’s income, and it already allowed a company to run that contribution through a Section 125 cafeteria plan so the employee funds a child’s account out of pre-tax salary. Employers could begin on July 4, 2026. What Treasury and the IRS published on Aug. 11 is the operating manual: how to structure the program, how nondiscrimination testing works, and a safe harbor for companies that want to match the government’s $1,000.
The Break Stops at the Income Tax Line
It is easy to overstate what “pre-tax” buys here. The exclusion applies to federal income tax only. The money stays wages for Social Security, Medicare, and unemployment tax purposes. So, the savings amount to nothing more than the sum deferred multiplied by the filer’s top income tax rate, which is precisely why $2,500 is worth $875 to a 35% taxpayer and $300 to a 12% taxpayer.
Postponed for Decades, Not Years
Nor is the tax forgiven. Nothing can be withdrawn throughout the rule’s growth period, which runs until January 1 of the year the child turns 18. From that date, the account behaves like any other traditional IRA, meaning a 10% additional tax on distributions taken before age 59½ unless an exception applies, on top of ordinary income tax. The realistic horizon is four decades or more, not the college fund some families picture.
On the basics: Trump Accounts, Section 530A of the code, came out of last year’s OBBBA. A child who is a U.S. citizen born from 2025 through 2028 can receive a one-time $1,000 federal deposit, though it is not automatic. A parent has to open the account and elect the deposit on Form 4547, and the child needs a Social Security number. Contributions from all sources top out at $5,000 a year at current levels, indexed for inflation after 2027. The money must sit in a fund tracking a broad index of mostly U.S. stocks, with no leverage and fees capped at a tenth of a percent.
Taxation on the way out follows the money’s path in. Dollars contributed with after-tax income create basis and come back untaxed. Everything else, meaning the federal $1,000, employer contributions, pre-tax payroll elections and all investment earnings, is ordinary income when withdrawn.
Not Every Parent Will Get the Chance
Access tilts the same direction. Mercer surveyed close to 350 employers in April and found roughly 4% expecting to launch a contribution program in 2026 or 2027, with about two-thirds ruling it out. Adoption skews toward large firms with real benefits infrastructure, the same employers already offering generous 401(k) matches. A parent at a small company may never see the option. Anyone self-employed is excluded by rule: partners, sole proprietors, and more-than-2% S corporation shareholders cannot make the pre-tax election even if their own company sponsors a program for its common-law employees.
There is a planning burden, too. Households with finite savings already ration dollars across retirement accounts, 529 plans and emergency reserves. A pre-tax Trump Account election adds another comparison, and the families most likely to get it right are the ones who can afford advice.
Conclusion
The regulations are proposals. Written comments close Sept. 25, and a hearing is set for Oct. 15, so the final text could shift. Employers may rely on the proposed rules in the meantime. What is unlikely to shift is the underlying arithmetic. The $1,000 from Treasury lands identically in every eligible child’s account. The pre-tax payroll option does not, and its value climbs with the parent’s bracket.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
For the first time since 2022, the IRS is changing standard mileage rates in the middle of the tax year. If you track business, medical or moving miles, this matters. Starting July 1, 2026, the numbers go up, and your recordkeeping needs to get more precise.
What Changed and Why
The IRS bumped the business mileage rate from 72.5 cents to 76 cents per mile for travel on or after July 1, 2026. Medical and moving rates rose from 20.5 cents to 23.5 cents. The charitable rate stays put at 14 cents, where it has been stuck since 1998.
The trigger was fuel prices. When the IRS set the original 2026 rates back in December, gas was averaging about $2.89 per gallon nationally. By mid-July 2026, AAA reported the average had climbed to roughly $3.87, an increase of 34 percent. Much of that spike traces back to the war in Iran and uncertainty around oil production and shipping through the Strait of Hormuz.
The last time the IRS made a midyear adjustment was 2022, after Russia invaded Ukraine and gas prices surged past $5 per gallon in some markets.
Two Sets of Rates for One Year
This creates a split year for mileage calculations. Miles driven from January 1 through June 30 use the original rates. Miles driven on or after July 1 use the revised rates. If you drove 4,000 medical miles before July and another 4,000 after, you would calculate them separately: $820 for the first half at 20.5 cents, $940 for the second half at 23.5 cents.
The same logic applies to employer reimbursements. The new rates kick in only when both the expense and the reimbursement occur on or after July 1. Employers running accountable plans should review their policies to make sure they are applying the correct rate based on when the travel happened and when the payment goes out.
Why the Rates Differ by Category
The business rate is higher because it accounts for both fixed and variable costs of operating a vehicle: depreciation, insurance, maintenance, tires, gas and oil. Medical and moving rates cover only variable costs, which is why they sit lower.
The charitable rate is a different animal entirely. Congress set it by statute, and it has not budged in nearly three decades. Adjusted for inflation, 14 cents from 1998 would be closer to 29 cents today.
Who Can Actually Use These Rates
Here is where it gets narrower than many taxpayers expect. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses starting in 2018, and the One Big Beautiful Bill Act made that change permanent. Most employees cannot write off business mileage whether their employer reimburses them or not.
Moving expense deductions are similarly limited. Only active duty military members moving under orders for a permanent change of station qualify, along with certain intelligence community members under rules effective for 2026.
Charitable mileage requires itemizing, which means it only helps if your total deductions exceed the standard deduction of $16,100 for single filers or $32,200 for married couples filing jointly. Many taxpayers skip it.
Self-employed individuals and business owners get the most benefit from the business rate since they can still deduct qualifying mileage on Schedule C.
Recordkeeping Just Got Harder
Normally, tracking mileage means logging dates, destinations, miles driven, and business purpose. This year, you also need to note which side of July 1 the expense falls on. A mileage app can help, but a notebook or spreadsheet works, too.
If you use a vehicle exclusively for business, beginning and end-of-year odometer readings establish total mileage. Photos can serve as backup. If you mix business and personal use, your records need to clearly separate the two.
Conclusion
Gas prices forced the IRS’s hand, and now 2026 has two mileage rate regimes. The math is not complicated, but the documentation requirements are tighter than usual. Know when your miles were driven, keep clean records and make sure your employer’s reimbursement policies reflect the July 1 cutoff. The details matter this year more than most.
Alan F Burke CPA
IRS Raises Mileage Rates Midyear: What You Need to Know
August 1, 2026 · Blog, Tax and Financial News
⏱ 4 min read
For the first time since 2022, the IRS is changing standard mileage rates in the middle of the tax year. If you track business, medical or moving miles, this matters. Starting July 1, 2026, the numbers go up, and your recordkeeping needs to get more precise.
What Changed and Why
The IRS bumped the business mileage rate from 72.5 cents to 76 cents per mile for travel on or after July 1, 2026. Medical and moving rates rose from 20.5 cents to 23.5 cents. The charitable rate stays put at 14 cents, where it has been stuck since 1998.
The trigger was fuel prices. When the IRS set the original 2026 rates back in December, gas was averaging about $2.89 per gallon nationally. By mid-July 2026, AAA reported the average had climbed to roughly $3.87, an increase of 34 percent. Much of that spike traces back to the war in Iran and uncertainty around oil production and shipping through the Strait of Hormuz.
The last time the IRS made a midyear adjustment was 2022, after Russia invaded Ukraine and gas prices surged past $5 per gallon in some markets.
Two Sets of Rates for One Year
This creates a split year for mileage calculations. Miles driven from January 1 through June 30 use the original rates. Miles driven on or after July 1 use the revised rates. If you drove 4,000 medical miles before July and another 4,000 after, you would calculate them separately: $820 for the first half at 20.5 cents, $940 for the second half at 23.5 cents.
The same logic applies to employer reimbursements. The new rates kick in only when both the expense and the reimbursement occur on or after July 1. Employers running accountable plans should review their policies to make sure they are applying the correct rate based on when the travel happened and when the payment goes out.
Why the Rates Differ by Category
The business rate is higher because it accounts for both fixed and variable costs of operating a vehicle: depreciation, insurance, maintenance, tires, gas and oil. Medical and moving rates cover only variable costs, which is why they sit lower.
The charitable rate is a different animal entirely. Congress set it by statute, and it has not budged in nearly three decades. Adjusted for inflation, 14 cents from 1998 would be closer to 29 cents today.
Who Can Actually Use These Rates
Here is where it gets narrower than many taxpayers expect. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses starting in 2018, and the One Big Beautiful Bill Act made that change permanent. Most employees cannot write off business mileage whether their employer reimburses them or not.
Moving expense deductions are similarly limited. Only active duty military members moving under orders for a permanent change of station qualify, along with certain intelligence community members under rules effective for 2026.
Charitable mileage requires itemizing, which means it only helps if your total deductions exceed the standard deduction of $16,100 for single filers or $32,200 for married couples filing jointly. Many taxpayers skip it.
Self-employed individuals and business owners get the most benefit from the business rate since they can still deduct qualifying mileage on Schedule C.
Recordkeeping Just Got Harder
Normally, tracking mileage means logging dates, destinations, miles driven, and business purpose. This year, you also need to note which side of July 1 the expense falls on. A mileage app can help, but a notebook or spreadsheet works, too.
If you use a vehicle exclusively for business, beginning and end-of-year odometer readings establish total mileage. Photos can serve as backup. If you mix business and personal use, your records need to clearly separate the two.
Conclusion
Gas prices forced the IRS’s hand, and now 2026 has two mileage rate regimes. The math is not complicated, but the documentation requirements are tighter than usual. Know when your miles were driven, keep clean records and make sure your employer’s reimbursement policies reflect the July 1 cutoff. The details matter this year more than most.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Anyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later with vague instructions. The whole thing should have been fixed a long time ago.
Picture two couples, each with a baby born this year, each routing $2,500 of salary into that child’s Trump Account through an employer’s payroll system. One couple sits in the 35% bracket. The other, at roughly $65,000 of taxable income, is in the 12% bracket. Both contributions escape federal income tax. The first couple’s bill shrinks by $875. The second couple’s bill shrinks by $300. Same account, same dollars, nearly three times the benefit for the household that needed it less.
For the first time since 2022, the IRS is changing standard mileage rates in the middle of the tax year. If you track business, medical or moving miles, this matters. Starting July 1, 2026, the numbers go up, and your recordkeeping needs to get more precise.