August 2026

A New Tax-Advantaged Savings Account for Children

Families seeking another way to prepare for a child’s future may want to explore Section 530A accounts. Created under the 2025 tax law commonly called the One Big Beautiful Bill Act, these tax-advantaged savings accounts, also known as Trump Accounts, are intended to help children build long-term assets. Contributions became available on July 4, 2026, and certain children may qualify for a $1,000 deposit funded by the federal government.

The Basics

A Section 530A account may be opened for anyone who will be younger than age 18 at the end of the tax year and who has a Social Security number. U.S. citizen children born between January 1, 2025, and December 31, 2028, may also qualify for the $1,000 government contribution.

To open a 530A account, file Form 4547, “Trump Account Election(s),” through the Trump Accounts app at trumpaccounts.gov or through your IRS Individual Account.

Parents, grandparents, and other individuals may contribute each year, subject to a combined annual limit of $5,000. The limit will be adjusted for inflation beginning in 2028 and applies until the year the child turns 18. The separate $1,000 government deposit does not reduce the amount others may contribute.

Beyond Family Contributions

Employers may establish programs to contribute to employees’ Section 530A accounts. Generally, an employer may contribute up to $2,500 annually, with inflation adjustments beginning in 2028, for an eligible employee or dependent under age 18. The $2,500 limit applies per employee, regardless of the number of qualifying dependents.

Employer contributions count toward the overall $5,000 annual limit but are excluded from the employee’s taxable income.

Tax Benefits and Account Rules

Individual contributions are not deductible, but earnings generally grow tax-deferred while the funds remain in the account. In most cases, withdrawals cannot be made before the year the child turns 18.

Before age 18, account assets may be invested only in qualifying mutual funds and exchange-traded funds that meet IRS standards. In the year the child turns 18, the account generally begins operating like a traditional IRA, and most traditional IRA rules apply. Future contributions usually require earned income and may be deductible if the child meets the applicable requirements.

Withdrawals may begin in the year the child reaches age 18. However, distributions will generally be at least partly taxable, and early IRA withdrawal penalties may also apply.

Finding the Best Option

Before contributing to a Section 530A account, families should compare it with other tax-advantaged savings options. For example, a Section 529 plan may be more suitable when the primary goal is paying for education. Withdrawals used for qualified education expenses are generally tax-free, and some or all of an unused balance may later be transferred tax-free to a Roth IRA, subject to applicable rules and limits.

Even if a 529 plan or another savings vehicle is a better choice, opening a 530A account may still make sense when a child qualifies for the $1,000 government deposit. Without additional family contributions, tax-deferred compounding on the initial $1,000 could still produce meaningful growth over time.

Seeking Guidance

A Section 530A account may offer valuable long-term savings opportunities. Consider its benefits, restrictions, and tax treatment as part of your family’s broader financial plan before deciding whether it fits best.

How to Choose the Right Business Financing Option

Access to financing can help small businesses operate successfully and pursue growth opportunities. Whether your company needs to manage cash flow shortages, expand operations or purchase long-term assets, understanding the available funding choices is essential. Comparing these options can help you make informed decisions and choose financing that supports your business objectives.

5 Financing Options to Consider

Small businesses may qualify for several types of financing, most of which fall within five general categories:

1. Lines of credit. A business line of credit is popular because it offers convenience and flexibility. After approval, a company may borrow funds up to its established credit limit as needed without submitting a new application each time. This option can be useful for handling temporary or seasonal cash flow gaps. Establishing a line of credit before funds are needed can help ensure that financing is available when unexpected expenses arise.

2. Term loans. Term loans provide a fixed amount of financing for a specified period. The balance is repaid with interest through scheduled payments over several years. Businesses commonly use these loans to acquire fixed assets, including vehicles, machinery and equipment, or to finance other significant investments.

3. Commercial mortgages. A commercial mortgage is a form of term financing used to purchase or refinance business property. Eligible properties may include office buildings, retail locations, warehouses, manufacturing facilities and other commercial real estate.

4. Government loan programs. Small Business Administration loan programs, including the 7(a) and 504 programs, can provide important financing opportunities for eligible businesses. Because program requirements, borrowing limits and other rules may change, applicants should review the latest SBA guidance before applying. Since the SBA guarantees part of the loan, participating lenders may be willing to finance businesses that would not meet standard lending requirements.

5. Equipment leases. Leasing equipment may sometimes be more practical than purchasing it. This can be especially helpful when acquiring technology or machinery that could become obsolete quickly. Leasing may preserve working capital, reduce upfront costs and make it easier for a business to replace or upgrade equipment as its needs evolve.

Alternative Funding

Businesses may also obtain financing through nontraditional providers, including online lenders and companies specializing in particular types of business funding.

These providers may offer products that supplement conventional bank financing, such as working capital loans, equipment financing and invoice factoring. With factoring, a business sells or borrows against outstanding customer invoices to receive cash sooner, which can help address immediate cash flow needs.

Moving Forward

Certain financing arrangements may provide tax benefits. Interest paid on qualifying business debt, including lines of credit, term loans, commercial mortgages and SBA loans, may be deductible, subject to applicable restrictions and limitations. Payments made under eligible equipment lease agreements may also generally be deducted as ordinary business expenses.

Planning Ahead to Defer Tax on Advance Payments

For federal income tax purposes, advance payments are generally recognized as taxable income in the year they are received. This rule always applies to businesses using the cash method of accounting. Businesses using the accrual method, however, may be eligible to defer some of the income until the following year.

An accrual-basis business may elect to delay reporting all or part of a qualifying advance payment until the tax year after receipt. To qualify, the payment generally must:

• Be reported at least partly as revenue in a later year on the business’s applicable financial statement (AFS), or, if no AFS exists, be treated as earned in a later year; and

• Relate to goods, services or another qualifying item identified in IRS guidance.

Therefore, an accrual-basis business that receives eligible advance payments during 2026 may be able to postpone reporting some or all of the income until 2027 for federal tax purposes.

The AFS Requirement

An AFS may include an audited financial statement prepared for lending or financial reporting purposes, certain statements filed with federal or state government agencies, or reports submitted to the Securities and Exchange Commission, such as Form 10-K or an annual report.

When a business does not have an AFS and chooses the deferral method, it generally must report the portion of the payment treated as earned during the year it was received. Any remaining amount is usually recognized as taxable income in the following year.

Identifying Eligible Payments

Qualifying advance payments may include amounts received for services, merchandise, gift cards, intellectual property rights, software licenses, warranty agreements and subscriptions. Other types of payments may also qualify under applicable IRS rules.

Some payments are excluded from the deferral option. These generally include rent, subject to limited exceptions, certain insurance premiums, payments involving financial instruments and some service warranty arrangements.

Single? You Still Need an Estate Plan

Being single without children doesn’t eliminate the need for an estate plan. A well-designed plan can help ensure your wishes are honored and that important financial and medical decisions remain with people you trust.

Without a valid will, state intestacy laws generally determine who receives your property. Although beneficiary designations control certain accounts, assets without named beneficiaries or joint ownership usually pass according to state law. For unmarried individuals with no children, property may be distributed to parents, siblings, aunts, uncles, cousins or other relatives. If no eligible relatives can be found, the assets may eventually pass to the state.

Single individuals with substantial wealth should also consider possible estate tax exposure. Planning strategies, including certain types of trusts, may help reduce taxes and preserve more assets for chosen beneficiaries.

Powers of attorney are another essential part of an estate plan. These documents allow trusted individuals to manage financial matters and make health care decisions if you become unable to act on your own behalf.

Higher IRS Mileage Rates Are Now in Effect

Because of higher fuel costs, the IRS has raised certain standard mileage rates for the second half of 2026. Beginning July 1, the rate for business use of a car, SUV, van, pickup or panel truck increases to 76 cents per mile, compared with 72.5 cents per mile during the first six months of the year.

The mileage rate for qualifying medical and moving travel rises to 23.5 cents per mile from 20.5 cents. The charitable mileage rate remains unchanged at 14 cents per mile.

The rates apply to gasoline, diesel, electric and hybrid vehicles. Maintain accurate mileage records and supporting documentation to help substantiate any deduction claimed.

Lending Money to Family or Friends? Understand the Tax Rules

Making a personal loan to a friend or relative may lead to unexpected tax consequences. When a loan charges little or no interest, the IRS may treat part or all of the transaction as a taxable gift under the below-market loan rules.

To help establish the arrangement as a legitimate loan, use a written promissory note that states the interest rate, payment dates and amounts for both principal and interest, and any collateral securing the debt. The interest rate should meet or exceed the applicable federal rate published by the IRS, which may change monthly.

Review Contractor and Payroll Records

August is an ideal time to review contractor and payroll records before year-end reporting begins. Start by confirming that every worker is correctly classified as either an employee or an independent contractor. Misclassification can lead to unpaid payroll taxes, penalties, interest and additional filing requirements.

Make sure you have a completed Form W-9 for each contractor and verify that names, addresses, Social Security numbers or employer identification numbers are accurate. Review year-to-date contractor payments so you can identify who may require a Form 1099-NEC. For employees, check payroll records, wage totals, tax withholdings, benefits, reimbursements and deductions.

You should also reconcile payroll reports with your bookkeeping records and confirm that payroll tax deposits and filings have been completed correctly. Correcting missing information or payment discrepancies in August gives you time to resolve problems before preparing Forms W-2 and 1099 at year-end.

A thorough review now can reduce filing errors, avoid last-minute delays and make January reporting much easier.