November 2025: IRS USA Tax Updates

IRS Announces Penalty Relief for 2025 Tip and Overtime Reporting Under OBBB

The IRS has announced penalty relief for employers for tax year 2025 as they transition to new reporting requirements for cash tips and qualified overtime under the One, Big, Beautiful Bill (OBBB). Since Forms W-2 and 1099 won’t yet reflect these changes, employers won’t be penalized for missing separate tip or overtime breakdowns as long as returns are otherwise correct. Employers are still encouraged to share this info with employees to help them claim related deductions. 

Read the article here: Treasury, IRS provide penalty relief for tax year 2025 for information reporting on tips and overtime under the One, Big, Beautiful Bill | Internal Revenue Service 

IRS Announces Higher 401(k), IRA & Catch-Up Limits for 2026

The IRS has raised retirement contribution limits for 2026, including increasing the 401(k) limit to $24,500 and the IRA limit to $7,500. Catch-up contributions for individuals aged 50+ and special SECURE 2.0 enhancements also saw notable increases. Income phase-out ranges for IRAs, Roth IRAs, SIMPLE plans, and the Saver’s Credit have all been adjusted upward for 2026. 

Read the article here: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 | Internal Revenue Service 

Interest Rates Hold Steady for 2026: IRS Releases Quarterly Update

The IRS announced that interest rates for tax overpayments and underpayments will remain unchanged for the first quarter of 2026, with the individual rate staying at 7%. Corporate rates also remain the same, including 6% for overpayments, 7% for underpayments, and 9% for large corporate underpayments. These rates are based on the federal short-term rate determined in October 2025. 

Read the article here: Interest rates remain the same for the first quarter of 2026 | Internal Revenue Service 

IRS Tax Tip

IRS Reminds Tax Professionals to Renew PTIN Before Year-End

The IRS is reminding all paid tax return preparers that their 2025 Preparer Tax Identification Numbers (PTINs) expire on December 31, 2025, and must be renewed in order to continue preparing returns for the 2026 tax-season. The renewal process takes about 15 minutes online, carries a non-refundable fee of $18.75 for 2026, and must be completed before the deadline to avoid interruption.

Read the article here: Treasury, IRS provide guidance for individuals who received tips or overtime during tax year 2025