2026 Tax Changes That Matter with Sheilah Smith CPA

We bring on CPA Sheilah Smith to break down the biggest 2026 tax updates and the real-world “gotchas” that trip people up during tax season. We also get practical about receipts, missing tax forms, business bookkeeping habits, and what to do if you have not filed in years. 

• no tax on tips and what people expect versus what rules require 
• no tax on overtime and why eligibility can be tricky 
• 100% bonus depreciation and how it affects business purchases 
• additional deduction for taxpayers age 65+ and the Social Security tax frustration 
• why receipts matter and why statements are not enough 
• how to document meal expenses with who and why 
• avoiding missed forms by collecting every page of consolidated 1099s 
• separating business and personal funds to avoid missed deductions 
• estimating the business portion of a cell phone bill 
• catching up on unfiled returns and reducing the stress 
• married filing jointly and shared responsibility, especially in divorce 

Sheilah Smith CPA 
214-282-5506
http://sheilahsmithcpa.com/

To learn more about Stansell Wealth Planning visit:
https://www.StansellWealth.com
Stansell Wealth Planning
5550 Granite Pkwy, STE 270  
Plano, TX 75024  
469-606-2040

Transcript

Speaker 1 0:16

Hi, everyone. Welcome back, Stansell Wealth Podcast. Thank you for joining. Hope you're doing well wherever you are out there. If you are new here, this is where we go through all the financial planning topics. So investments, taxes, estate planning, cash flow, how to pay off debt, all the topics. And from time to time, we have a guest join us. And today, if I'm very excited about this, we have a guest, CPA, tax professional, Sheilah Smith. Sheilah, what's going on?

Speaker 0:52

It's tax season. Everybody's favorite time of the year, right?

unknown 0:55

Yes.

Speaker 0:56

Death and taxes. Those are the two things that are guaranteed in life.

Speaker 1 0:59

Yes. Yeah, that's. And if for anyone watching this in the future, it is late February. So Sheilah, I was hesitant reaching out, like, hey, I know you're about to be in the depth attack, but can you take some time? So I appreciate you joining us.

Speaker 1:16

Not a problem at all. I'm glad to be here.

Speaker 1 1:17

Yes, absolutely. I didn't even introduce myself. If someone's brand new, my name is Cody Stansell, certified financial planner. We have this podcast. We try to come out with new episodes every Wednesday. So every week. And once again, going through the various topics that we'll go through. So really excited to walk through with Sheilah. As I was saying, she's a CPA. We've been, goodness, Sheilah, we've been working together four or five years or so.

unknown 1:44

Yeah.

Meet CPA Sheila Smith

2026 Tax Updates That Stand Out

Speaker 1 1:45

And we do not prepare taxes at our firm. We do a lot of tax planning, but not preparation. So that's where a lot of CPA partners that help us and send clients to. So we'll dive into some changes in 2026. There's some things to be considering, and we'll uh we'll go from there. But Sheilah, let me read off your bio, more formally introduce you. And this one is a little bit longer. I thought it was really good stuff. I got a lot of this off your website. So hang with me here if you're watching or if you're listening, but let me run through and introduce Sheilah and then we'll go from there. So Sheilah Smith is a CPA, runs a small business accounting firm licensed in Texas and Arizona, providing tax and business services to small businesses and individuals. With over 22 years of public accounting experience with the international accounting firms of KPMG, Deloitte, Sheilah has extensive experience in individual taxation for high net worth individuals, international assignees, and has successfully represented clients with IRS matters, including audits. Additionally, she provides a full range of tax planning and compliance services to sole proprietors, LLCs, partnerships, and S corporations, as well as bookkeeping and payroll administration administration services. Sheilah is proactive in conveying information to her clients in a sound, practical terms, which I love, by the way. And every client is given the attention and devotion he or she deserves. Sheilah works with each client on a personal level to determine what drives their business and personal strategies and financial decisions. I know it was a mouthful, but I wanted to go through through the logistics of who you help and then what makes you a little bit different and convey that. So let's dive in. What are we in a brand new tax year? I know Trump administration won big, beautiful bill. There's been a lot of tax law updates. What's the biggest tax updates you're seeing 2026 affecting people?

Speaker 3:52

For individuals, it's the no tax on tips. Everybody's very excited about that, and the no tax on overtime. The overtime one is tricky because there was no requirement for employers to put anything in the W-2s or to provide anything during for 2025. And one of the things that catches everybody is just because you got paid overtime, maybe you worked nine hours one day and you got paid for an hour of overtime, but you only worked 35 hours that week, it doesn't qualify for the no tax on overtime. You have to have worked 40 hours, and so it's only the overtime over 40. And it's only that portion that halftime. So if you get paid time and half, it's only that halftime that is not subject to tax. So that one kind of catches everybody. And everybody's definitely pointing those out to us that they've got the tips in overtime, which I think is good. Any kind of tax break for the small taxpayer, I think is great. For businesses, the big one is the bonus depreciation, which is now at 100%. So if you have you purchased a new asset in your business, you bought an expensive computer that was $3,000. Now you can expense the entire thing in the year you purchased it due to the bone the 100% bonus depreciation. For our senior citizens, there's the additional $6,000 deduction if there's 65 or over. But the that and the no tax on tips, the no tax on overtime, that's only good through tax year 2028, unless Congress comes up and makes those permanent, those are set to expire in 2028.

Speaker 1 5:33

Yeah, that's awesome. That's those are all very helpful to taxpayers. In my opinion, if you own a business, the bonus depreciation is unbelievable. Instead of amortizing it over 10, 15 years, you can take it all. That's a big one. It is. And then the catch-up deduction, if you will, above 65. We've already seen that in working with that with clients of it was Trump administration trying to not pay taxes on Social Security. They couldn't quite get that through the bill. So this is making up for it in a way.

Speaker 6:05

And I will say that's one of those. Normally when I look at the tax code, I'm like, it is what it is. It just maybe it makes sense, maybe it doesn't. It is what it is. But I will say my personal perspective is I don't like I disagree with there being tax on social security. You've already paid tax on that income. But they didn't come to me and ask my opinion.

Speaker 1 6:24

So they didn't.

Speaker 6:25

Back to it is what it is.

Common Tax Prep Misunderstandings

Speaker 1 6:27

Right. Yeah, you don't create tax law, you just follow it and I just have to follow it. Yep, exactly. You've probably already met with some clients in 2026, but especially in years past, what are the most common misunderstandings or misconceptions where clients maybe they ask the same question, there's some confusion with tax prep.

Speaker 6:48

I would say from a business perspective, it's receipts. And the answer is you absolutely have to keep all your receipts. The tax court ruled, and I think it was 2018, that your bank statements or your credit card statements do not support any deduction or a number you've taken in your tax return. And so if you were ever audited, you actually have to have all of your receipts. One thing regarding meals, receipts for meals, that is particularly important is you want to make sure you write down on your receipt who you were with and what was the topic of the conversation. And I always say it doesn't have to be a big dissertation. You could just put, I met with Cody Stansell and we're a client or we were networking, and that's good enough, but you do need to document who you were with and what was the topic of the conversation. So from a business perspective, that's the big one that I see. And we don't necessarily need your receipts, but you want to make sure you keep them. From a personal perspective, it's making sure that you've really gotten all your tax documents. And I think there's been confusion over the years where sometimes you might get them paper and sometimes you don't get it paper. And I think those are the ones that are easy to forget about. You have to remember, oh, I have this account. I need to log in and I need to download the tax document. And two, for the 1099 consolidated, some of those might be, I've seen some that are only three or four pages, and I've seen some 50 plus pages. And we actually do ask for every single page, even though looking at it, you're like, I know you don't need half of these, but we want to make sure we have everything so that nothing gets missed. And I'd say that's the big one on the individual side.

Missed Deductions And Better Habits

Speaker 1 8:28

Yeah, that's a really good point because we have clients that maybe they have four or five different accounts with us at Charles Schwab. And through the them becoming new clients and the paperwork, maybe they accidentally chose two of those accounts to be electronic statements and the other two or three to be paper. And so a lot of times they'll just send the CPA only their electronic copies or only the paper. So obviously, if you have a good handle on that, that's perfectly fine. But we encourage clients hey, if you have four accounts, make sure they're all paper or they're all electronic. That way you're not missing anything. So that's a really good point. So, what is there a tax benefit deduction you've seen clients miss or not know about? Maybe some business owners that just didn't really track that segment of their business because they didn't think it'd be helpful.

Speaker 9:17

From a business perspective, I think where I see it most often is if co-mingling funds, co-mingling business funds with personal funds. Even if you have a separate business account, which you should, you should, you want to make sure everything business related is going through the business account, everything personal is going through the personal account. And where I see when you commingle funds or you haven't set up a separate business account, odds are you're absolutely probably going to miss some deductions, some expenses that you are entitled to. That's probably the big one, that right there. I always remind clients or ask clients about cell phone. Most people just have one cell phone and you're using it for both business and personal. So I always ask about that. Now, with if you have a business, you can't deduct the entire cell phone bill because clearly you're using it some for personal. And the response is just you need to make your most reasonable estimate as far as what percentage of time you think you use your cell phone for business purposes. But that's the big, and I would say too, if we get back up to talking about not commingling funds, another suggestion too is stay on top of your business expenses and your business income. The if you wait until year end to do everything, again, odds are you're probably going to overlook or miss an expense because you're rushing to get everything done. And I think too, if you do it throughout the year, it probably won't even take you as much time as if waiting to the end of the year to do everything.

Getting Caught Up After Not Filing

Speaker 1 10:48

Yeah, that's a really good point. Depending on your business, everyone's a little bit different monthly or quarterly. It'll take an hour, is whereas compared to at the end of the year, you forget or you lose it. And now it's taking you a half day to wrangle up everything. So that's really, that's a really good point. Is there an interesting client situation or scenario? It could be humorous, it could be reasonable that you've run across recently last couple of years?

Speaker 11:19

So I think we I often get contacted by clients that are, I haven't filed in a few years. And I think it's I think once you have missed one year, it's easy for it to just get out of control and now you've missed two, three, or four years, and you don't want to think about it and you don't want to address it. And the thing is, you're not alone. You, I promise you, your situation is not unique. You are not the only one in this situation. And the best thing to do is let's just tackle it, get you caught up. I promise you'll sleep better at night, you'll feel better. And sometimes I give this scenario my very first client right out of college. I was working for, I was working for KPMG, a big firm. My very first client, I was living in Phoenix, and so there's a lot of golfers in Phoenix. And my first client was a golf pro. He hadn't filed his return for a few years. He literally came in with the green outdoor trash bags, you know, the big huge ones that are for industrial kid you not full of receipts for probably three or four years. So no matter what your situation is, I guarantee you it is not as bad as what my very first client was. And I remember the room was freezing cold, and I probably spent three weeks there sorting through receipts and making a list of what he had and what he didn't have. So nobody is going to beat that one. Or it'll, I think it'll be hard, I think you'll be hard pressed to beat that one.

Speaker 1 12:58

That's a really good point because there's clients come to me all the time and are like, prospects. I'm like, we got a really bad situation. Don't know if you've seen one like this. And I was like, I'd try me because odds are we have. And there's another case. I met with this client late last year where I said, Hey, send me last year's tax return. And they said, Yeah, yeah, that's the thing. We haven't filed in about three years. And I said, Do what? And I'm not the IRS, right? But you can tell me anything. But yeah, let's get back on top of that because that might be a big deal. So let's make sure.

Joint Returns And Divorce Risks

Speaker 13:31

I would say to that point, like I haven't filed in a few years. Another one, too, is I see with married couples, generally one person is handles all the finances and handles the tax returns. And I want to point out that if you're married filing joint, it's both of your tax returns, and both parties have had to sign off on the tax return to be filed. I do come across, it's not as often as it used to be, but I do come across where one especially in divorce, where the the new client is, I've never seen the return, I don't have a copy of the prior year return. I just want to caution everybody that even if you haven't received it, I guarantee you had to have signed it. And so you are partly responsible for that return. So that's a really good point on having copies of your prior year returns. So I always ask for that because we're always comparing prior year to current year just to make sure we're not missing anything, or if you had dividends in the prior year of $25,000 and this year it's $500. Let's talk about why the difference. But another thing I also come across is married filing joint. So if you couple filing a joint return, both parties are responsible for the return. Both the husband and spouse have signed off on the return. So you've put your signature on it and you own that return and you're attesting to everything in that return. And what I sometimes see is with divorce that the one generally one person within a marriage handles all the finances, which is fine, handles the finances, takes care of the tax returns, but then the other person really doesn't know uh know what's going on, maybe doesn't even have a copy of that prior year return. And I would just be cautious of that because you've signed off on it. So if there's anything happening from an IRS perspective that's not that's not up to to snuff, you're responsible if you've signed off. So I would just make sure you always have a copy of that prior year return.

How To Contact Sheila

Speaker 1 15:30

That's a really good point. I like that one. Okay. Thank you so much for your time and expertise. Tell everyone where they can find you. What phone number, what website?

Speaker 15:43

So the best way to get a hold of me is through my cell 214-282-5506. One thing I do tell my clients this time of the year, I'm not gonna be real timely getting back to you, but I will. And generally what I do is first thing Saturday mornings, if I haven't been able to return a call or something, first thing Saturday is when I start taking care of all that. And I don't think I'm unique in that. I think that's just the nature of tax season. Or you can check out my website. It's Sheilah S H E I L A H Smith C P A dot com.

Speaker 1 16:23

Okay, awesome. Sheilah, thank you so much for your time. Appreciate it.

Speaker 16:27

You're welcome. I enjoyed it. Thank you.

Speaker 1 16:29

Yes, absolutely. Have a good rest of your day.

Speaker 16:31

Thanks, you too.

Podcast Disclaimer And Closing

Speaker 1 16:34

Thank you for listening to the Stansell Wealth Podcast. This podcast is for informational and educational purposes only. It is general in nature and may not apply to your specific situation. Please consult with a professional before acting on any information shared in this podcast pertaining to financial, investment, legal, or tax advice. The views expressed by Cody and his guests do not necessarily represent those of Charles Schwab, Victory Financial Group, or any other organization.