This article reflects on personal milestones and discusses recent tax-related changes, including the phasing out of paper refund checks by the IRS, the suspension of employer 401(k) matches, housing affordability issues, adjustments to capital gains exclusions, implications of recent tax legislation, and upcoming deadlines and events. It also explores a notable FBAR enforcement case, the potential impact of a government shutdown, and encourages tax professionals to participate in pro bono activities during October.

Tax Updates and Personal Reflections as September Wraps Up

Plus: Disappearing employer 401(k) matches, retirement plan contributions, capital gains and housing, a possible government shutdown, an FBAR shakeup, tax filing deadlines, tax trivia and more.

Kelly Phillips Erb is a Forbes senior writer who covers tax.

My birthday is coming up and, as I do every year, I get a little contemplative. There are a few things in this world that make me feel, well, old. Things like having to scroll for a bit to reach my birth year when I complete an online form, realizing that my kids think about Nirvana in the same way that I used to think about Beatles (some old band that had long disappeared), and figuring out that if they remade “Back To The Future” today, Marty McFly would go back in time to 1994. Nineteen. Ninety. Four. (Let that sink in.)

I also felt it this week when the IRS officially announced that paper tax refund checks for individual taxpayers will be phased out beginning on September 30, 2025. It is the first step in the broader transition to electronic payments as required by an Executive Order issued by President Trump.

The executive order also requires that payments be made electronically, too, which means no more paper checks. But not to worry, while the switch over from paper refund checks will be immediate, the IRS says to make payments as usual–the agency will publish detailed guidance for 2025 tax returns before the 2026 filing season begins.

The announcement brought a mix of responses to my feed, ranging from “It’s about time!” to “This sounds like a very bad idea.” My favorite, “Who writes checks anymore?” Me. I’m that person (but don’t worry, I don’t write checks in grocery stores or at other retailers). I do it for a lot of reasons–including avoiding those distasteful service fees for credit card payments that merchants keep adding.

But honestly, I’m somewhere in the middle. I applaud the IRS’ efforts to expand electronic payments and I appreciate that they are typically more efficient and secure. I just hope that, as the agency works to craft exceptions, they are thoughtful about the fact that not everyone can or wants to rely on digital payments–including the unbanked and Americans abroad (under current law, if you live outside the country, your federal income tax refund can only be deposited directly into a U.S. bank account or an affiliated account). I’ll keep you updated as more guidance becomes available.

It’s not just the check-writing that is showing my age. This year, my daughter joined millions of other workers when she enrolled in her employer’s 401(k) plan. It’s her first real job and it’s been fun to watch her realize all of the perks associated with a “real job”—including an employer match, which, as I explained to her, is basically free money.

But what if your employer didn’t offer a match? Or worse, what if your employer announced that it would no longer contribute a match to your 401(k) plan?

That’s exactly what happened to workers at Sherwin-Williams, a paint and coatings company based in Cleveland, Ohio. The company, which boasts just under 50,000 workers nationwide, announced plans to temporarily suspend its 401(k) match. According to Cleveland.com, which first reported the move, the company cited several factors, including tariff policies, increased costs, high mortgage rates that have pushed housing demand to near-historic lows and inflation that has reduced DIY demand for three consecutive years.

It’s important to understand the options available under your plan–and what you can do outside of your plan (keep reading to see our related reader question this week).

Housing costs are also driving news in the tax sphere. The National Association of Home Builders said in March that 60% of U.S. households can’t afford a $300,000 home at a time when the median price is now well above $400,000.

One potential reason? Housing prices have soared since the 1990s, but the tax rules that govern selling a home haven’t changed. The capital gains exclusion for primary residences is still capped at $250,000 for single filers and $500,000 for married couples. For many long-time owners, especially seniors, that means selling triggers a steep tax bill. Downsizing becomes less about preference and more about what they can afford after taxes.

Congress has tried to raise the limits before–there have been multiple attempts since 1997, some to index the caps, others to create special relief for seniors. This summer, President Trump suggested he might offer relief. Eliminating the cap could free up hundreds of thousands of homes, boosting local tax revenues and helping unclog the market. But it could also create more competition at the low end as downsizers bid against first-time buyers. We’ll have to watch to see what happens.

Housing prices are also impacted by the cost of living, including state and local taxes (SALT). While tax rates stayed put under the new tax bill, some of the provisions in the One Big Beautiful Bill Act (OBBBA) result in so-called “stealth taxes”—items that increase your tax bill by reducing tax breaks or adding other taxes. One example from OBBBA is the SALT deduction limit. OBBBA raised the limit on SALT deductions from $10,000 to $40,000. But the limit is reduced for taxpayers with higher incomes, beginning with modified adjusted gross income (MAGI) above $500,000.

That means as income rises, the SALT deduction is reduced so the real marginal tax rate increases. The marginal tax rate for the couple peaks at 45.5% when MAGI is $550,000. When MAGI is above $550,000, the marginal tax rate declines, but never below 35%. It’s an important consideration when thinking about retirement, spending and other potentially tax bracket-dependent items.

Income limits also impact tax breaks on the lower end of the income spectrum. OBBBA permanently increased the maximum child tax credit (CTC) amount to $2,200 per child and indexed it for inflation, which was good news for many families. But these changes do little for families with low incomes, because the credit's pre-OBBBA phase-in rules remain in place. And, as under prior law, the phase-in amounts grow each year with inflation. But the amount of credit a family can receive beyond taxes owed is limited to 15% of earnings above $2,500. A larger credit with these same phase-in rules means that more children now live in families that cannot receive the full CTC because their parents do not earn enough.

There’s one more income-dependent OBBBA provision that’s making news: student loan borrowers are facing a ticking time bomb that could result in an “enormous tax liability.” That’s according to a lawsuit filed against the Department of Education in the U.S. District Court for the District of Columbia.

The complaint alleges that, in February of 2025, the Department of Education blocked access to all income-driven repayment plans and online loan consolidation applications without warning, impacting over 12 million student loan borrowers who rely on those plans. Eventually, the Department re-opened the online applications, leading to a backlog as borrowers rushed to recertify their income and apply for other relief.

So what’s the problem? The backlog remains. And while the American Rescue Plan Act of 2021 (ARPA) made clear that the cancellation of federal student loans does not result in a taxable event for federal income tax purposes for discharges occurring after December 31, 2020, and before January 1, 2026, OBBBA didn’t extend this protection for borrowers, except for loans cancelled due to death or disability. That means that if the Department does not process cancellations before the end of the year, those borrowers will not qualify for the exemption. In other words, the complaint alleges, “these borrowers will literally pay for the government’s inaction.”

Speaking of the government, last week I reported that the Treasury had issued final regulations on SECURE 2.0 Act provisions related to catch-up contributions. The Regs were, um, confusing at best (you might have seen the reporting with headlines like, “What’s the Actual Effective Date for Roth Catch-Up Contributions?” followed by statements like, “still they have caused some confusion.”). The most confounding bit was the compliance date. After some back and forth, I agreed that the Regs intended to convey that plans have no choice about whether to comply with the basic statutory requirement (the 2026 deadline), but that they have until 2027 to sort out the details of exactly how to comply. That change has been made and I apologize for any confusion. I would also be floored if we didn’t see an official follow-up from the Treasury on this point.

And with that, it’s wild to think that September is almost over. October will be here before you know it and that means at least two important things: post-season baseball (!) and it’s pro bono month. Every October since 2009, legal organizations across America participate in the National Celebration of Pro Bono to draw attention to the need for pro bono participation, and to thank those who give their time year-round.

While pro bono is often affiliated with lawyers, there are lots of opportunities for tax and other professionals to give back, too. My best advice? Work with an existing organization—they have the infrastructure to screen for need and fit, and may provide support, resources, and, importantly, insurance coverage (you may remember that the Alaska program I participated in was sponsored by the American Bar Association Section of Taxation). If you’ve never done any pro bono work before, this is a great time to give it a whirl.

Enjoy your weekend,

Kelly Phillips Erb (Senior Writer, Tax)