I’m guessing you, like me, get plenty of questionable emails in your inbox. Recently, I received one that looked like a routine notification from the Social Security Administration. My latest Social Security Statement was supposedly ready to view.

Except it wasn't.

The email was a scam, and a potentially dangerous one. Clicking the link led to a website designed to look like Social Security. But instead of downloading a statement, you could end up downloading software that could give scammers remote access to your computer.

Here's what makes this one particularly troubling: The software itself, ScreenConnect, is legitimate. It's used by businesses and IT professionals all of the time. But in the wrong hands, it can give someone access to your sensitive information and even control of your computer.

I took a closer look at how the scam works, including what to do if you've already clicked. It's a good reminder that an email with an official-looking logo doesn't necessarily come from the government.

Speaking of the government, the Supreme Court has agreed to hear a case about something you might not expect to find in the tax code: making whiskey at home.

You can generally brew beer and make wine at home for personal use. But federal law prohibits distilling spirits at home, even if you have no intention of selling them. The restriction dates back to the 1860s, when Congress was trying to crack down on excise tax evasion.

The Supreme Court has now agreed to consider whether Congress went too far. The case, Department of Justice v. McNutt, asks whether Congress's power to collect taxes also allows it to prohibit an activity because that activity might make tax collection more difficult. The Supreme Court is expected to hear arguments in 2027.

(If you've been reading for a while, you may remember that we've followed this issue before for “You Be The Tax Judge.” There’s a new case this week… keep reading.)

From a nearly 160-year-old law to a new one, there's another tax change worth paying attention to, and it has to do with your retirement. Starting in 2026, some higher-income workers must make their retirement catch-up contributions on a Roth basis instead of a traditional pre-tax basis.

If you're age 50 or older, you may be able to contribute more to your workplace retirement plan than younger workers. For 2026, the regular 401(k) contribution limit is $24,500. But when you turn 50, you can make an additional catch-up contribution of $8,000, which means that you can potentially put away $32,500 for retirement. (Workers ages 60–63 can save even more.)

Now, if you’re 50 or older by the end of 2026 and you earned more than $150,000 in FICA wages from the employer sponsoring your plan in 2025, your catch-up contributions must be made on a Roth basis rather than a traditional pre-tax basis.

Why does it matter? Traditional pre-tax retirement contributions typically lower your tax bill because they are excluded from your current taxable income. That money grows tax-deferred, and you pay tax when you withdraw it.

Roth contributions work differently. With a Roth, you pay income tax now, but qualified withdrawals in retirement are normally tax-free.

The new rule doesn't mean you can't save as much for retirement. But it may change how much of your contribution reduces your current taxable income—and, potentially, how much you take home in your paycheck. For example, if you're in the 24% federal tax bracket, switching an $8,000 catch-up contribution from pre-tax to Roth could mean about $1,920 more in federal income taxes this year.

Why is this happening? Money. As Cyndi Lauper sings, “Money changes everything.” When Congress passed SECURE 2.0 in 2022 (the law causing this change), they needed to offset some of the other goodies. Forcing my fellow Gen-Xers (and older workers) to pay tax now does exactly that.

And speaking of tax law changes, I’ve received lots of questions about those 2027 tax brackets. The reason you can’t seem to find them? They’re not out yet. But if you want a peek at what they will likely look like, I published Bloomberg’s projections earlier this fall. You can find those here.

Let’s talk more tax.

A reader asks: I won a scholarship for my semester abroad. I’ll be studying business (start-ups) in Mexico as part of my degree. I read that it might be taxed to me. I’m confused because I don’t pay taxes because I’m a full-time student. Help?

Taxgirl says: First, congratulations on your scholarship! What an amazing opportunity!

So, let’s address your question in a few parts. First, don't assume that being a full-time student exempts you from paying federal income taxes. Whether you have to file a tax return or owe taxes depends on several factors, including your income, age, filing status, and whether someone else can claim you as a dependent.

Now, about that scholarship. Scholarships are generally tax-free if you're pursuing a degree at an eligible educational institution and use the money for qualified education expenses. Those expenses include tuition, required enrollment fees, and books, supplies, and equipment required for your courses.

Here's where studying abroad can get tricky. The IRS doesn't treat all education-related expenses the same way. Even if your semester in Mexico is part of your degree program, scholarship funds used for airfare, housing, meals, or other living expenses aren't tax-free. That means you could have both taxable and nontaxable portions of the same scholarship.

My advice? Check the terms of your scholarship to see what expenses it covers, and keep records showing how you spend the funds. Your school's financial aid office should also be able to help you identify which expenses qualify. If part of your scholarship is taxable, that doesn't necessarily mean you'll owe taxes or have to file a return, but you'll need to consider that income when determining your filing obligations.

And enjoy Mexico!

One thing that genuinely surprises taxpayers year after year is that when married taxpayers file a joint federal income tax return, they are jointly and severally liable for the tax due on that return. That means each spouse is legally responsible for 100% of the tax liability, including any additional tax, interest, and penalties that may be assessed (and no, that math doesn’t make sense). The IRS can seek payment from either spouse, even if one spouse earned all the income or was responsible for an error on the return.

Joint and several liability can have consequences long after a marriage ends. A divorce decree may assign responsibility for unpaid taxes to one spouse, but that agreement typically doesn't bind the IRS. The IRS will still chase divorced spouses for the entire tax bill if the tax remains unpaid.

There are exceptions. Taxpayers who meet certain requirements may qualify for innocent spouse relief, separation of liability relief, or equitable relief. These provisions can provide relief from responsibility for tax attributable to a spouse or former spouse, depending on the circumstances. Relief isn't automatic, however, and taxpayers must request it from the IRS.

In 1983, Senator William Roth, for whom Roth retirement accounts are named, decorated a Christmas tree to draw attention to government waste. What did he use as ornaments?

A. Shredded tax returns
B. Overpriced Pentagon hardware
C. Copies of the federal budget
D. Rejected government checks

Find the answer at the bottom of this newsletter.

This week, get to know Ben Alarie, co-founder and CEO of Blue J and a law professor at the University of Toronto who's helping reshape how tax professionals use AI. Ben talks about the future of tax research, why AI isn't replacing tax professionals, and the risks of firms ignoring how their employees are already using AI. He also shares how a mentor sparked his interest in tax, why he keeps a hammock in his office, and how he spent four years hiking more than 900 kilometers with his family.

If you know someone who should be featured in a future Getting To Know You Tuesday, you’ll find nomination and submission information at the bottom of the post.

Review Your Health Insurance and Plan Your HSA Contributions. With open enrollment underway at many companies, now is a good time to review your options. Review what you spent on healthcare this year, consider any anticipated changes, and compare premiums, deductibles, and out-of-pocket costs. If you're eligible for a health savings account (HSA), consider how much you want to contribute in 2027. The contribution limits increase to $4,500 for self-only coverage and $9,000 for family coverage, with an additional $1,000 allowed for those age 55 and older. Remember, HSA contributions offer tax advantages, and unused funds roll over from year to year.

Now through December 7, 2026 — Medicare Open Enrollment. Review or change Medicare Advantage and Part D prescription drug plans for 2027.

November 1, 2026 — Health Insurance Marketplace Open Enrollment Begins. Individuals can begin selecting health insurance coverage for 2027.

December 7, 2026 — Medicare Open Enrollment Ends. Last day to make changes to Medicare Advantage and Part D prescription drug plans for 2027.

December 15, 2026 — Marketplace Coverage Deadline. Enroll through HealthCare.gov by this date for coverage beginning January 1, 2027.

December 31, 2026 — Year-End Tax Planning Deadline. Generally the last day to make charitable contributions and complete Roth conversions for the 2026 tax year.

December 31, 2026 — Required Minimum Distributions (RMDs) Deadline. Most taxpayers age 73 and older must take their RMDs from traditional IRAs and certain retirement accounts by year-end. 

November 9-10 — AICPA National Tax Conference, Washington, DC + virtual. Federal tax developments, IRS priorities, and legislative changes. Speakers include National Taxpayer Advocate Erin Collins and my former Forbes writing colleague, Tony Nitti.

November 15-20 — NYU Institute on Federal Taxation, New York City. Focus on tax controversies, partnerships, trusts and estates, international tax, and more. 

Made a mistake with your IRA? There's a new fix coming. The IRS has announced a new correction program for certain IRA mistakes involving financial institutions and other service providers, as well as a process for requesting waivers of the 60-day rollover deadline in qualifying circumstances. The program takes effect May 1, 2027.

Michigan man sentenced to nearly six years in prison for PPP fraud. Carl Lawrence, a business consultant, was sentenced to 70 months in prison for his role in submitting 29 fraudulent Paycheck Protection Program (PPP) loan applications that resulted in more than $4.7 million in improper payments. Lawrence personally pocketed nearly $450,000 from the scheme, which involved a Delaware tax preparer and ultimately brought in approximately $9.1 million in pandemic relief funds. 

IRS begins issuing automatic adoption credit refunds. The IRS has begun issuing refunds to more than 50,000 taxpayers who claimed unused adoption tax credits from 2020 through 2024 on their 2025 tax returns. Eligible families won't need to file amended returns, and the agency expects most refunds to be issued by year-end.

The tax world is full of interesting people. Here’s who’s making news.

Herbert "Herb" Beller, a longtime tax attorney and former ABA Tax Section chair, has established a scholarship fund at Northwestern Pritzker School of Law. Beller, who practiced tax law for more than 50 years and taught at Northwestern for 14 years, created the Herb Beller Tax Career Scholarship Fund to support students pursuing joint JD-Tax LL.M. degrees.

Kimberly Ellison-Taylor and Gene Dodaro have received the AICPA's highest honors. Ellison-Taylor, a former AICPA chair and technology executive, received the Gold Medal Award of Distinction, while Dodaro, former U.S. Comptroller General and head of the Government Accountability Office, received the Honorary Gold Medal. 

The answer is B. 

Roth decorated a Christmas tree with military spare parts, including nuts, bolts, and wrenches, that would have cost the Pentagon approximately $101,000. The same items could be purchased at ordinary hardware stores for about $110.

Last week, I asked whether a California couple could claim nearly $25,000 in home-office renovation expenses. If you sided with the IRS, you were right! In Fontayne v. Commissioner, the Tax Court ruled that the renovations were capital improvements, not currently deductible business expenses.

This week, we're tackling a different question: What does it actually mean to file a tax return? A partnership provided copies of its return to the IRS, but the agency argued that it had never been properly filed. Does giving a return to an IRS employee count, or does it matter where the return ends up? Read the facts and cast your vote. I'll share the court's ruling next week.

A quick note: This week's newsletter includes an ad from CookUnity, a chef-prepared meal delivery service. Sponsorships like this help keep Taxgirl free for everyone. Thanks for being here!

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Thanks for reading! 💚

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