Don't Mess With Taxes

As Congress continues to haggle over how best to prevent falling off a tax cliff when myriad Internal Revenue Code provisions expire at the end of 2025, two other critical deadlines involving popular U.S. social safety net programs were announced. The news is not good for those who currently rely on or one day hope to collect Social Security and Medicare benefits. The report by the trustees of the Social Security and Medicare trust funds, which annually assesses the state of and future outlook for these federal retirement and medical benefits, says both programs will face fiscal shortfall sooner than... Read more →

Photo by Mike van Schoonderwalt Leaders of the Republican-controlled Congress are finding that pushing through one comprehensive tax (and more) bill is not that easy, even with the support of the presidential bully pulpit. The House version, christened the One Big Beautiful Bill (OBBB) in keeping with Donald J. Trump’s not-so-subtle suggestion, narrowly passed the House on May 22. Yesterday, June 16, Senate tax writers released their version, which makes substantial changes to several key House provisions. The differing bills already are sparking intra-party fighting. And depending on what’s in the final version, the Republican party also could have a... Read more →

Senate side of the U.S. Capitol (Scrumshus - Own work, Public Domain) Are you ready for more tax fighting on Capitol Hill? Apparently the Republican-led Senate Finance Committee is. The panel this afternoon released its changes to the House-passed One Big Beautiful Bill (OBBB). As expected, tax writers in the upper chamber made lots of changes. Here’s a look at some key differences. Child Tax Credit: If Congress doesn’t act, the Tax Cuts and Jobs Act (TCJA) provision that bumped the popular Child Tax Credit (CTC) from $1,000 to $2,000 per qualifying child will expire on Dec. 31, cutting the... Read more →

Facebook Real estate can be a good way to increase your personal wealth. However, some property investments aren’t as good as advertised. That was the very costly lesson learned by individuals persuaded by a popular social media financial influencer to let him use their money in what they were told was a property flipping venture that would net them returns of 30 percent or more. Instead, federal investigators and prosecutors alleged it was all a real estate Ponzi scheme concocted by Tyler Bossetti. As the scheme unraveled, investors ended up defrauded out of more than $11 million. Today, it formally... Read more →

Photo by RDNE Stock project Is the money account for growth and advancement, or MAGA, account for children, now renamed Trump Savings, necessary? I was going to use that as this post's headline, but it's a tad long. Plus, an editor once told me that every question headline can be answered “no.” I disagree, but this time, he’s probably right. James, a reader of the ol’ blog, also apparently agrees. In a comment on my post last week that looked at some of the tax changes in the GOP’s House-passed One Big Beautiful Bill (OBBB), he noted: Basically shifting the... Read more →

Image by freepik Financial literacy literally means understanding money. That's a big category, and effective financial knowledge goes beyond just making a living. When you are financially literate, you can maximize what you have so your, and your family and community, are financially healthy. Too many people, however, are functionally illiterate when it comes to finances. They scrape by, or do okay but don’t get ahead enough to stop worrying about money. Helping people improve their understanding of financial concepts and how to improve them was a main reason the Financial Literacy and Education Commission (FLEC) was created more than... Read more →

Some of my fellow Texans every Memorial Day weekend head to appliance stores instead of the beach. They are taking advantage of the Lone Star State’s annual Energy Star Sales Tax Holiday. It runs from the long holiday’s Saturday through Memorial Day Monday, exempting certain energy saving products from the state’s 6.25 percent sales tax, as well as the added 2 percent most cities also tack on to purchases. But this might be the last such sales tax holiday for Texans and shoppers in three other states. Energy Star tax breaks also are the hook for sales tax holidays in... Read more →

House Speaker Rep. Mike Johnson (R-Louisiana) on the phone as he and staff walk through the U.S. Capitol’s Statuary Hall. (Credit: Mike Johnson Facebook) The Republicans’ consolidated measure to enact Donald J. Trump’s tax, immigration, energy, and more policies eked through the House early this morning. The original Ways and Means Committee version of the legislation, dubbed the One Big Beautiful Bill (OBBB) per Trump’s not so subtle suggestion, was tweaked just enough this week to pass by a 215 to 214 vote. Only two GOP members, Rep. Warren Davidson of Ohio and Thomas Massie of Kentucky, defected. The pair... Read more →

The surprise move beat the House, which has a similar provision in its still pending One Big Beautiful Bill, to the tax relief punch. Photo by RDNE Stock project The House’s One Big Beautiful Bill (OBBB) does contain one of Donald J. Trump’s campaign trail tax promises. It provides tax relief for some workers who rely on tips to increase their income. The Senate, however, decided it was tired of waiting for its counterpart on the other side of Capitol Hill to act on this issue. On Tuesday, May 20, Senators unanimously, and surprisingly, passed their own the No Tax... Read more →

At the 100-day mark, the road looks a bit rough for the second Trump administration. (Photo by shy sol) April 29 marks the first 100 days of Donald Trump’s second presidential term. It has not been smooth for him or taxpayers. The Republican led House and Senate have been working on the Tax Cuts and Jobs Act, the party’s massive 2017 tax code overhaul bill that has a Dec. 31, 2025, end date for most individual tax provisions. But there’s been no action to date on what will happen to the law. Still, there’s been a lot going on that... Read more →

Photo by olia danilevich Tax Day always is illuminating, but not necessarily in a good way. Too often taxpayers discover how little they know about not only our U.S. tax system, but how it affects them personally. That unfamiliarity can be quite costly, which is the subject of this weekend’s Saturday Shout Outs. It's also the headline of the first shout out item, Tax and Financial Illiteracy Are Costing Americans, by Daniel Bunn, who is president and CEO of the Tax Foundation. His post at the Washington, D.C.-based tax policy group’s website points out some alarming findings about our overall... Read more →

Happy Easter weekend to all who celebrate. I've always enjoyed the more secular activities, like my neighborhood's annual Easter egg hunt. I always get a kick out of watching the youngsters scramble to fill their baskets with colorful eggs. Today’s hunts feature multi-hued plastic eggs, which is a good change from the targets of my childhood. I still remember finding stinky spoiled real, dyed eggs that were overlooked during the original quest. And yes, in my (geezer alert!) day, parents actually hid the eggs, instead of just scattering them across open areas. I also remember my mother not being thrilled... Read more →

Source: Statista A week ago, Donald J. Trump kicked off a series of tariffs on the United States’ global trade partners. He’s told us to “hang tough,” but the markets don’t seem to be listening. If you’re trying to stay positive while watching the markets’ continued dive eat into your nest egg, here’s an idea. The lower value of a traditional IRA could make this a great time to convert it to a Roth version. Roth conversion opportunity: A Roth IRA is a great option for many. Its biggest tax appeal is that you pay taxes on the money you... Read more →

Donald Trump's touted tariff Liberation Day turned into a dark day after for U.S. investors. (Autopilot via Wikimedia) How are my fellow investors doing this day after Liberation Day? Yeah, I thought so. When the markets opened today, we got to see the real time reaction to Donald Trump’s expansive round of tariffs he announced late Monday, April 2, afternoon. It wasn’t pretty. The global trade move sparked a Wall Street dive to its worst day in five years. That prior low also was under a Trump presidency, as we were starting to feel the initial economic effects of the... Read more →

Photo by cottonbro studio All of us with older cars, but not enough to buy a newer one right now, are watching Donald J. Trump's latest tariff move. What he sees at Liberation Day on April 3, could mean we drivers are stuck dealing with aging autos for a bit longer. Trump's convinced that his latest trade war volley, a 25 percent tariff on foreign-made vehicles and parts, will lead to a fundamental transformation of the U.S. economy. A lot of people, both economic experts and U.S. consumers agree, but not in the same positive reconfiguration that the 47th president... Read more →

Most of these birthday celebrants at an Austin-area senior citizens' center are enjoying the shared festivities. Maybe the man on the right is worried about his upcoming RMD. (Photo by Kay Bell) Did you celebrate your 73rd birthday last year? Congratulations and belated best wishes. The Internal Revenue Service also applauds your milestone, but partly for selfish reasons. Individuals who have certain tax-deferred retirement plans must start withdrawing some of those funds and pay tax due on the amounts once they turn 73. These required minimum distributions (RMDs) are annual. But you can delay your first withdrawal until April 1... Read more →

Photo by Polina Tankilevitch Special needs individuals and those who work with them are understandable concerned about many of the changes being made or proposed by the Trump administration and its Department of Government Efficiency (DOGE) henchmen partners. But the Internal Revenue Service, even though it is dealing with its own DOGE issues, is reminding people with disabilities of how an Achieving a Better Life Experience, or ABLE, account can help. The accounts were created in 2014 by the eponymous Achieving a Better Life Experience (ABLE) Act, a federal law that allows states to create tax-advantaged savings programs for eligible... Read more →

A related, and larger question, is what will happen to all federal student loans if, as the Trump administration also wants, the U.S. Department of Education is dismantled? And if your student loan already has been canceled, your celebration could be dampened if you live in one of 19 states that wants tax on the forgiven loan amount. The entrance to the National Museum of Education, located in the U.S. Department of Education headquarters in the Lyndon Baines Johnson Building, Washington, D.C. (Photo by Carol M. Highsmith for LBJ Building Architecture Gallery at GSA.gov) When the White House announced last... Read more →

Some taxpayers got a new earnings statement this year, a 1099-K form. The tax statement arrived because they sold more than $5,000 in products or services through apps and marketplaces. The 1099-K, officially titled Payment Card and Third Party Network Transactions, finally was issued this year on a widespread basis. It was supposed to go out years earlier to sellers who made $600 or more. That was a change made in the American Rescue Plan Act (ARPA) of 2021 from the $20,000 in sales and 200 transactions trigger to issue the form. All income you make, even if you don’t... Read more →

Photo by David Guerrero It's early in the 2025 filing season, but millions of taxpayers have already received their tax refunds. Most of these early filers also instructed the Internal Revenue Service to directly deposit their tax cash. Not only is direct deposit faster — in most cases, the IRS says refunds sent straight to financial accounts get there in 21 days or less — it’s a safer delivery method. You don’t have to worry about the U.S. Postal Service losing or misdelivering your Treasury check. Even better, it takes tax refund mailbox thieves out of the equation. Some taxpayers,... Read more →