On Oct. 10, Social Security recipients got the annual word on how their benefits will change in the coming year. It was not exactly the news many had hoped to hear. The 2.5 percent increase for 2025 for around 68 million retirees and disabled workers who receive Social Security payments was one of the lowest in recent years. Recipients’ grumbling about the 2025 increase also were likely influenced by this year’s 3.2 percent hike, and the 8.7 percent boost in 2023 when inflation was at an historic level. Fixed-income folks also are still worried about inflation. Although it has eased,... Read more →
Politics
The coming wage base bump also means more FICA taxes for higher earners. Running the numbers is important for everyone, but critical for older folks who rely on Social Security benefits, and the annual cost-of-living increases, to cover much of their expenses. (Photo by Getty Images via Unsplash) There’s some good news for the more than 72.5 million recipients of Social Security payments. The Social Security Administration (SSA) today announced they’ll soon see an increase in their retirement and/or Supplemental Security Income (SSI) benefits. Nearly 68 million retirees who receive monthly Social Security deposits will see a 2.5 percent cost-of-living... Read more →
Photo by Adeolu Eletu on Unsplash The main goal of the Republican tax reform bill in 2017 was to lower the corporate tax rate. It did that, cutting it from 35 percent to 21 percent and making it permanent. For anyone not fluent in Congressional legislative language, that means that, unlike the many individual tax breaks in the Tax Cuts and Jobs Act (TCJA) set to expire at the end of 2025, there’s no sunset on the lower corporate tax rate. That’s put much of the tax focus, especially on Capitol Hill, on those expiring provisions. But the corporate tax... Read more →
Americans have always been aspirational. We strive to be better, especially financially. And while we’d all like to be millionaires (or richer), we’re also pretty pragmatic. We want to do better than we did the year before, making progress as we continue our American Dream journey. That’s why candidates for all offices this election year are making promises they say will help middle-class voters Americans. Based on data gathered last year, those vote seekers better get to work. Fast. The United States’ middle class has been shrinking. Economic stresses have increased: Independent inflation data aggregator Truflation reported that the number... Read more →
A television studio like this one in the CBS Broadcast Center will be the site of next week’s only vice presidential debate. Gov. Tim Walz and Sen. JD Vance, the two major party vice presidential candidates, will face off on Tuesday night, Oct. 1, for their first formal debate from the CBS Broadcast Center in New York City. With GOP nominee Donald J. Trump saying it's too late to debate his Democratic counterpart Vice President Kamala Harris a second time, the Walz-Vance encounter likely will be the last major televised debate of this election cycle. Unlike the Harris-Trump debate, the... Read more →
Even the Internal Revenue Service has acknowledged the Employee Retention Credit (ERC) claim process has been beleaguered by fraud and abuse. That’s why the tax agency stopped accepting new ERC filings last year, and has focused on working through existing claims. While some ERC claimants have received tax credit money for keeping staff on payroll during the height of the coronavirus pandemic, others are getting bad news from the IRS. Their ERC claims have been denied. The unwelcome word is arriving as IRS Letter 105-C. The mailed correspondence means the IRS has found the claim ineligible, and has disallowed, or... Read more →
Photo by RDNE Stock project A home of one’s own has long been part of the traditional American Dream. Nowadays, though, some say it’s a nightmare trying to join the homeownership ranks. So, of course, as we head into the last few weeks of the 2024 election, candidates at all levels also are focusing on housing. Vice President Kamala Harris, the Democratic presidential nominee, has proposed tax breaks she says will increase the housing supply, which should lead to lower prices. She’s also promoting a first-time buyer tax to help buyers get into those homes. Using the tax code to... Read more →
Will the federal government be open or closed on Oct. 1? We should get an idea this week as Congress considers yet another short-term funding bill for Uncle Sam's operations. (Open and Closed sign photos by Tim Mossholder) Here we go again. I wish I was talking about the great Ray Charles’ version of that classic song, but alas this post’s focus is, again, on a possible federal government shutdown. That could happen, at least partially, if Congress and the White House don’t agree on a funding measure beyond this fiscal year, which ends Sept. 30. Without money, Uncle Sam... Read more →
Next year, we go into the final year of the Republican tax reform law's SALT cap. Since the Tax Cuts and Jobs Act (TCJA) of 2017 took effect, taxpayers in high income and property tax states and their Capitol Hill reps have been fighting the law's limit on state and local taxes, or SALT, that can be claimed as an itemized federal deduction. Their main argument is that the TCJA's $10,000 cap is too low. From a fiscal perspective, supporters of the cap pointed out that it benefited wealthier taxpayers. Their big SALT claims also cost the U.S. Treasury lots... Read more →
Unsplash+ in collaboration with Getty Images Congressional proposals to exempt gratuities from income pop up periodically, usually in election years. It’s happening again in 2024. Republican presidential nominee Donald J. Trump suggested tax-free tips during a June campaign stop in Nevada, where workers in tourist meccas like Las Vegas depend on the added income. Vice President Kamala Harris, the Democratic counterpart hoping to hold the White House for the party, endorsed easing taxes on tips in August. So, of course, lawmakers on Capitol Hill got in on the tax-free pledge. So far, bills to exempt tip income have been introduced... Read more →
It’s not unusual, especially here in Texas, for undocumented workers to be employed in industries that depend on manual labor, such as agriculture or construction. (Photo by Zohair Mirza on Unsplash) “They’re eating the dogs” is now forever part of U.S. presidential campaign lore, for worse or worst since there’s no better take. Following Donald J. Trump’s exclamation of a false social media rumor of pet deaths in Springfield, Ohio, during his Sept. 10 debate last week with Kamala Harris, the municipality about half an hour northeast of Dayton has encountered much unwanted attention. It has included bomb threats to... Read more →
Photo by Pavel Danilyuk The Texas Comptroller Glenn Hegar today announced cities, counties, transit systems, and special purpose districts soon will be getting their share of $1.1 billion in local sales tax allocations for September. That's 6.3 percent more than last September. Sales taxes are one of the three major ways states and the assorted jurisdictions within their borders get revenue. The other two are property taxes, mostly on real estate value, and income earned by individuals and businesses. Since the Lone Star State has no personal income tax, most of us residents are resigned to generally high sales and... Read more →
Any kind of saving is good, but for your retirement, a better option is a workplace retirement plan or IRA. A new Saver’s Match will help some when it takes effect in a couple of years. (Photo by Diane Helentjaris on Unsplash) The Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted at the end of 2022, includes a notable change in how eligible individuals can collect the Saver’s Credit. This tax credit turns contributions to popular retirement plans, which already are tax-favored, into addition funds. Qualifying lower- and middle-income savers who put $2,000 into an Internal Revenue Service-authorized... Read more →
Treasury Secretary Janet L. Yellen speaking at the Austin, Texas, Internal Revenue Service campus Friday, Sept. 6. The Secretary's remarks included news of progress collecting unpaid taxes from rich nonfilers. (Screen capture from Treasury YouTube video) The U.S. Treasury’s balance has grown recently, thanks to Internal Revenue Service’s success in collecting from high-wealth individuals who neglected to file tax returns. Treasury Secretary Janet L. Yellen and IRS Commissioner Danny Werfel this morning announced that to date $1.3 billion has been recovered from wealthy nonfilers. The new collection effort, kicked off in 2023 and led by dozens of senior employees, focused... Read more →
Photo by Antoni Shkraba Capital gains, the money made when you sell an asset that’s increased in value, have been in the tax code since the modern income tax was ratified in 1913. Back then, these earnings were taxed at a top 7 percent rate. In 1921, an alternative top capital gains tax rate of 12.5 percent was allowed. The 5.5 percentage point hike was not that bad, though, when you compared it to the top ordinary tax rate more than a century ago of 73 pct. Then the investment tax followed the adage that what goes up must come... Read more →
Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Maryland, where the hubby and I spent our first married years, is our adopted second home. It's also home of wildlife areas like the Jug Bay tidal wetlands pictured above that we frequently visited to watch birds and wildlife. Now, the Old Line State also will be part of the IRS Direct File program. (Photo of Jug Bay Wetlands Sanctuary by Kevans27 via Wikipedia Commons) The Internal Revenue Service continues to make progress in getting states to sign up for Direct File, the agency’s... Read more →
However, opponents of the Internal Revenue Service's option that cuts out private tax software companies still aren't convinced of the program's value or security. UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states will be a part of the Internal Revenue Service’s Direct File program next year. When the 2025 filing season starts, more than 120,000 Maine and 600,000 Wisconsin taxpayers and will be eligible to file via the IRS created and managed free, online tax preparation and e-filing option. The potential Pine Tree State and... Read more →
Photo by Alesia Kozik The 2024 election features a lot of firsts. We’ve seen the first sitting president to withdraw from the race after securing enough delegates to win his party’s nomination. The first woman of color seeking the presidency. The first person convicted of (and facing more) felony charges running against her. It’s also the first presidential race in which crypto currency could play a major role. Blockchain companies have supplied 48 percent of the $248 million of corporate money donated to influence federal elections this cycle, according to research by the nonprofit watchdog group Public Citizen. To be... Read more →
When making retirement plans, be sure to include how taxes might affect your ability to spend your golden years the way you want. Taxation of Social Security is getting a closer look this year, mainly because the Republican presidential nominee has suggested ending the current federal tax paid by some retirees on up to 85 percent of their benefits. A handful of states also tax the federal retirement benefits that their residents receive. This is the case in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Those nine Social Security taxing states are this weekend’s... Read more →
A few years ago, when housing prices here in Austin kept climbing, the hubby and I hired a company to protest our annual real estate appraisal. That assessment is used to calculate just how big our property tax bill will be. Other factors, such as local tax rates and certain exemptions, also come into play. But if your house is deemed to be worth a whole lot of money, and you’re not planning on selling it for or near that amount, then a generous appraisal will cost you property tax dollars. So, we hired a firm with time and experience... Read more →