Core Insights - Taxpayers can anticipate larger-than-usual refunds for the 2025 tax year due to provisions in the One Big Beautiful Bill Act (OBBBA) [2] Tax Cuts Under OBBBA - Maximum child tax credit increased by $200 [7] - Standard deduction raised by $750 for single filers and $1,500 for joint filers [7] - State and local tax (SALT) deduction cap increased to $40,000 for taxpayers earning less than $500,000 annually [7] - New $6,000 additional deduction for seniors, phasing out for incomes over $75,000 (or $150,000 for joint filers) [7] - New $10,000 auto loan interest deduction, phasing out for incomes over $100,000 (or $200,000 for joint filers) [7] - New deduction for up to $25,000 in tip income, phasing out for incomes over $150,000 ($300,000 joint) [7] - New deduction for up to $12,500 in overtime income ($25,000 for joint filers), phasing out for incomes over $150,000 ($300,000 joint) [7] Financial Recommendations for Tax Refunds - Paying down debt, especially high-interest credit card debt, is recommended as the best use of tax refunds [3][5] - The average credit card balance in the U.S. was $5,595 per cardholder as of Q2 2025, while the average federal tax refund last year was $3,116, indicating that refunds can significantly reduce debt [4] - Building up an emergency fund is advised, ideally covering three to six months of essential expenses [6]

🚨BREAKING: U S TREASURY DEPARTMENT ANNOUNCES EXPANDED TAX BENEFITS FOR 2026 FILING SEASON@Ustreasury touts "Working Families Tax Cuts" package as tax season opens, claiming "biggest refunds in American history."Key provisions listed:-No tax on tips-No tax on overtime pay-No tax on Social Security benefits-No tax on auto loans for American-made vehicles-Enhanced child tax credit-Doubled standard deduction-$1,000 "Trump Account" for children ...

want to thank my entire cabinet for 12 months of unprecedented achievements. We really have I mean unprecedented the numbers we've had on the economy and growth. Uh you see them and that's despite a Democrat shutdown.Without the shutdown we would have picked up about a point and a half more than already high numbers, record setting numbers. So this has been I think and a lot of people say it the most successful year of any administration in American history. first year.There's never been a first year like t ...

Core Insights - The tax season began on January 26, with many Americans expecting larger tax refunds this year, potentially up to $1,000 higher than previous years [1][2]. Tax Cuts - The increase in tax refunds is attributed to the One Big Beautiful Bill Act (OBBBA), which introduced several tax cuts, including new deductions for seniors, overtime pay, tips, and car loan interest, as well as an increase in the standard deduction [2][4]. - The state and local tax deduction cap has increased from $10,000 to $40,000, benefiting taxpayers in high-tax states [5]. Tax Withholding - The IRS did not update its federal income tax withholding tables for 2025, leading to many W-2 employees potentially overpaying their taxes throughout the year [2][6]. - Taxpayers may receive larger refunds because they had more withheld than necessary due to the unchanged withholding tables despite new deductions being available [7]. Refund Comparisons - In the previous tax season, the IRS issued over 103 million refunds with an average amount of $3,167 [8]. - The actual refund amount will vary based on individual circumstances, with higher-income households potentially benefiting more from the new deductions [9]. Recommendations for Tax Refund Usage - Taxpayers are advised to use their refunds wisely, such as paying down high-interest debt or boosting savings in a high-yield savings account [11][12].

President Trump has been touting these new provisions from his big beautiful bill. He did so at the speech at the World Economic Forum in Davos this week. >> In July, we passed the largest tax cuts in American history, including no tax on tips, no tax on overtime, no tax on social security for our great seniors.>> No tax. Not exactly. Their details are a bit more complicated.The three tax breaks the president referenced are for limited amounts and phase out completely for higher inome Americans. Here are th ...

Economic Outlook - The U.S. economy is expected to experience solid growth in 2026, with lower unemployment and slightly reduced inflation compared to 2025 [2][9] - Vanguard's forecast for 2026 includes a drop in the unemployment rate to 4.2% from 4.6% in November 2025, driven by increased investments in AI and other projects [7] Employment and Job Market - The job market is anticipated to rebound in 2026 after a sluggish performance in 2025, as businesses increase investments and economic growth drives demand for workers [7][9] Economic Growth - GDP growth is projected at 2.25% for 2026, supported by strong investment numbers and fiscal policy changes, particularly tax cuts from the "One Big, Beautiful Bill" [7][10] Inflation Trends - Inflation is expected to remain elevated due to the continued impact of tariffs, with consumer prices rising by 2.6% in 2026, slightly down from 2.8% in September 2025 [10][11]

Core Insights - The tax refunds for Americans in 2026 are projected to be significantly larger than usual, with estimates suggesting an average increase of around $1,000 compared to previous years [2][5][8] - This increase is attributed to tax cuts implemented by President Trump's legislation, which reduced individual taxes by an estimated $144 billion in 2025, affecting the amount withheld from paychecks [5][7] Tax Refund Projections - Treasury Secretary Scott Bessent has indicated that the upcoming tax refunds are likely to be "gigantic," reflecting a substantial financial benefit for taxpayers [4] - The Tax Foundation's analysis predicts that the average tax refund could be approximately $1,000 higher in 2026 due to the retroactive application of tax cuts [5][8] Withholding and Tax Filing - The changes in tax rules were enacted mid-year, leading to no adjustments in withholding amounts from paychecks, resulting in higher amounts being withheld than necessary [6][7] - Taxpayers will file their returns in 2026 for the 2025 tax year, allowing them to reclaim the excess amounts withheld, which is expected to average around $1,000 [8] Beneficiaries of Tax Changes - The tax changes will particularly benefit individuals who qualify for new targeted tax breaks, including parents receiving a larger child tax credit, those with deductible auto loan interest, tipped workers, and homeowners eligible for a larger SALT deduction [9][11] Financial Planning - It is advised that taxpayers utilize their anticipated extra refund wisely, such as contributing to retirement plans, paying down debt, or building emergency funds [9][10] - Awareness of the temporary nature of these tax benefits, which last only until 2028, is crucial for long-term financial planning [10]

Core Insights - The article discusses the potential tax benefits under Trump's One Big Beautiful Bill Act (OBBBA), particularly for seniors, families with children, and employees earning overtime [6][8] - It highlights that a significant portion of U.S. households could potentially pay $0 in federal income tax by 2025 due to the new tax deductions and credits [7][8] Tax Benefits for Seniors - A retired couple earning a combined adjusted gross income of $96,700 can reduce their taxable income significantly through the standard deduction and the new seniors deduction, resulting in a taxable income of $50,000 [2][6] - The article notes that a senior couple could potentially pay $0 in federal income tax due to capital gains and qualified dividends being taxed at a 0% rate [1][6] Tax Credits and Deductions - Families like Casey and Riley, with a combined income of $100,000 and two children, can utilize various deductions totaling $31,500, along with additional deductions for overtime pay, to lower their taxable income [5][4] - The maximum child tax credit has increased to $2,200 per child, which can further offset tax liabilities, potentially resulting in a $0 federal tax bill [3][6] Broader Implications of Tax Changes - Approximately 40% of U.S. households had a $0 federal tax bill in 2022, and this trend may continue with the new tax cuts favoring specific demographics [6][7] - The article mentions that while many may benefit from the new tax rules, higher-income households may not be able to reduce their tax bills to $0 [9] Financial Advisory Services - The article introduces financial advisory services like Range, which offers tax recommendations and investment advisory services at a lower cost compared to traditional advisors [10][11] - It emphasizes the importance of working with a financial advisor to navigate the new tax landscape and optimize tax strategies [13][18]

Economic Growth Outlook - The U.S. economy is expected to experience accelerated growth in 2026, with a forecasted real GDP growth rate of 2.6%, surpassing the Bloomberg consensus of 2% [3][6] - The growth in 2025 was impacted by higher-than-expected tariffs, which increased the average effective tariff rate by 11 percentage points, contributing to a 0.6 percentage point reduction in GDP in the latter half of 2025 [2][6] Factors Driving Growth - Three main factors are anticipated to drive faster economic growth in 2026: reduced tariff drag, tax cuts from the One Big Beautiful Bill Act (OBBBA), and more favorable financial conditions due to interest rate cuts by the Federal Reserve [6][7] - Consumers are projected to receive an additional $100 billion in tax refunds in the first half of 2026, equating to approximately 0.4% of annual disposable income [7] Labor Market Insights - Despite the optimistic growth outlook, the labor market is not expected to see significant improvement, with the unemployment rate projected to stabilize around 4.5% in 2026 [8][10] - The unemployment rate rose from 4.1% in June to 4.6% in November, indicating a cooling labor market amid economic uncertainties [9] Inflation Trends - Inflation is expected to decline, with core PCE inflation projected to fall to just above 2% by the end of 2026, primarily due to diminishing tariff pass-through effects [12][13] - The current core PCE inflation rate is noted at 2.8%, largely influenced by tariff pass-through, which is expected to rise slightly from 0.5 percentage points to 0.8 percentage points by mid-2026 [12][13]

Core Viewpoint - Economists predict that the tax cuts in Trump's One Big Beautiful Bill will significantly drive the U.S. economy in 2026 for both individuals and businesses [1] Individual Tax Cuts - The law makes permanent the lower individual and business income tax rates from Trump's 2017 Tax Cuts and Jobs Act, which were set to expire [3] - It extends the standard deduction and expands the alternative minimum tax exemption, raising the estate tax exemption from $14 million to $15 million [3] - Taxes on up to $25,000 in tipped income will be exempt until 2029, phasing out for individuals earning over $150,000 [3] - Taxes on up to $12,500 in overtime pay will also be exempt until 2029, with similar income phase-out conditions [3] - A new deduction of up to $6,000 for individuals aged 65 and older will be available until 2029 [3] - A tax break for up to $10,000 in interest payments on auto loans will be created until 2029, applicable only to U.S.-assembled personal vehicles [3] - The deduction for state and local tax (SALT) payments will be expanded from $10,000 to $40,000 until 2029, benefiting affluent homeowners in high-tax states [3] Business Tax Breaks - The business tax changes aim to incentivize investment in enterprises through the extension of lower tax rates and larger write-offs for capital expenditures and R&D spending [4] - The lower corporate tax rates from the 2017 law will be made permanent [5] - Full expensing for certain equipment purchases will be allowed, enabling immediate deduction from taxable revenue [5] - Full expensing of U.S.-based R&D costs will be permitted, with small businesses able to retroactively deduct R&D expenses incurred since 2022 [5] - Limits on interest deductions will be loosened, broadening the deduction to include amortization costs [5] - A tax break for owners of "pass-through" businesses will be extended and increased, allowing a deduction of up to 20% of their income [5]