The question Sharon Eperson is here now is to kind of break this all down Sharon and give people a sense of what to really expect now. >> Well, talking to tax experts, you know, whenever you hear the words no tax, there's usually some caveats there and there are a lot more details to this that that we need to go through, particularly when you're looking at the no tax on tips, a lot of discussion about that and whether that's going to happen. Key thing to know, this is a deduction.It is not going to complete ...

Core Insights - The average tax refund in 2025 was $3,052, totaling nearly $312 billion, indicating that many taxpayers are overpaying taxes throughout the year [1] - Overpaying taxes is likened to providing an interest-free loan to the government, which could be better utilized for personal financial growth [2] - Financial planning should focus on making money work for individuals rather than the government, through investments or savings [4] Tax Refund Implications - A large tax refund suggests excessive withholding from paychecks or overpayment of estimated taxes [5] - The objective should be to minimize the refund amount to near zero, allowing taxpayers to retain more money throughout the year [5] Adjusting Withholding - Updating Form W-4 and using the IRS Withholding Estimator can help taxpayers determine appropriate withholding amounts based on their financial situation [6] - Life changes such as marriage, divorce, or new employment should prompt a review of withholding to ensure accuracy [6] - Self-employed individuals should adjust estimated tax payments quarterly to avoid overpayments [6]

Core Insights - The article emphasizes the potential benefits of adjusting tax withholding to increase monthly take-home pay instead of relying on a large annual tax refund [2][7][9] - It highlights that many U.S. tax filers receive an average refund of over $3,000, which could be better utilized by receiving smaller amounts throughout the year [2][10] Financial Management - Over 100 million U.S. tax filers typically receive a refund, with the average amount exceeding $3,000, suggesting a significant opportunity for financial management [2][4] - Adjusting tax withholding can add approximately $250 or more to monthly budgets, allowing for better cash flow management [2][9] Behavioral Insights - The article discusses the psychological appeal of tax refunds, which many view as a form of forced savings, but suggests that changing this mindset can lead to faster achievement of financial goals [4][5] - It proposes setting up automatic transfers to a high-yield savings account to maintain the discipline of saving while enjoying increased monthly cash flow [6] Flexibility and Control - Making changes to tax withholding does not affect the upcoming tax season, allowing individuals to maintain flexibility in their financial planning [3] - The ability to adjust withholding is not permanent, providing individuals with control over their financial situation as circumstances change [9]

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]

Tax Policy Changes - The child tax credit received a $200 boost to the maximum amount for the 2025 tax year [2] - Individuals with tipped income can deduct that on their tax return, effective for 2025 [3] - A new $6,000 deduction per senior is available, subject to income thresholds [5][6] Impact of Tariffs - In 2025, tariffs amount to an estimated $1,100 burden per US household on average [7][8] - If tariffs remain in effect, the burden is projected to grow to about $1,400 per household next year [8] - Customs duties on Christmas lights alone have risen to $45 million this year [9] - Tariffs on holiday items have climbed to upwards of $500 million through the first 9 months of 2025 [11] - Toys and board games are subject to tariffs, increasing their cost [13][15] Offsetting Factors - Tax cuts passed by Congress last year will result in larger refunds [16] - The Treasury Department will adjust withholding tables for lower taxes from each paycheck [16] - Tax cuts in aggregate have a larger revenue impact than the tariff hikes [17]

Core Insights - The upcoming tax season will serve as the first evaluation of the benefits from the Trump administration's tax law, referred to as the "One Big Beautiful Bill" [2][4] - Significant changes in tax deductions and credits are expected to lead to higher income-tax refunds for households, with projections suggesting an increase of up to $1,000 in refunds for 2026 [5][14] - The new tax law introduces various deductions, including those for overtime pay, tips, and a senior bonus, which create new planning opportunities for taxpayers [4][18] Tax Breaks and Deductions - Specific income limits apply for various tax breaks, such as $75,000 for individuals aged 65 and older seeking a $6,000 senior bonus deduction, and $500,000 for households wanting the full $40,000 state and local tax deduction [1][7] - The SALT deduction has quadrupled to at least $40,000 through 2029, which will lead to an increase in itemized deductions for 5 to 7 million additional households [10][14] - Taxpayers may need to "bunch" charitable contributions to maximize itemized deductions before the eligibility for such deductions decreases in 2026 [12][13] Refunds and Withholdings - The average tax refund for the current year was $3,052, and the upcoming tax season is projected to be the largest refund season ever [5][14] - Critics argue that larger refunds indicate overpayment of taxes throughout the year, suggesting that individuals should adjust their withholdings to avoid this situation [15][16] - Changes in withholding tables in 2026 may allow taxpayers to see the benefits of tax cuts reflected in higher take-home pay [17] State Tax Implications - States may not uniformly adopt the new federal tax changes, leading to a patchwork of state tax laws that could affect the application of new federal deductions [20][21] - Some states, like Michigan, have already aligned their tax laws with the new federal tax breaks, while others are still determining their approach [22] New Tax-Advantaged Accounts - The introduction of "Trump Accounts" allows parents to open tax-deferred accounts for children under 18, with a $1,000 seed contribution for U.S. citizen babies born between 2025 and 2028 [24][25] - While parents cannot claim a tax deduction for their contributions, there may be potential tax benefits depending on employer contributions and IRS regulations [25][26]

Core Insights - The average tax refund in 2025 was approximately $3,000, indicating that many taxpayers are overpaying the IRS by withholding too much throughout the year [1] - Common reasons for overpayment include outdated W-4 forms, missed deductions, and unclaimed credits, particularly affecting dual-income households and those with equity compensation [2][3] - Adjusting W-4 forms to accurately reflect dependents, credits, and actual income can help taxpayers avoid excessive withholding and large refunds [3] Reasons for Overpayment - Taxpayers often provide the IRS with an interest-free loan due to incorrect withholding practices, leading to larger refunds than necessary [2][3] - Signs of overpayment include oversized refunds, inconsistent paychecks, and low take-home pay, with a refund of $1,000 or more being a key indicator [4] Missed Tax Breaks - Many taxpayers fail to claim valuable credits and deductions, such as the saver's credit, child and dependent care credit, and student loan interest deductions, which could reduce their tax bills [5] - Renters and homeowners often overlook state-level benefits and energy-efficiency credits, respectively, as well as charitable contributions made through payroll or stock donations [5] Monitoring Overpayment - Mid-year checks can help taxpayers assess whether they are on track for a large refund or unexpected tax bill by reviewing year-to-date withholding against projected income [6] - Taxpayers receiving equity compensation should conduct mid-year reviews, as bonuses and restricted stock units can unexpectedly increase tax liability [6]

Core Insights - The U.S. stock market, particularly the S&P 500, has shown significant growth, with a year-to-date increase of approximately 16% and an overall gain of about 86% over the past five years [1][2] - The upcoming tax refund season in 2026 is projected to be the largest on record, potentially providing American households with refunds ranging from $1,000 to $2,000, totaling between $100 billion and $150 billion [3][4][5] - Investment strategies such as owning an S&P 500 index fund are recommended for individuals looking to benefit from the stock market's long-term growth [6][7] Investment Opportunities - Real estate is highlighted as a cornerstone of wealth-building, with properties providing consistent rental income and serving as a hedge against inflation [10][11] - Crowdfunding platforms like Arrived allow individuals to invest in rental properties with minimal capital, starting as low as $100, making real estate investment more accessible [12][13] - Commercial property investments through platforms like First National Realty Partners (FNRP) enable accredited investors to diversify their portfolios without the responsibilities of being a landlord [14][15] Financial Management Strategies - High-yield savings accounts (HYSAs) and certificates of deposit (CDs) are discussed as options for managing cash, particularly in a fluctuating interest-rate environment [16][18] - Raisin offers access to high-yield and no-penalty CDs, providing options for both fixed returns and flexibility in accessing funds [19][20]

Core Viewpoint - Wells Fargo projects a bullish outlook for the S&P 500, expecting it to reach between 7,400 and 7,600 by 2026, indicating a potential gain of up to 11% driven by consumer spending, AI investment, and deregulation [1][2]. Group 1: Market Performance and Projections - The S&P 500 is currently up 16% this year and is on track for its third consecutive year of double-digit gains, having previously logged over 20% gains in both 2023 and 2024 [3]. - Wells Fargo's forecast for the S&P 500 aligns with other positive outlooks, with predictions ranging from 7,100 to 8,000 [2]. Group 2: Key Drivers of Growth - Three main factors are expected to support stock prices in the upcoming year: lower interest rates, benefits from the AI investment cycle, and increased consumer spending due to larger tax refunds from the One Big Beautiful Bill Act (OBBBA) [3][4]. - The OBBBA is anticipated to provide consumers with one of the largest tax refunds in decades, enhancing their spending power [4]. Group 3: Historical Context and Implications - Historical data shows that when the Federal Reserve cuts interest rates while the S&P 500 is near record highs, the index has always been higher 12 months later [5].

Core Insights - Federal income-tax refunds for Americans are projected to increase significantly in 2026, influenced by President Trump's tax law, with individual refunds expected to rise by hundreds of dollars and total refunds by billions [1][2][5] Refund Projections - Average tax refunds could increase by an estimated $675, bringing the typical refund to nearly $3,800 per filer [3] - Intuit's TurboTax estimates suggest taxpayers might receive up to $1,000 more per refund next year, with current averages exceeding $3,000 [4] - Piper Sandler analysts project a collective increase of around $91 billion in refunds for 2025 taxes, translating to approximately $1,000 more per refund for taxpayers [5] Tax Breaks and Legislation - The anticipated increase in refunds is attributed to new and enhanced tax breaks under the One Big Beautiful Bill Act, including provisions like "no tax on tips" and a "senior bonus," which are retroactive to 2025 tax returns [6]