The new “no tax on tips” and “no tax on overtime” deductions require additional reporting by employers and payers. To help, the IRS is offering penalty relief in 2025. https://t.co/t2EF4CyNn5 ...

Core Insights - Millions of Americans will see tax savings for the 2025 tax season due to the provisions of the Big Beautiful Bill Act (OBBBA), which made many aspects of the 2017 Tax Cuts and Jobs Act (TCJA) permanent and introduced new tax deductions and credits for households [1] Tax Savings by Income Group - Working-class families earning between $15,000 and $30,000 will experience a 21% tax cut, the largest reduction among all income groups [2] State-Specific Tax Savings - Taxpayers in different states will experience varying levels of tax savings, with some states projected to save significantly more than others [3] California - California taxpayers are expected to save an average of $2,293.15 annually, primarily due to estate and gift tax breaks, averaging $898 per return, potentially saving over $3.2 million per estate [4] - The State and Local Tax (SALT) deduction is significant, with about 15% of Californians itemizing their returns, leading to average savings exceeding $5,200. Seniors benefit from an average savings of $1,386 with a new $6,000 senior deduction, and over 6.6 million qualifying children are eligible for the Child Tax Credit (CTC) [5] Oregon - Oregon taxpayers are projected to save an average of $2,226.61 annually, with estate and gift tax benefits averaging about $963 per return, allowing estates to save upwards of $2.5 million [6] - Approximately 13% of Oregonians itemize their returns, resulting in average tax savings exceeding $5,500. Seniors, making up about 20% of the population, could save over $1,100 on average with the new senior deduction, and there are over 670,000 qualifying children eligible for the CTC [7] Massachusetts - Massachusetts ranks third, with taxpayers saving an average of $2,150.45 annually, driven largely by estate and gift tax savings, which average about $921 per return, with individual estates saving more than $2.3 million [8]

Core Points - The article discusses estate planning for a couple in their 70s, focusing on the distribution of assets and the implications of a recent health diagnosis [1][3][5] - The husband plans to leave a life estate in the condo to his wife, allowing her to receive rent from his properties, while leaving the remainder of his estate to charity [3][6] - The wife's estate will primarily benefit her two adult children, which raises questions about fairness and reasonableness in their estate planning [2][4][5] Financial Overview - The wife has $30,000 in stocks, shared ownership of a house worth $125,000, and a monthly pension of $1,200 [2][3] - The husband owns a home and two rental properties valued at $1 million, along with $300,000 in savings and a $200,000 Porsche [2][6] - The husband's income is reported to be three times that of the wife, indicating a significant financial disparity [2][6] Estate Planning Considerations - The husband's decision to leave a life estate and charity bequests is viewed as logical and fair, given his financial situation [5][6] - The wife is encouraged to consider the financial future of her children, who may benefit from her estate for home purchases or investments [5][6] - The article highlights the potential for rental income and property appreciation as beneficial aspects of their financial strategy [7]

Core Perspective - The traditional approach to building wealth through long-term employment and retirement savings may not be the most effective strategy, as alternative methods can lead to greater financial success [1][2]. Group 1: Side Business - Establishing a side business can provide additional income, allowing individuals to pay off debts, build an emergency fund, and invest more effectively [4]. - Employees relying solely on retirement accounts may face challenges due to stagnant wages and high fees associated with 401(k) plans [3]. Group 2: Remote Income - A side business can facilitate remote income opportunities, enabling individuals to work flexibly and avoid time-consuming commutes, thus improving work-life balance [5]. - Being self-employed allows for greater control over retirement timing and the potential to continue working into older age [5]. Group 3: Tax Advantages - Business owners can take advantage of tax deductions that significantly reduce their tax liability, potentially saving over $10,000 annually [6]. - Employees typically face higher tax rates compared to business owners, making it financially advantageous to operate a business [6][7].

Core Insights - Corporations benefit from tax code advantages, allowing them to pay lower effective tax rates compared to average American families, leading to feelings of resentment among the middle class [1] Tax Benefits for Middle-Class Families - If middle-class households could access the same deductions as corporations, their tax bills could decrease significantly, potentially saving thousands of dollars annually [3] - With reduced tax liabilities, families could invest more in retirement accounts, college savings, or debt repayment, enhancing their financial security over time [4] Impact on Wealth Inequality - Leveling the tax playing field could help redistribute wealth, providing middle-class families with more opportunities to save and invest, which may narrow income inequality [5] Policy Considerations - Implementing corporate-style tax breaks for all households could drastically reduce government tax revenue, potentially affecting funding for essential services like Social Security and Medicare [6] - Specific modeling indicates that for a household income of $80,000, an additional $20,000 in deductions could lower the federal tax bill by approximately $2,400, reducing the effective tax rate from over 7% to about 4% [6] - Similar deductions for households earning $100,000 and $120,000 would yield comparable savings, lowering their effective tax rates to 5.6% and under 7%, respectively [6]

To help taxpayers sort out the details, the Treasury Department and the IRS have rolled out additional guidance in the form of Proposed Regulations related to the deductions for tipped workers. https://t.co/KROCtHBDHw https://t.co/ajT0yrpWa3 ...

To help taxpayers sort out the details, the Treasury Department and the IRS have rolled out additional guidance in the form of Proposed Regulations related to the deductions for tipped workers. https://t.co/7UYcLjQVkQ https://t.co/8qSmaAo9A9 ...

Italian bank stocks dropped after a report that Italy’s government is working on a preliminary plan to raise €3 billion over the next two years from lenders by postponing their tax deductions https://t.co/31YgmOq1Yi ...

Core Insights - Tax gain harvesting is a financial strategy that allows seniors to significantly reduce their tax liabilities by strategically selling assets to lock in gains at lower tax rates [2][4] - In 2025, a married couple filing jointly can earn up to $141,900 tax-free if they meet certain income thresholds and deductions [3][6] Tax Gain Harvesting Strategy - Tax gain harvesting is similar to tax-loss harvesting, where selling assets at a gain can be beneficial when income is low or tax deductions are high [2] - The favorable treatment of long-term capital gains allows single filers with taxable income below $48,350 to qualify for a 0% tax rate, while the threshold for married couples filing jointly is $96,700 [3] Income and Deductions - A couple with a combined income of $36,700 can sell assets and lock in up to $60,000 in capital gains without incurring taxes, in addition to the 2025 standard deduction of $30,000 [4] - Seniors over 65 can benefit from an additional $6,000 bonus deduction per person, totaling $12,000 for couples filing jointly [5] - Combining income thresholds for long-term gains with standard and bonus deductions allows couples to potentially generate $141,900 tax-free in 2025 [6]

Tax Policy Changes - The "One Big, Beautiful Bill" increases two significant tax deductions [1] - The bill cuts clean energy tax credits for the 2025 tax year [1]