2025 promises to be a big year for taxes. Right now, the individual provisions of the Tax Cuts and Jobs Act of 2017 set our current standard deductions and tax brackets. Those rules expire, like Cinderella’s carriage at midnight on December 31. At that point, if Washington hasn’t extended them, taxes go up for as much as 80% of Americans. That’s an unacceptable result for Democrats and Republicans alike. And it promises a bruising effort ahead as Congress weighs continuing the cuts against a $36 trillion national debt.
End of an Era?
Last month, Peacock aired the series finale of their monster hit Yellowstone. (One big spoiler to come!) For five and a half seasons, the show chronicled the ups and downs of the Dutton family, heirs to the largest contiguous ranch in the United States, as they fought to defend their land. On one side, greedy developers conspired to turn it into the next Park City. On the other, the neighboring Broken Rock tribe wanted to reclaim their ancestral home. Real Montana ranchers say the show is remarkably true-to-life, especially the gunfights, beatings, explosions, and occasional “long black train” to the back of the head.
Poop. Farts. Burps.
This week’s story is mostly ridiculous, unless you’re a five-year-old boy just starting to learn dirty words. But it illustrates just how far some countries will go to find new sources of revenue. It also illustrates how precisely lawmakers can target taxes to influence their citizens’ behavior. Fortunately, we’re on your side, using our opposable thumbs every day to help you pay less!
When Irish Eyes Are Smiling
Economies across the board are roaring back from the pandemic. But few have roared back faster than Ireland. The Emerald Isle is projected to grow by 2.5% this year and 3% next year. The Wall Street Journal reports the government is stashing cash in two sovereign wealth funds and regulators are warning they’re spending so fast they may overheat the economy. Still, there’s enough left over to start work on a €2.2 billion children’s hospital and spend €10 million on keeping the kids off their phones at school. (If you figure out an answer, could you maybe send it our way?)
Understanding IRS Notice CP136: What Employers Need to Know
The Internal Revenue Service (IRS) periodically reviews employers’ tax liabilities to determine appropriate federal tax deposit schedules. Recently, the IRS has been issuing Notice CP136 to inform employers of changes to their deposit requirements for Form 941, the Employer’s Quarterly Federal Tax Return. Understanding this notice is essential for maintaining compliance and avoiding potential penalties.
Taxing “Climate Criminals”
Last week, we discussed how the 2017 tax cuts are scheduled to expire at the end of 2025—and how the election results make it likelier that Washington will extend them. Here’s the problem: it won’t be cheap. The Congressional Budget Office estimates extending the current rules will blow a $4 billion hole in the budget over the next 10 years, along with an unknown amount of higher interest payments on the new debt. That’s making life difficult for a new administration that also wants to eliminate tax on tips, overtime pay, and Social Security benefits, along with other giveaways.