Category: Blog

2025 U.S. Tax Legislation Forecast: What to Expect

4 min read

2025 U.S. Tax Legislation ForecastAs 2025 unfolds, U.S. tax policy is poised for significant shifts, particularly with a new Republican administration under President Donald Trump. The year ahead will likely see a range of tax reforms, largely driven by the GOP’s objectives and campaign promises. In this article, we’ll explore the major tax policy trends, legislative developments, and administration changes that may shape U.S. tax law in 2025.

The Impact of Supreme Court Decisions

2024 also saw two major Supreme Court decisions with significant tax implications. In the Moore case, the Court ruled narrowly on the issue of wealth taxation, leaving open the possibility of revisiting the question in the future. While wealth tax proposals had gained some traction among Democrats, the Court’s decision, combined with the political climate, suggests that such proposals are unlikely to gain much momentum under the new administration.

The Loper Bright decision, which questioned the deference given to government regulations, could have far-reaching effects on tax policy. The ruling makes it more difficult for agencies like the IRS to issue regulations without clear legislative guidance, potentially leading to more legal challenges to IRS regulations and shifting the balance of power between lawmakers and regulatory agencies.

2025: A New Republican Agenda

With a Republican administration taking office in 2025, tax policy is expected to shift dramatically. President Trump, along with a Republican-controlled Senate and House, will likely push for several key changes to tax law.

One of the primary objectives will be to extend provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that are set to expire. This includes individual tax cuts, corporate rate reductions and changes to the state and local tax (SALT) deduction cap. The extension of other expiring provisions involving lifetime gift and estate tax exemptions, AMT, child tax credits, and the mortgage interest deduction may also be on the table. Additionally, the GOP is expected to explore new tax cuts, with some lawmakers proposing measures like eliminating taxes on tips, which was promoted during Trump’s election campaign.

On the corporate side, there may be discussions about lowering the effective tax rate through credits and incentives rather than direct reductions to the statutory corporate tax rate. There also could be movement on tax expensing for research and development, as well as other measures to incentivize business investment.

Potential Revenue-Raising Measures

Despite the tax cuts expected to dominate the agenda, there may be some revenue-raising measures included in the GOP’s tax proposals. The focus on reducing deficits could lead to efforts to cut some of the green credits in the Inflation Reduction Act, although these cuts are unlikely to raise significant revenue. There also may be attempts to tighten international tax rules from the TCJA to generate more revenue.

President Trump has also proposed replacing individual income taxes with increases in tariffs, implementing a universal 20 percent tariff across the board, and implementing an additional 50 percent tariff on imports from China.

IRS Funding and Administration Changes

Under the new administration, the IRS is expected to face significant cuts, particularly in its enforcement budget. The $80 billion allocated to the agency in recent years, which was intended to improve taxpayer services and combat tax evasion, is likely to be rolled back. Republicans have expressed strong opposition to the IRS’ expanded powers and are expected to push for a reallocation of those funds toward customer service rather than enforcement.

Additionally, the new administration may replace current IRS Commissioner Daniel Werfel, who was appointed during the Biden administration. Trump could nominate a new commissioner, and if this happens, it could spark further debates over the direction of the IRS in the coming years.

Conclusion

2025 promises to be a dynamic year for U.S. tax policy, with significant changes expected under the new administration. Key issues to watch include the fate of the TCJA’s expiring provisions, potential new tax cuts, and ongoing debates over IRS funding and regulations. As the administration works to implement its agenda, there will likely be contentious discussions and compromises on Capitol Hill, setting the stage for a new era of tax policy for the United States.

Analyzing Return on Ad Spending

3 min read

What is Return on Ad SpendingReturn on Ad Spend (ROAS) is one way to help advertising and marketing professionals and investors analyze how well promotions do (or don’t) produce sales. It helps advertisers develop data based on their campaigns’ revenue production (or lack thereof). Understanding how this metric is calculated and how to analyze ROAS is essential for businesses to monitor and increase their advertising performance.

Known as a Key Performance Indicator (KPI), ROAS determines how much sales are generated per dollar invested on advertising outlays. It separates advertising costs from the company’s costs, and it focuses on:

1. The differences between advertising income and advertisement expenses

2. Assisting companies with creating efficient budgets

3. Identifying unprofitable campaigns

How ROAS is calculated:

Return on Ad Spend (ROAS) = Revenue generated from ad campaign/Total advertising costs for a specific campaign

The revenue generated from an ad campaign is the revenue immediately assignable to promotions utilizing a tracking tool.

Total advertising costs for a specific campaign are expenses explicitly connected to the advertising platform.

The resulting calculation determines the business’ return on ad spend, giving owners and managers an idea of how well (or not) ad spending impacts the company’s sales. It similarly enables business owners to reconcile the company’s budgeted advertising costs against growing sales metrics. The following hypothetical breakdown shows what a positive scenario looks like:

A ROAS of 10 = $10 of revenue was earned for every $1 spent on ads. This would translate into:

Total Ad Spend: $10,000

Revenue Generated: $100,000

ROAS = $10

ROAS = 10:1

Important considerations when calculating this include factoring in merchant expenses, costs for digital content production, and costs incurred from media platforms. It’s also important to consider that it’s not always cut-and-dry as to how and what specific ads convert potential customers into paying customers. Assigning the exact ad platform or campaign is a common problem when determining the exact ROAS.

Credit analysis conducted by lenders evaluates ROAS to determine the sales ability of companies seeking loans, especially with promotion-centric companies. The higher the ROAS, the less risk there is and the more reliable the revenue from each campaign. For merger and acquisition professionals, ROAS trends offer insight into a target company’s sustainability. It helps determine if a company’s advertising campaigns can sustain themselves and keep generating future growth.

It’s equally important to see how ROAS compares against other metrics. While ROAS focuses on revenue generated per dollar spent, the advertising-to-sales ratio looks at the total proportion of sales driven by advertising efforts. Similarly, while ROAS measures the revenue per ad spend, return on investment analyzes the comprehensive profitability for the complete level of marketing expenses – not exclusively advertising. While ROAS is a short-term measure on instant sales, Lifetime Value looks at the customer’s history with the company and the entire revenue the company earns from the relationship.

While this metric is helpful for many professionals, it’s important to ensure that only necessary data is included and customer conversion is monitored precisely in order to get the best output.

Rules of the Roth

4 min read

Rules of Roth IRAWith a Roth IRA, the owner can make limited contributions each year. In 2025, the limit is $7,000; $8,000 if age 50 or older. Only people who earn less than $150,000 (single filers) or under $236,000 (married filing jointly) can make a full Roth IRA contribution. While contributions do not qualify for a tax deduction, earnings are not taxable once the account has been open for five years. Contributions, which were previously taxed as income, can be withdrawn at any time.

Once you open and contribute to a Roth IRA, the five-year countdown begins before you can take any earnings out tax-free. However, the holding period is actually measured from Jan. 1 of the year you made the first contribution.

For example, if you opened your Roth IRA on Dec. 31, 2024, the holding period backs up to Jan. 1, 2024. Therefore, your holding period is technically only four years instead of five to avoid paying taxes on earnings.

However, it gets even better because you are allowed to make a Roth contribution for the prior tax year up until tax day in April. That means if you open a Roth in April 2025 and designate your contribution for 2024, your holding period is shortened by another four months.

This is why it’s important to open a Roth as soon as possible, even if you cannot contribute a lot of money in the near future. It makes a great strategy for a high school or college student with job earnings to at least open a Roth for future use. While there is no upfront tax deduction, you may withdraw contributions penalty and tax-free at any time – which makes it ideal as both a liquid emergency account as well as long-term savings.

As for withdrawing earnings, the rules are trickier. As far as the IRS is concerned, contributions are withdrawn first and then earnings. Note that when earnings are withdrawn before age 59½, the amount is subject to both taxes and a 10 percent penalty, but there are exceptions that waive the penalty. For example, if your account is less than five years old, you can still withdraw earnings (penalty-free but still subject to taxes) for the following purposes:

  • To help pay for a first-time home purchase (up to $10,000)
  • To pay for college
  • To pay certain emergency expenses
  • To pay for expenses in connection with a federally qualified disaster
  • To pay expenses related to a birth or adoption
  • To pay for unreimbursed medical expenses or health insurance if unemployed
  • If you become disabled or are a survivor of domestic abuse

If your account is older than five years, you can avoid both taxes and the penalty if the funds are used to help pay for a first-time home purchase (up to $10,000) or if you become disabled.

After age 59½, there are no taxes and no penalties for any money withdrawn from a Roth IRA for any reason.

Multiple Roths

The same five-year holding period applies to all the Roths you own, with the clock starting at the first contribution to your first Roth. This means that if five years after the date you open your first Roth, you open a new Roth and contribute a bunch of income, you won’t have to wait another five years to tap those earnings tax-free. This perk does not apply to a Roth 401(k) account, which maintains a separate five-year holding period.

Conversion Benefits

When you convert a traditional IRA or 401(k) to a Roth (assuming your plan allows in-service withdrawals or in-plan conversions), you must pay income taxes in the year the money is converted. However, there are some very good reasons to convert:

  • Tax-Free Income – By converting assets when you’re still working, you can pay the taxes owed with current income, but from that point on, the Roth IRA will grow tax-free. This is particularly helpful in diversifying your tax liability during retirement if you have other income sources (e.g., pension, brokerage account, Social Security).
  • Eliminate RMDs – If you continue working into your 70s, you may continue contributing to your Roth IRA, and assets converted from a 401(k) or traditional IRA are no longer subject to required minimum distributions. This way, your full account balance has the opportunity to continue growing for later retirement and/or for your heirs.

Be aware that converting a taxable retirement account to a Roth IRA begins its own five-year timetable, so convert long before you need to begin withdrawals.

5 Tips on How to Track Monthly Expenses

4 min read

5 Tips on How to Track Monthly ExpensesKeeping tabs on what you spend isn’t hard. It just has to become a habit. But here’s the good news: Studies show that it only takes an average of 66 days to form a habit. A little over two months. With these easy ways to track your monthly expenses, you’ll be a regular money manager in no time.

Add Up Your Monthly Income

We’re talking about your regular paychecks – and extras from any side hustles. Have irregular income? No problem. Look at what you’ve made in the past few months and list the lowest amount as this month’s planned income. When you know how much you have to work with, you’ll be ready to dive in.

Calculate Your Monthly Expenses

Open up your bank account and start dividing your expenses into buckets, e.g., rent/mortgage, food, utilities, etc. The numbers may surprise you. Think about your needs and wants. What’s really important? What can you live without? Where can you cut? Or if you have a surplus, where should this money go? Regardless, here’s a good way to categorize your income:

  •  Four walls (food, utilities, shelter/housing, and transportation)
  • Other essentials (insurance, debt, childcare, etc.)
  • Extras (entertainment, restaurants, etc.)
  • Giving (10 percent of your income)
  • Savings (varies based on your resources)

Create a Budget

Now that you know how much you make and what you spend, do a little mat,h and you’ll have a sum total. Dave Ramsey recommends a zero-based budget, where you give every dollar a job to do, such as spending, saving, or giving. But in these categories, you’ll want to get more detailed. For instance, under Food, you might list Dining Out and Groceries. When you get specific, it’s easier to track where you spend.

Track Any Money You Earn and Spend

When you get paid, enter the amount. When you spend, enter the amount. This repetition contributes to forming a habit. If you need a bit more immediacy and structure, get a handy budget app for your phone. Mint (it’s free!), YNAB (You Need a Budget), and Simplifi are a few of many others. It might well be a fail-safe idea, given how much we humans love to be on our phones.

While tracking is super important for those who have a regular income, it’s even more important if you have an irregular income. As mentioned above, the recommendation is to plan around the lowest amount of money you make. If you happen to earn more in any given month, adjust the number and your current money goals. This way, you can cover some extras in your budget.

Tracking also applies to the money you spend. Enter every single transaction, then do that math. Whether your expenditure is coming from your bank account or piggy bank, keeping up-to-date on outflow is key to not overspending.

Create a Regular Rhythm for Tracking

This cadence is totally up to you and what works best for your life. It might be daily or weekly – or before you leave the gas station or grocery store. When you enter the amount of what you spent right after you do it, chances are you won’t forget about it. (Nod to the budget app!) If you’re married and/or have a partner, having a central location for money management increases communication and accountability. Neither one of you can say, “Oh, I didn’t know you were going to spend all our fun money on pickleball lessons. I wanted to sign us up for bridge at the community center.”

Having a handle on monthly expenses (tracking them) means being more aware of what’s going on, avoiding surprises, and being in control. And that’s a good thing for everyone.

Sources

How Long Does it Take to Build a Habit?

How to Track Your Monthly Expenses – Ramsey

Beefing Up Laws for Illegal Immigrants and Preparing for Future Disasters

3 min read

S 5,HR 152,HR 153,HR 164,HR 471, HR 187, HCon Res. 1Laken Riley Act (S 5) – A holdover from the last congressional session, this bill was re-introduced by Sen. Katie Britt (R-AL) on Jan. 6. It is similar to a 1996 law, the Illegal Immigration Reform and Immigrant Responsibility Act, that deports illegal immigrants who are found guilty of serious crimes. This new bill enables the government to detain and deport illegals who are arrested for serious crimes or misdemeanors (such as shoplifting), but they do not have to be charged or found guilty. The legislation passed in the Senate on Jan. 20 and the House on Jan. 22, and it is expected to be the first bill signed by the Trump administration.

Federal Disaster Assistance Coordination Act (HR 152) – This legislation would amend the Disaster Recovery Reform Act of 2018 to authorize a new study designed to streamline and consolidate data regarding the collection of preliminary damage assessments. It was introduced by Rep. Mike Ezell (R-MS) on Jan. 3, passed in the House on Jan. 13, and is currently in the Senate.

Post-Disaster Assistance Online Accountability Act (HR 153) – This is a disaster companion bill, also introduced by Rep. Mike Ezell (R-MS) on Jan. 3. It would create an online repository for recipients of Federal disaster assistance to meet specific reporting requirements. The bipartisan bill passed in the House on Jan. 14, and its fate also lies with the Senate.

POWER Act of 2025 (HR 164) – Also known as the Promoting Opportunities to Widen Electrical Resilience Act, this non-controversial bill was passed on Jan. 15 under a House procedure called “suspension of the rules.” It would allow Federal agencies to provide essential assistance for the emergency restoration of power and not restrict utility company recipients from also qualifying for hazard mitigation assistance if necessary. The bill amends the previous Robert T. Stafford Disaster Relief and Emergency Assistance Act (1988), which details the process for federal government assistance to state and local governments following a major disaster. The bill was introduced by Rep. Valerie Hoyle (D-OR) on Jan. 3 and currently lies with the Senate.

Fix Our Forests Act (HR 471) – The purpose of this bill is to expedite improvements in forest management activities on National Forest public lands under the jurisdiction of the Bureau of Land Management to return resilience to overgrown, fire-prone forested lands. This bipartisan legislation was introduced by Rep. Bruce Westerman (R-AR) on Jan. 16 and passed in the House on Jan. 23. It currently lies with the Senate.

MAPWaters Act of 2025 (HR 187) – This bipartisan bill authorizes the standardization, consolidation, and publication of federal waterways data regarding outdoor recreational uses by the public, as tracked by federal land and water management agencies. The legislation was introduced by Rep. Blake Moore (R-UT) on Jan. 3, passed in the House on Jan. 21, and is under consideration in the Senate.

Regarding consent to assemble outside the seat of government (HCon Res. 1) – This concurrent resolution was introduced on Jan. 3 by Rep. Michelle Fischbach (R-MN). It is a bipartisan resolution, agreed to by all four majority and minority leaders in both houses, that would allow members of the House and the Senate to assemble at a location outside the District of Columbia if it is in the public interest. The resolution passed in the House on Jan. 3 and currently rests in the Senate.

Why Your Business Needs a Vertical AI Agent: Top Benefits for Niche Markets

4 min read

Why Your Business Needs a Vertical AI AgentThe rise of artificial intelligence (AI) is continuously transforming how businesses operate, offering opportunities for efficiency, innovation, and growth. However, in an increasingly competitive landscape, businesses seek solutions tailored to their specific industries. To meet this demand for more tailored tools, vertical AI agents are emerging as key to staying ahead in the age of specialization.

What are Vertical AI Agents?

Vertical AI agents are designed to solve specific problems within industries in areas such as finance, retail, and healthcare. This differs from horizontal AI, which provides general capabilities across various sectors. Horizontal AI cross-functional applications such as marketing automation are applicable across different sectors. These horizontal AI solutions were witnessed in the early days of AI, when companies like Google, Microsoft, and Amazon created broad AI solutions. These solutions handle multiple tasks but are not optimized for any specific ones.

Vertical AI has been enabled by advancements in Large Language Models (LLMs), which now possess the capability to process complex, industry-specific data and automate complex tasks. These breakthroughs and the inefficiencies of outdated technologies in many industries have created a demand for specialized solutions. Additionally, some platforms simplify the creation and deployment of vertical AI by providing data management and customization tools. At the same time, businesses increasingly recognize AI’s potential to drive efficiency and competitive advantage.

Vertical AI agents are emerging as the next disruption in tech and are anticipated to dominate in 2025. With its market valued at $5.1 billion in 2024, the figures are projected to rise to $47.1 billion by 2030.

Some areas where vertical AI agents are used include finance to enhance risk assessment models and provide insights into market trends and investment opportunities.

Banking institutions are also deploying vertical AI agents to detect fraud in real-time and reduce manual intervention.

In retail verticals, AI agents help personalize product suggestions for customers.

It is important to note that the success of vertical AI precision depends on its ability to solve clear and specific problems. It leverages industry-specific data and domain expertise to deliver solutions that have better precision than general AI systems.

As such, some companies have begun building their own AI tools by using their datasets to create tailored solutions for their specific industry challenges.

Key Benefits of Vertical AI Agents for Niche Markets

  1. Increased operational efficiency – Frees human resources by automating complex and repetitive tasks to increase productivity. Employees have more time to focus on tasks that require creativity, strategy, or problem-solving.
  2. Enhanced accuracy and decision-making – Vertical AI agents are trained on vast amounts of industry-specific data. As a result, they deliver more accurate and consistent results. This reduces human error, which may have dire consequences in critical high-stakes fields such as healthcare and finance.
  3. Cost saving – automating tasks traditionally performed by large teams helps reduce costs. It lowers payroll expenses and minimizes operational costs. This enables companies to reallocate resources to innovation and growth rather than to routine tasks.
  4. Unlock new markets – traditional software solutions may struggle to penetrate niche markets. This is because of their complexity or unstructured data requirements. However, vertical AI agents handle these challenges effectively, opening up new revenue opportunities in previously underserved segments.
  5. Improved customer experience – vertical AI agents enhance customer interaction since they can provide personalized service and faster response time.
  6. Competitive advantage – businesses leveraging vertical AI agents have a significant competitive edge over competitors relying on generalized solutions.
  7. Driving innovation – vertical AI agents streamline operations and offer data-driven recommendations. This enables businesses to experiment and develop cutting-edge products and services. Ultimately, a business can maintain a competitive edge in niche markets.

Challenges and Considerations

Vertical AI agents have compelling benefits but also come with some challenges. A business must navigate the potential challenges during implementation. This includes integration with existing systems, data privacy concerns, employee resistance, and the need for ongoing human oversight. The good news is that with careful planning and a strategic approach, it is easy to overcome these challenges and fully realize the benefits of vertical AI.

Closing Thoughts

Automation has become a critical tool for businesses that want to remain competitive. As the demand for smarter and more efficient operations rises, vertical AI agents are emerging as a solution. These advanced AI solutions deliver targeted results by focusing on niche applications. As AI continues to advance, vertical AI agents will become more efficient and accessible, integrating with broader systems.

Calculating the CAC Payback Period

4 min read

Calculating the CAC Payback PeriodThe CAC Payback Period looks at how a business needs to recover its investment in attracting new customers. It is especially crucial for companies that are in industries with large marketing and sales costs. It’s an important metric because it helps businesses measure their performance in a number of ways.

First, it shows how well a business is managing its budget. Based on the resulting figure of the CAC Payback Period, the shorter the time required to break even on its customer acquisition costs, the more efficient a company is with its sales and marketing expenses. If, however, the result is high, this signals the company is doing something wrong and needs to analyze its current approach.

Running this analysis can also identify a company’s financial perils. The more prolonged the CAC Payback Period, the more likely a company might be facing cash flow concerns. Whether it is caused by overall economic conditions or industry or company-specific challenges, this is another reason for a company to run the numbers to see how it can mitigate or turn around the costs associated with acquiring customers.

The calculation also can help a business determine if it is able to expand to new products and markets and scale up existing product lines. The shorter the time needed to acquire new customers, the more likely a business can grow.

When investors and lenders analyze a company’s financials, including this metric, the more efficient a company is, and the more likely it will attract investors or have lenders offer favorable financing terms.

How to Calculate the CAC Payback Period

This scenario looks at $300,000 in customer acquisition costs, such as marketing, sales, etc., for a three-month period. The company obtained 1,000 new customers and is expected to gain $200,000 in new monthly recurring revenue (MRR), with an estimated gross margin of 60 percent.

First Step: Calculate the CAC by dividing Sales and Marketing Expenses by the new customers (1,000). It’s expressed as follows:

CAC = Sales and Marketing Expenses/Number of New Customers

CAC = $300,000/1,000 = $300 per customer

Second Step: This is to determine the monthly recurring revenue (MRR) per customer. The new MRR amount is divided by the number of newly acquired customers. It’s calculated as follows:

MRR = $200,000/1,000 = $200 per customer

Third Step: Determine the gross margin or how much remains from revenue after subtracting direct costs. In this case, we’ll use 60 percent.

Fourth (and Final) Step: This step determines how many months it will take to recoup the customer acquisition costs from the profits generated by the newly acquired customer. It’s calculated as follows:

CAC Payback Period = $300/($200 x 0.60) = 2.5

Based on the resulting 2.5 figure, it takes, on average, 2.5 months of profit from the newly acquired customers to pay for the customer’s acquisition cost.

Understanding CAC Payback Period Efficiency

If it’s less than 12 months, it’s favorable. This implies a business has an efficient approach to profitability and growth. However, it’s not a hard and fast rule because the repayment time frame can fluctuate based on the economy and the business operations. If a company is a low-margin business or industry (e-commerce, groceries, etc.), a far tighter payback time frame would be necessary to be viable.

There are many factors that can affect this company-specific measurement, such as the industry or sector, current economic conditions, or the business’ approach to gaining new customers. If a company has a shorter CAC Payback Period in an industry that has a generally accepted longer one, this can imply that the company is more efficient in its operations.

This metric is another tool in a financial analyst’s toolbox that can measure and identify efficiency (or lack thereof) and help put businesses back on track for greater financial health.

The Social Security Fairness Act of 2023: More Retirement Income for Teachers, Police, Firefighters & Gov. Workers

3 min read

The Social Security Fairness Act of 2023, More Retirement Income for Teachers Police Firefighters & Gov WorkersThe Social Security Fairness Act of 2023, formally known as H.R. 82, aimed at ending two provisions in the Social Security system that affect public sector employees who have earned pensions from jobs not covered by Social Security. These provisions are the Windfall Elimination Provision and the Government Pension Offset, both of which reduce or eliminate Social Security benefits for workers who have worked in both public-sector and private-sector jobs.

The Problem: WEP and GPO

The Windfall Elimination Provision and the Government Pension Offset were originally designed to prevent public sector workers from receiving larger Social Security benefits than they would have been entitled to had they worked in jobs covered by Social Security for their entire careers. However, critics argue that these provisions disproportionately harm workers who have spent a significant portion of their careers in public service, such as teachers, police officers, firefighters, and other state and local government employees.

Windfall Elimination Provision (WEP):

The WEP reduces the Social Security benefits of individuals who have worked in both the private sector (where they paid into Social Security) and the public sector (where they often did not contribute to Social Security). Typically, Social Security benefits are based on an individual’s 35 highest-earning years. The WEP alters the formula used to calculate benefits for individuals with fewer than 30 years of substantial earnings in Social Security-covered employment, leading to a lower Social Security benefit than they would otherwise be entitled to. For many, this results in a significant reduction in the monthly payment they would have received under the standard Social Security formula.

Government Pension Offset (GPO):

The GPO affects spouses and widows/widowers of Social Security beneficiaries. Under this provision, individuals who receive a government pension from work that was not covered by Social Security (such as state or local government employees) see a reduction in their spousal or survivor benefits from Social Security. The offset is calculated by reducing the spousal or survivor benefit by an amount equal to two-thirds of the government pension. This can leave many public employees with little to no spousal or survivor benefits despite their spouse having paid into Social Security.

What H.R. 82 Seeks to Accomplish

By eliminating both the WEP and GPO, the bill aims to ensure that public sector workers who have earned Social Security benefits through their work in the private sector are not penalized by reductions in those benefits. It also seeks to provide fairer treatment for the spouses and survivors of government employees who may otherwise see their Social Security benefits reduced or eliminated entirely.

The bill has garnered bipartisan support, as lawmakers from both sides of the aisle recognize the fairness of eliminating these provisions, which many see as an unjust penalty against those who have dedicated their careers to public service. H.R. 82, if passed, would provide much-needed relief to millions of retirees, many of who are struggling with the financial impacts of these provisions.

Conclusion:

The introduction of H.R. 82, the Social Security Fairness Act of 2023, marks a crucial point in the ongoing debate over Social Security benefits for public sector workers. By eliminating the Windfall Elimination Provision and the Government Pension Offset, the bill would restore fairness and equity for millions of public employees who have spent their careers in service to their communities. As this bill progresses, it will likely remain a significant issue in discussions surrounding Social Security reform and the treatment of public sector employees.

President Joe Biden signed H.R. 82, the Social Security Fairness Act, into law on Sunday, January 5, 2025, at 3:00 p.m. Central Time Zone.

Tips for Tax Season

4 min read

Tips for Tax SeasonWhether you file your income tax return early or at the last minute, there are ways to simplify the process and reduce what you owe – or even increase your refund – before the deadline.

Filing Simplification Tip

Once you receive your W-2 and/or 1099 tax forms, see what income tax bracket you fall under to determine whether you should itemize expenses or take the standard deduction. Thinking about this step first can save you a lot of time. If you don’t come near the standard deduction amount, you will not be itemizing expenses. And if you are not itemizing expenses, you won’t have to gather all the receipts (e.g., mortgage interest, property tax, state and local income taxes, and sales tax paid in 2024).  

2024 Tax Season Income Tax Brackets

 
Single filer Married filing separately Married filing jointly (includes qualifying widow/er) Head of Household Tax Rate

$0 to $11,600 

$0 to $11,600 

$0 to $23,200 

$0 to $16,550 

10%

$11,601 to $47,150 

$11,601 to $47,150 

$23,201 to $94,300 

$16,551 to $63,100 

12%

$47,151 to $100,525 

$47,151 to $100,525 

$94,301 to $201,050 

$63,101 to $100,500 

22%

$100,526 to $191,950 

$100,526 to $191,950 

$201,051 to $383,900 

$100,501 to $191,950 

24%

$191,951 to $243,725 

$191,951 to $243,725 

$383,901 to $487,450 

$191,951 to $243,700 

32%

$243,726 to $609,350 

$243,726 to $365,600 

$487,451 to $731,200 

$243,701 to $609,350 

35%

$609,351 or more 

$365,601 or more 

$731,201 or more 

$609,351 or more

37%

2024 Tax Season Standard Deductions

Single filer and married filing separately Married filing jointly (includes qualifying widow/er) Head of Household

$14,600

$29,200

$21,900

Retirement Saving Tips

It’s not too late to contribute to an IRA. Both the traditional and Roth IRAs allow you to make contributions for 2024 up until the tax-filing deadline of the following year – which this year is Tuesday, April 15. The advantage to this later deadline is that you can complete your taxes before they are due, then adjust them to reduce your tax liability if needed by contributing to your IRA. The total maximum contribution you can make to all of your IRAs combined (both Roths and traditional) is $7,000 for 2024 or $8,000 if you are 50 years or older.

However, if you have a Roth IRA, there are restrictions to contributions based on your 2024 income. You may make the maximum contribution to your Roth only if your 2024 modified adjusted gross income (MAGI) is less than a certain threshold.

Filing Status MAGI Contribution amount

Single and Head of Household filers

Below $146,000

Between $146,001 and 161,000

Above $161,000

$7,000/$8,000 (age 50+)

Phased (IRS Worksheet 2-2)

Nothing

Married filing jointly

(includes qualifying widow/er)

Below $230,000

Between $230,000 and $240,000

Above $240,000

$7,000/$8,000 (age 50+)

Phased (IRS Worksheet 2-2)

Nothing

Be aware that the amount of deduction you can claim for a traditional IRA contribution may be limited if you or your spouse are covered by a retirement plan at work.

Filing Status MAGI Deduction amount

Single and Head of Household filers

$77,000 or less

Between $77,000 and 87,000

$87,000 or more

Full deduction

Partial (IRS Worksheet 1-2)

None

Married filing jointly

(includes qualifying widow/er)

$123,000 or less

Between $123,000 and 143,000

$143,000 or more

Full deduction

Partial (IRS Worksheet 1-2)

None

Married filing separately

Less than $10,000

$10,000 or more

Partial (IRS Worksheet 1-2)

None

If you make a traditional and/or Roth IRA contribution by the April 15 deadline, you may qualify for the Retirement Saver’s Credit (also available if you contributed to an employer plan by Dec. 31, 2024). The maximum credit is $1,000 ($2,000 for married couples), and it can increase your refund or reduce the tax you owe. However, the saver’s credit is subject to other deductions, credits, and income restrictions.

Filing Status MAGI

Single and Married filing separately

up to $57,375

Married couples filing jointly

(includes qualifying widow/er)

up to $76,500

 

Head of Household Filers

up to $57,375

Work with an experienced tax preparer to take advantage of legitimate deductions and credits to ensure that you only pay what is required for your situation.

7 Ways to Start 2025 with Fresh Finances

4 min read

7 Ways to Start 2025 with Fresh FinancesHere we are in yet another new year. The obligations and celebrations are over. Chances are, you’ve spent a fair amount over the holidays and might need a plan to help kickstart 2025 with some actionable financial goals. Here are a few ideas.

Create a Budget

This one never gets old. Why? It’s one of the keys to successful budgeting. You can set up a budget for the year that includes essentials, entertainment, and nice-to-haves, aka your Wish Farm. Then place it in your planner or app – there are many good ones out there. In fact, there’s a TikTok trend called loud budgeting, where people openly discuss their financial goals on social media – why they do or don’t want to buy something. If this is your thing and it helps you stay on track, go for it! If not, a good old-fashioned planner works just as well.

Bucket Your Money

This is the next step after the aforementioned. Split your money into categories: food, rent/ mortgage, utilities, medical, entertainment, vacation, etc. Apps can help you parse out these groups. You might also set up separate banking accounts for some of the necessities so you’ll know to leave them alone and not dip into them, tempting as it may be.

Set Up Auto-Drafts

Let’s say you’re saving for your child’s college fund or a down payment on a car. When you create an auto-draft for a certain amount, you’ll never miss that deposit. If you need to tweak the amount during the year, do it. Here’s the bottom line: 1) You’ll learn to live on less, and 2) you’ll be on the way to making your dreams come true.

Look for Savings Deals

Don’t just settle for the interest rate your current bank is offering. There are many options out there to grow your money. But first, do you want to lock into a fixed rate? This can be useful for long-term goals, such as buying a property. Or do you want an easy-to-access account with the ability to withdraw cash for emergencies or short-term needs like birthday or wedding gifts? Shop around.

Cancel Seldom-Used Subscriptions

Scour your bank statement. Do you need all those online magazine subscriptions? How about newsletters you pay for – the ones you rarely read? Purge your subscriptions, then see how much you’ll save. If you’re so inclined, you could put these dollars toward a gym membership. January is when all the specials appear: zero joining fees, if not a seriously cut rate.

Start a Savings Challenge

Try putting away a small amount every month. Get in the habit of emptying your pockets or coin purse. Safeguard your coins in a mason jar, and then transfer them monthly into your savings account. The next month, increase how much you contribute. Pennies, nickels, dimes, and quarters add up! After a year, you might be surprised how much you’ve saved.

Decide on Goals

These can be small or large. It’s up to you. Spend some time thinking about what’s important. Do you want to remodel your house? Contribute to a beloved charity or cause? One resource you might want to consider setting up is an emergency spending pot. This is essential and sometimes overlooked. Regardless of what you decide, figure out your parameters: how much to set aside, how often, and by when. Having financial targets gives you something to look forward to. Best of all, when you achieve your goal, it’s an awesome feeling.

More often than not, New Year’s resolutions center on getting physically fit. But if you stay the course with your finances, you’ll most definitely be, wait for it … fiscally fit!

Sources

10 things you can do right now to start 2025 with fresh finances

https://www.msn.com/en-us/money/personalfinance/10-things-you-can-do-right-now-to-start-2025-with-fresh-finances/ar-AA1vnhyg