| ▲ | throw0101a 5 days ago |
| PSA: the "No Tax On Tips" provision expires: > New deduction: Effective for 2025 through 2028, employees and self-employed individuals may deduct qualified tips received in occupations that are listed by the IRS as customarily and regularly receiving tips on or before December 31, 2024, and that are reported on a Form W-2, Form 1099, or other specified statement furnished to the individual or reported directly by the individual on Form 4137. * https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-... There's also a maximum of $25k/year (~$2k/mo). |
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| ▲ | japanuspus 5 days ago | parent | next [-] |
| > PSA: the "No Tax On Tips" provision expires... My understanding is that this is true for all the Trump handouts: otherwise the ten-year economic outlooks would have cratered. The Economist had a couple of nice analyses on this. Of course this means that the next administration will need to start with tax increases just to get to neutral, but maybe that is a feature? |
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| ▲ | ahoka 5 days ago | parent | next [-] | | The Republican strategy is to booby trap the US economy every time they are in power since Reagan. | |
| ▲ | zimpenfish 5 days ago | parent | prev | next [-] | | > true for all the Trump handouts: otherwise the ten-year economic outlooks would have cratered Not just that - they're often timed to expire early into the next administration which, if Democrats win, is an instant "look how the Democrats treat the working folk!" hammer. e.g. "Tax Cuts and Jobs Act" from 2017, expiring at the end of 2025[0]. [0] https://theconversation.com/trumps-plans-to-extend-tax-cuts-... | |
| ▲ | rayiner 5 days ago | parent | prev | next [-] | | Tax bills are universally passed through the budget reconciliation process these days to overcome the filibuster (can do a budget with only 51 Senate votes). That process has many restrictions on what tax changes can do to projected revenues outside a certain window: https://www.ey.com/en_us/insights/tax/prospects-for-budget-r.... | |
| ▲ | overfeed 5 days ago | parent | prev | next [-] | | > My understanding is that this is true for all the Trump handouts Only those for humans expire. The corporate tax cuts are forever. Read into that what you will. | | |
| ▲ | Y_Y 5 days ago | parent | next [-] | | Luckily the politicians involved are set to expire around the same time | |
| ▲ | rayiner 5 days ago | parent | prev [-] | | Those were set to expire this year as well but got extended. |
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| ▲ | drdec 5 days ago | parent | prev [-] | | > Of course this means that the next administration will need to start with tax increases just to get to neutral, but maybe that is a feature? Oh no. What you have missed is the incredible end run around the spirit of the reconciliation process that the Republicans did this time around. So, the did these tricks with the tax in Trump's first term, with tax breaks set to sunset in order to have a revenue-neutral effect over the required ten years. This time around they needed to extend those breaks, right? So they must had to cut spending or raise other taxes in order to do that and have a revenue-neutral effect, right? Ha ha, no! They convinced the CBO that the baseline for the reconciliation process this time should be whatever was in effect for the last few years. So those breaks are already baked in and don't need to be counterbalanced. It's a two-step, long-term process for making things permanent through the reconciliation process that otherwise one could not. |
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| ▲ | jagged-chisel 5 days ago | parent | prev | next [-] |
| Is that maximum $25k in tips, or in total income that includes tips? |
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| ▲ | rayiner 5 days ago | parent | next [-] | | Tips. The AGI phaseout starts at 150k (300 married). | | |
| ▲ | fn-mote 5 days ago | parent [-] | | 300k before your tips start to become taxable?? What in the world is driving this very high ceiling? | | |
| ▲ | Frieren 5 days ago | parent | next [-] | | Kids of rich people now can exploit this loophole. They can get up to 300k from some fake job and do not pay any taxes on the "tips" part of it. Each month the tips part is going, oh surprise, going to be the maximum allowed by law. | | |
| ▲ | pests 5 days ago | parent [-] | | So they pay tax on 30k but none on the 2k per month. Not that big of a loophole. | | |
| ▲ | Den_VR 5 days ago | parent [-] | | More like on top of whatever “free money” they could have as “gifts,” they can now move an extra $2k/month as daddy’s tip. |
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| ▲ | ashdksnndck 5 days ago | parent | prev | next [-] | | Rich people are more likely to pay accountants to come up with complicated ways to exploit the tax system. If the top 5% had access to this loophole, you’d probably end up with some crazy outcome like 80% of money saved from this deduction goes to the top 5% of earners. And that would make the provision more expensive to include in tax legislation (trading off against other things like the headline tax rate). Since “no tax on tips” was a campaign promise, they probably wanted to keep the promise while setting limits to make it easier to fit into the rest of the bill. | | | |
| ▲ | 5 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | cebert 5 days ago | parent | prev | next [-] | | 300k isn’t what it used to be these days with inflation and cost of living. If you have kids and a house, things get expensive quickly. | | |
| ▲ | vasco 5 days ago | parent | next [-] | | Get real, look at some statistics, that's more than 3x median | | | |
| ▲ | CalRobert 5 days ago | parent | prev [-] | | Yes, it was Ferrari money and now it’s just Porsche money. Poor things. | | |
| ▲ | hiatus 5 days ago | parent [-] | | This is the problem when talking about class warfare. We are eating our own. Someone making $300k a year is closer to the median than someone making $5 million a year. Losing ~30% of your spending power since 2008 might not matter if you're a billionaire but for most working professionals it has an impact. | | |
| ▲ | CalRobert 4 days ago | parent [-] | | You make a good point - lumping people who make 500k a year with those making 5 million (or 50 million) a year is bad policy. It's still a very good income, though. |
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| ▲ | rayiner 5 days ago | parent | prev [-] | | That’s a typical phase-out threshold for dedications. |
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| ▲ | itake 5 days ago | parent | prev [-] | | In tips |
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| ▲ | throwawayq3423 5 days ago | parent | prev | next [-] |
| Right on time for them to lose the next election so people blame Democrats. It's all so cynical. |
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| ▲ | theultdev 5 days ago | parent [-] | | If Democrats win they could extend them | | |
| ▲ | throw0101d 5 days ago | parent | next [-] | | > If Democrats win they could extend them And what happens to the debt/deficit then? You know, the thing that the GOP constantly complains about but always makes worse? The GOP loves to cut revenues (taxes, especially for top percentiles): * https://en.wikipedia.org/wiki/Starve_the_beast | | | |
| ▲ | brendoelfrendo 5 days ago | parent | prev | next [-] | | If Democrats win the presidency, they would still probably need cooperation from Republicans to get an extension through Congress, which means that there are no good options for the Dems. | |
| ▲ | throwawayq3423 13 hours ago | parent | prev | next [-] | | Just in time for Republicans to blame them for making the debt worse. It's all so cynical. | |
| ▲ | kimbernator 5 days ago | parent | prev | next [-] | | Yes but this policy is absolutely terrible, so it seems unlikely they would | | | |
| ▲ | estearum 5 days ago | parent | prev [-] | | but it's a very stupid policy. |
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| ▲ | cyanydeez 5 days ago | parent | prev [-] |
| It's a free tax fraud for everyone! hooray! |
