kathyc2

Yep.  I pointed that out months ago.  No more subsidies for anyone over 400% FLP.

Can't repeal it outright, so death by 1000 cuts.

Also not being talked about is clean energy credits end 9/30/25 and residential energy credits end 12/31/25.

Clarification on this:  They can still take 100% deduction of winning as long as losses are are 11% higher than winnings.  

“(1) IN GENERAL.—For purposes of losses from wagering transactions, the amount allowed as a deduction for any taxable year—

“(A) shall be equal to 90 percent of the amount of such losses during such taxable year, and

“(B) shall be allowed only to the extent of the gains from such transactions during such taxable year.

“(2) SPECIAL RULE.—For purposes of paragraph (1), the term ‘losses from wagering transactions’ includes any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.”.

(b) Effective date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2025.

Once again, JOA has done a wonderful job of taking legislative text and turning it into real language. 

https://www.journalofaccountancy.com/news/2025/jun/tax-changes-in-senate-budget-reconciliation-bill/

I'm well aware of the fact that the tax on SS benefits goes from general fund to trust funds.  I'm just saying I can't find anything as to how they actually calculate the amount.  The extra 6K doesn't affect how much is thrown into the taxable column since it's an after AGI adjustment.  So, if they just use that amount times a rate nothing will change.  I highly doubt they have the computers look at each return and say xx% of the actual tax on return was a result of SS benefits and then use that amount for reimbursement. 

Personally I've never understood why someone should have a higher standard deduction simply because of being 65.  Most of us at that age should not have a mortgage or rent, yet we are allowed to pay less FIT than a young person trying to get a start making the same income. 

I was just livid about the email SSA sent out.  Waaayyyy too political of a statement and extremely misleading coming directly from an agency that's supposed to be apolitical. 

I think a lot depends on how they calculate the amount of "tax" on benefits that goes back to trust funds.  That seems to be a well guarded secret. 

Example age 65+ with 30K SS and 50K other income taxed at regular rates.  Max 85% or 25,500 falls into taxable column.  

Taxable income w/ std is 58.5K as is or 52.5K with add'l 6K.  Either way it's in 22% marginal bracket, although w/ add'l 6K tax will decrease it by 1,320.  

If they take the taxable amount of 25.5K times 22% it's not going to change. if they do some kind of proration (which I doubt) it will go down some.

I don't have a lot of faith in an organization that makes a statement like this: "Under current law, Social Security benefits are 50 percent taxable for seniors with over $25,000 ($32,000 for couples) of annual income, and 85 percent taxable for seniors with over $34,000 ($44,000 for couples) of income. That 50 percent is deposited into the Social Security trust fund, and the additional 35 percent into Medicare’s Hospital Insurance (HI) trust fund."

2 minutes ago, Lee B said:

I see what you are saying but I disagree because this deduction will reduce the taxes paid on social security benefits which are dedicated to the Social Security Trust Fund.

I don't think it will.  If that were true they would have needed to change the code section that authorizes payment from general fund to trust fund and the formula used.  

Twitter was abuzz about that yesterday.  Some guy was going on why if he won 400K but lost 500K why he now has to pay tax on the 40K.  He didn't like my answer that it's a stupidity tax on people that throw away money gambling. 

1 hour ago, Lee B said:

Different analyses that I have read say that it reduces the percentage of seniors who will pay taxes on their social security benefits from about 40 % down to about 12 %.

The same analyses say that the social security trust surplus will be gone in 7 years (2032) since taxes on social security benefits are dedicated to the trust fund

Seriously wish people would stop equating the 6K deduction to taxes on SS benefits.

1.  People who are age 65 but not drawing benefits get the deduction.

2. People under 65 with benefits will see no change.

3. Taxable income is taxable income.  You could just as easy say they are receiving 6K of interest tax free. Or, 6K of wages.  Or any other line item that makes up taxable income. 

4.  If it is reducing SS taxation, then it would have needed to be set up the the only way a person receives it is if there is taxable SS benefits and age would not matter.  

It doesn't change the standard deduction, as it's a separate line item.  Also available to those that itemize.

“(C) DEDUCTION FOR SENIORS.—

“(i) IN GENERAL.—In the case of a taxable year beginning before January 1, 2029, there shall be allowed a deduction in an amount equal to $6,000 for each qualified individual with respect to the taxpayer.

“(ii) QUALIFIED INDIVIDUAL.—For purposes of clause (i), the term ‘qualified individual’ means—

“(I) the taxpayer, if the taxpayer has attained age 65 before the close of the taxable year, and

“(II) in the case of a joint return, the taxpayer's spouse, if such spouse has attained age 65 before the close of the taxable year.

“(iii) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—

“(I) IN GENERAL.—In the case of any taxpayer for any taxable year, the $6,000 amount in clause (i) shall be reduced (but not below zero) by 6 percent of so much of the taxpayer's modified adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).

“(II) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this clause, the term ‘modified adjusted gross income’ means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.

If son qualifies as dependent, client may also qualify for HOH.

No problem to amend back three years, just make sure you have done your due diligence for qualification.

11 minutes ago, Lee B said:

 

What's worse is that the benefit is received by middle and upper income senior taxpayers .

Lower income senior citizens receive no benefit.

Phaseout of the add'l 6K starts at 75K for S and HOH and 150K for MFJ.

I have several clients that I give an amount to each year how much they can convert from Trad to Roth free of tax.  I'm going to need to recalculate and contact those clients so they don't think they can just add the 6K amount and still pay zero FIT. 

Includes:  "The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned."

Bad enough that we need to dispel the  "somebody said" and FB garbage, now it's coming direct from federal agency.  Shameful. 

Thanks all!  It seems promising that it may work.  

My main concern was losing past data, so I'm downloading 25+ years of data to Excel in various formats so I should be able to find prior info if needed.

I don't use QB for billing or AP, so going forward if it doesn't work, I should be able to find something simple that will.  Basically just need ledgers for various financial accounts and expenses classified by category.  I'm a creature of habit and prefer to stay with what I know rather than new programs.  Definitely don't want or need all the silly graphics and charts that much of the new stuff uses. 

I have QB 2019 desktop Accountant Edition.  I'm seeing conflicting info online if it will continue to work with Windows 11.

Anyone with first hand experience?

Before people start going on about security, I only use it for my personal information, not clients. 

Either they were paid late or if AGI over 75/150 110% was not paid. 

https://rsmus.com/insights/tax-alerts/2025/irs-extends-tax-filing-deadline-for-taxpayers-in-tennessee.html

I downloaded the full bill from the house and skimmed through it. 

The 4,000 for over 65 as written is in additional to the higher standard deduction.  It adds a new paragraph to 63(f) and doesn't replace it.  Even those that itemize will receive the 4K deduction.  Phase out starts at 75/150K.  Interestingly, as currently written the 4K is the same for all filing statuses.

The "no tax on tips" and "no tax on overtime" appear to be an after AGI deduction.

Takes away the payback limit of APTC based on income .  Nothing to extend the PTC for those over 400% FPL from IRA.  Hopefully the Senate will correct that. If not, a couple in 60's but not eligible for MC with income of ~85K will go from paying ~7K to ~20-25K for insurance. 

Interest on auto includes such things as ATV, motorcycles, campers, trailers, etc. 

Residential energy credits go away after 2025.

Requires states to collect fee of 100/250 when plating hybrid/electric vehicles.

Lots of other items that are going to be a PITA.

A lot of the items start for 2025 tax year.  After they pass, IRS will need to issue procs, companies will need to learn what new info they need to provide, forms will need to be revised, software will need to be reprogrammed, etc.  Uggh!

Whatever...  Just go ahead and delete it then.

33 minutes ago, JimTaxes said:

Limit the value of itemized deductions to 35 cents on the dollar?  what does not mean

Those in 37% rate are limited to taxable income reduction from itemized at a 35% rate.  Scored at ~1.5B per year.

Also included is bringing back Pease, scored at ~18B per year.

https://taxfoundation.org/research/all/federal/big-beautiful-bill-house-gop-tax-plan/

Under the title of bill, you can download to Excel the "cost" of items. 

It can be hard for legit farmers to show a profit.

A lot of the hobby farms have a few acres and "someone" told them they can take the loss.  Maybe they raise five cattle for beef in a year, butchering one for themselves.  When I tell them I'm going to decrease feed, vet, etc by 20% they aren't happy.  

8 hours ago, Corduroy Frog said:

Michigan has no reciprocity with Indiana

MI and IN have reciprocity for wages for state income tax.  However, IN also has a county tax that is not included in agreement. MI residents working in IN pay the county tax to IN and can then take a credit on MI return. I've yet to see DIY software handle this correctly. Even on professional software I need to manually enter it on MI return rather than having it flow from W2.

IN and IL do not have an agreement.  This is due to a large difference of IN residents working in IL (Chicago) than vice versa. I'm guessing the east coast states without reciprocity has to do with similar differences rather than where a football team plays. 

Craziest one I've seen without reciprocity is KS and MO.  TP works for company that has locations in both KS and MO portions of Kansas City.  W2 has wages and w/h for both states depending on which location she works at. 

I decided to keep it very simple.  This is what I came up with:

"This tax season was rather hectic for me, especially toward the end.  After reflecting, I realize that I need to reduce some of the workload to maintain my sanity.

While I have enjoyed helping with your tax prep needs over the years, I think it’s best that you make other arrangements for next year. I wanted to let you know now so you have ample time to find another preparer."

Thoughts?

4 hours ago, Max W said:

I wouldn't put it past them.   Remember, just before W was inaugurated, the white house staff pulled out the letter W from all the keyboards.   Infantile in both cases.

My money is on the chainsaw gang who have shown time after time that attention to detail is not their forte.