Category: Taxes Made Simple
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Overtime pay up to $12,500 is deductible this year, and it lands in box 12 of your W-2 under code TT
Box 12 of the Form W-2 carries a code this year that was not on the wage statement workers opened last January. Employers must now enter qualified overtime compensation there under the two-letter code TT, and that single entry is what makes the new overtime deduction usable at all. The Internal Revenue Service set out…
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The FTC says tax debt relief firms take a fee to settle back taxes for pennies on the dollar, then often do nothing
An FTC consumer alert warns that tax relief firms promise to settle back taxes for pennies on the dollar before reviewing a file, charge a fee, and often do nothing.
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Proposed IRS rules would cap Trump Account fund fees at 0.1 percent
Treasury and the IRS proposed rules defining eligible investments for Trump Accounts: an unleveraged U.S. equity index fund charging no more than 0.1 percent a year.
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The small-business ownership filing millions were told was mandatory has been permanently scrapped
Anyone who set up an LLC for a rental property, a consulting practice or a side business in the past few years likely encountered a federal filing described as compulsory, backed by penalties, and carrying a hard deadline. A great deal of money was spent on services offering to handle it. That requirement no longer…
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Starting with 2027 contributions, the government will match up to $1,000 a year into a retirement account
A tax break that most eligible workers never claimed is being converted into something harder to miss: cash deposited straight into a retirement account. Treasury and the IRS have begun writing the rules for the Saver’s Match, a federal contribution worth as much as $1,000 a year to low- and moderate-income savers. It applies to…
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Americans 65 and older get an extra $6,000 deduction on their 2026 tax return
Older taxpayers have a new break this year, and it is one of the simpler ones to use. Anyone 65 and older gets an extra $6,000 deduction — $12,000 for a married couple where both spouses qualify — on top of the standard deduction. It lowers taxable income whether or not you itemize, and for…
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You can now deduct up to $10,000 of car-loan interest on your 2026 tax return
Car-loan interest has been a dead end at tax time for decades — a real cost with no deduction behind it. That changes for recent buyers of certain new vehicles. A new tax break lets you write off up to $10,000 a year in interest on a loan for a qualifying vehicle, and unlike most…
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The 2026 estate and gift tax exemption is now $15 million, or $30 million per couple
For most families, the federal estate tax has always been someone else’s problem, and a change taking effect this year makes that even truer. The amount a person can pass on free of federal estate and gift tax rose to $15 million for 2026, or $30 million for a married couple. Just as important as…
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New rules let workers deduct up to $25,000 in tips and $12,500 in overtime pay
Two of the most talked-about tax changes of the past year are now real, filed on a new form, and aimed squarely at people who work for tips or clock overtime. Eligible workers can deduct up to $25,000 in qualified tips and up to $12,500 in overtime pay from their taxable income. The catch is…
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Employers could put $2,500 a year, tax-free, into the Trump Account of a worker’s child under proposed rules
Think of the list your employer hands you at open enrollment. Health plan, dental, vision, the 401(k) match, maybe a dependent care account and a commuter benefit. Treasury and the IRS have put out proposed regulations that would add another optional line to that menu: a contribution of up to $2,500 a year, excluded from…