Latest news with #MarkHamrick
Yahoo
01-08-2025
- Business
- Yahoo
Stunning revisions show US added 258K fewer jobs than first reported
The U.S. added 258,000 fewer jobs in May and June than the Labor Department first reported, according to federal data released Friday. The Bureau of Labor Statistics (BLS) issued stunning revisions to its reports on May and June employment growth in an overall dismal July jobs report, drastically changing the picture of the U.S. economy. The U.S. only added 19,000 jobs in May compared to an initial report of 144,000, and only 14,000 in June after an initial report of 147,000, according to the BLS. Those two paltry totals, plus a July jobs gain of 73,000, means the U.S. added just 106,000 jobs over the past three months. 'Hiring has hit a wall in the U.S. Substantial downward revisions in payrolls means that private sector hiring has averaged a little more than 50,000 jobs over the past three months,' Bankrate senior economic analyst Mark Hamrick wrote in an analysis. While the BLS often revises job figures, the scale of the revisions — and what they said about the economy — stunned experts and investors after a week of relatively solid economic data. The July jobs report showed the labor market stalling out last month, with most industries other than health care reporting meager job gains or outright losses. The report comes two days after the Federal Reserve kept interest rates steady, but with two members of the Fed board calling for lower rates. President Trump raged against the Fed and its chair, Jerome Powell, in the hours before the report was released. Trump urged the Fed board to overrule Powell on future decisions and warned of future dissents from board members. The combination of slowing job gains and rising inflation, however, make it harder for the Fed to respond without exacerbating either issue. Cutting interest rates can fuel economic activity to support job growth, but also risks fueling inflation. Keeping interest rates at moderately high levels can help snuff out inflation, but could hold back the job market. 'Persistent policy uncertainty, tariffs, and diminished immigration flows paralyzing employers, the US economy is now flirting with job losses, revealing a labor market that is much weaker than most Fed policymakers had believed,' EY-Parthenon chief economist Gregory Daco wrote in an analysis. This dynamic, he said, now puts the Fed 'behind the curve.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Solve the daily Crossword
Yahoo
01-08-2025
- Business
- Yahoo
25% of workers ‘very likely' to seek a new job
This story was originally published on To receive daily news and insights, subscribe to our free daily newsletter. How many workers at your company are looking for a new job? Perhaps more than you thought. In 2023, 'the great stay' trend developed when turnover was at a low rate. That followed a two-year period of 'the great resignation,' when employee churn hit a record high. And now, there are signs the job market may be shifting once again, with almost half (48%) of workers saying they're at least somewhat likely to search for a job by mid-2026, according to a June Bankrate survey of 1,005 people either working full time or seeking full-time employment. And 25% of them characterized themselves as 'very likely' to do so. More than a quarter (27%) of workers said their level of worry about their job security has worsened since January of this year, compared with 15% who said it has improved. In fact, 26% of them said they're likely to start their own business by the middle of next year. In another sign of a possible softening of the 2023-2024 employers' market, 44% of participants in the June survey said they're likely to ask for a raise within a year. 'As the job market has normalized following the period a few years ago when it was widely described as red-hot, many workers are seeking better pay or new work,' said Mark Hamrick, senior economic analyst for Bankrate, a consumer financial services company. More than a third (36%) of those surveyed reported being likely to ask for more flexibility with work hours and remote work. That marked a pullback from the previous year, when 42% of workers told Bankrate they'd requested greater workplace flexibility. The survey revealed that a worker's income level affects their likelihood of being in job-search mode. Those making less than $50,000 were unsurprisingly the most likely (58%) to search for a new job, while those earning between $50,000 and $79,999 followed at 47%. The $80,000-$99,999 cohort continued the pattern at 29%. However, it reversed to 41% among those making at least $100,000. Generationally, 53% of Gen Z workers (ages 18 to 28) are likely to look for a job, not much more than the 49% of Millennials (ages 29 to 44) and 48% of Gen X (ages 45 to 60) reported the same. Among Baby Boomers (ages 61 to 79), one in four expect to be job seekers. On a positive note, 22% of the employees said their employment/career situation has improved since January of this year, compared with 14% who said it has worsened. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-07-2025
- Business
- Yahoo
What the Big, Beautiful Bill means for small businesses
Key takeaways The One Big Beautiful Bill Act has introduced a wide range of tax cuts and adjustments that small business owners should pay attention to and prepare for. New deductions around pass-through income, tipped and overtime wage and bonus depreciation can allow small business owners and workers to lower their tax burden. The repeal of the de minimis rule means small business owners can expect to pay more on smaller imported shipments. President Donald Trump's megabill, the One Big Beautiful Bill Act, introduced a swath of tax cuts, deductions and adjustments for both consumers and businesses. While proponents of the bill have claimed the new deductions and extensions to the 2017 Jobs and Tax Cuts Act will help small businesses, it would prove to be an economically mixed bag in the long run. (Read more: Trump signs megabill into law — here's what it means for your money.) 'By heading off a tax increase at the end of this year, a potential headwind has been eliminated. And this should provide some added momentum to growth and consumer spending,' says Mark Hamrick, senior economic analyst for Bankrate. 'At the same time, the impacts regarding the federal debt and deficits are also consequential, lending upward pressure on interest rates for the foreseeable future.' With the new and extended deductions becoming effective for the 2026 tax year, small business owners should start working with their tax preparer in order to take advantage as soon as possible. 'Small business owners should consult with a tax professional before year-end to understand how the new provisions in the bill affect them,' says Kem Washington, CPA and former revenue agent and criminal investigator for the IRS. 'They should be aware of key changes that may impact both business and personal taxes.' Here's what you need to know about how the massice new law will impact your business, and what you should do to adapt. Summary of the Big, Beautiful Bill's business impact In a hurry? Here's the Big Beautiful Bill's business impact in a nutshell. Bill provision What it means What you should do No tax on tips or overtime Workers get up to a $25,000 deduction on tipped and up to a $12,500 deduction on overtime wages Stay aware of more negative sentiments around tipping Communicate with workers about fair compensation Pass-through deduction made permanent Pass-through business owners get a 20 percent deduction on their qualified income Ensure you qualify for pass-through income Talk to your tax preparer to take advantage of the deduction De minimis repealed Imports under $800 are now subject to tariffs Be prepared for sudden price spikes Consider switching supply chains or products 100% bonus depreciation Qualified business assets purchased or constructed after Jan 19, 2025 can have their depreciation deducted in the first year See if it makes sense to take the deduction up front Ensure your business assets qualify for the deduction More flexible R&D writeoffs Research and development expenses between Jan 1, 2022 and Jan 1, 2025 can be deducted over one or two years. See if you have any retroactive R&D expenses you can deduct Track R&D expenses accordingly No tax on tips and overtime The bill introduces two big tax breaks for workers: a $25,000 deduction on qualified tip income, and a $12,500 deduction on overtime (or $25,000 if married filing jointly), effective 2025 through 2028. Tips are classified as income received directly from customers in addition to regular income. While tips can be earned by any worker, some workers work for tipped wages, with the expectation that the majority of their income will come from tips. The IRS says it will publish a list of occupations that qualify for the new tax deduction by Oct. 2. As for overtime, the Fair Labor Standards Act of 1938 requires that hourly workers who are in excess of 40 hours per week be paid time and a half per hour. Both overtime and tips are taxed as income and are required to be reported as income to the IRS, and are taxed as such. Keep in mind that the value of both of these tax deductions starts to phase out for workers with modified adjusted gross income of $150,000 or more ($300,000 or more if married filing jointly). What it means for small business Tipped and overtime wage tax deductions can be seen as a win for workers with this type of income. For business owners, it may make recruiting tipped or overtime workers easier, as you can advertise that they'll be able to take home more pay. However, it does come as a mixed bag. Sentiments about tipping have shifted into the negative, with 41 percent of Americans saying that businesses should pay their employees better instead of relying on tips, according to Bankrate's 2025 survey on tipping. Moreover, some labor advocates worry that businesses will take advantage of this rule to push workers to work for tips or overtime, instead of offering a living wage or keeping a balanced work schedule. What you should do now: Keep tracking tipped wages. Your employees will be the ones taking the deduction when they file, so be sure to be compliant with payroll tax and reporting laws. Don't rely on deductions for a fair wage. With changing sentiments around tipping, it might be a better idea to attract workers with a competitive salary instead of pushing for more tips. Focus on a healthy working environment. Make sure that employees taking on more overtime aren't overextending themselves. Pass-through deduction extended The pass-through deduction, or Sec. 199A, allows for business owners who directly pass through their business profits to their individual income tax returns to deduct up to 20 percent of their qualified business income. This applies to LLCs, partnerships, S-corporations and sole proprietors who pass through their income in this way. Originally established in 2018, the deduction was set to expire this year. However, the 'big, beautiful bill' has now made it permanent. It has also changed certain provisions around the deduction's limitations, including: An increased deduction threshold from $50,000 to $75,000 for single filers, and from $100,000 to $150,000 for married couples filing jointly. The minimum deduction amount has been adjusted to $400 for at least $1,000 in qualified business income, to be adjusted for inflation starting in 2026. These new rules will apply to tax seasons after Dec. 31, 2025. What it means for small business With many small business owners receiving their income as pass-through, the now-permanent deduction means that the lower amount of income taxes they've been paying since 2017 will continue permanently. What you should do now: Talk to your tax preparer. They can help you determine how to claim the deduction and that you're classifying your qualified business correctly. Make sure you're a pass-through business. Only sole proprietorships, partnerships, LLCs and S-corporations are eligible for pass-through income. Ensure that you're deducting qualified business income. The IRS exempts certain types of income, such as wage income, and certain investment gains from being counted as qualified business income. De minimis repealed One tariff-related rule the new law has codified is getting rid of the de minimis rule, which allowed imported packages under $800 to be exempted from U.S. tariffs. This new rule impacts drop-shipped items in particular, as importers that send packages directly to the consumer instead of bulk-shipping now have to pay a tariff. What it means for small business If you rely on imports for your inventory and materials, you'll likely start paying more if you aren't already. This can be particularly impactful on smaller custom orders from tariffed countries, as tariffs will apply to packages you may not have paid out before alongside price increases from tariffs across the board. What you should do now: See where your shipments are coming from. Knowing your supply chain can help you make informed decisions about where tariffs are hitting you the hardest. Consider switching or dropping products. Changing shipments to come from a lower-tariffed country or a domestic supplier can help keep costs low. See if you can buy in bulk. Larger orders are often cheaper per unit, offsetting the cost of tariffs. Teaming up with other businesses to split shipment costs can also be helpful. 100% bonus depreciation The OBBB Act has extended bonus depreciation rules, which allow businesses to deduct the full amount of an asset's depreciation within the first year of purchase, instead of spreading it out over its depreciable life. Asset depreciation — or how much the value of an asset decreases over time — is a deductible expense for business owners. For example, if a business purchases a semi-truck for $200,000, and it depreciates by $5,000 each year, business owners can only deduct $5,000 each tax year of the truck's useful life — five years — as classified by the IRS. This new rule applies to assets placed in service from Jan. 19, 2025 to Jan. 1, 2029. However, with the new bonus depreciation, business owners can now deduct the full depreciation of the truck — $25,000 — up front in the year of purchase. Manufacturers and farmers can also now deduct the full cost of their production property in the year it's constructed. This can cover the cost of purchase or the cost of construction (not including the cost of land). It applies to property that begins construction between Jan 19, 2025 and Jan. 1, 2029, with the condition that the property must be put into production before Jan. 1, 2031. The production property deductions apply only to qualified production property, which is: Used by the taxpayer as an integral part of a qualified production activity Placed in service in the United States Original use commences with the taxpayer (AKA, the person taking the deduction has to be the one using the property for the first time. The production property deduction also only applies to manufacturing, refining and production businesses. What it means for small business The depreciation bonus can help you offset property purchase and construction costs, so long as you file the deduction correctly and understand what counts as qualified property. While you can choose to deduct in the standard way — with smaller deductions taken out over the useful life of the property — it might make more financial sense to take out the 100 percent deduction from the start, especially if you can put the money back into the purchase cost. What you should do now: Talk to your tax preparer. They can help you make the right decision about which deduction to take, and how much you can deduct based on the asset's useful life. Make sure your property is qualified. Production property has specific provisions for its deduction. This is outlined in more detail in the One Big Beautiful Bill Act. Put your deducted cash to good use. Besides putting the money back into your business or property, you can also bulk up your cash reserves. More flexible research and development tax writeoffs If you conduct research and development (R&D) for product creation, market testing, software creation or otherwise, you may qualify for an R&D expenditure tax credit. Under the One Big Beautiful Bill Act, small businesses can retroactively expense and deduct domestic R&D costs going back to Jan. 1, 2022, and do so over one or two years instead of 15 years under previous law. This new provision only applies to domestic R&D. Any foreign R&D will have to be amortized over 15 years as before. What it means for small businesses Even if your company isn't in the research industry, it's still possible to take advantage of the new rule. Research and development is defined fairly broadly, and can include: Researching product feasibility Product development or improvement Software development, improvement, and testing Product design and modeling Research documentation Creating product models or demos Research equipment maintenance R&D meetings In terms of what can be expenses, wages, supplies, software subscriptions and contract expenses related to any of the above activities are considered expensable. What you should do now See what you can count as R&D. With the definition being pretty broad, you might qualify even when you think you don't. Talk to a CPA or tax preparer. They can help you find expenses that you can See if you qualify for the retroactive deduction. Any R&D expenses incurred from Jan 1, 2022 onward can qualify. The bottom line The One Big Beautiful Bill Act introduced a wide range of tax cuts and adjustments that small business owners should be aware of. New deductions can allow employers and employees to take home more pay, while the repeal of the de minimis rule may mean you'll pay more in tariffs. Be sure to analyze your finances and talk to your tax preparer so your business is in good shape to take advantage of and adjust to the changes introduced by the new megabill. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-07-2025
- Business
- Yahoo
Senate's ‘big beautiful' bill trims popular tax breaks — 4 ways it could impact your taxes
The Senate's version of the massive tax bill squeaked through on a 51-50 vote on Tuesday and, while it largely matches the tax bill that passed the House in May, there are some key differences that could pose problems for House Republicans, who must now either vote on the Senate's version 'as is' or face drawn-out negotiations that would put their hoped-for July 4 deadline for passage out of reach. The Senate version of the bill adds much deeper cuts to Medicaid than the House version does. And, while the Senate did bow to House Republican pressure and raised its annual cap on the state and local taxes deduction to $40,000 from $10,000, the Senate extended that cap for just five years, until 2030. (The so-called SALT deduction is a key tax provision for many taxpayers who itemize their deductions in high-tax states such as California, New York and New Jersey.) 'Some members of the Senate GOP want to restrain components of the tax breaks approved by the House, and a moving target appears to be the so-called SALT deduction,' says Mark Hamrick, senior economic analyst at Bankrate. Here are some of the key tax provisions in the Senate-approved bill — and how it could affect your bottom line if the bill becomes law. Keep in mind that both proposed bills would maintain the lower income tax rates and higher standard deduction initially set by the Tax Cuts and Jobs Act of 2017 — provisions that are set to expire at the end of 2025 unless Congress acts. The state and local tax (SALT) deduction has long been a sticking point in the GOP's tax bill. Some House Republicans from high-tax states initially stalled the bill from advancing unless the current $10,000 SALT cap was increased. The House bill would allow taxpayers to claim up to $40,000 annually in SALT deductions ($20,000 if married filing separately), with the tax break phasing out for taxpayers with income of $500,000 or more ($250,000 or more if married filing separately). That compromise was enough to win over Republican holdouts. The Senate's version of the bill takes a different stance: It would hike the SALT cap to $40,000 but only for five years, at which point the cap would drop back to $10,000. It remains to be seen whether House Republicans will accept the temporary status of the $40,000 cap. The $10,000 SALT cap was originally enacted under the 2017 Tax Cuts and Jobs Act (TCJA) and expires at the end of 2025 unless Congress acts. Under the current law, the cap applies to most taxpayers, while those who file as married filing separately are limited to a $5,000 cap, regardless of income. Prior to the TCJA, there was no cap on claiming state and local taxes as an itemized deduction. Get matched: Find a financial advisor who can help you maximize your investments As part of the tax bill, the House proposed an increase to the child tax credit — from the current $2,000 to $2,500 per child under the age of 17. But the Senate's version scales back the increase, raising the credit to only $2,200 per child starting this year. Under the Senate's bill, the child tax credit would increase starting in 2025 and continue through 2028. The plan would also make the current income thresholds permanent, allowing families to qualify if their modified adjusted gross income (MAGI) doesn't exceed $400,000 for married couples filing jointly and $200,000 for single filers. The Senate's version of the bill would adjust the amount of the credit for inflation annually. If Congress doesn't act, the value of the child tax credit will revert back to $1,000 per child and lower income thresholds would apply — $110,000 for married couples and $75,000 for all other filers. Trump campaigned on the promise that he would eliminate taxes on tips and overtime pay. Both the House and Senate versions of the bill carry out his promise, but in different ways. The House version of the bill includes a provision to exclude qualified tips from income taxes, with a phaseout starting at $160,000 of modified adjusted gross income (MAGI) for all taxpayers. A similar measure applies to overtime pay. However, the Senate's version provides a much different picture. It would allow a deduction worth up to $25,000 for qualified tips and $12,500 for qualified overtime pay, creating two new deductions, which would be available from 2025 through 2028. These provisions would gradually phase out for taxpayers with MAGI exceeding $150,000 for single filers and $300,000 for joint filers. Some experts argue that while both proposals could offer some tax relief to millions of Americans, few would see a significant benefit. Fully 40 percent of U.S. households that report tip income would not see any tax break from the proposal, according to a report by the Tax Policy Center, a nonpartisan research organization. Of those households making less than $33,000 a year, just 1.4 percent of households would benefit from no tax on tips, and for those households, their average tax cut would be $450 a year. Learn more: No tax on tips or overtime: What workers should know Along with the previously mentioned tax provisions, the Senate takes a different stance on several key tax-related measures. The Senate's version of the bill modifies the House-approved version as follows: Car loan interest deduction: The House bill includes a tax deduction for interest paid up to $10,000 for interest paid on both new and used vehicles. The Senate version narrows the benefit, allowing the deduction for new vehicles only. Standard deduction for seniors: The Senate increases the additional standard deduction for seniors to $6,000, compared with $4,000 in the House bill. Read more: New bonus tax deduction worth up to $6,000 may come soon for older Americans. Qualified business income (QBI) deduction: While the House proposal boosts the QBI deduction from 20 percent to 23 percent, the Senate bill keeps it at 20 percent. 'The differences in the House and Senate where the GOP prevails may translate to potentially protracted negotiations,' Hamrick says. 'It appears Congress and the president are content with further fueling the federal debt and deficits, even though it is generally understood the situation is not sustainable in the long-term.' Learn more: The average tax refund each year, and how tax refunds work
Yahoo
02-07-2025
- Business
- Yahoo
Senate's ‘big beautiful' bill trims popular tax breaks — 4 ways it could impact your taxes
The Senate's version of the massive tax bill squeaked through on a 51-50 vote on Tuesday and, while it largely matches the tax bill that passed the House in May, there are some key differences that could pose problems for House Republicans, who must now either vote on the Senate's version 'as is' or face drawn-out negotiations that would put their hoped-for July 4 deadline for passage out of reach. The Senate version of the bill adds much deeper cuts to Medicaid than the House version does. And, while the Senate did bow to House Republican pressure and raised its annual cap on the state and local taxes deduction to $40,000 from $10,000, the Senate extended that cap for just five years, until 2030. (The so-called SALT deduction is a key tax provision for many taxpayers who itemize their deductions in high-tax states such as California, New York and New Jersey.) 'Some members of the Senate GOP want to restrain components of the tax breaks approved by the House, and a moving target appears to be the so-called SALT deduction,' says Mark Hamrick, senior economic analyst at Bankrate. Here are some of the key tax provisions in the Senate-approved bill — and how it could affect your bottom line if the bill becomes law. Keep in mind that both proposed bills would maintain the lower income tax rates and higher standard deduction initially set by the Tax Cuts and Jobs Act of 2017 — provisions that are set to expire at the end of 2025 unless Congress acts. The state and local tax (SALT) deduction has long been a sticking point in the GOP's tax bill. Some House Republicans from high-tax states initially stalled the bill from advancing unless the current $10,000 SALT cap was increased. The House bill would allow taxpayers to claim up to $40,000 annually in SALT deductions ($20,000 if married filing separately), with the tax break phasing out for taxpayers with income of $500,000 or more ($250,000 or more if married filing separately). That compromise was enough to win over Republican holdouts. The Senate's version of the bill takes a different stance: It would hike the SALT cap to $40,000 but only for five years, at which point the cap would drop back to $10,000. It remains to be seen whether House Republicans will accept the temporary status of the $40,000 cap. The $10,000 SALT cap was originally enacted under the 2017 Tax Cuts and Jobs Act (TCJA) and expires at the end of 2025 unless Congress acts. Under the current law, the cap applies to most taxpayers, while those who file as married filing separately are limited to a $5,000 cap, regardless of income. Prior to the TCJA, there was no cap on claiming state and local taxes as an itemized deduction. Get matched: Find a financial advisor who can help you maximize your investments As part of the tax bill, the House proposed an increase to the child tax credit — from the current $2,000 to $2,500 per child under the age of 17. But the Senate's version scales back the increase, raising the credit to only $2,200 per child starting this year. Under the Senate's bill, the child tax credit would increase starting in 2025 and continue through 2028. The plan would also make the current income thresholds permanent, allowing families to qualify if their modified adjusted gross income (MAGI) doesn't exceed $400,000 for married couples filing jointly and $200,000 for single filers. The Senate's version of the bill would adjust the amount of the credit for inflation annually. If Congress doesn't act, the value of the child tax credit will revert back to $1,000 per child and lower income thresholds would apply — $110,000 for married couples and $75,000 for all other filers. Trump campaigned on the promise that he would eliminate taxes on tips and overtime pay. Both the House and Senate versions of the bill carry out his promise, but in different ways. The House version of the bill includes a provision to exclude qualified tips from income taxes, with a phaseout starting at $160,000 of modified adjusted gross income (MAGI) for all taxpayers. A similar measure applies to overtime pay. However, the Senate's version provides a much different picture. It would allow a deduction worth up to $25,000 for qualified tips and $12,500 for qualified overtime pay, creating two new deductions, which would be available from 2025 through 2028. These provisions would gradually phase out for taxpayers with MAGI exceeding $150,000 for single filers and $300,000 for joint filers. Some experts argue that while both proposals could offer some tax relief to millions of Americans, few would see a significant benefit. Fully 40 percent of U.S. households that report tip income would not see any tax break from the proposal, according to a report by the Tax Policy Center, a nonpartisan research organization. Of those households making less than $33,000 a year, just 1.4 percent of households would benefit from no tax on tips, and for those households, their average tax cut would be $450 a year. Learn more: No tax on tips or overtime: What workers should know Along with the previously mentioned tax provisions, the Senate takes a different stance on several key tax-related measures. The Senate's version of the bill modifies the House-approved version as follows: Car loan interest deduction: The House bill includes a tax deduction for interest paid up to $10,000 for interest paid on both new and used vehicles. The Senate version narrows the benefit, allowing the deduction for new vehicles only. Standard deduction for seniors: The Senate increases the additional standard deduction for seniors to $6,000, compared with $4,000 in the House bill. Read more: New bonus tax deduction worth up to $6,000 may come soon for older Americans. Qualified business income (QBI) deduction: While the House proposal boosts the QBI deduction from 20 percent to 23 percent, the Senate bill keeps it at 20 percent. 'The differences in the House and Senate where the GOP prevails may translate to potentially protracted negotiations,' Hamrick says. 'It appears Congress and the president are content with further fueling the federal debt and deficits, even though it is generally understood the situation is not sustainable in the long-term.' Learn more: The average tax refund each year, and how tax refunds work Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
