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Time of India
02-06-2025
- Business
- Time of India
Trump's tax plan may cost poor Americans $1,500 a year—while tipping the rich $104,000
U.S. President Donald Trump's proposed tax break on tips might sound like a win for working-class Americans, but analysts say it offers limited benefits for low-income earners—and could, in fact, leave them worse off overall. The "no tax on tips " idea is one of several elements in a sweeping tax and spending bill currently before Congress. While it targets service workers like bartenders and hairdressers, experts say most won't benefit much. In fact, broader cuts to healthcare and food assistance programs could erase any gains. 'If you're thinking about things that could help low-income workers, 'no taxes on tips' would not be high up on my list,' said Martha Gimbel, director of the Budget Lab at Yale University. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like If You Eat Ginger Everyday for 1 Month This is What Happens Tips and Tricks A Shift in Wealth According to multiple independent analyses, the bill would effectively redistribute wealth—from the poor to the rich. The Penn Wharton Budget Model estimates that families earning less than $22,000 per year would lose $1,500 in after-tax income. Meanwhile, those making more than $5.2 million could see an annual windfall of $104,000. Live Events The Congressional Budget Office (CBO) supports these findings, also highlighting large gains for the wealthiest Americans. Limited Reach for Tipped Workers Despite the popularity of the 'tax-free tips' idea—especially in hospitality-heavy swing states like Nevada—it would benefit only a small portion of workers. Tipped employees make up just 2.5% of the U.S. workforce, and 37% of them earn too little to owe any income tax at all, meaning the deduction wouldn't apply to them. The bill passed in the House would allow workers earning up to $160,000 a year to deduct their tips from gross income until 2029. However, the income would still be subject to Social Security and Medicare taxes. House Republicans claim the bill would provide an average $1,300 tax cut per family, and that business tax breaks will lead to better wages. Jason Smith, Chairman of the House Ways and Means Committee, said the plan helps workers afford housing, food, and save for the future. Benefits for the Wealthy, Barriers for the Poor But critics argue the benefits are tilted toward higher earners. Tax breaks on tips, overtime, and auto loan interest only help people who already owe income tax—excluding many low-wage earners. 'All of those will only benefit someone if they have enough income that they are paying a positive tax liability,' said Brandon DeBot, policy director at NYU's Tax Law Center. Worse, other changes in the bill would restrict access to key support programs: Up to 8.7 million lower-income Americans could lose health coverage due to Medicaid and ACA cuts, according to the CBO. New restrictions on the Child Tax Credit would exclude 4.5 million eligible children by requiring a Social Security number for qualification. The Earned Income Tax Credit, which reached 23 million tax filers in 2022, would impose stricter eligibility standards. Reduced IRS funding could make it harder for low-income families to navigate the new tax code. Long-Term Costs for the Poor The bill is also projected to add $3.8 trillion to the national debt by 2035, pushing the total to over $36 trillion. That burden, economists say, will fall disproportionately on the poor. Penn Wharton found that low-income households could see a lifetime loss of $8,500 due to a weaker safety net and higher debt service costs. Wealthier households, on the other hand, could gain $17,800 over their lifetime. 'You're inheriting this higher debt, this higher burden. Somebody has to pay for it,' said Kent Smetters, director of the Penn Wharton Budget Model. With agency inputs
USA Today
30-05-2025
- Business
- USA Today
What is a post-June 1 cut in the NFL? What you need to know ahead of roster moves
What is a post-June 1 cut in the NFL? What you need to know ahead of roster moves Show Caption Hide Caption Greg Olsen expresses excitement for upcoming Olympic flag football Former TE Greg Olsen is excited for some NFL players to showcase their skills in the upcoming 2028 Summer Olympics and the debut of flag football. Sports Seriously NFL teams began their organized team activities (OTAs) to close out May as players across the league put pads on for voluntary workouts. With the schedule release in the rear view, there are few milestone days until the start of the regular season. One of the first key dates is June 1, when teams can move on from high-cost veterans who may not be part of the franchise moving forward. Quarterback Aaron Rodgers is the best example of this in 2025. The New York Jets have a new coaching staff and general manager and informed him they will release him as a post-June 1 cut. That means the four-time MVP quarterback can move on from New York after two seasons with the Jets. Critically, they designated him as a post-June 1 release to ease the cost of getting out of his contract early. Here's why post-June 1 designations are important in the NFL: RAVENS: Coach John Harbaugh explains 'complex' decision to release Justin Tucker What is a post-June 1 cut in the NFL? This is when an NFL team releases a player on June 2 or later. In doing so, the team can spread out the player's dead cap money over more time. What is dead cap money in the NFL? Dead cap money is the monetary charge to the salary cap for a player who is no longer on the roster. It commonly comes from signing bonuses, which are guaranteed, owed to players who are released, traded or retired. NFL teams can prorate bonuses in contracts for up to five years. They're often paid upfront but the team spreads the salary cap charge evenly over the full duration of the contract to keep from overloading one single year of the salary cap. But if a team releases a player before the end of their contract, they owe the remaining bonus money against the salary cap and have to account for it in one single year. This is considered dead money. By waiting until after June 1, they can spread this out over two years and reduce the immediate charge on the salary cap for a player who is no longer on the team. This incentivizes teams to release high-price players later on in the offseason to create more salary cap flexibility. Using Rodgers as an example, the Jets were to able to spread out his dead money over the next two seasons. They'll owe him $14 million in 2025 and $35 million in 2026 rather than $49 million in 2025 alone. 'A DISTRACTION': Caleb Williams addresses book saying he wanted to avoid Bears Post-June 1 trades Because the cap penalties are reduced for making moves after June 1, trades can also be impacted this time of the year. Players can re-work their contracts ahead of trades – Bryce Huff did as much with his trade from Philadelphia to San Francisco – but their original teams could carry a lower cap penalty for trading a top player early. For the sake of an example, say the Chicago Bears want to trade tight end Cole Kmet after taking tight end Colston Loveland in Round 1 of the 2025 NFL Draft. (To be clear, this is completely hypothetical and there are no reports of Chicago looking to deal Kmet.) If Chicago traded him before June 1 and did nothing to amend his contract, he would carry a $4.8 million dead money hit on the 2025 salary cap. If they waited until after June 1, he would carry a $1.8 million dead money hit on the 2025 salary cap. Potential June-1 cuts in 2025 Rodgers has been confirmed as a post-June 1 cut this offseason. He may not be alone, though. Here are few players who could end up being cut after June 1 with contract information provided by OverTheCap.
Daily Mirror
29-05-2025
- Business
- Daily Mirror
HMRC confirms major tax change that affects thousands of people
It comes after the Bank of England dropped its base interest rate to 4.25% earlier this month HMRC has cut the late payment interest rate from 8.5% to 8.25% from this week. It comes after the Bank of England dropped its base interest rate to 4.25% earlier this month. It means if you've missed a payment on your tax bill, you'll now be charged slightly less in interest. HMRC said: 'The late payment interest rate encourages prompt payment. It ensures fairness for those who pay their tax on time.' This could affect you if you have yet to file or settle your latest self-assessment tax bill. An estimated 1.1m self-assessment taxpayers missed the recent January 31 tax deadline. Meanwhile, the repayment interest – which is paid to you when HMRC owes you money, for example, if you overpaid tax – is also being reduced to 3.25%. You may need to submit a self-assessment if you're self-employed, if you earned extra income outside of your main employment, if you earn income from renting out a property, or if you're a high earner and you claim Child Benefit. If you missed the January 31 deadline to file your tax return, you would have been slapped with a £100 fine. This increases to fines of £10 a day, up to a maximum of £900. If you still haven't filed after three months - then after six months, you're charged 5% of tax owed or £300, whichever is greater. This is then repeated again after 12 months. You must also pay any tax due or you'll be charged interest on late payments. After 30 days you'll then also be fined an extra 5% of the unpaid tax, with this being repeated at six months and 12 months. If you're struggling to pay your tax bill and you owe less than £30,000, you may be able to set up a payment plan with HMRC, known as Time to Pay. Do I need to fill in a self-assessment tax return? MoneyHelper has explained that you may need to fill in a self-assessment if one of the following applies to you: Your self-employment income was more than £1,000 (before taking off anything you can claim tax relief on) Your income from renting out property was more than £2,500 (you'll need to contact HMRC if it was between £1,000 and £2,500) You earned more than £2,500 in untaxed income, for example from tips or commission Your income from savings or investments was £10,000 or more before tax You need to pay Capital Gains Tax on profits from selling things like shares or a second home You're a director of a company (unless it was a non-profit organisation, such as a charity) You, or your partner's, income was over £60,000 and you're claiming Child Benefit You have income from abroad that you need to pay tax on, or you live abroad but have an income in the UK Your total taxable income was over £150,000 You're a trustee of a trust or registered pension scheme Your State Pension was your only source of income and was more than your personal allowance You received a P800 from HMRC saying you didn't pay enough tax last year
Hindustan Times
26-05-2025
- Entertainment
- Hindustan Times
Allu Aravind backs Pawan Kalyan and questions theatre bandh during HHVM release; Dil Raju claims ‘miscommunication'
Ever since news came out two weeks ago that the exhibitors in the Telugu states are debating calling for a theatre bandh from 1 June, should their demands not be met, allegations have been thrown around. Actor and Deputy CM of Andhra Pradesh, Pawan Kalyan, whose film Hari Hara Veera Mallu (HHVM) was in the line of fire, also called out the Telugu film industry for lacking respect for the government. Since then, the bigwigs in the film industry have scrambled to make things right, at least publicly. (Also Read: Telugu film industry doesn't have 'minimum respect or gratitude towards Andhra Pradesh govt', says Pawan Kalyan) On Saturday, the actor-politician called out the film industry's lack of respect, pointing out that the film chamber has yet to meet AP CM N Chandrababu Naidu since he came into power. Pawan said, 'At a time when the government is thinking of giving industry status and developing the film industry, including ensuring that their (film makers) respect is not lowered, they do not have even a minimum respect or gratitude towards the Andhra Pradesh government.' While he did not bring up the bandh, his film HHVM, which was supposed to be released on 12 June, would've been affected. On Sunday, producer Allu Aravind, who is also Pawan's brother, Chiranjeevi's brother-in-law, backed the actor-politician and questioned the bandh. 'When Pawan Kalyan's film is about to release, how do you call for a theatre bandh? He has helped the industry so much since he came into power. When we went to meet him for ticket hikes once, he asked us to meet CM Chandrababu Naidu with the chamber (Telugu Film Chamber of Commerce).' However, Aravind claims that no one bothered to meet the CM despite Pawan asking them to, saying, 'But no one bothered to meet the CM till date. Someone even questioned what our private business has to do with the government. If that's true, why did the bigwigs of the film industry go to meet the former CM? Don't we owe them more respect than this?' Producer Naga Vamsi also posted a cryptic post on X (formerly Twitter) that read, 'Unnecessary issues created at times when focus was needed elsewhere have led to much bigger problems, ones that could have been easily avoided if common sense had taken the driver's seat.' Telangana Film Development Corporation Chairman Dil Raju held a press meet in Hyderabad on Monday to chalk it all down to nothing but 'miscommunication'. 'Kalyan garu is angry today; he has the right to scold us. We will bear it. His anger is justified, but it's not true that his film was targeted. It happened because you also printed such headlines,' he said, also blaming the media, adding, 'No one has the audacity to stop his film from releasing. This was also miscommunicated to the governments. As a film industry, the chamber should've met the AP CM. Don't ask me questions on why we need to meet the government in the first place.' Raju also claimed that the theatre bandh was 'blown out of proportion' after the East Godavari exhibitors kicked off the conversation around the revenue system on 19 April. He also claimed that not all films follow the rental-based model, but most follow the percentage model. 'More than anything, when this conversation began, the HHVM release date was not locked. I never encouraged the exhibitors to shut down theatres,' he claimed, adding, 'Ideally, Allu Aravind and I should've held a press meet together. But there's no unity in the film industry among anyone.' He also blamed the chamber for not speaking up about the issue as soon as the news came out.
Yahoo
10-05-2025
- Business
- Yahoo
Can't pay your tax bill? File your return on time and don't panic, experts say
OTTAWA — For many Canadians, filing their taxes often means a refund, but for some, tax time can mean a bill that's unexpected or more than anticipated. If that's you and you don't have the cash on hand to pay the bill, tax experts say not to panic. Ottawa-based accountant Marlene L. Grant says you need to file your tax return on time even if you can't pay the bill or you will end up paying more. "You need to file it because you don't want to have late filing and then late payment penalties and all of that," Grant said. The late-filing penalty charged by the Canada Revenue Agency is five per cent of your 2024 balance owing, plus an additional one per cent for each full month that you file after the due date to a maximum of 12 months. The penalty is worse if CRA charged a late-filing penalty for 2021, 2022 or 2023 and requested a formal demand for a return. In that case, the late-filing penalty for 2024 will be 10 per cent of the balance owing plus an additional two per cent for each full month that you file after the due date to a maximum of 20 months. The penalties are in addition to interest that CRA will charge on any unpaid amount owing for 2024, starting the day after the money is due. Grant said if you can borrow money at a lower interest rate than CRA charges you, that could be an option, but if you can't get your hands on the cash you need, she recommends to clients that they pay what they can and then reach out to CRA to make a payment arrangement. "Make sure you abide by that payment arrangement, because if you don't, then they have the right to come back and say, 'That's it. We're going to take the money now,'" she said. The tax filing deadline this year is April 30, while the self-employed or those with a spouse or common-law partner that is self-employed have until June 16 this year because June 15 lands on a Sunday. However, if you owe money, whether you are self-employed or not, the deadline to pay your taxes is April 30. That means, Grant said, if you qualify for the later filing deadline and owe money, CRA will charge interest on the balance after April 30 until the bill is paid, though you won't face a late-filing penalty unless you miss the June deadline. An employer will deduct income tax from an employee's regular paycheque, but for freelancers or contract workers, that may not be the case, resulting in a bill come tax time. Those who work for more than one employer may also end up with not enough being deducted, while Canadians with taxable investment gains or earnings from a side hustle may also face more tax than they planned for. Tax consultant Sunny Widerman said if you have an outstanding tax bill, CRA may take federal payments such as the GST/HST credit and instead apply them to your debt. "If you owe anything to CRA and you've got a payment coming, it's immediately going to get snatched," she said. Whatever you do, Widerman said don't ignore CRA and hope they will forget about you. If they contact you, it is important to respond. "They are a lot more flexible than people seem to think they are," she said. "But the thing they hate the most is silence." This report by The Canadian Press was first published April 10, 2025. Craig Wong, The Canadian Press 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
