Latest news with #taxbreak
Forbes
a day ago
- Business
- Forbes
Everything Parents Need To Know About The 2025 Child Tax Credit Changes
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. The Child Tax Credit is getting another update in 2025 under the new One Big Beautiful Bill . While it doesn't match the expanded benefits from the 2021 pandemic relief, the credit continues to provide significant support, particularly for middle-income families facing rising costs. The 2021 American Rescue Plan temporarily increased the Child Tax Credit to $3,600 per child under age 6 and $3,000 per child aged 6 to 17. It also made the credit fully refundable, allowing families who didn't owe any federal income tax to receive the full amount. Under the new policy, the credit reduces to $2,200 per child under 17—close to what it was prepandemic. While there's no extra boost like before, it's still a nice tax break. The good news? More families can now qualify for the tax credit thanks to higher income phaseout thresholds. The credit now begins to phase out at: $200,000 for single filers $400,000 for married couples filing jointly Before 2021, phaseouts kicked in at much lower levels—$75,000 and $150,000, respectively. This is a welcome change for middle-income families, especially those in high-cost areas, who may have previously phased out under the old limits. Claiming the Child Tax Credit is pretty straightforward; however, you want to make sure you include the correct forms so you don't miss out. Use IRS Form 1040 to file your federal taxes to file your federal taxes Attach Schedule 8812 , the form for the Child Tax Credit, to claim the credit , the form for the Child Tax Credit, to claim the credit File by the tax deadline, which is April 15, 2026 Before filing, make sure you meet the new requirements from the IRS, as missing or inconsistent information could hold up your credit. Here's what the IRS now looks for from the qualifying child: Age. The child must be under 17 at the end of the tax year. The child must be under 17 at the end of the tax year. Relationship. The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or even a grandchild, niece or nephew. The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or even a grandchild, niece or nephew. Support. You need to be primarily supporting them; the child can't provide more than half of their support during the year. You need to be primarily supporting them; the child can't provide more than half of their support during the year. Residency. To qualify, the child must have lived with you for more than half the year. To qualify, the child must have lived with you for more than half the year. Dependency. You need to claim them as a dependent on your tax return. You need to claim them as a dependent on your tax return. Filing status. The child cannot file a joint tax return with someone else unless they are seeking a refund of withheld or estimated taxes. The child cannot file a joint tax return with someone else unless they are seeking a refund of withheld or estimated taxes. Citizenship. The child must be a U.S. citizen, U.S. national, or U.S. resident alien. The child must be a U.S. citizen, U.S. national, or U.S. resident alien. Social Security number. The child needs a valid Social Security number to work, and it must be issued before your tax return is due (including any extensions). If you have unpaid federal taxes, the IRS can reduce your Child Tax Credit to cover what you owe. So, if you're behind on payments, you'll want to clear those debts before filing to avoid losing part of your credit. Even if your tax bill is low or zero, you could still receive the Child Tax Credit. Because part of the credit is refundable, families may receive up to $1,700 per child, providing crucial support regardless of tax liability. Start by gathering your paperwork. Make sure you have your child's Social Security number and any custody or relationship documents. In addition, check whether your annual income falls under the phaseout limits, so you have a better idea of what to expect. If you owe back taxes, it's best to deal with it now than put it off. If you don't owe anything, you can begin organizing your documents and preparing for tax season. And if all this feels overwhelming, getting help from a tax professional or using reliable tax software can make the process easier. Here are some of the best tax software options available. The 2025 Child Tax Credit isn't as big as the pandemic-era boost families got in 2021, but it is still a relief for many, especially middle-income households. With higher income limits, more families can get the full credit this year. That said, the IRS is enforcing stricter eligibility rules. Make sure your paperwork is in order and address any unpaid taxes that could hold up your claim.
Yahoo
a day ago
- Business
- Yahoo
Gamblers will pay more taxes in 2026 and beyond when Trump's 'Big, Beautiful Bill' hits
Gamblers lost a bit of a tax break in the nearly 900-page mega tax-and-spending bill that President Donald Trump signed into law July 4. If you won $1,000 betting on the Super Bowl in 2025, for example, you still could claim up to $1,000 in gambling losses if you itemize all your deductions when you file your federal income tax return next year. And you wouldn't be taxed on that win in this example. But the game's over when tax rules for gambling change beginning in 2026. What are the tax rules when it comes to gambling? What remains true: You can claim gambling losses up to the amount of your winnings only if you itemize all your deductions. Most people don't itemize these days because they get a better tax break by taking the standard deduction. The amount of losses you can deduct are limited by your winnings. Deductible losses still will not be able to exceed total winnings for the year. How the new tax law changes things for legal gamblers What's changed: Beginning in 2026, the tax law shifts just enough to irk plenty of people who dream big by heading to the casino, betting online, or buying lottery tickets. A $1,000 win in 2026 and afterward will mean that you can only deduct 90% of your losses ‒ or $900 in this example. Someone who wins in this example would pay taxes on $100 in winnings in 2026 when they file that year's tax return. Economic outcomes: Trump's mega tax and spending law will have small economic impact, forecasters say "Instead of gambling losses being deductible to the full extent of gambling winnings, they're going to be limited to 90%," said Tom O'Saben, enrolled agent and director of tax content and government relations for the National Association of Tax Professionals, which has 23,000 members. Make no mistake, the new 90% limit has no impact on the 2025 tax returns that will be filed early next year. It would only apply to winnings and losses that take place in 2026 and after. Casual gamblers cannot deduct expenses related to their lodging, transportation, or food and other incidental expenses during their gambling, Mark Steber, chief tax information officer for Jackson Hewitt Tax Services, told the Detroit Free Press, part of the USA TODAY Network, earlier this year. And that's still true going forward. Yet, he noted, someone who is a professional gambler and considered self-employed would be eligible to deduct travel and lodging expenses while working. The new tax law, though, clarifies that any expense related to carrying on gambling activities ‒ such as travel, admission fees and lodging related to professional gambling ‒ would be treated as a gambling loss and then subject to that 90% cap, O'Saben explained in a presentation on July 9 to tax professionals. As a result, everyone from professional poker players to young gamblers using an app to bet on football is screaming foul and viewing the change as a 10% penalty of sorts. Some already want to see the new tax rule changed On July 7, U.S. Rep. Dina Titus introduced legislation to restore the 100% deduction for gamblers. The Nevada Democrat calls her bill the My FAIR BET Act ‒ which calls for "Fair Accounting for Income Realized from Betting Earnings Taxation." "It gives everyone ‒ from recreational gamblers to high-stakes gamblers ‒ a fair shake," Titus said in a statement. "We should be encouraging players to properly report their winnings and wager using legal operators. The Senate change will only push people to not report their winnings and to use unregulated platforms.' The American Gaming Association applauds Titus for introducing the FAIR BET Act, as the group would like to see congressional leaders and the Trump administration restore the long-standing tax treatment of gaming losses, according to a group spokesperson. The industry group ‒ whose members include DraftKings, MGM Resorts International, Churchill Downs, FireKeepers Casino Hotel, Cherokee Nation Entertainment and other big names ‒ earlier in the spring urged congressional leadership to not only "maintain the deduction for taxpayers who itemize, but ‒ as a matter of fairness ‒ Congress should consider allowing for non-itemizers to net their gambling wins and losses for purposes of reporting adjusted gross income." "Under current policy," according to the letter sent in May to congressional leaders, "most taxpayers do not itemize and many gaming customers are subject to the mismatch of being taxed on the full amount of their gross gaming wins with no ability to net their losses." "As a result, those who are in a losing position at the end of the year are in effect being taxed on income they have not received," according to the letter. Others are speaking out on social media, too. A Nevada-based tax preparer posted on X that high-stakes gamblers will be hurt if this law with the 90% limit stays in place and goes into effect in 2026. "But so will the average gambler who 'gets lucky,' " said Russell Fox, whose profile also proclaims that he's a poker player. "Vegas was built on the dream, and if that dream is removed (or drastically lessened) by a bad law, Vegas will be hurt." I'd imagine the same would be true for casinos in a million other spots where many people choose to legally gamble. Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor. This article originally appeared on Detroit Free Press: Tax break to change for gambling with Trump's 'Big, Beautiful Bill' 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
GSM Arena
6 days ago
- Business
- GSM Arena
Apple's tax woes in Ireland are officially over
Apple's €14.3 billion Irish tax break fine is officially one for the history books now, as the Irish government has announced that it's withdrawn all the money from the escrow account Apple set up back in 2018. That's when it deposited the aforementioned sum after being fined by the European Commission (EC) for receiving unfair tax breaks from Ireland. The amount is judged to be what Apple would have paid in taxes in Ireland had it not received a "sweetheart deal" in the form of "illegal state aid" from the Irish government in exchange for setting up its European HQ in the country. Now that Ireland has moved the money from the escrow account into its central fund, the escrow account has been closed and Apple's saga regarding these back taxes allegedly owed can finally be put to rest. The timeline goes like this: in 2013 the EC launched an investigation into Apple and found that the tax breaks it received from Ireland were illegal, and in 2016 it ruled that Apple had to pay back the "state aid" it was deemed to have received over a 10-year period before the probe was launched, since it was allegedly given "significant advantage" over its competitors. In 2018, Apple set up the escrow account and paid the amount it was deemed to owe into it. In 2020, the EU's General Court ruled in Apple's favor, but in 2024, the European Court of Justice overturned that decision and confirmed the EC's original ruling from 2016. Hence why the Irish government has now finally taken possession of the money. Source
New York Times
6 days ago
- Business
- New York Times
How Republicans Supersized Silicon Valley's Favorite Tax Break
The prospect of earning millions of dollars would, at first blush, seem like reason enough to want to start a successful company. Yet Congress has for years sweetened the deal, offering start-up founders and early investors the added incentive of making much of their money completely tax-free. Tucked into the huge set of tax cuts that Republicans passed into law this month was an expansion of the unusually valuable tax break. The generosity of the change came as a surprise to even some in Silicon Valley, where the tax measure is popular. 'Everyone was like: 'Are you joking?'' Christopher Karachale, a San Francisco lawyer who helps people claim the tax break, said. 'These founders and early employees, they're already getting a huge benefit. So if anything people are thinking: 'Wow it's remarkable the statute got opened up all this more.'' The tax break, known as the qualified small business stock exclusion, is a decades-old element of the tax code that Congress has repeatedly made more generous. It allows investors and founders to skip out on paying taxes when they cash out their shares in start-ups. For early owners of stock in a business that started as a shoestring operation and became a major publicly-traded company, like Lyft or LinkedIn, or was bought out by another firm, that could mean millions in tax savings. After warding off an attempt by Democrats to narrow the tax break under former President Joseph R. Biden Jr., trade groups representing venture capitalists saw an opportunity to hitch their own tax cut to the broader G.O.P. effort. 'Every once in a while you get lucky,' said Bobby Franklin, the chief executive of the National Venture Capital Association who has been pitching lawmakers on expanding the tax break for years. 'And somebody that it resonates with is in a position to advocate for its inclusion at the right place, at the right time.' Want all of The Times? Subscribe.
Yahoo
14-07-2025
- Business
- Yahoo
Trump Mocked For Claiming ‘Big Beautiful Bill' Helps Ugly Rich Guys Stay Married
Sure,Donald Trump's so-called 'big, beautiful bill' drastically cuts government programs that benefit lower- and middle-class Americans in order to pay for a $975 billion tax break for the wealthiest 1% in the country. But that doesn't mean he's heartless. In fact, the president suggested on Monday that the bill is crucial and necessary to ensure the happiness of at least one apparently marginalized community: ugly rich guys. During a meeting with members of the White House Faith Office, Trump explained that one of the reasons why he insisted on the controversial bill's passage was humanitarian in nature. For ugly rich guys, that is. Trump explained that the bill is needed to 'make the economy strong' to prevent 'a depression where you people, so rich, so beautiful, so nice to look at, will be totally busted.' He then suggested that the bill would not only benefit billionaires' bottom lines, but also their love lives. 'And let's see how long your wife stays with you. You're beautiful. She'll stay with you for about three weeks, and she'll say, 'Darling, I can't take it anymore. I can't take it anymore, darling. I'm leaving you,'' Trump said. He then explained his thinking by relating a conversation he claimed he had with an apparently ugly rich dude. 'I said to one guy, he's a very, very unattractive man, but he's smart and he's rich,' Trump said. 'And I said, you better hope we get this thing passed because your wife will be gone within about two minutes. He said, 'You're right.'' For some strange reason, Trump's 'won't somebody think of the unattractive billionaires' claim wasn't exactly the rallying cry he might have expected. And, yes, there was a lot of internet mockery. Soccer Fans Brutally Boo Trump During The FIFA Club World Cup George Conway Spots 'More Evidence We Have A Ding-A-Ling President' In Trump Ex-White House Aide Reveals Why Trump's 'Panicking Right Now' Trump Tells Supporters Their Wives Would Probably Leave Them If His Tax Bill Didn't Pass
