Latest news with #SALT
Yahoo
4 hours ago
- Business
- Yahoo
I Asked ChatGPT What the Big Beautiful Bill Means for Upper Class Taxes — Here's What It Said
President Donald Trump's One Big Beautiful Bill Act became U.S. law as of July 4, and my ongoing aspiration to achieve a life of luxury meant I couldn't help but wonder how the legislation would impact taxes for the upper class I hope to one day join. Read More: For You: I'm willing to work hard to become an aristocrat, but not if it means enduring the tedium of trolling through the bill's hundreds of pages — and that's where ChatGPT came in. To cut through the clutter, I asked the AI platform to give me a concise explanation. Here's what it said: In an opening section titled 'Key Impacts on High-Income Taxpayers,' the platform summarized four key ways the bill will help the upper class guard and grow its already sizeable wealth. It cited dozens of sources, such as the Tax Foundation and the New Yorker. This, and all of the following synopses, are word-for-word, with only modest edits for style. Trending Now: The 2017 Tax Cuts and Jobs Act (TCJA) tax rates and brackets are now permanent, continuing lower rates for high earners. The top individual tax rate for millionaires remains at 37%, as the bill did not include President Trump's later pledge to raise it to 39.6%. Temporarily increases the State and Local Tax (SALT) deduction cap to $40,000 (single and joint), indexed upward, but phases out for income above $500,000 (or $250,000 for separate filers) by 30%. After 2030, it reverts to the old $10,000 cap. Despite raising the cap, the phase-out means many upper-income households still see minimal benefit. Continues limiting itemized deductions, capping their value for high earners. Despite expectations, the bill does not eliminate the carried-interest tax loophole, continuing favorable tax treatment for hedge fund and private equity managers. Next was a section titled 'Wealth Transfer: A Big Boost to the Top,' which explained how disproportionately some analysts say the bill favors the wealthy — and who will pick up the tab. Analysts estimate 70% of the tax benefits go to the top 20% of earners and over 20% to the top 1%. The non-partisan Tax Foundation projects the bill will reduce federal revenue by $5 trillion over ten years — far more than it redistributes in lower- and middle-income relief. Critics label it the 'largest upward transfer of wealth from the poor to the rich in U.S. history.' Next, the platform created a table that broke down how the bill boosts the garden-variety rich and the ultra-wealthy elite in different ways. Taxpayer Group Changes Impact Summary High Earners (> $500K/year) Permanent tax rates, modest SALT benefit, deduction caps, no carried-interest reforms Significant net tax savings, though diminished by SALT phase-out Ultra-Wealthy (hedge fund, private equity) Highest brackets unchanged, continued carried-interest loophole Continued preferential treatment, no additional tax burden In closing, ChatGPT generated a section titled 'Bottom Line,' consisting of three bullet points. Upper-income individuals, especially those in the top 1%, see larger tax savings through permanent TCJA rates, expanded SALT deductions and retained loopholes. Though the SALT cap increase offers some relief, the phase-out reduces its effectiveness for high earners. Overall, the bill delivers a significant net tax benefit to the wealthy, while increasing the federal deficit dramatically and shifting fiscal burdens. It closed with this offer: 'If you'd like to explore specific income brackets or scenarios, feel free to ask!' Thanks anyway for now, ChatGPT, but let's revisit this when I hit the big time. More From GOBankingRates Here's the Minimum Salary Required To Be Considered Upper Class in 2025 This article originally appeared on I Asked ChatGPT What the Big Beautiful Bill Means for Upper Class Taxes — Here's What It Said 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
New York Post
2 days ago
- Business
- New York Post
NY Gov. Hochul builds $17.5M campaign war chest — as likely GOP challenger Rep. Elise Stefanik gains fundraising momentum
ALBANY – Gov. Kathy Hochul grew her massive campaign war chest in the first half of the year, as Rep. Elise Stefanik (R-NY), a potential challenger, boasted a massive fundraising haul of her own. The Democratic governor raised around $4 million for her re-election bid in the first half of 2025, leaving it with around $17.5 million in the bank, according to her campaign. 'In the last six months, Governor Kathy Hochul has seen grassroots support pour in from every single county in the state as she fights back against Donald Trump and delivers real progress toward a safer, more affordable New York,' Hochul's campaign manager, Preston Elliott, wrote in a statement Monday. 4 Gov. Kathy Hochul's campaign has around $17.5 million in the bank heading into the second half of 2025, a spokesperson said. Andrew Schwartz / But while Hochul's early fundraising advantage is clear, her likely challengers in next year's race are already posting impressive totals of their own. Stefanik — who has yet to officially pull the trigger on running for the GOP nomination — raised $4 million between her campaign and various committees over the last quarter, her spokesperson said. The congresswoman's camp claimed it was the most ever raised by a New York Republican in a single quarter during an off-cycle year. 'I am humbled by the record early support from generous grassroots donors and supporters in New York and across the country,' Stefanik wrote in a statement. 'I will continue to work tirelessly to enact President Trump's historic mandate in Congress, ensure Republican victories up and down the ballot in New York, and then we will fire Kathy Hochul once and for all next year,' she said. Stefanik's campaign raised $138,000 in the first quarter of 2025. She holds around $11 million cash-on-hand across all her accounts, her campaign said. 4 Rep. Elise Stefanik has a massive $11 million on-hand, that could be used to help her potential campaign for governor if she jumps in the race. AP Those funds could ultimately be repurposed to help the North Country Republican's gubernatorial campaign if she officially jumps in the race. Fellow potential GOP challenger Rep. Mike Lawler reported raising $1.4 million in the second quarter of 2025. That's on top of $1.5 million raised by his congressional campaign in the first quarter of the year, leaving him with around $2.2 million cash-on-hand. 'New Yorkers in the Hudson Valley are tired of extremism and political stunts. Congressman Lawler is delivering on issues that matter like middle-class tax relief — including his promise to lift the cap on SALT, safer communities, and economic prosperity, and he is in a prime position to win re-election next November,' a spokesperson for Lawler's campaign wrote. 4 Rep. Mike Lawler, raised $1.4 million for his congressional campaign in the last quarter. REUTERS The Republicans aren't the only ones cranking the cash machine. Lt. Gov. Antonio Delgado, who is running against his estranged boss Hochul for the Dem nomination, hauled in almost $1.5 million between his various accounts, his campaign said. 'After launching the campaign just six weeks ago, today's filing shows real momentum and that we have the resources we need to communicate Antonio's vision for bold, transformational change,' a Delgado spokesperson wrote in a statement. During the first half of the year, Hochul's camp said she also raised around $7 million for the state Democratic party apparatus. 4 Lt. Gov. Antonio Delgado raised around $1.5 million in the first half of 2025 after announcing his primary bid against Hochul. Paul Martinka That haul is big for Hochul, who worked last cycle to build out a coordinated campaign effort with the party to support Dems in New York's congressional battleground districts and other downballot races. The stash of cash could be a major source of power for the governor, as she faces a primary from the left by Delgado. She may also feel compelled to use the apparatus to defend allies and other incumbents should Democratic New York City mayoral nominee Zohran Mamdani and his gang of socialists follow through on threats to mount primaries against establishment pols like House Minority Leader Hakeem Jeffries (D-NY).
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Business Standard
2 days ago
- Business
- Business Standard
Sun Pharma launches hair loss drug Leqselvi in US after patent settlement
The delay in Sun Pharma's launch of Leqselvi in the US was caused by a patent infringement case, which was later settled in a US court with Incyte Corp New Delhi Sun Pharmaceutical has launched a new medicine for severe alopecia areata, called Leqselvi, in the United States. Alopecia areata is a condition in which the immune system attacks hair follicles, leading to hair loss on the scalp as well as other parts of the body. 'Leqselvi is an important step forward for people living with severe alopecia areata,' said Richard Ascroft, CEO of Sun Pharma North America. 8 mg Leqselvi tablets for severe alopecia areata is now available by prescription across the US. The delay in Sun Pharma's launch of Leqselvi in the US was caused by a patent infringement case, which was later settled in a US court with Incyte Corp, as reported by Reuters. The drug underwent two clinical trials, THRIVE-AA1 and THRIVE-AA2, involving 1,223 adults between 18 and 65 years of age. The trials were conducted in the US, Canada, and Europe. Hair regrowth was measured over a period of 24 weeks using a scoring system known as the Severity of Alopecia Tool (SALT), according to the company's statement. Shrikant Akolkar, analyst at Nuvama Institutional Equities, said the drug could generate up to $400 million in sales by FY30, with peak sales potential of $900 million, and boost growth in Sun's key US market, according to Reuters. The National Alopecia Areata Foundation (NAAF) welcomed the launch. Its President, Nicole Friedland, said the new treatment offers hope to many people dealing with the emotional and social impacts of hair loss. Sun Pharmaceutical is also offering a 'Leqselvi Support Program' to help patients access the medicine. Eligible patients may be able to receive the drug for as little as $0 for up to two years. The program also includes personal guidance and support throughout the treatment process. 'The clinical evidence for Leqselvi is truly compelling, demonstrating consistent efficacy," said Arash Mostaghimi, Vice Chair of Clinical Trials and Innovation and Associate Professor of Dermatology at Brigham and Women's Hospital. However, Leqselvi does carry certain risks. It may cause side effects such as infections, acne, headaches, or more serious health issues. Doctors are advised to screen patients thoroughly before and during treatment. Alopecia areata affects nearly 2.5 per cent of people in the United States during their lifetime. According to figures cited in the company's release, the condition also affects a similar percentage of the global population. The scalp is the most commonly affected area, but hair loss can also occur on other parts of the body.
Miami Herald
4 days ago
- Business
- Miami Herald
Roth IRA conversions just got more complicated
Roth IRA conversions have long been a go-to strategy for managing long-term tax liability. By moving funds from a traditional IRA to a Roth IRA - triggering ordinary income tax in the year of conversion - taxpayers can secure tax-free growth and tax-free withdrawals down the road. But thanks to the newly enacted One Big Beautiful Bill Act (OBBBA), the Roth conversion calculus just got more complicated. According to LISI Income Tax Planning Newsletter #267, authored by Keebler & Associates Partner Robert Keebler and Jim Magner, an advanced planning attorney at The Guardian Life Insurance Company of America, OBBBA's new tax provisions introduce both opportunities and landmines. Don't miss the move: Subscribe to TheStreet's free daily newsletter "While Roth conversions will continue to be a cornerstone of first-class planning, the impact of both the senior and SALT deductions - as well as the SALT phaseout -should be modeled," Keebler and Magner wrote. Image source: Bermix Studio on Unsplash One headline provision in the new law is a $6,000 deduction for taxpayers age 65 or older - or $12,000 per couple. But it comes with a phaseout: The deduction is reduced to zero between $150,000 and $250,000 of modified adjusted gross income (MAGI). MAGI is your adjusted gross income (Line 11 on IRS Form 1040) plus certain deductions added back, and it's used to determine eligibility for various tax benefits, including this new senior deduction. Keebler and Magner warn this phaseout creates a new tax cliff for Roth conversions. At $150,000 of MAGI, a married couple over 65 qualifies for the full $12,000 deduction - translating to a $2,640 tax savings. Related: Retired workers to see frustrating change to Medicare in 2026 But a $100,000 Roth conversion, if it pushes MAGI to $250,000, could not only trigger a 22% income tax, but also wipe out the senior deduction. "At first glance, it appears that a $100,000 conversion would generate additional federal income taxes of $22,000," they wrote. "However, the actual result is an increase in federal tax of $24,640, with the difference being the loss of the Senior deduction." Planning tip: Tax projections should model the marginal impact of the lost deduction. In some cases, it may be smarter to convert earlier - before age 65 - to lower future MAGI and preserve eligibility for the senior deduction later. Roth conversions are taxed as ordinary income at the federal and state levels. Under the Tax Cuts and Jobs Act of 2017 (TCJA), state income taxes became largely non-deductible, increasing the cost of conversions for taxpayers in high-tax states. More Personal Finance: Dave Ramsey sends strong message to Americans on MedicareJean Chatzky offers critical advice on 401(k)s, Social SecuritySuze Orman sends message on growing Social Security problem The OBBBA changes that by raising the SALT (state and local tax) deduction cap to $40,000, which can reduce the effective tax burden on conversions. For some, this makes conversions more attractive - as long as they stay below the SALT cap. "A planner may consider limiting Roth conversions in such a way to avoid exceeding the $40,000 SALT limitation," Keebler and Magner advised. Just as with the senior deduction, planners should isolate this benefit in tax models to determine whether the deduction increases the net benefit of converting. The SALT deduction, however, comes with its own phaseout for high earners. Taxpayers with MAGI over $500,000 face a 30% phaseout of the SALT deduction on income exceeding that threshold. By the time MAGI hits $600,000, the deduction shrinks to the statutory floor of $10,000. Here's an example from Keebler and Magner: Randy and Sarah have MAGI of $500,000 and itemized deductions of $75,000, including a $40,000 SALT deduction. They execute a Roth conversion of $100,000, pushing MAGI to $600,000. As a result, their SALT deduction is slashed to $10,000. Related: Who saves money due to 'Big Beautiful Bill' tax cuts? Translation: Their income went up by $100,000, but their taxable income rose by $130,000. At a 35% marginal rate, their effective rate on the conversion is 45.5%. "This hidden 10.5% tax rate increase will almost certainly eliminate most, if not all, the benefits of this Roth conversion," the authors noted. That said, they add, a larger conversion may still make sense in the long run - but only if long-term tax projections justify the tradeoff. Roth conversions remain a powerful planning tool, but under the One Big Beautiful Bill Act, they demand greater precision and modeling. Planners (and taxpayers) must now account for the interaction between new deductions, phaseouts, and income thresholds. As Keebler and Magner emphasize, what once was a straightforward tax decision now requires a more nuanced, scenario-by-scenario analysis. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
NBC News
5 days ago
- Business
- NBC News
Trump's 'big beautiful bill' could deliver 45.5% 'SALT torpedo' for high earners, tax pro says
President Donald Trump 's 'big beautiful bill' delivers a temporary higher limit on the federal deduction for state and local taxes, known as SALT. But the phaseout, or income-based benefit reduction, could trigger a tax surprise for some higher earners, experts say. If you itemize tax breaks, you can claim the SALT deduction, which includes state and local income taxes and property taxes. Trump's legislation raises the SALT deduction limit to $40,000 starting in 2025, with a 1% yearly increase through 2029, before reverting to $10,000 in 2030. However, the $40,000 SALT cap starts to phase out once modified adjusted gross income, or MAGI, exceeds $500,000. The SALT limit drops to $10,000 once MAGI reaches $600,000. MAGI is adjusted gross income with some tax breaks added back in. This phaseout can create a 'SALT torpedo' — an artificially high tax rate — when MAGI falls between $500,000 and $600,000, certified public accountant Jeff Levine said in a LinkedIn post this week. In some cases, you could pay a 45.5% federal tax rate on earnings between those thresholds, experts say. Here's how the 'SALT torpedo' works and who could be impacted, according to tax experts. How the SALT deduction phaseout works Under Trump's legislation, the SALT deduction limit for 2025 is now $30,000 higher. But a 30% phaseout kicks in once MAGI exceeds $500,000 for 2025. Between $500,000 and $600,000, 'you're losing 30% for every dollar' of benefit between those thresholds, said certified financial planner Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts. He is also a CPA. At $600,000, if you multiply the extra $100,000 of income by 30%, that's a $30,000 benefit reduction, which drops the $40,000 SALT cap back to $10,000. A 'quirky' phaseout boosts tax rate With the 30% SALT deduction phaseout between $500,000 and $600,000 of MAGI, some individuals could pay a higher-than-expected tax on earnings between those thresholds, according to Robert Keebler, a CPA with tax advisory firm Keebler & Associates in Green Bay, Wisconsin. Between $500,000 and $600,000, you're increasing taxable income while losing part of the SALT deduction, which raises your effective tax rate — the percent of taxable income you pay. If taxable income rises while the SALT deduction falls, your effective tax rate on income between $500,000 and $600,000 could far exceed your regular income tax rate, Keebler said in a LinkedIn post last week. 'It's definitely a quirky little phaseout provision,' Andy Whitehair, a CPA and a director with Baker Tilly's Washington tax council practice, told CNBC. 'When people start actually crunching numbers, they might be in for some surprises.' Whitehair also shared a basic example of the phaseout on LinkedIn this week. If your income is $500,000 and you subtract $75,000 of itemized deductions (including $40,000 for SALT), your taxable income is $425,000. By contrast, $600,000 of income would drop the SALT deduction to $10,000, which reduces itemized deductions to $45,000, and raises taxable income to $555,000. When comparing taxable income for each example, the true difference is $130,000 with the $30,000 lost SALT deduction. If you multiply that by the 35% tax bracket, you get $45,500. In this simplified example, there is $45,500 more federal tax owed by earning $100,000 more, which is 45.5%, Whitehair said. If your 2025 earnings could be near $500,000, you should run projections with a tax advisor and weigh strategies to reduce MAGI, experts say. With the steep tax penalty between $500,000 and $600,000, you may reconsider Roth individual retirement conversions, incurring large capital gains or other moves that could boost your income, according to Keebler.
