As reported by Forbes, the Senate has unanimously passed the “No Tax on Tips Act” in a unanimous vote. This bipartisan piece of legislation now heads to Trump’s desk to be signed into law. This article highlights three key takeaways from the significant tax law change. 1. Most Tip-Based Taxpayers Will Pay No Tax On Some Tips The No Tax On Tips Act provides a tax deduction for cash tip wages reported to employers. However, there are key limitations. First, the amount that can be deducted is capped at $25,000. Thus, the bill actually means that some (rather than no…

The Original Purpose of Social Security: A Three-Legged Stool Social Security is a cornerstone of the United States’ social safety net. Many Americans depend on this program to fund their retirement. The most recent data available from the Social Security Administration highlights the program’s critical role in retirement planning. Social Security benefits account for approximately 30% of the income for individuals ages 65 and older. Retirement income was envisioned as a three-legged stool consisting of pensions, personal savings, and Social Security, each contributing one-third. The program was never intended to serve as the primary source of retirement income. Many Lower-Income…

The application of U.S. tax laws often turns on the meaning of “residency.” Although U.S. citizens and residents are subject to federal income taxes on their worldwide income, non-residents who are not U.S. citizens (“Foreign Persons”) are generally not unless the income has a nexus to the U.S. Under the U.S. income tax regime, individuals may establish residency through their physical presence in the U.S. U.S. estate and gift tax laws—referred to as “transfer taxes”—also apply to U.S. citizens and residents. Significantly, however, the U.S. transfer tax regime defines the term “residency” different than its U.S. income tax counterpart. Here,…

More than eight in ten households would get a tax cut in 2026 under the big budget bill now being considered by the House, according to a new analysis of the reconciliation bill by the Tax Policy Center. But 60 percent of the tax cuts would go to the top 20 percent of households and more than one-third would go to those making $460,000 or more, TPC found. The average household would get a 2026 tax cut of about $2,900, compared to what it would pay if key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) expire as…

In this episode of Tax Notes Talk, four policy experts discuss the Trump administration’s actions on tariffs, their economic impacts, and their effects on tax policy during a live recording from the American Bar Association Section of Taxation May meeting. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: live from D.C., it’s Tax Notes Talk. We have something a bit different for you this week. On Friday, May 9, I went down to the ABA Tax Section meeting and recorded a live podcast. I was joined by four…

Moody’s has cut the U.S.’s sovereign credit rating from the highest possible rating (Aaa) to one notch below (Aa1). According to CNBC, the agency lowered the rating due to the growing burden of the federal government’s deficit and the rising costs the U.S. now faces due to interest rates. Moody’s joins Standard & Poor’s, which downgraded the U.S. in August 2011, and Fitch Ratings, which downgraded the U.S. rating in August 2023. The U.S. credit rating has significant market wide effects, as demonstrated by the Dow, S&P 500, and NASDAQ indices all being down at the start of trading. In…

To read this article with full citations, please visit taxnotes.com Several weeks ago, I used this column to suggest an unconventional idea: The taxpayers of the United States would benefit greatly from the creation of a national tariff-payer advocate. Such an officeholder would take on responsibilities that parallel those of the national taxpayer advocate — a position that has existed within the IRS since the mid-1990s — but in the tariff context. The officeholder would be supported by a professional staff and function as an independent actor, at liberty to raise whatever concerns she deems appropriate insofar as they affect…

Corporate tax professionals have a complicated relationship with artificial intelligence (AI). Over the last decade or so, AI has been pitched as everything from an existential threat to a potential industry savior. Now that the hype machine has slowed and corporate tax teams have been able to actually start using AI-powered tools in their day-to-day work, they’ve become the unlikely champions of AI-led innovation in the modern corporation. In fact, when it comes to adopting generative AI (GenAI) tools for research, analysis, and data summarization tasks, corporate tax professionals are leading the way, according to a new report conducted by…

The House Budget Committee promised to revisit the stalled tax bill—by posting a notice that the committee would reconvene a hearing on the matter on Sunday, May 18, at 10 p.m. ET. That’s not a typo. After an earlier vote didn’t advance the bill on Friday, Representatives said they would resume talks on Monday during business hours. That changed over the weekend after criticisms lobbed at fiscally conservative Republicans who had initially opposed the bill because it would contribute significantly to the deficit switched their votes to “present.” On Friday, five Republicans joined Democrats in voting no on the bill:…

The present and future of the tax law is currently being debated in Congress, and it seems all but certain that big changes will be made before the end of 2025 when the so-called Trump tax cuts are scheduled to expire. We all have to pay taxes, and that will remain a constant, though very few of us enjoy the annual drudgery associated with tax return filings, much less the constant record-keeping and the nagging fear of audit. Most of us don’t especially like parting with some of our hard-earned dollars either. It doesn’t help that our tax system is…