The IRS has announced that the amount of tax-favored funds that you can sock away for retirement is increasing. In 2025, the amount most individuals can contribute to their 401(k) plans will tick up to $23,500—it was $23,000 for 2024. The announcement is tied to cost‑of‑living adjustments for pension plans and other retirement-related items for tax year 2025 (those adjustments are required by law). Here’s a look at some of the most common plans and what will be different next year: 401(k) and Similar Plans As noted, the amount individuals can contribute to their 401(k) plans is $23,500—that limit applies…

There aren’t many tax credits that can help lower your expenses throughout the year, but the premium tax credit (PTC) is a notable exception.The PTC helps taxpayers afford the premiums of health insurance plans from the health insurance marketplace. Taxpayers can choose between getting the credit at tax time or getting it “in advance” throughout the year in the form of lower premiums.Here are the details on the PTC, its eligibility criteria, the pros and cons of choosing the advance premium tax credit (APTC), and the tax forms you’ll need to claim the credit.What is the premium tax credit (PTC)?The…

This is a published version of our weekly Forbes Tax Breaks newsletter. You can sign-up to get Tax Breaks in your inbox here. Last weekend, I popped over the border to Quebec City, Canada–a trip I haven’t made since I was four. I learned a few things while there, including that Canadian football fields are bigger than those in the U.S., Canadian ounces are smaller than those in the U.S., and that people will talk about taxes almost anywhere you go. While at a distillery and meadery on an urban farm (they harvest honey from the bees they keep), I…

While Texas doesn’t have an individual income tax, it does have a state sales and use tax on goods and services. Here’s what you can expect if you’re making a purchase in Texas.Texas state sales tax rateThe state sales tax in Texas is 6.25%. Local tax can’t exceed 2%, which means that 8.25% is the maximum combined sales tax that can be collected in Texas. The local tax amount generally depends on the seller’s place of business — such as a store or an office — if they have one. Different rules apply for sellers shipping orders to customers, whether…

John Anthony Castro’s greatest claim to fame is probably his run for the 2024 Republican nomination for President. Using his status as a candidates for standing he filed lawsuits to have Donald Trump removed from the ballot on Fourteenth Amendment Section 3 grounds. Those cases did not go anywhere. The case that did go somewhere is the United States of America v John Anthony Castro in the United States District Court For the Northern District of Texas in Fort Worth. The indictment filed January 3, 2024 charged Castro with 33 counts of “Aiding and Assisting in the Preparation and Presentation…

The entire goal of investing is to make additional money. But if you meet that goal, you’ll owe tax on the money you earned. And depending on your income, you may owe net investment income tax, too.What is the net investment income tax?The net investment income tax (NIIT) is a 3.8% tax that kicks in if you have investment income and your income exceeds $200,000 for single filers, $250,000 for those married filing jointly or $125,000 for those married filing separately. Who has to pay the net investment income tax?You’ll have to pay the net investment income tax if you…

Allan Lichtman is weirdly famous. Of course, by famous I mean historian-famous, not Taylor Swift-famous. Or even Ron Chernow-famous — not every historian gets a helping hand from Lin-Manuel Miranda. But Lichtman, a history professor at American University, is indisputably famous among a certain group of extra-online, hyperpolitical news junkies. These people are fascinated by Lichtman because he makes ironclad predictions about who will win each presidential election. (He’s picked Kamala Harris this year.) Lichtman eschews the more defensible probabilistic forecasts like the ones from Nate Silver and other number crunchers. Lichtman likes his predictions to be clear and falsifiable,…

What is married filing jointly?Married filing jointly is one of five filing statuses taxpayers can choose from. If you file a joint tax return, you and your spouse report your combined income, credits and deductions. This also means that both people are responsible for any tax due.The other filing status married couples can choose when filing Form 1040 is married filing separately. Most married taxpayers choose to file a joint return since it can give them access to more tax credits and larger tax deductions. You qualify for married filing jointly status as long as you were married by Dec.…

Almost every legal settlement includes a full release of claims. A release may recite some of the plaintiff’s claims, but it will be broad. It might say any taxes on the settlement are solely the plaintiff’s responsibility, but should it say more? Yes, if there is a chance to add tax language before signing, take advantage of it. Disagreements can usually be worked out, and a few words can matter and help with taxes later. In contrast, a release that says nothing can invite IRS scrutiny. Consider Isidra Elizabeth Espinoza v. C.I.R, 636 F.3d 747 (5th Cir. 2011). This tax…

What is an underpayment penalty?An underpayment penalty is a charge the IRS imposes on taxpayers who did not pay all of their estimated income taxes for the year or paid their taxes late. You’ll face an underpayment penalty if you:Didn’t pay at least 90% of the tax on your current-year return or 100% of the tax shown on the prior year’s return.Paid your estimated taxes late.If you work for an employer, you may be hit with this penalty because the tax that was withheld from your paycheck during the year didn’t cover your full tax liability. If you’re an independent…