As the year progresses, significant tax changes loom, impacting individuals, businesses, and the IRS itself. Nobody likes talking about taxes. But like it or not, Uncle Sam STILL wants his cut! Whether you’re clockin’ in at the 9 to 5, grindin’ side hustles on the weekend, or just tryna stretch that Social Security check, tax talk is money talk. And with some major changes coming down the pipeline, this ain’t the year to tune out. This is the year to pay attention.
Let’s break it all down—real quick, real clear, real direct.
Trump’s Tax Cuts? They’re Set to Expire.
You remember those tax cuts passed back in 2017 under the Trump administration? The Tax Cuts and Jobs Act (TCJA) of 2017. They have an expiration date—December 31, 2025. Unless Congress steps in to extend those tax cuts or make them permanent, many Americans might see a bigger tax bill come 2026.
Here’s what’s at risk:
Standard deductions might shrink. Translation: Less of your income will be tax-free. The doubled standard deduction under TCJA will revert to pre-2018 levels, increasing taxable income for many filers.
Pre-TCJA (2017 and earlier):
- Single: $6,350
- Married Jointly: $12,700
- Head of Household: $9,350
Post-TCJA (2018–2025):
- Single: $12,000
- Married Jointly: $24,000
- Head of Household: $18,000
If TCJA expires, standard deductions will revert to pre-TCJA levels, adjusted for inflation, potentially increasing taxable income for many filers.
Child Tax Credit could drop. Families who’ve been relying on those boosted credits…Get ready. The credit will drop from $2,000 per child to $1,000.
Income tax brackets may shift. That means you could get pushed into a higher bracket and owe more without even making more money. Marginal rates will increase across most brackets, with the top rate rising from 37 percent to 39.6 percent.
Bottom line: Unless something changes in D.C., taxes are going up for a lot of folks. Without intervention, over 62 percent of filers could owe more taxes starting in 2026. Policymakers face pressure to extend these provisions, but funding remains a challenge. Time to act accordingly. That might mean updating your withholdings, stashing more in savings, or just being ready so you’re not blindsided.
Trump’s New Tax Proposals? Let’s talk about it.
Trump is out here pushing a new wave of tax promises. Some sound good. Some got questions. Let’s break down a few:
No tax on tips or overtime: Sounds sweet if you’re in the service industry. This could benefit workers in hospitality and hourly industries. Could mean more take-home for hard workers. But will jobs abuse this by cutting base pay?
Deduct interest on U.S.-made cars: While patriotic in intent, proving a vehicle is entirely American-made may be complex. Good luck proving your ride is 100 percent American-made in today’s global market. Most cars made in America have parts that are made overseas.
No tax on Social Security: Seniors love it—but the government could lose up to $1.5 trillion over 10 years. Here’s a trillion dollar question. What will get cut to make up the difference? Inquiring minds want to know!
Tariffs = Hidden taxes. Trump’s talking about more tariffs on imports, but guess who pays when prices go up? You do. Tariffs act as hidden taxes by increasing the cost of imported goods, which businesses often pass on to consumers through higher prices. This indirect cost can make everyday products more expensive.
It all sounds bold. But bold doesn’t always mean better. Tax cuts without a plan to replace lost revenue is a setup for disaster. These reforms aim to reduce tax burdens but could significantly increase deficits, potentially exceeding $11 trillion over the next decade.
IRS Hit with Layoffs: What It Means for You
The IRS just laid off over 12,000 workers. That’s major. Here’s what it means for the average taxpayer:
- Fewer audits. Especially for high earners and corporations. That’s a win for the rich, but maybe not for fairness.
- Longer phone wait times. Good luck getting someone on the line when you have a question.
- Less enforcement. Less staff means fewer eyes on tax cheats.
Refunds are still coming through. In fact, the average refund this year is $3,324. So if you filed already and didn’t see that number, maybe it’s time to holla at your tax pro.
Side Hustlers & Gig Workers: You’re on the Tax Radar!
Freelancers and gig workers should be vigilant about new reporting requirements. If you’re getting paid on Venmo, Paypal, Cash App, Zelle, or any of them digital platforms, listen up:
- $5,000 or more in payments = 1099-K in your mailbox.
That’s right—Uncle Sam wants his cut of your side hustle, too. Whether it’s selling T-shirts, doing hair, driving Uber, or babysitting on the weekend, the IRS is watching!
Keep clean records. Track your expenses. Don’t let the IRS tax your lunch money like it’s pure profit. Keeping organized records is essential to avoid penalties or over-taxation on personal expenses.
IRS Direct File IS Real. Elon Was Wrong.
You might’ve seen Elon Musk say the government “deleted” the IRS Direct File program. Wrong.
The new IRS Direct File system is real, free, and available in 25 states. It’s online. It’s simple. It’s a legit option for folks with basic returns who don’t wanna pay for tax software or a tax professional like myself.
IRS Direct File is a free service run by the IRS, allowing taxpayers with simple returns to file directly online in 25 states. It supports basic income types and deductions but excludes complex returns.
Don’t sleep on your taxes.
The laws are shifting. The rules are changing. The IRS is watching—even with less staff. Whether you’re an employee, entrepreneur, retiree, or somewhere in between—this is your money.
Keep your eyes open. Stay organized. Handle your biz.
Because one thing that never changes? Uncle Sam doesn’t play! He’s going to get his money! If you’re caught slipping, he’ll smack you with fees, penalties and interest.
(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website at www.damonmoneycoach.com)
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