When the One, Big, Beautiful Bill was passed, one of the biggest headlines involved not paying taxes on tips and overtime. This is reasonable since so many people do earn pay in tips or overtime that it was bound to catch their attention. At the same time, you don’t want to then tell them the bad news that it may be a little complicated for the first year since things weren’t set up to record this information in a way to easily report it on a tax return. This could especially weigh heavy on employers who did not properly delineate all prior pay for the year.

But now, let’s celebrate some really good news – This is OK!!!!!

Yes, this was a potential problem that was looming, but the IRS released a notice last week that it is granting one year of penalty relief if this reporting isn’t perfect for 2025.

From the Notice:

Specifically, employers and other payors will not face penalties for failing to provide a separate accounting of any amounts reasonably designated as cash tips or the occupation of the person receiving such tips. In addition, employers and other payors will also not face penalties for failing to separately provide the total amount of qualified overtime compensation. The relief is limited to returns and statements filed and provided for tax year 2025 and applies only to the extent that the person required to make the return or statement otherwise files and provides a complete and correct return or statement. 

Note that this only applies to the one specific year, so once we turn the calendar into 2026 (and can you believe how quickly that is coming up?) you will be expected to have things fully in order and correct.

Since 2026 is coming up so quickly, this is one of those things that you are going to want to get a hold on soon. There may not always be a lot you can do to get ready for taxes before the calendar turns, but when there is, you can get that jump that can make everything feel better when we do hit the next year. Employees should see that everything is being properly reported and employers should ensure they have a way to properly reflect this in paychecks.

Warmly,

Josh Bousquet
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​As the government shutdown continues on, I thought it could be helpful to look at what it means from a tax perspective.

First, remember that this is only a federal government shutdown. So if you have any state or local tax questions, start with knowing nothing has changed there.

Next, even as we will see that the IRS is not actively doing all the work that the agency is tasked with, it still expects all taxpayers to come through with their obligations. If you owe any taxes, are late on any filings, are on a payment plan, need to make quarterly estimates, etc., then these are still expected to be completed on time.

Unsurprisingly, there’s not a lot of good news during this time. In fact, the only small bit is that in a recent advisory the IRS said, “For taxpayers filing a Form 1040, refunds will continue to be paid on electronically filed, error-free tax returns that can be automatically processed and direct deposited.” This is nice for some people who just needed a little extra time to get their latest tax return in and did so on the extended deadline earlier this month, but most people filing recently aren’t of that simple 1040 variety so will be waiting for the processing of their return and any payment they expect to receive.

Beyond that, a lot of dealing with the IRS will be even more of a burden than it usually is. Most automated toll-free telephone applications will remain operational but live telephone customer assistance will be limited (after it can already feel limited even in the best of times).

All the agency’s walk-in Taxpayer Assistance Centers will be closed. All appointments at the TAC will be canceled until the government reopens.

Also, all appointments related to the Independent Office of Appeals or Taxpayer Advocate Service cases are canceled while the government is shut down. The IRS will reschedule the meetings when the government reopens.
​Warmly,

Josh Bousquet
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One of the themes I often enjoy exploring in this space are the unexpected consequences of actions when it comes to finances. And this isn’t done to point any fingers at people making mistakes. It is more about how things can happen outside of our control that can affect our personal situations and make some changes necessary.

This hit me again recently when reading a CNN article about how AI could be making electricity bills higher – and how this is a trend that could continue into the future. It’s not as if this is a giant surprise, as there are enough stories out there about how new technologies, like AI and cryptocurrency, are using huge amounts of energy. This may not have been something you ever imagined could reach into your household and affect your personal finances, though.

​We shouldn’t forget the across-the-board inflation that came with the COVID pandemic, as well. This still isn’t a situation where we can point and convict any one culprit of the crime, but many forces happening far away from anyone personally combined into something that changed how many had to handle household budgets.

Things like this feel so big, because there is little we can do to combat it. To a large degree, the amount of your electric bill is just the amount of your electric bill. Granted, there are programs that can help those in need with those bills and there can be budget programs that can even out your payments to help combat higher payments in critical months. But even with those, if your bill is going up, it is going up.

With that inflation season, as well, we felt it each time we went to the grocery store. And of course you could alter what you were buying to try to get to a budget-friendly final number, but it’s not as if you could stop feeding your family.

With this, I wanted to give the advice to be sure you have wiggle room when planning any budgets. Without it, you can find yourself falling into a spot where there is little you can do because of something you couldn’t do anything about. If you’ve budgeted things down to the penny, you have no extra pennies. This is where the importance of savings can come in. It’s not only good for the future but also gives you a shield against a changing world.

Warmly,

Josh Bousquet
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Government shutdown or not, if you got an extension on your 2024 tax return, the deadline for filing remains October 15. Now granted, no one can currently guarantee when that return will be processed but the government is still going to expect it.

I don’t want to really harp upon this too much. If at this point you have procrastinated to where you are feeling a time crunch, there isn’t much more that can be done other than offer a shrug. We can, however, let this moment on the calendar serve as a reminder to do better in general.

Whether you filed for an extension or not, there probably was something that occurred during tax filing that you wished had been done better. Possibly you even promised that you would improve things for next season.

But have you yet?

If so, good job, relax and enjoy the upcoming holiday season. If not, let this time serve as a little extra impulse to get on top of it so that you will be ahead of things next time. Too often, we think about making these changes but the further we move into the year, the more worrying about taxes fades into the background.

It’s almost as if we start to forget that no matter what, come next April 15, the IRS will be expecting us yet again.

Warmly,

Josh Bousquet
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What people care about most politically often equates to what affects their personal lives the most, which means it often comes down to how things feel in your wallet. And the place we feel this the most is often the grocery store, seeing as it makes up a large piece of the pie when it comes to a household budget. And lately this piece has been feeling a little heavier – as food prices are up almost 3% from last year.

When that happens, we want something to blame. When things are getting more expensive across the board, there must be some reason as to why, right? In a way, the answer to this is yes, but it becomes complicated because the answer usually isn’t one thing but a confluence of many.

That is that situation we find ourselves in now as this recent CNN article speaks to how tariffs, deportation, and climate change are coming together to account for the current problems. Once you get some answers, though, how one interprets them can still depend on one’s political viewpoint. This article clearly isn’t shining the best light on the current administration, and there will certainly be some people out there whose future votes could be affected by this.

Others will not be swayed, though, and that’s not necessarily wrong. After all, an issue could be important enough to someone that they are willing to sacrifice a little more at the cash register to see that other believe taken care of.

What we need to do, however, is own the price of what our choices could mean. It is worth taking some time to understand the outcomes of policies and know where they’re likely to have you ending up. Such news as this article gives isn’t necessarily going to be bad news to everyone. Much like the recent tax bill passed by the Trump administration, some are happy about it, some are not.

In the end, let’s be aware, be measured, and be aware of what we support means.

Warmly,

Josh Bousquet
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