It is not unreasonable that the One Big, Beautiful Bill dominated people’s thoughts about tax changes and how they would affect their personal situations once President Trump came into office for his second term. It promised to have meaningful content and this proved true once it was passed. There are definite changes in it that will affect people’s tax picture. At the same time, however, there are some other changes going on in the tax world that should be noted.

Passed during the Biden administration, the Inflation Reduction Act of 2022 provided almost $80 billion of additional funding to the IRS over 10 years. That almost immediately became something that could be bargained with when funding was needed elsewhere and with the Republicans now holding fuller power that total has been more than halved.

Part of the plan for that initial large outlay to the agency was to be allocated for enforcement activities. The budgetary thinking was that if funds are invested in collecting money that taxpayers owe the government, it is something that will essentially pay for itself. More than half the additional money going to the agency was to go there, but now the amount set for enforcement is less than $4 billion.

With a strategy of using the enforcement funds to pay for themselves, it shouldn’t be surprising that much of the plan was to pursue high-income taxpayers who owed money. After all, there’s a big difference between clawing back $10 million owed over $1,000.

And let’s also not forget that along with many other federal agencies, the IRS has seen its staff numbers decrease and there isn’t any indication that this will change soon. So, with less enforcement money and less people to do the enforcement … well, the endpoint becomes clear.

Even with this inevitable answer, I never want to tell anyone that they shouldn’t worry about a tax audit. It is always a possibility and “it probably won’t matter” isn’t a good reason to fudge your tax return. As always, we instead believe in submitting the tax return that is most advantageous to you within the current rules.

While also acknowledging that, yes, the chances of an audit do appear to be lessening. 

Warmly,

Josh Bousquet
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With the recent flooding in Texas, we are seeing stark reminders of how quickly our lives can be forever affected by things that are completely outside of our control.

​When such things happen, there is some relief offered by the IRS. Granted, this isn’t relief of a sort that you suddenly don’t have to pay as many taxes as you thought, but it does postpone various deadlines, so as some people try to move on with too many worries hanging over them, it at least removes some.

As a little reminder here, too, it is not only the giant disasters that cause the IRS to give some of this relief. Granted, these affect a smaller amount of people over a smaller area, but if you think  you may have be in such an area, it can be worth checking out the agency’s list of disaster relief areas at www.irs.gov/newsroom/tax-relief-in-disaster-situations.

To me, taking advantage of this disaster relief is part of taking care of yourself in the small ways. It clearly is not going to fix a lot of what some people are going through, but if you can embrace enough smaller acts, they start to add up and make a difference.

The same type of dynamic is at work when it comes to personal security and protecting personal information. Another IRS help that is offered in this area is the ability to get an identity protection PIN (IP PIN). This is a rather simple concept of a six-digit number that is provided to you by the IRS that will be necessary to file a tax return. This will keep anyone else from submitting a return using your social security number. You can even do this now ahead of next tax season on the IRS website.

And again, this also isn’t some life-changing concept, but it could be enough to add some extra comfort and help you feel better about what will happen when you do file your return.

A final small thing to keep in mind in this area is to not stop paying attention to the news now that the Big, Beautiful Bill has been signed into law. As I said in this space last week, that passage unfortunately doesn’t mean we know exactly how everything in it is going to play out. But if you keep an ear open to what is happening, you will be best prepared when it is time to do something about it. And this doesn’t have to be a constant thing, just don’t be shut off now that it’s over.

Warmly,

Josh Bousquet
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We have all been waiting for it essentially since Trump was elected in November and then last week it finally happened – a Big, Beautiful Bill has made its way into law. With such a wait, it shouldn’t be surprising that we started getting some questions from clients immediately about what it means.

And on one level, this is great. People should be interested in how big things affect their lives – especially when they are ones that you could potentially turn to your advantage.

On another level, though, we still must advise using some caution because exactly what everything is going to look like is not quite certain. When the Tax Cuts and Jobs Act was passed in the first Trump administration, it represented a large shift but exactly how it would be reflected on a tax return still took some time to be fleshed out. Then during the pandemic, stimulus payments became big quickly but all the answers as to how those would look long-term were also not immediately apparent.

Because of their size, big changes take time to appreciate everything they bring.

My advice for now is to make yourself generally knowledgeable about what was included in the Bill. And this is for everyone, no matter what side of the political spectrum you are on or how much you think you already know about the bill.

To start, it’s huge. The Big moniker is not a lie. There are probably some things in it that you are not aware of. These things may not affect your life, but it is still worth a look.

If you do this, I would even wager that you will find something in the bill that you like that you didn’t know was there. Again, it covers a lot of areas in a lot of different ways, and they don’t all fit in one news story, so some may be surprising. Of course, this also means you are going to find things that you do not agree with. Either way, it’s good to know.

And we will remain with you as we continue this journey – it is just also going to be a big one. As such, we can’t go from beginning to end in one moment, but we have taken a big step on the way. So as guidance from the IRS is released, we will continue to keep you posted.

Warmly,

Josh Bousquet
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This is a week where many celebrate the things that make our country special – and possibly even make our country great. It is therefore no surprise that Donald Trump and the Republicans had a push to try to get their Big, Beautiful Bill passed for the July 4 holiday.

And as of this point, it looks like their wish may even come true if votes fall the way they hope today.

How you feel about what is being passed probably is not much of a surprise. If you were a fan of what the Republican priorities are, you are likely pleased. If you are not a fan of where Republican priorities are, you are likely not.

Either way, don’t let your feelings overcome how you absorb news about what is happening. Take the time to understand what it means for you and your situation. Will you be able to work your way through all the twists and turns and get a 100% answer as to where you’ll land? Probably not, but you can at least avoid any surprises. Wherever your politics stand, you deserve the peace of knowing how the current administration is affecting your personal picture.

And you also deserve to still enjoy a good holiday weekend. No matter how you feel about what this means, do what is good for your mental health, remain mindful of your physical health, and we will see you again here next week.

Warmly,

Josh Bousquet
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