Latest news with #OneBigBeautifulBill
Yahoo
3 hours ago
- Business
- Yahoo
From tax on tips to SALT deductions: Senate tweaks bring change to Trump's big tax bill
The Senate released its revisions to the legislation dubbed the "One Big Beautiful Bill" by President Donald Trump this week, but whether it's better for average Americans than the House bill might be questionable, some experts say. The Senate's version of the mega tax bill keeps popular benefits like no taxes on overtime and tips, an additional tax deduction for those 65 years and older, and a deduction for state and local taxes (SALT). However, the Senate's tweaks, if passed, may make those tax benefits less beneficial for individual taxpayers, some accountants said. Eliminating taxes on tips and overtime pay is one of President Donald Trump's most popular campaign promises, and the Senate kept it – but with a cap. For tips, the Senate offers a maximum $25,000 deduction for both overtime pay and tips, but it would begin to phase out for single filers earning, with a modified adjusted gross income (MAGI), $150,000, and couples over $300,000. It would reduce the deduction by $100 for every $1,000 of income over those thresholds. MAGI begins with the adjusted gross income, whch is basically the sum of all income, which commonly can include items like dividends, interest, capital gains, rental income, self-employment income, taxable alimony, Social Security, pensions, annuity income, and a few more things. The AGI is then adjusted or 'modified' further to get to the MAGI. For a single filer, the deduction is completely phased out if income is $250,000 over the MAGI threshold. The House version didn't have a cap or a phase out. Instead, it excluded highly compensated employees who make at least $160,000 in 2025. 'For both no tax on tips and no tax on overtime, the House version is more beneficial to the average taxpayer as there are no caps on the deduction,' said Richard Pon, a certified public accountant in San Francisco. The Senate proposed a $6,000 'bonus deduction' for those aged 65 and older, but eligibility is capped at $75,000 in income for single filers and $150,000 for couples. The deduction would be available from 2025 through 2028, and would supplement, but not replace, the existing extra standard deduction already available to older adults. For 2025, a single filer age 65 or older can claim an extra $2,000, while married couples filing jointly can add $1,600 for each spouse over 65 in addition to the standard deduction available to all taxpayers. The Senate's bonus deduction would be on top of those. The House agreed on a $4,000 bonus deduction with similar eligibility parameters and duration. Bonus deductions are meant as a substitute for Trump's promise of no tax on Social Security because the budget reconciliation process doesn't allow provisions related to Social Security, according to the Bipartisan Policy Center Since tax deductions only reduce taxable income, not tax owed directly, those who pay little to no federal income tax may benefit very little if at all from the bonus deduction, analysts said. Individual taxpayers could lose big under the Senate's version of the controversial SALT, or state and local tax, deduction. In 2017, Trump's first major tax bill capped SALT at $10,000. Before that, it was uncapped, meaning individuals could deduct all their state and local taxes on their federal tax returns. The cap was seen as mostly hurting many big Democratic states like New York with high state and local taxes. As a workaround, many states adopted Pass-Through Entity (PTE) taxes, which allow the entity to pay state income tax at the entity level and take the tax deduction. Only individuals, not entities, are subject to the SALT cap. The House plan raises the cap to $40,000 for individuals earning $500,000 or less. The Senate kept the current $10,000 cap and said passthrough entity taxes (PTE) would now be subject to the $10,000 limit, Pon said. 'I think the cap may be raised slightly -- most likely by doubling the cap to $20,000 for married taxpayers,' Pon said. But 'the proposal to stop the PTE workaround, I think, will pass as it raises revenue which is needed to get the deficit under control.' Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: Senate tweaks to Trump tax bill take president's promises down a notch Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
USA Today
3 hours ago
- Business
- USA Today
From tax on tips to SALT deductions: Senate tweaks bring change to Trump's big tax bill
The Senate released its revisions to the legislation dubbed the "One Big Beautiful Bill" by President Donald Trump this week, but whether it's better for average Americans than the House bill might be questionable, some experts say. The Senate's version of the mega tax bill keeps popular benefits like no taxes on overtime and tips, an additional tax deduction for those 65 years and older, and a deduction for state and local taxes (SALT). However, the Senate's tweaks, if passed, may make those tax benefits less beneficial for individual taxpayers, some accountants said. No tax on tips and overtime pay Eliminating taxes on tips and overtime pay is one of President Donald Trump's most popular campaign promises, and the Senate kept it – but with a cap. For tips, the Senate offers a maximum $25,000 deduction for both overtime pay and tips, but it would begin to phase out for single filers earning, with a modified adjusted gross income (MAGI), $150,000, and couples over $300,000. It would reduce the deduction by $100 for every $1,000 of income over those thresholds. MAGI begins with the adjusted gross income, whch is basically the sum of all income, which commonly can include items like dividends, interest, capital gains, rental income, self-employment income, taxable alimony, Social Security, pensions, annuity income, and a few more things. The AGI is then adjusted or 'modified' further to get to the MAGI. For a single filer, the deduction is completely phased out if income is $250,000 over the MAGI threshold. The House version didn't have a cap or a phase out. Instead, it excluded highly compensated employees who make at least $160,000 in 2025. 'For both no tax on tips and no tax on overtime, the House version is more beneficial to the average taxpayer as there are no caps on the deduction,' said Richard Pon, a certified public accountant in San Francisco. Senior deduction The Senate proposed a $6,000 'bonus deduction' for those aged 65 and older, but eligibility is capped at $75,000 in income for single filers and $150,000 for couples. The deduction would be available from 2025 through 2028, and would supplement, but not replace, the existing extra standard deduction already available to older adults. For 2025, a single filer age 65 or older can claim an extra $2,000, while married couples filing jointly can add $1,600 for each spouse over 65 in addition to the standard deduction available to all taxpayers. The Senate's bonus deduction would be on top of those. The House agreed on a $4,000 bonus deduction with similar eligibility parameters and duration. Bonus deductions are meant as a substitute for Trump's promise of no tax on Social Security because the budget reconciliation process doesn't allow provisions related to Social Security, according to the Bipartisan Policy Center Since tax deductions only reduce taxable income, not tax owed directly, those who pay little to no federal income tax may benefit very little if at all from the bonus deduction, analysts said. SALT deduction Individual taxpayers could lose big under the Senate's version of the controversial SALT, or state and local tax, deduction. In 2017, Trump's first major tax bill capped SALT at $10,000. Before that, it was uncapped, meaning individuals could deduct all their state and local taxes on their federal tax returns. The cap was seen as mostly hurting many big Democratic states like New York with high state and local taxes. As a workaround, many states adopted Pass-Through Entity (PTE) taxes, which allow the entity to pay state income tax at the entity level and take the tax deduction. Only individuals, not entities, are subject to the SALT cap. The House plan raises the cap to $40,000 for individuals earning $500,000 or less. The Senate kept the current $10,000 cap and said passthrough entity taxes (PTE) would now be subject to the $10,000 limit, Pon said. 'I think the cap may be raised slightly -- most likely by doubling the cap to $20,000 for married taxpayers,' Pon said. But 'the proposal to stop the PTE workaround, I think, will pass as it raises revenue which is needed to get the deficit under control.' Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
Yahoo
4 hours ago
- Politics
- Yahoo
Speaker Mike Johnson sponsors downtown Shreveport billboard on display before Sanders rally
A billboard sponsored by Speaker Mike Johnson in downtown Shreveport is on display in advance of Vermont Senator Bernie Sanders' visit to Shreveport. Sanders will be making a stop at the Shreveport Municipal Auditorium on Saturday as part of his nationwide "Fighting Oligarchy Tour." The tour aims to rally support for progressive policies and challenges what they perceive as an oligarchic system. The billboard is located near Market Street and I-20. More: Bernie Sanders is stopping in Shreveport on Saturday for his "Fighting Oligarchy" tour "As Bernie Sanders arrives in Shreveport, families will be reminded that his policy ideas are disastrous," Johnson stated. "If he and Democrats in Washington had their way, they would defeat the One Big Beautiful Bill and force the people of our district t pay an average nearly $1,300 more in federal taxes every year. That is one of the many reasons Louisiana, like the rest of our nation, will pass on Democrats' socialism and tax hikes." The "One Big, Beautiful Bill", or HR 1, is a proposed tax bill that includes significant tax relief for seniors. The bill is currently in the Senate voting stage. Sanders has shown opposition to the bill, stating in a May 23 Facebook post: Under Trump's "big, beautiful bill", the top 0.1% will see their income increase by nearly $400,000 next year, while Americans making less than $51,000 will see their incomes GO DOWN. Oligarchs are waging a war on the working class, and they are intent on winning. Follow Ian Robinson on Twitter @_irobinsonand on Facebook at This article originally appeared on Shreveport Times: Shreveport billboard displays House Speaker's message prior to Sanders rally
The Independent
6 hours ago
- Business
- The Independent
Senate version of Trump's Big Beautiful Bill holds ‘'unexpected' tax break up to $2,000 for nearly all Americans
The Senate version of President Donald Trump's 'One Big, Beautiful Bill' legislation includes a tax break that would benefit 90 percent of Americans, CNBC reported. The Senate Finance Committee released the text for the tax and health care aspects of the Senate's version of the bill that passed the House of Representatives last month. The House version allows people who do not itemize their taxes to deduct $150 for individuals and $300 for joint filers like married couples. But the Senate version would allow $1,000 for single filers and $2,000 for joint filers. Typically, people need to choose to itemize their taxes to receive the charitable contribution deduction. The rare exception came during the Covid-19 pandemic. But 9 out of 10 Americans use the standard deduction, meaning the $2,000 tax break could come to most Americans. 'This could provide some tax savings for folks,' Erica York of the Tax Foundation, a conservative think tank, told CNBC. 'That could be something unexpected if you're not currently deducting charitable giving.' The Senate is currently debating its version of the 'One Big, Beautiful Bill,' as Trump requested Republicans to name it. In addition to the charitable deduction, Republicans hope to extend the 2017 tax cuts that Trump signed during his first tenure in the White House, boost up money for the military, military spending and oil production in the United States. But Republicans remain split on a number of aspects of the bill, including its changes to Medicaid. Fiscal conservatives also say that the bill does not do enough to slash federal spending. Earlier this week, the nonpartisan Congressional Budget Office released its dynamic estimate and it found that it would increase the deficit by $3.4 trillion. Other Republicans want to keep the renewable energy tax credits that then-President Joe Biden put into place in the 2022 Inflation Reduction Act because many Republican states benefited from the law. Republicans have only 53 seats in the Senate. To sidestep a filibuster, they plan to use a process called budget reconciliation, which allows them to pass legislation with a simple majority as long as it relates to federal spending and taxes. Currently, the legislation is undergoing the 'Byrd Bath,' wherein Senate Parliamentarian Elizabeth MacDonough, a career Senate employee, evaluates whether the legislation follows the rules of budget reconciliation and none of the parts of the bill are 'merely incidental' to the budget.
CNBC
9 hours ago
- Business
- CNBC
Rooftop solar stocks face ‘wipe out' but First Solar shares could double, says clean energy investor
The U.S. Senate's latest draft of President Donald Trump's signature tax bill is expected to wreck the rooftop solar industry, while rewarding large-scale renewable energy operators. According to FactSet data, shares of rooftop solar energy firms Sunrun and SolarEdge have declined by 36% and 29% since the release of the Senate's version of the One Big Beautiful Bill earlier this week, which accelerates subsidy cuts to the sector. Supplier to the sector, Enphase Energy , has also plummeted by 20%. The Senate's draft ends clean electricity tax credits for wind and solar in 2028, with a gradual decrease starting in 2026. Earlier versions of the bill prescribed subsidies would be curtailed in 2029 or 3031. Investment banks have also rushed to downgrade residential solar stocks, citing an "ongoing and overwhelming regulatory overhang". KeyBanc Capital Markets slashed its ratings for all three solar stocks to "Underweight," warning that the new bill "may challenge their business models". RBC Capital Markets followed suit, lowering its price target for Sunrun and Enphase by 58% and 44%, respectively. Investors haven't slammed the brakes on all stocks in the solar energy sector, with shares of solar panel makers First Solar and Toyo taking less damage. The rooftop collapse The Senate proposal aims to terminate Section 25D, which has fueled the industry's growth by offering homeowners 30% of the cost of installing solar panels on rooftops through tax credits. "The rooftop solar industry, they are toast," Per Lekander, founder of hedge fund Clean Energy Transition, told CNBC's Squawk Box Wednesday. "I think the whole sector could get wiped out" Wall Street analysts have echoed that bleak assessment. RBC's analysts, led by Christopher Dendrinos, said they were lowering demand and margin assumptions for residential solar names based on the proposed "resi solar lease restrictions and termination of 25D". Janney analysts meanwhile noted the Senate proposal means "residential solar being boxed out of tax credits", creating "more headwinds for domestic residential solar demand". These legislative headwinds come as the sector is already under pressure from higher interest rates, which have made consumer financing more expensive. Lekander pointed to the recent bankruptcy of U.S. energy firm Sunnova as evidence of his assessment. Resilient and insulated While the rooftop sector faces an existential threat, the utility-scale market — which builds large solar farms to power data centers, factories, and entire communities — appears to be somewhat insulated. It is shielded from the impact of subsidy withdrawal largely due to its customer base, its economics, and a sheer lack of viable alternatives. "We believe utility solar will be more resilient," wrote RBC's Dendrinos in a June 18 note to clients, because "these projects are not limited by the leasing restrictions" and the "outlook for growing electricity demand remains strong". The customers for these projects are not individual households but corporations like Meta and Amazon, for whom energy is a relatively small part of a multi-billion-dollar data center budget. "If you [build] a data center, energy power is like 7% of the cost. If 7% of the cost [becomes] 9% of the cost, do you think they will stop this project? I do not think so," Lekander said. In May, Meta Platforms, owner of Facebook, Instagram, and WhatsApp, inked a deal with utility AES Corp to supply 650 megawatts of solar energy in Texas and Kansas. AES, in turn, will purchase solar panels from manufacturers and suppliers to build the solar farms. In June, the utility company also announced the completion of a 500-megawatt solar farm, with 500 megawatts of battery capacity that can last up to four hour, which will supply power to Amazon's data centers. This insensitive demand is also strengthened by the impracticality of alternatives. "If you were to go and try to do a gas turbine, you would probably get it delivered in 2033," Lekander said. "If you want to build a nuclear plant, it's 2040." "A solar plant you can do in one year," the investor added. This reality, analysts suggest, makes utility-scale solar relatively better positioned. RBC's Dendrinos says that "even absent tax credits we believe solar remains highly cost competitive with other fossil fuel generation technologies". However, the Senate bill includes a surprise provision that would repeal the "stacking" of the manufacturing tax credit, and hurt Arizona-based First Solar, America's largest panel manufacturer. The change could prevent the company from claiming credits for each stage of its integrated process—wafer, cell, and module—potentially more than halving its benefit from $0.17 per watt to just $0.07 per watt, according to RBC Capital Markets. But Per Lakander says the sell-off in First Solar is not a crisis but a "great buying opportunity" for long-term shareholders. Asked about the valuation of First Solar's double-digit percent stock plunge, he answered unequivocally: "It is wrongly priced. Okay? It's going to double."
