‘Electric Vehicles: The Good, the Bad, and the Ugly'
In the battle between electric vehicles and internal combustion engines, electric is winning—at least with the Federal and California state governments. Surely, the politicians carefully weighed the pros and cons, right? Bestselling author and media commentator Larry Elder is not so sure. He does the thorough analysis politicians avoid as the presenter, investigator, and on-camera host of 'Electric Vehicles: The Good, the Bad, and the Ugly,' directed by Mathias Magnason.
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Yahoo
4 hours ago
- Yahoo
Trump's New Tip Tax Break Is Temporary — Don't Budget for It
President Donald Trump's recently passed 'One Big Beautiful Bill' (OBBB) has a shiny new tax break for tip earners, but it comes with an expiration date. Find Out: Read Next: In fact, there are quite a few stipulations on the tax break that might have qualifying tip earners thinking twice about how they treat the extra cash they're able to pocket. Regardless of how much money it nets back into tip earners' wallets, the break is temporary. Here's why tip earners who get a break should budget like they aren't. What Is the Tip Tax Break and Who Gets It? The good news for qualifying tip earners is that effective 2025, some employees and self-employed people are allowed to deduct 'qualified tips' — though with the following caveats: The qualifying tips must be 'in occupations that are listed by the IRS as customarily and regularly receiving tips' which will be published by Oct. 2, 2025. Meanwhile, some general guidance on how to report tips is available in an IRS publication. Qualified tips comprise any 'voluntary cash or charged tips' delivered by a customer or through tip sharing at a job. There is a maximum annual deduction of $25,000 for employed workers. For self-employed workers, the deduction cannot be higher than the individual's net income. The deduction is only for taxpayers with a modified adjusted gross income (AGI) that is under $150,000 ($300,000 for joint filers). This is only the federal portion of taxes. State taxes may still apply. Learn More: How Much Can You Save? How much can a tip earner really save? Let's take a hypothetical scenario*: You make $12/hour base pay. You earn $250/week in tips on top of your base pay. You work 50 weeks/year = $12,500/year in tips. If the full $12,500 counts as deductible under the new rules: For someone in the 22% federal tax bracket: Deduction value = $12,500 22% = $2,750 in tax savings For someone in the 12% bracket: Deduction value = $12,500 12% = $1,500 in tax savings *(Note that these numbers don't reflect state taxes). A Raw Deal for Tipped Workers Who Earn Below Minimum Wage This tipped tax break benefit goes down significantly, however, for workers in states where they earn a sub-minimum base wage (such as $2.13/hour federally) and rely on tips to bring their total pay up to minimum wage and sometimes beyond. In these cases, only the portion of tips that exceeds the regular minimum wage would be eligible for the deduction. In a hypothetical scenario of a restaurant worker earning that $2.13/hour minimum wage, in a state where their employer can use their tips to equal minimum wage, this tax break might look as follows: Their base wage is $2.13/hour. They work 40 hours/week, so base = $85.20/week. Minimum wage in your state is $15/hour = $600/week. Their tips = $550/week. Breakdown: The first $514.80 of tips are used just to meet minimum wage ($600-$85.20) Only the remaining $35.20/week counts as 'above regular pay.' $35.20/week 50 weeks = $1,760/year deductible If you're in the 12% tax bracket, that's just $211 in annual tax savings. Why This Tax Break Won't Last While this break may bring some relief to some tipped taxpayers, it's temporary — the provision is only good through 2028 unless further legislation extends it. And temporary relief can create a permanent budgeting problem if you're not careful, through things like lifestyle creep and overspending. Don't Spend It — Redirect It If you're in the group that will see some additional income, rather than increasing your spending, try to treat tip income as if it's still taxed by preserving your existing budget. Instead, you can do one of the following things with that extra money: Build an emergency fund. This is a great opportunity to build a padding for emergencies and unexpected expenses or even job loss. Pay down debt. If high-interest debt is holding you back, now you can begin to get out from under it. Contribute to a retirement account. Get ahead on retirement savings with your extras. Your money will also compound, growing more than just a regular savings. Think Ahead: What Happens in 2029? Most importantly, remember that without legislative action, this tax break will end in 2028 and you'll no longer see that additional income. Taking action now with the additional money will help you prepare for the future. Ideally, speak with a finance or tax planner to plot a smart budgeting strategy. What To Ask Your Financial Advisor or Tax Preparer If you're unsure about whether you qualify for the tax break, reach out to a tax planner and ask the following questions: Do I qualify for this tax break? Should I adjust my withholdings or estimated taxes? How should I save or invest the extra money I'm not paying in taxes? Will this affect my eligibility for other benefits or credits? While it's fine to enjoy the relief, remember that it's temporary. The best approach is to stay proactive and prepared. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 5 Cities You Need To Consider If You're Retiring in 2025 10 Cars That Outlast the Average Vehicle This article originally appeared on Trump's New Tip Tax Break Is Temporary — Don't Budget for It
Yahoo
4 hours ago
- Yahoo
The dominant economic narrative has been revised: Chart of the Week
The US labor market has not been adding nearly as many jobs as initially reported. Friday's jobs report showed the US economy added 73,000 jobs while the unemployment rate moved higher to 4.2%. But the portion of the release that sent markets stumbling was "larger than normal" revisions to previous reports, according to the Bureau of Labor Statistics. Sign up for the Yahoo Finance Morning Brief By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Changes to May's and June's reports showed more than a quarter million fewer jobs were added to the economy over those months. May's job gains were revised down to 19,000 from 144,000, while June's additions were cut to just 14,000 from the 147,000 initially reported. Monthly jobs numbers are always revised in later months. But these are not standard revisions. Outside of the 2020 pandemic, May and June's downward revisions were the largest since at least 1979, according to data compiled by Yale Budget Lab's director of economics Ernie Tedeschi. The job revisions came just two days after the Federal Reserve opted to hold interest rates steady at its July meeting despite two officials dissenting and arguing the central bank should be lowering interest rates. In the subsequent press conference, Fed Chair Jerome Powell described the labor market as "solid" and pointed to a "historically low" unemployment rate as a key metric to watch when assessing the health of the jobs picture in America. Powell admitted job creation has shown slowing, but that has come with a decrease in labor supply due to less immigration, therefore keeping the broad labor market picture in balance. But market pricing and economists argue Friday's report was likely a game changer for the overall economic narrative and how the Fed will move forward. Following Friday's jobs report, the probability of a September interest rate cut from the Fed surged to 83%, up from just 38% the day prior, per the CME FedWatch Tool. "Surely, Chair Powell wishes he had these numbers 48 hours ago," Jefferies chief US economist Thomas Simons wrote in a note to clients. "A much more downbeat view on the health of the labor market would have made a more dovish message easier to deliver with confidence." Powell has argued the unemployment rate is the most important metric in the labor market to watch right now. At 4.2%, it's still historically low, but it did move higher in July. The number of Americans filing for weekly unemployment claims has also been calm. This illuminates the fact that Friday's job revisions aren't sounding a code red alarm on the labor market. But the Fed chair also talked extensively about "downside risks" to the labor market during his recent press conference. Friday's revisions certainly feed those fears. "The picture of labor market weakening has become much clearer now," BlackRock chief investment officer of global fixed income Rick Rieder wrote in a note following Friday's jobs report. "If the slack in the labor force builds at all, or we continue to see a below 100,000 jobs hiring rate persistently, we would expect the Fed to start moving rates lower, and a 50-basis point cut in September might be possible depending on how the data evolves." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
5 hours ago
- Yahoo
US Treasury Rally Pauses With $125 Billion of Bond Sales Due
(Bloomberg) -- US Treasuries halted Friday's rally as traders braced for a hefty slate of bond sales this week. We Should All Be Biking Along the Beach Seeking Relief From Heat and Smog, Cities Follow the Wind Chicago Curbs Hiring, Travel to Tackle $1 Billion Budget Hole NYC Mayor Adams Gives Bally's Bronx Casino Plan a Second Chance The yield on 10-year debt rose one basis point to 4.22%, trimming the steepest drop in a year on Friday. The two-year yield was steady after falling the most since 2023. The biggest week for sales of longer government bonds since May could weigh on prices as the Treasury offers $125 billion of new three-, 10- and 30-year notes. For now that's put on hold Friday's surge, which was triggered by surprisingly weak US jobs data and fresh speculation Federal Reserve Chair Jerome Powell will be replaced by someone more willing to aggressively cut interest rates. Money markets assign around an 85% chance the Fed will lower rates by a quarter-point in September, according to swaps tied to policy-meeting dates. While that's down from Friday's peak of 90%, it's much higher than the 40% anticipated before the payroll data was published. 'Markets are signaling that the Fed will have to look through any tariff-induced price rises and that a September cut is imminent,' ING Groep NV strategists including Benjamin Schroeder wrote in a note. 'The curve can steepen significantly more from here if that narrative strengthens.' The market ructions at the end of the week came as traders reacted to the jobs-data shock. After Wednesday's Fed decision to hold interest-rates steady, they'd been cautious about betting on more cuts, especially after comments from Powell citing continued uncertainty around tariffs and inflation. Adding to Friday's turnaround was the early exit of Fed Governor Adriana Kugler — potentially giving Trump the opportunity to appoint a low-rates loyalist instead. Trump said Powell should follow Kugler's example and resign, ratcheting up his feud with the central bank chair. The bond rally has turned into a payoff for some investors who had bet the gap between short- and long-dated debt would widen. The yield premium on 30-year notes over five-year counterparts jumped 14 basis points Friday — the most since the 2023 banking crisis — to 106 basis points, where it remains currently. Yields on German and UK peers fell four basis points to 2.64% and one basis point to 4.52% respectively on Monday. (Updates yield levels) How Podcast-Obsessed Tech Investors Made a New Media Industry Russia Builds a New Web Around Kremlin's Handpicked Super App AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off What's Really Behind Those Rosy GDP Numbers? ©2025 Bloomberg L.P. 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
