1 00:00:07,820 --> 00:00:12,449 Suze: August 10, 2025. Welcome everybody to the Women and Money podcast, 2 00:00:12,489 --> 00:00:16,639 Suze: and everybody smart enough to listen. Suze O here today 3 00:00:16,639 --> 00:00:21,319 Suze: is Suze School, and yes, this is the third part, 4 00:00:21,450 --> 00:00:24,770 Suze: our very last part of what I want all of 5 00:00:24,770 --> 00:00:29,100 Suze: you to know about the big beautiful bill. Now listen 6 00:00:29,100 --> 00:00:32,168 Suze: to me. There are many parts of this bill that 7 00:00:32,168 --> 00:00:35,409 Suze: I hate. I hate so much I can't even tell you. 8 00:00:35,990 --> 00:00:39,560 Suze: But that's not what I'm gonna focus on, because there's 9 00:00:39,560 --> 00:00:42,720 Suze: not a lot we can do about those things at 10 00:00:42,720 --> 00:00:46,759 Suze: this moment in time. What I am focusing on. 11 00:00:47,439 --> 00:00:50,598 Suze: For these three parts are the things you can take 12 00:00:50,598 --> 00:00:54,119 Suze: advantage of that can save you money to help you 13 00:00:54,119 --> 00:00:56,950 Suze: make more out of the money that you make. So 14 00:00:57,240 --> 00:00:59,959 Suze: just know that. So don't be out there and go 15 00:00:59,959 --> 00:01:03,080 Suze: writing all this negative stuff about, well, why isn't Suze 16 00:01:03,080 --> 00:01:05,680 Suze: talking about the health benefits that are going away or 17 00:01:05,680 --> 00:01:09,669 Suze: this and that? I get it, everybody, but you first 18 00:01:09,669 --> 00:01:12,629 Suze: have to be able to take advantage of the things 19 00:01:12,629 --> 00:01:14,559 Suze: that you can take advantage of 20 00:01:15,160 --> 00:01:18,139 Suze: and not waste money, so just get off of it. 21 00:01:18,449 --> 00:01:23,419 Suze: And really, really listen to the first one, the second one, 22 00:01:23,430 --> 00:01:26,628 Suze: and this one when it comes to the things you 23 00:01:26,629 --> 00:01:29,830 Suze: need to know, cause all of these things that I'm 24 00:01:29,830 --> 00:01:35,119 Suze: talking about from the big beautiful bill will save you 25 00:01:35,120 --> 00:01:39,300 Suze: money in many instances. So are you ready to take 26 00:01:39,300 --> 00:01:42,149 Suze: out your Susy notebook, and by the way, yes, Miss 27 00:01:42,150 --> 00:01:45,190 Suze: Travis is back. She wanted to do this Suze School 28 00:01:45,190 --> 00:01:46,459 Suze: with me, and I said you cannot. 29 00:01:47,089 --> 00:01:51,110 Suze: You cannot. I have one more part to get through, 30 00:01:51,319 --> 00:01:55,919 Suze: and then I'm not touching it again for a long time, OK? 31 00:01:56,279 --> 00:01:58,910 Suze: Did you all like staple coins? Did you learn anything? 32 00:01:59,160 --> 00:02:00,309 Suze: All right, no problem. 33 00:02:01,180 --> 00:02:04,699 Suze: Now listen to me, everybody. The things that I'm about 34 00:02:04,699 --> 00:02:09,089 Suze: to go through, believe it or not, the very last 35 00:02:09,089 --> 00:02:13,669 Suze: one may be the most important to many of you, 36 00:02:13,880 --> 00:02:18,380 Suze: so just make sure that you listen to this podcast 37 00:02:18,380 --> 00:02:20,419 Suze: all the way through. 38 00:02:21,320 --> 00:02:25,630 Suze: All right, everybody, let's start. The very first thing that 39 00:02:25,630 --> 00:02:28,149 Suze: I want you to know, and I think that is 40 00:02:28,149 --> 00:02:32,699 Suze: really great, by the way, is the child tax credit, 41 00:02:32,949 --> 00:02:36,910 Suze: and really it is a lifeline for so many parents. 42 00:02:36,949 --> 00:02:39,070 Suze: I can't even tell you so if you happen to 43 00:02:39,070 --> 00:02:43,949 Suze: be raising kids under age 17, I need you to 44 00:02:43,949 --> 00:02:45,750 Suze: listen up, OK. 45 00:02:46,339 --> 00:02:50,300 Suze: Right now, the child tax credit gives you up to 46 00:02:50,300 --> 00:02:55,619 Suze: $2,200 per child. Notice I said right now, and that's 47 00:02:55,619 --> 00:02:59,050 Suze: because it is in effect right now, and guess what? 48 00:02:59,619 --> 00:03:02,460 Suze: Even if you owe no tax, because there are many 49 00:03:02,460 --> 00:03:05,729 Suze: of you that don't owe any income tax at all, 50 00:03:06,139 --> 00:03:12,288 Suze: $1,700 of that $2,200 and that's per child, by the way, 51 00:03:12,619 --> 00:03:18,130 Suze: is refundable, meaning the IRS will send you a check. 52 00:03:19,320 --> 00:03:23,638 Suze: Now I don't know, but for many women that I 53 00:03:23,639 --> 00:03:27,839 Suze: know who are single mothers, they have three kids. They 54 00:03:27,839 --> 00:03:31,839 Suze: were in an abusive relationship. They live for this. But 55 00:03:31,839 --> 00:03:35,839 Suze: the problem is they don't have any income tax write-offs. 56 00:03:35,919 --> 00:03:39,070 Suze: They're da da da da. This is really, like I said, 57 00:03:39,119 --> 00:03:42,600 Suze: a lifeline. Now what you have to know, but really 58 00:03:42,600 --> 00:03:44,960 Suze: it's not going to affect those of you who are 59 00:03:44,960 --> 00:03:46,360 Suze: reliant on it. 60 00:03:46,679 --> 00:03:50,389 Suze: Is that this credit starts to phase out once your 61 00:03:50,389 --> 00:03:55,270 Suze: modified adjusted gross income hits $200,000 if you're single or 62 00:03:55,270 --> 00:04:00,229 Suze: head of household $400,000 if you're married or jointly. Now 63 00:04:00,229 --> 00:04:04,339 Suze: there is a catch. You must have a child who qualifies, 64 00:04:04,509 --> 00:04:07,148 Suze: and that means they are a US citizen. 65 00:04:07,460 --> 00:04:10,279 Suze: And I live with you more than half the year 66 00:04:10,279 --> 00:04:13,970 Suze: and is your dependent, so I am asking you to 67 00:04:13,970 --> 00:04:17,239 Suze: think about this and do not leave money on the table. 68 00:04:17,488 --> 00:04:20,000 Suze: That was number one. Number two: 69 00:04:21,019 --> 00:04:27,738 Suze: Auto interest loans are now deductible for the car you 70 00:04:27,738 --> 00:04:31,699 Suze: actually drive. This isn't for business. This is for the 71 00:04:31,699 --> 00:04:35,778 Suze: car you actually drive, and in many circumstances I have 72 00:04:35,778 --> 00:04:40,289 Suze: to tell you, this one is fabulous. You can now 73 00:04:40,289 --> 00:04:44,819 Suze: deduct up to $10,000 per year in interest on a 74 00:04:44,819 --> 00:04:47,979 Suze: personal auto loan as long as there's always a catch, 75 00:04:48,019 --> 00:04:48,658 Suze: isn't there? 76 00:04:49,029 --> 00:04:53,618 Suze: The car is assembled in the United States. The loan 77 00:04:53,619 --> 00:05:01,500 Suze: is in your name and this car cannot be leased 78 00:05:02,140 --> 00:05:05,928 Suze: or a business vehicle. This again, everybody is for your 79 00:05:05,928 --> 00:05:07,690 Suze: personal car, but you all know I don't want you 80 00:05:07,690 --> 00:05:10,209 Suze: to lease a car no matter what anyway that's besides 81 00:05:10,209 --> 00:05:15,450 Suze: the point, and it's good through 2028. So if you're 82 00:05:15,450 --> 00:05:20,089 Suze: buying a car and financing it, please make sure you qualify. 83 00:05:20,170 --> 00:05:25,290 Suze: Just ask, does this car qualify or not. Number three: 84 00:05:25,910 --> 00:05:27,859 Suze: This will not be for all of you, but it's 85 00:05:27,859 --> 00:05:32,540 Suze: a big one for many of you. Bonus depreciation, and 86 00:05:32,540 --> 00:05:36,380 Suze: this really is for small business owners. If you are 87 00:05:36,380 --> 00:05:40,578 Suze: self-employed or you own a small business, I'm telling you 88 00:05:40,579 --> 00:05:47,849 Suze: this is your moment because you can now write off 100% 89 00:05:48,100 --> 00:05:52,238 Suze: of the cost of qualified business property in the year 90 00:05:52,238 --> 00:05:53,219 Suze: you buy it. 91 00:05:53,959 --> 00:05:59,959 Suze: As long as it's January 19, 2025 or later, which 92 00:05:59,959 --> 00:06:03,720 Suze: is when you acquired it, so you just need to 93 00:06:03,720 --> 00:06:09,230 Suze: know that, all right? So think computers, think office equipment, 94 00:06:09,480 --> 00:06:12,760 Suze: even a car by the way you use for work because. 95 00:06:12,950 --> 00:06:17,618 Suze: This bonus depreciation, listen to me, does not expire in 2028. 96 00:06:17,700 --> 00:06:22,299 Suze: Oh no, this one is now permanent. That means make 97 00:06:22,299 --> 00:06:25,260 Suze: more money of your money. That is more money in 98 00:06:25,260 --> 00:06:30,980 Suze: your pocket faster. But remember, personal assets don't qualify. This is 99 00:06:30,980 --> 00:06:35,738 Suze: for business. The next one, number four is what's known 100 00:06:35,738 --> 00:06:41,899 Suze: as a QBI deduction, qualified business income deduction. So. 101 00:06:42,450 --> 00:06:46,250 Suze: again, this one is a game changer for many of you. 102 00:06:46,559 --> 00:06:49,919 Suze: Let's just say you earn money through a pass through 103 00:06:49,920 --> 00:06:54,600 Suze: business like a sole proprietorship, an LLC, an S-Corp, or 104 00:06:54,600 --> 00:06:58,799 Suze: even a partnership. You may be able to deduct up 105 00:06:58,799 --> 00:07:02,320 Suze: to 20% of your qualified business income. 106 00:07:03,619 --> 00:07:06,089 Suze: If you think that's not a lot, that's a lot. 107 00:07:06,320 --> 00:07:11,260 Suze: Now the full deduction is available if your income is, 108 00:07:11,380 --> 00:07:17,649 Suze: let's just say if you're a single, up to $197,300 109 00:07:18,079 --> 00:07:21,040 Suze: of adjusted gross income, and it goes away, it phases 110 00:07:21,040 --> 00:07:27,079 Suze: down once you make over $247,300. 111 00:07:28,059 --> 00:07:32,220 Suze: If you're married finally and jointly, as long as your 112 00:07:32,220 --> 00:07:40,970 Suze: modified adjusted gross income is below $394,600 full 20% deduction, 113 00:07:41,160 --> 00:07:42,170 Suze: all right, everybody. 114 00:07:42,910 --> 00:07:50,260 Suze: And it phases out once you are making $494,600. So 115 00:07:50,260 --> 00:07:53,500 Suze: if you're above those limits, again, the deduction might phase 116 00:07:53,500 --> 00:07:55,540 Suze: out based on your business type and how much you 117 00:07:55,540 --> 00:07:58,040 Suze: pay yourself in wages. But I just have to tell 118 00:07:58,040 --> 00:08:04,299 Suze: you this is huge for freelancers, for gig workers, for consultants, 119 00:08:04,459 --> 00:08:08,339 Suze: for small businesses, and guess what, this one, 120 00:08:09,070 --> 00:08:17,149 Suze: also is extended through 2028 just that simple, you know, 121 00:08:17,190 --> 00:08:19,589 Suze: it dawns on me as I just have done all 122 00:08:19,589 --> 00:08:22,350 Suze: these for you, why do they allow you to do 123 00:08:22,350 --> 00:08:23,190 Suze: these things? 124 00:08:24,089 --> 00:08:27,890 Suze: Number one, it saves you more money, right? What do 125 00:08:27,890 --> 00:08:30,959 Suze: you do with the money that you save? Most of you, 126 00:08:31,089 --> 00:08:32,650 Suze: if you're smart, you save it. 127 00:08:33,499 --> 00:08:36,387 Suze: You invest it, you take advantage of what's happening in 128 00:08:36,388 --> 00:08:39,828 Suze: the markets, but many of you will do what? You 129 00:08:39,828 --> 00:08:43,068 Suze: will go on vacation, you will spend it, you'll buy this, 130 00:08:43,148 --> 00:08:46,028 Suze: you'll buy that. You'll spend it, and when you do 131 00:08:46,028 --> 00:08:48,379 Suze: what do you do, you stimulate the economy. 132 00:08:49,179 --> 00:08:51,659 Suze: Don't you find it a little funny that many of 133 00:08:51,659 --> 00:08:55,140 Suze: these expire in 2028? 134 00:08:55,900 --> 00:09:00,609 Suze: You do know what happens in 2028, don't you? Yes, 135 00:09:00,739 --> 00:09:05,079 Suze: you do. We have a new president, so just something 136 00:09:05,080 --> 00:09:08,919 Suze: to think of. That's why I think they're doing all 137 00:09:08,919 --> 00:09:13,710 Suze: these things, cause it really helps the economy look better. 138 00:09:14,159 --> 00:09:17,319 Suze: But if you're smart, you'll forget about the economy and 139 00:09:17,320 --> 00:09:21,500 Suze: you'll think about your own bottom line. All right, next one, 140 00:09:21,599 --> 00:09:23,968 Suze: and I have forgotten the number we're on, but just 141 00:09:23,969 --> 00:09:25,159 Suze: doesn't matter. All right. 142 00:09:26,409 --> 00:09:31,780 Suze: Tax free tips. Uh-huh. Now listen, a lot of you 143 00:09:31,780 --> 00:09:33,729 Suze: are like, no, you should have to pay taxes on 144 00:09:33,729 --> 00:09:36,770 Suze: your tips whether you should or you shouldn't. 145 00:09:37,460 --> 00:09:41,409 Suze: You all need to be a little bit compassionate because 146 00:09:41,409 --> 00:09:46,409 Suze: there are many people out there, many that really they 147 00:09:46,409 --> 00:09:51,809 Suze: work for tips, whether they're hairdressers or waiters or whatever 148 00:09:51,809 --> 00:09:55,239 Suze: it may be. They are able to sustain their family 149 00:09:55,239 --> 00:10:00,929 Suze: because of tips, however, many of them haven't claimed tips. 150 00:10:01,739 --> 00:10:04,130 Suze: Because they didn't want to have to pay taxes on it, 151 00:10:04,140 --> 00:10:06,809 Suze: because if they did, they wouldn't have enough money to survive, 152 00:10:07,059 --> 00:10:09,979 Suze: but I was always sad about that because if you 153 00:10:09,979 --> 00:10:13,539 Suze: didn't claim your tips, guess what else? Your Social Security 154 00:10:13,539 --> 00:10:17,979 Suze: later on isn't as much, so it catches up to you. 155 00:10:18,020 --> 00:10:21,820 Suze: So if you rely on tips for your income, I 156 00:10:21,820 --> 00:10:25,020 Suze: want you to listen up right now. This really is 157 00:10:25,020 --> 00:10:27,780 Suze: one of the biggest tax breaks you're gonna ever see. 158 00:10:28,299 --> 00:10:32,929 Suze: But listen closely. I need you to keep really immaculate 159 00:10:32,929 --> 00:10:37,640 Suze: records and report every penny of tips, and you need 160 00:10:37,640 --> 00:10:42,630 Suze: to know the income limits. All right, again, starting this 161 00:10:42,630 --> 00:10:47,919 Suze: year right here and right now, individuals can exclude up 162 00:10:47,919 --> 00:10:53,478 Suze: to 25,000 in tips from now this is important when 163 00:10:53,479 --> 00:10:58,159 Suze: I'm about to say, from federal income tax every year. 164 00:10:59,150 --> 00:11:03,059 Suze: Not state income tax, federal income tax. 165 00:11:04,450 --> 00:11:09,718 Suze: And any tips over 25,000 in a single year are 166 00:11:09,719 --> 00:11:13,429 Suze: going to be taxable as normal now again. 167 00:11:14,219 --> 00:11:17,400 Suze: I just said it. This is only true for federal 168 00:11:17,929 --> 00:11:20,409 Suze: income taxes, not state unless. 169 00:11:21,260 --> 00:11:28,679 Suze: You live in Illinois, Massachusetts, New York, New Jersey, North Carolina, Oregon, 170 00:11:28,700 --> 00:11:34,549 Suze: and Pennsylvania because they all have bills currently under consideration 171 00:11:34,900 --> 00:11:37,939 Suze: to make it so you don't have to pay taxes 172 00:11:37,940 --> 00:11:41,659 Suze: on the state level. So keep checking because if your 173 00:11:41,659 --> 00:11:44,260 Suze: state passes a bill, then guess what, it is going 174 00:11:44,260 --> 00:11:48,260 Suze: to be tax free for both federal and state, however. 175 00:11:48,979 --> 00:11:53,140 Suze: Remember there are nine US states currently that have no 176 00:11:53,140 --> 00:11:57,069 Suze: personal income tax at all, so tip income is not 177 00:11:57,070 --> 00:12:00,218 Suze: taxed on the state level in those states, and you 178 00:12:00,219 --> 00:12:05,020 Suze: already know what states they are. Now again, the annual 179 00:12:05,020 --> 00:12:11,500 Suze: limit is $25,000 per tax return per year, and that 180 00:12:11,500 --> 00:12:14,979 Suze: is the maximum that is tax free. Notice I said 181 00:12:14,979 --> 00:12:18,340 Suze: per tax return, not per person. 182 00:12:18,650 --> 00:12:22,159 Suze: So if you're single, you file one tax return, there's 183 00:12:22,159 --> 00:12:27,440 Suze: a $25,000 exemption. But if you're married filing jointly, you 184 00:12:27,440 --> 00:12:32,799 Suze: also file one tax return, you still only get $25,000 185 00:12:32,799 --> 00:12:36,440 Suze: of an exemption, not $50,000. And by the way, if 186 00:12:36,440 --> 00:12:39,440 Suze: you are married finally and separately, oh, you are so 187 00:12:39,440 --> 00:12:41,950 Suze: out of luck you don't get an exemption at all. 188 00:12:42,200 --> 00:12:44,640 Suze: So all of you, you really need to think why 189 00:12:45,270 --> 00:12:48,390 Suze: you file married finally and separately. You really do. You 190 00:12:48,390 --> 00:12:49,989 Suze: don't get to do a Roth. You don't get to 191 00:12:49,989 --> 00:12:53,840 Suze: do a lot of things. Now listen, most of you 192 00:12:54,190 --> 00:12:58,299 Suze: will get this 25,000 exemption, but you need to know 193 00:12:58,469 --> 00:13:01,559 Suze: that some of you work for tips, believe it or not, 194 00:13:01,710 --> 00:13:05,400 Suze: and you do make a lot of money. However, 195 00:13:05,710 --> 00:13:11,700 Suze: The single filers, the $25,000 starts to phase out once 196 00:13:11,700 --> 00:13:17,218 Suze: you are over $150,000 of modified adjusted gross income, or 197 00:13:17,219 --> 00:13:21,580 Suze: $300,000 if in fact you're married finally and jointly and 198 00:13:21,580 --> 00:13:25,859 Suze: the phase out gradually meaning it's no longer there is 199 00:13:25,859 --> 00:13:29,020 Suze: once you are making over 175,000 as a 200 00:13:29,140 --> 00:13:34,049 Suze: single 350 married filing jointly then it's over. But let 201 00:13:34,049 --> 00:13:37,280 Suze: me just give you an idea of how it works, OK, 202 00:13:37,530 --> 00:13:41,010 Suze: because listen, you may be married filing and jointly, and 203 00:13:41,010 --> 00:13:43,479 Suze: maybe your spouse makes a whole lot more money than 204 00:13:43,479 --> 00:13:47,690 Suze: you do. However, you're working for tips and what you're 205 00:13:47,690 --> 00:13:52,489 Suze: working for really gets your family to get by. All right. 206 00:13:53,250 --> 00:13:59,859 Suze: $25,000 deduction remember, but it is reduced by $100 for 207 00:13:59,859 --> 00:14:02,940 Suze: every $1,000 over the limit. 208 00:14:03,729 --> 00:14:06,799 Suze: Right, so that's what you need to know. That's how 209 00:14:06,799 --> 00:14:09,409 Suze: it works. Now one thing you all do have to 210 00:14:09,409 --> 00:14:14,409 Suze: remember is that even though it's federally and possibly state 211 00:14:14,409 --> 00:14:18,210 Suze: tax free, that doesn't mean that they're not going to 212 00:14:18,210 --> 00:14:22,369 Suze: take out FICA, which Medicare taxes. They will still apply 213 00:14:22,369 --> 00:14:27,130 Suze: to all tip income, even the tax free portion. 214 00:14:28,099 --> 00:14:30,440 Suze: However, I have to just tell you, because you might 215 00:14:30,440 --> 00:14:34,690 Suze: be worried about this, this does not affect eligibility, however, 216 00:14:34,859 --> 00:14:39,169 Suze: for the earned income tax credit or other credits. So 217 00:14:39,700 --> 00:14:43,409 Suze: what's your takeaway here, everybody, because this really is a gift. 218 00:14:43,739 --> 00:14:48,140 Suze: But remember, gifts, in my opinion, come with responsibility. Usually 219 00:14:48,140 --> 00:14:50,099 Suze: it's like writing a thank you letter. 220 00:14:50,700 --> 00:14:52,859 Suze: Not an email to whoever gave you the gift, but 221 00:14:52,859 --> 00:14:55,940 Suze: that's besides the point. Number one, I want you to 222 00:14:55,940 --> 00:14:59,929 Suze: track your tips. I want you to report everything honestly. 223 00:15:00,179 --> 00:15:03,260 Suze: I want you to file your taxes carefully, and I 224 00:15:03,260 --> 00:15:07,530 Suze: want you to watch your income levels because what good 225 00:15:07,530 --> 00:15:09,500 Suze: is a $25,000 break? 226 00:15:10,479 --> 00:15:13,880 Suze: If you blow it by not filing again, this is 227 00:15:13,880 --> 00:15:17,599 Suze: only good through what is that magic year? What is 228 00:15:17,599 --> 00:15:24,190 Suze: the magic year that things change? Possibly 2028. Next topic 229 00:15:24,479 --> 00:15:27,989 Suze: is over time. Now truthfully, 230 00:15:28,349 --> 00:15:32,710 Suze: a lot of you really ask to work overtime. You 231 00:15:32,710 --> 00:15:38,669 Suze: need to work overtime, so this really could seriously lower 232 00:15:38,669 --> 00:15:43,070 Suze: your tax bill if and only if you qualify. So first, 233 00:15:43,099 --> 00:15:48,219 Suze: let's get it straight. What is overtime? Overtime is not 234 00:15:48,219 --> 00:15:52,859 Suze: just working hard, it's not working weekends, it's not getting 235 00:15:52,859 --> 00:15:57,969 Suze: a bonus or holiday pay. No overtime means this. 236 00:15:58,849 --> 00:16:03,260 Suze: You are a W-2 employee. Got that, who works more 237 00:16:03,260 --> 00:16:08,000 Suze: than 40 hours in a single work week and your 238 00:16:08,000 --> 00:16:12,539 Suze: employer pays you time and a half. That's 1.5 times 239 00:16:12,539 --> 00:16:17,460 Suze: your regular hourly wage for those extra hours. So if 240 00:16:17,460 --> 00:16:22,099 Suze: you normally earn $20 an hour and you work 45 241 00:16:22,099 --> 00:16:23,729 Suze: hours in one week. 242 00:16:24,169 --> 00:16:29,960 Suze: Those extra five hours must be paid at $30 an hour. 243 00:16:30,169 --> 00:16:38,890 Suze: That's real legal overtime, and only that qualifies for this deduction. Self-employed, 244 00:16:39,090 --> 00:16:43,530 Suze: guess what? You can't do this now for the tax 245 00:16:43,530 --> 00:16:49,789 Suze: years 2025 through what? What's that magic deadline 2028? You 246 00:16:49,789 --> 00:16:52,690 Suze: may be able to deduct your overtime pay. 247 00:16:52,875 --> 00:16:57,205 Suze: From your federal income tax up to a limit, right? 248 00:16:57,474 --> 00:17:01,515 Suze: So again, if you are single, you can deduct up 249 00:17:01,515 --> 00:17:05,954 Suze: to $12,500 for overtime pay each year. If you are 250 00:17:05,954 --> 00:17:11,544 Suze: married filing and jointly, the deduction is up to $25,000. 251 00:17:11,675 --> 00:17:16,155 Suze: This means if you make, let's just say $10,000 in 252 00:17:16,155 --> 00:17:19,114 Suze: true overtime this year and you qualify. 253 00:17:20,020 --> 00:17:24,900 Suze: You probably won't have to pay federal income tax on 254 00:17:24,900 --> 00:17:32,060 Suze: that $10,000. Now if you are single, your MAGI has 255 00:17:32,060 --> 00:17:39,430 Suze: to be under $150,000. Married filing and jointly under $300,000. 256 00:17:39,699 --> 00:17:45,680 Suze: And again it phases down till you hit 170,000 for singles, 257 00:17:45,829 --> 00:17:52,800 Suze: 340,000 MAGI if you're married filing jointly, then you don't qualify. 258 00:17:53,130 --> 00:17:56,000 Suze: And again, should I just reiterate, if you're married filing 259 00:17:56,000 --> 00:18:01,439 Suze: and separately, oh, you just don't qualify. Remember the deduction 260 00:18:01,439 --> 00:18:02,810 Suze: is temporary. 261 00:18:03,579 --> 00:18:08,198 Suze: And just like tips, it's only good for four years, 262 00:18:08,250 --> 00:18:12,609 Suze: you know this money's available to you. The question becomes 263 00:18:12,609 --> 00:18:16,010 Suze: how do you claim it? How do you get that deduction? 264 00:18:16,130 --> 00:18:20,409 Suze: All right, you claim the deduction on your federal tax 265 00:18:20,410 --> 00:18:24,889 Suze: return using Schedule 1 as an adjustment to income. 266 00:18:25,140 --> 00:18:29,380 Suze: So you're going to subtract your eligible overtime, whether it's 267 00:18:29,380 --> 00:18:34,659 Suze: 12,500 or 25,000 depending on your filing status from your 268 00:18:34,660 --> 00:18:39,399 Suze: taxable income, but I need you to keep your pay stubs, 269 00:18:39,739 --> 00:18:43,889 Suze: your time sheets, and your W-2s to prove how much 270 00:18:43,890 --> 00:18:46,938 Suze: overtime you worked and how much you were paying. 271 00:18:47,479 --> 00:18:52,839 Suze: Your employer may even report your overtime separately on future 272 00:18:52,839 --> 00:18:56,239 Suze: W-2s to help you and the IRS track it, but 273 00:18:56,239 --> 00:19:00,560 Suze: just in case you have to be responsible, so keep 274 00:19:00,560 --> 00:19:04,109 Suze: your pay stubs, your time sheets, your W-2s, all of it. 275 00:19:04,359 --> 00:19:05,989 Suze: Do you understand? 276 00:19:06,599 --> 00:19:12,949 Suze: Now the overtime deduction only applies to federal income tax. 277 00:19:13,160 --> 00:19:16,919 Suze: It does not mean again that you don't pay Social 278 00:19:16,920 --> 00:19:20,919 Suze: Security tax, known as FICA or Medicare tax on the 279 00:19:20,920 --> 00:19:26,469 Suze: amount of overtime reported. So yes, your full overtime pay 280 00:19:26,469 --> 00:19:31,400 Suze: is still subject to payroll taxes even if you deduct 281 00:19:32,030 --> 00:19:36,709 Suze: the overtime from year 1040, the IRS still considers it 282 00:19:36,709 --> 00:19:42,329 Suze: wages for the purpose of Social Security and Medicare contributions, 283 00:19:42,500 --> 00:19:47,260 Suze: so your employer still has to withhold FICA from those earnings, 284 00:19:47,300 --> 00:19:50,339 Suze: and guess what? So do you. I don't want you 285 00:19:50,339 --> 00:19:54,660 Suze: to confuse what helps you on your tax return with 286 00:19:54,660 --> 00:19:59,589 Suze: what affects your paycheck. These deductions don't increase your take 287 00:19:59,589 --> 00:20:01,170 Suze: home pay during this year. 288 00:20:01,839 --> 00:20:04,849 Suze: You will see the benefit when you file your tax 289 00:20:04,849 --> 00:20:09,329 Suze: return now when you see that benefit. 290 00:20:10,310 --> 00:20:13,300 Suze: Can you just take that money that it saved you 291 00:20:13,550 --> 00:20:17,869 Suze: and fund your Roth IRA, fund a retirement account, pay 292 00:20:17,869 --> 00:20:21,270 Suze: down your credit card debt, do something with it that 293 00:20:21,270 --> 00:20:25,069 Suze: makes sense. Now, last but not least. 294 00:20:25,770 --> 00:20:27,729 Suze: And this is the one I have to tell you, 295 00:20:27,739 --> 00:20:32,500 Suze: I saved the best for last. And you're gonna say really, Suze... 296 00:20:33,369 --> 00:20:35,750 Suze: You think this one's one of the best, and it 297 00:20:35,750 --> 00:20:41,359 Suze: is for many people. Are you ready? It is the 298 00:20:41,359 --> 00:20:43,920 Suze: new Trump accounts. 299 00:20:45,219 --> 00:20:48,729 Suze: All right, get up off the floor, right? So if 300 00:20:48,729 --> 00:20:54,119 Suze: you have a kid, a grandkid, a nephew, a friend, anyone, 301 00:20:54,209 --> 00:20:57,169 Suze: I don't care who it is, who is 18 years 302 00:20:57,170 --> 00:20:58,680 Suze: of age or younger. 303 00:20:59,510 --> 00:21:03,060 Suze: There are two parts of this program that you need 304 00:21:03,060 --> 00:21:07,050 Suze: to understand, and I have to tell you, in my opinion, 305 00:21:07,339 --> 00:21:11,219 Suze: I think this is a great program. Sure there are 306 00:21:11,219 --> 00:21:13,180 Suze: downfalls to it and things like that, and could it 307 00:21:13,180 --> 00:21:16,688 Suze: have been better? Absolutely, but it is what it is, 308 00:21:17,140 --> 00:21:20,219 Suze: and wishing it were something different doesn't help you, you 309 00:21:20,219 --> 00:21:24,420 Suze: need to understand what it is. So again, 310 00:21:25,189 --> 00:21:34,140 Suze: children born between January 1st, 2025 and December 31st, 2028 311 00:21:34,510 --> 00:21:40,390 Suze: who are US citizens with a Social Security number. Got that? 312 00:21:41,619 --> 00:21:46,420 Suze: Will receive and did you hear that will receive an 313 00:21:46,420 --> 00:21:55,380 Suze: automatic one time deposit of $1,000 from the treasury. Now 314 00:21:55,380 --> 00:22:01,780 Suze: the treasury intends to begin July 2026, so. 315 00:22:02,280 --> 00:22:04,839 Suze: What you need to get it doesn't matter when your 316 00:22:04,839 --> 00:22:10,959 Suze: kids are born 2025, 2026. The Treasury is going to 317 00:22:10,959 --> 00:22:16,079 Suze: put that $1,000 in a Treasury account, so you have 318 00:22:16,079 --> 00:22:19,079 Suze: to stay tuned on to how they are actually going 319 00:22:19,079 --> 00:22:22,359 Suze: to do that. But that is what they are going 320 00:22:22,359 --> 00:22:26,670 Suze: to do. However, besides the $1,000 from the Treasury. 321 00:22:27,150 --> 00:22:33,550 Suze: You can contribute up to $5,000 per year into the 322 00:22:33,550 --> 00:22:38,430 Suze: Trump account for each child again as long as they 323 00:22:38,430 --> 00:22:44,310 Suze: are under 18 years of age. Now that's important to 324 00:22:44,310 --> 00:22:46,469 Suze: know because listen. 325 00:22:47,000 --> 00:22:51,718 Suze: Children who are born before 2025, you may be saying, oh, 326 00:22:51,760 --> 00:22:54,560 Suze: are you telling me my kid doesn't matter? I had 327 00:22:54,560 --> 00:22:58,510 Suze: a kid last year, so I can't get any of this. 328 00:22:58,790 --> 00:23:04,599 Suze: The kid doesn't qualify for the government contribution of $1,000 however. 329 00:23:05,680 --> 00:23:09,839 Suze: They do qualify to allow you to contribute up to 330 00:23:09,839 --> 00:23:15,719 Suze: $5,000 per year into a Trump account, and this, this 331 00:23:15,719 --> 00:23:18,520 Suze: sum this yearly $5,000 or whatever you want to put 332 00:23:18,520 --> 00:23:24,609 Suze: in can come from parents, friends, grandparents. It just doesn't matter. 333 00:23:25,369 --> 00:23:28,250 Suze: Now remember your kid has to have a Social Security 334 00:23:28,250 --> 00:23:31,930 Suze: number and be a US citizen. All right, let's say 335 00:23:31,930 --> 00:23:35,409 Suze: you can muster up $5,000 a year. You can say, 336 00:23:35,449 --> 00:23:38,660 Suze: you know what, everybody, rather than giving my kids gifts 337 00:23:38,660 --> 00:23:43,319 Suze: and never give $500 here, $100 whatever it may be. 338 00:23:43,569 --> 00:23:48,170 Suze: But let's say you were able to contribute $5,000 a 339 00:23:48,170 --> 00:23:52,478 Suze: year for 18 years because once the kid is 18. 340 00:23:52,750 --> 00:23:55,599 Suze: You can no longer put any money in this account. 341 00:23:56,349 --> 00:23:59,879 Suze: That's $90,000. 342 00:24:00,849 --> 00:24:04,530 Suze: Over 18 years, even if your kid is just currently 343 00:24:04,530 --> 00:24:08,819 Suze: 14 years of age, you can still sack away a 344 00:24:08,819 --> 00:24:13,969 Suze: nice sum of money. So the question is should you 345 00:24:13,969 --> 00:24:19,579 Suze: or shouldn't you, and it obviously depends on your situation, 346 00:24:19,670 --> 00:24:21,959 Suze: but let me just educate you just a little bit 347 00:24:21,959 --> 00:24:26,770 Suze: more about all the details and really why I like it. 348 00:24:27,569 --> 00:24:31,000 Suze: The first detail that I like, believe it or not, 349 00:24:31,290 --> 00:24:34,250 Suze: is no one, not you or your kid, because this 350 00:24:34,250 --> 00:24:37,389 Suze: will be in your kid's name, can take a penny 351 00:24:37,390 --> 00:24:43,250 Suze: out before your kid turns 18. Too often you put 352 00:24:43,250 --> 00:24:45,930 Suze: money away. It's for your kid, and all of a 353 00:24:45,930 --> 00:24:49,359 Suze: sudden you end up taking it, using it for something else. 354 00:24:49,890 --> 00:24:53,810 Suze: No one can take a penny out before your kid 355 00:24:53,810 --> 00:24:55,810 Suze: turns 18. Second 356 00:24:56,709 --> 00:24:57,500 Suze: detail... 357 00:24:58,410 --> 00:25:03,919 Suze: After 18 till they reach 59 and a half because 358 00:25:03,920 --> 00:25:07,500 Suze: this isn't like a retirement account where it has RMDs, 359 00:25:07,510 --> 00:25:10,439 Suze: they could leave this money in there for as long 360 00:25:10,439 --> 00:25:13,000 Suze: as they want. They never have to take out a penny. 361 00:25:13,209 --> 00:25:15,920 Suze: Then it goes down to their kids, whatever it may be. 362 00:25:16,130 --> 00:25:17,718 Suze: But now listen to me. 363 00:25:18,599 --> 00:25:21,939 Suze: They can leave it in there, but until they reach 364 00:25:21,939 --> 00:25:29,729 Suze: 59 and a half they are allowed to take penalty free withdrawals, meaning 365 00:25:29,729 --> 00:25:36,979 Suze: no 10% penalty for three things qualified education expenses. 366 00:25:38,119 --> 00:25:41,750 Suze: Up to 10,000 towards a first time home purchase. 367 00:25:42,500 --> 00:25:47,280 Suze: And seed funds for starting a small business. 368 00:25:48,069 --> 00:25:51,170 Suze: I don't know. I think that's kind of great. If 369 00:25:51,170 --> 00:25:55,530 Suze: they take out any money before the age of 59 and a half 370 00:25:55,810 --> 00:25:59,560 Suze: for anything but those three things. 371 00:26:00,479 --> 00:26:04,880 Suze: Like I just mentioned, they will owe a 10% penalty 372 00:26:04,880 --> 00:26:09,160 Suze: on it. Obviously once they turn 59 and a half, 373 00:26:10,079 --> 00:26:14,188 Suze: no longer is there a 10% penalty and the third 374 00:26:14,189 --> 00:26:16,430 Suze: most important detail. 375 00:26:18,040 --> 00:26:21,319 Suze: Any and all money withdrawn no matter what it is 376 00:26:21,319 --> 00:26:26,760 Suze: for the growth part of that money is taxed as 377 00:26:26,760 --> 00:26:32,919 Suze: ordinary income. Your contributions are not taxed, so any money 378 00:26:32,920 --> 00:26:35,199 Suze: that you withdraw doesn't matter. 379 00:26:36,180 --> 00:26:41,530 Suze: After the age of 18, all withdrawals are all part growth. 380 00:26:42,239 --> 00:26:45,889 Suze: And return of money, which is how they are taxed. 381 00:26:46,339 --> 00:26:48,500 Suze: Let me just give you an example, all right? Let's 382 00:26:48,500 --> 00:26:50,949 Suze: just say your kid is 18. 383 00:26:51,569 --> 00:26:57,400 Suze: And your child's Trump account is now worth $170,000 because 384 00:26:57,400 --> 00:27:01,439 Suze: one thing that you should know this money will be 385 00:27:01,439 --> 00:27:06,238 Suze: invested in indexed funds or ETFs or whatever they're going 386 00:27:06,239 --> 00:27:09,319 Suze: to do, but the money during those years that it's 387 00:27:09,319 --> 00:27:12,439 Suze: in there is going to be invested. 388 00:27:14,250 --> 00:27:17,609 Suze: So let's say over 18 years the average annual rate 389 00:27:17,609 --> 00:27:21,489 Suze: of those funds, let's just say we're 7% in annual 390 00:27:21,489 --> 00:27:27,889 Suze: average rate, all right, so you put in $90,000 the 391 00:27:27,890 --> 00:27:32,679 Suze: account grows by 80, you now have $170,000 in there. 392 00:27:33,530 --> 00:27:38,089 Suze: What you would do is divide the 80,000, the growth 393 00:27:38,089 --> 00:27:42,369 Suze: of your money by the $170,000 in this case that's 394 00:27:42,369 --> 00:27:48,319 Suze: in there, and that is 47%. Now let's just suppose 395 00:27:49,089 --> 00:27:54,448 Suze: they withdrew $20,000 for college expenses, so there's no 10% penalty. 396 00:27:55,439 --> 00:28:03,329 Suze: 47% of that $20,000 is only $9400. That is the 397 00:28:03,329 --> 00:28:07,880 Suze: amount your kid would owe taxes on in their tax bracket. 398 00:28:07,930 --> 00:28:14,688 Suze: The remaining part of that $20,000 is $10,600 that is 399 00:28:14,689 --> 00:28:18,489 Suze: returned to you tax free. Now don't freak out here 400 00:28:18,489 --> 00:28:21,239 Suze: because I can hear you now. Well, how will I know? 401 00:28:21,449 --> 00:28:23,208 Suze: How much is going to be growth? Who's going to 402 00:28:23,209 --> 00:28:24,260 Suze: keep track for me? 403 00:28:24,630 --> 00:28:27,050 Suze: The financial institution. 404 00:28:27,650 --> 00:28:32,040 Suze: The bank or broker managing the account is going to 405 00:28:32,040 --> 00:28:37,150 Suze: track the basis for you. For example, the total contributions, 406 00:28:37,359 --> 00:28:42,199 Suze: and they will report the taxable portion of each withdrawal 407 00:28:42,199 --> 00:28:47,839 Suze: on the IRS form 1099R. So you and your child 408 00:28:47,839 --> 00:28:52,520 Suze: will use this form just that simple to file taxes 409 00:28:52,520 --> 00:28:57,000 Suze: reporting the taxable income portion. So the next question is. 410 00:28:57,760 --> 00:29:01,089 Suze: Well, what's better, a 529 or this because remember a 411 00:29:01,089 --> 00:29:05,239 Suze: 529 plan. You can take the money out tax free 412 00:29:05,239 --> 00:29:09,670 Suze: for education, but not all of your kids go to school, 413 00:29:09,839 --> 00:29:12,109 Suze: and then what do you do? You end up owing 414 00:29:12,109 --> 00:29:15,469 Suze: the 10% penalty on the growth and everything like that. 415 00:29:15,800 --> 00:29:21,079 Suze: If you are focused specifically on education, then exploring a 416 00:29:21,079 --> 00:29:23,520 Suze: 529 plan is likely smarter. 417 00:29:24,410 --> 00:29:30,530 Suze: Especially because they offer tax-free distributions and for qualified expenses 418 00:29:30,530 --> 00:29:34,609 Suze: they may also offer state tax benefits. When would a 419 00:29:34,609 --> 00:29:38,939 Suze: Trump account be better? A Trump account might be better 420 00:29:39,130 --> 00:29:42,079 Suze: if your kid doesn't want to go to school, whatever, 421 00:29:42,130 --> 00:29:43,810 Suze: but here's the real bottom line. 422 00:29:44,719 --> 00:29:49,109 Suze: There's nothing preventing you from doing both. You may also 423 00:29:49,109 --> 00:29:53,260 Suze: want to do a Trump account and a Roth IRA separately, 424 00:29:53,479 --> 00:29:56,069 Suze: cause let's say your kid starts working as a teen 425 00:29:56,069 --> 00:29:59,790 Suze: or in college, then a custodial Roth might be the 426 00:29:59,790 --> 00:30:01,420 Suze: way to go as well. 427 00:30:01,880 --> 00:30:06,339 Suze: But you could do all of them a 529, a 428 00:30:06,339 --> 00:30:12,449 Suze: Trump account, a Roth account, all of those things are important. 429 00:30:12,739 --> 00:30:17,859 Suze: So that everybody brings us to the end of this 430 00:30:17,859 --> 00:30:23,099 Suze: three part series on the advantages that are within the 431 00:30:23,099 --> 00:30:27,010 Suze: big beautiful bill. So until Thursday... 432 00:30:28,089 --> 00:30:30,079 Suze: I don't have a clue what we're going to do 433 00:30:30,079 --> 00:30:34,949 Suze: except I do know it's ask KT and Suzie anything. 434 00:30:35,199 --> 00:30:40,640 Suze: So everybody tune in and remember, make your money, make 435 00:30:40,640 --> 00:30:42,040 Suze: more money. All right, bye bye.