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The topics and opinions express in the following show are
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solely those of the hosts and their guests and not
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those of W FOURCY Radio. It's employees are affiliates. We
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make no recommendations or endorsements for radio show programs, services,
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or products mentioned on air or on our web. No
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liability explicit or implies shall be extended to W four
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CY Radio or it's employees are affiliates. Any questions or
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comments should be directed to those show hosts. Thank you
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for choosing W FOURCY Radio.
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Farry G.
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Fouler EA brings you tax talk for you right here
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on W four CY Radio and.
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Talk for TV.
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As an enrolled agent and a national leader in tax
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resolution as well as Trucker bookkeeping and tax planning. With
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over thirty years of experience, Barry will break down taxes, bookkeeping,
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tax planning, and tax relief for individuals and businesses just
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like you. So let's have some tax talk for you
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with your hosts.
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Farry G. Foul Hey, welcome in, good morning. It's great
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to be here. It's man fantastic weekend with family and birthdays, baptisms,
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all the fun we get to do, uh for not
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just us but our grand kids and you know, our kids,
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and it makes the weekends uh well worth it as
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well as you know, doing some some ranching and uh
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working with cattle and the pigs and cows. And then
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we get to come back here on Mondays and and
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talk about taxes here with you. Not only here, but
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also we get to be on radio with ass the
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experts a couple of times a month nationwide, just bringing
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information to you to help you in your business. Whether
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you are own our operator truck driver, oh excuse me,
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or whether you're self employed individual out there, or you're
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just W two and you're working on your own taxes,
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or even if you're using somebody. It's good to know
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what's happening in the tax law and what's going to
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change each year. The IRS makes adjustments that's going to
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impact your taxes, your retirement saving contributions, and other financial
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thresholds that are out there. So staying updated on these
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changes it can help you get a head start for
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planning and making the most of you know, the benefits
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maybe even that your company offers or that you're going
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to offer as a self employed individual or as a
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owner operator out there. So let's go into some of
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the major updates for twenty twenty five and how they
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may impact your financial strategy geez on what you're going
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to do in your life and your financial situation. So
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some of the notable changes for twenty twenty five. The
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standard deduction, you know, for single taxpayers or married taxpayers
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that are filing separate for twenty twenty five, the standard
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deduction is going to rise to fifteen thousand. That's a
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four hundred dollars increase from twenty twenty five. Doesn't really
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seem like much with you know, inflation out there, but
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every dollar does help. For married couples filing jointly, the
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standard deduction is going to rise to thirty thousand, and
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that's an increase of eight hundred dollars for twenty twenty
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five over twenty twenty four. For heads of households, the
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standard deduction is going to be twenty two thousand and
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five hundred, and that's for tax year twenty twenty five,
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and that's a six hundred dollars increase there. Now, the
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marginal tax brackets, now, you know, we have tax brackets
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that they're going to range from anywhere from ten percent
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to thirty five percent. Ten percent is going to be
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for incomes of eleven thousand, nine hundred and twenty five
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dollars or less for single or married filing separate, and
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it's twenty three thousand and eight point fifty for married
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couple's filing joint. Now remember the thing about the marginal
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rates and the marginal tax brackets. So you're if you're
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a married couple filing, that first twenty three thousand and
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eight to fifty is going to be taxed at no
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more than ten percent, and then you're going to move
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to the next tax bracket. So every dollar over that
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twenty three thousand and eight point fifty, again for married
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filing joint couples, it'll be taxed at twelve percent. And
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so that's going to go all the way up to
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the next bracket, which is the twenty two percent bracket,
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which starts at ninety six thousand and nine to fifty.
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So the way brackets work is that first twenty three
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thousand and eight to fifty is tax at ten percent,
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the dollar amount from the twenty three eight point fifty
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one all the way up to ninety six nine to
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fifty is taxed at twelve percent, and then the next
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bracket is at twenty two percent bracket, and that's going
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to go all the way to two hundred and six thousand,
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seven hundred dollars for married couples filing jointly. Now you
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can divide that in half to get to singles, and
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you can for married filing separate. Each of those brackets
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are going to be pretty much half of you know
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what we're talking about. For married couples. The next bracket
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from twenty four goes up to thirty two percent, a
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big eight percent jump, and that's going to be incomes
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over three hundred and ninety four thousand, six hundred, So
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there's one hundred basically one hundred and eighty eight thousand
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dollars before the next bracket. And then you take your
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next big jump to thirty five percent, and that's over
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five hundred and one thousand and fifty dollars, and so
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everything above that will get taxed at thirty five percent,
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and then you've got the top marginal tax bracket is
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going to be thirty seven percent, and it's going to
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be married couples are going to be where it's over
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seven hundred and fifty one thousand to six hundred dollars
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if you are single, that actually starts at six hundred
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and twenty six thousand, three fifty, so that one is
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not a half of what the married couple files. Those
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single taxpayers get an advantage of having a greater jump
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to get to that thirty seven percent tax bracket, So
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you know, you've got to keep these in things in mind.
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It is not where you jump from one bracket to
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having everything taxed at the highest bracket. So if you
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do move from let's say you know you're making two
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hundred thousand, and all of a sudden you move up
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to two hundred and twenty thousand, the only difference is
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going to be from that two hundred and six thousand
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going up. So you know, you don't take a huge
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jump to the twenty four percent tax bracket for everything,
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just the next step above where that marginal rate starts,
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so you know you'll be taxed at everything at the
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lower rates and the lower brackets as you move through.
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Alternative minimum tax. You know, we don't talk much about
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it because it's sometimes harder, you know, to hit these days,
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to hit the alternative minimum tax. For the tax year
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twenty twenty five, the exemption amount for unmarried individuals will
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jump to eighty eight thousand, sixty eight thousand, and six
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point fifty for married filing separate and begins to phase
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out at six hundred and twenty six thousand, and then
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for married couples the exemption amount increases two hundred and
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thirty seven thousand and phases out at one point two million,
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fifty two thousand, seven hundred. Like I said, we don't
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usually hit it too much in alternative minimum tax anymore.
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We're hoping with what they're planning in Congress at the
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moment that I just read you know this morning, is
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hitting the ground running quickly to extend or made permanent
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the Trump tax code, which is a good thing for
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everybody that helps somewhat simplify the taxes. I remember when
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they were first talking about the Trump tax Code and
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trying to simplify everything to be a postcard and ended
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up being like three different small sections, and now it's
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back to the full forms. We would all love to
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see it get a little more simplified for you know,
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lower income people, it's always going to be more sophisticated
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or higher income people, but the standard deduction, you know,
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with today's mortgage interest rates and everything. More and more
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people than they refinance their homes or bought new homes,
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or sold their home and bought a new one are
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more likely to hit get over that standard deduction as well,
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which makes charitable contributions more deductible. The one change that
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I'm also seeing that they're looking to make is possibly
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doing away from the limitations for state and local taxes,
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which is capped at ten thousand dollars and not been
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incremated for inflation or anything like that. So you know,
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that has has stood at the ten thousand since the
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tax code was passed back in twenty sixteen and effective
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in seventeen. So we got to keep those things in mind. Now.
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If they make these changes, then depending on what state
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you're in, you know, depending on what your income taxes are,
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what your property taxes may be, that could impact whether
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or not you're going to be able to do more
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than what the standard deductions would be because those things
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would come into play. If you're in one of the
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lower tax states, you know, those things may not affect
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you as much. And we're going to take a short break.
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We're going to come back talk about our income tax credits,
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your retirement changes. And be your flexible spending accounts and
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medical savings accounts. And we're going to be right back
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after this.
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We have only scratched the surface of today's show. Please
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stand by as Barry chief Foller will be right back
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with tax talk for you. If you owe the IRS
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or are going through an IRS audit, don't go at
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it alone. Call Taxation Solutions Tax Relief at eight eight
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eight nine three zero one zero one six. We are
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your solution for IRS debts, audits, back taxes, garnishments, leans
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and levees. Whether you're an individual or business, you need
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a solution and a strong aggressive tax resolution. Don't let
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the IRS walk all over you. Stop the IRS now
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call eight eight eight nine three zero one zero one
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six or go to Taxationsolutions dot net now for a
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free no obligation consultation. Let's get back to tax stock
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for you with more tax stock once again. Here's your host,
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Barry G.
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Fowler. Hey, welcome back. You know we'd love to get questions,
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so you can text us your questions. We'll answer them
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here on the air, so you know, feel free to
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text us and we'll get the questions on air for
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you and answer those as well. Somebody asked a question.
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Let's see who this was. Chris asked about personal exemptions.
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What is the personal exemption amount? Well, personal exemptions were
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eliminated as part of the provision of Tax Cuts and
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Jobs Act of twenty seventeen. We haven't had personal exemptions
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since then. So in twenty twenty five they're going to
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remain zero as they are in twenty twenty four. A
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good question that many people think about those things, But
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those are some of the tax laws that we had
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in effect, you know, back prior to the Trump tax
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cuts for the twenty seventeen to Act, and you know,
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they did increase the standard deductions and things to help
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offset a lot of the things that they were doing,
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and change the tax rates and the brackets as well.
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So talking about her you know changes and how they
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modified you know, tax code and the changes they make
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from one year to the next, such as things like
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earned income tax credits, which are important to a lot
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of people for qualifying taxpayers if you have three or
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more qualifying children. The tax year twenty twenty five, the
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maximum earned income tax credits going to be eight thousand,
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forty six dollars. That's an increase from seven and thirty
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dollars in twenty twenty four. The revenue you know procedure
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manual is going to contain a table providing you know,
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maximum earned income tax credits for other categories and thresholds
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and phase outs. They are all going to go up
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a little bit for inflation, that cost of living, which
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never keeps pace with actual inflation. Flexible spending accounts the
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cafeteria plans for health savings. Beginning in twenty twenty five,
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the dollar limitations for employee salary reduction contributions to these
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health flexible spending accounts is going to rise to thirty
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three hundred, increasing from thirty two hundred in twenty twenty four.
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These are cafeteria plans that are going to allow you
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to put money away pre tax and they also most
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of these plans nowadays allow the carryover unused amounts. This
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maxim carryover and these accounts are going to be like
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six hundred and sixty dollars instead of six hundred and
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forty from twenty twenty four. So if you've got it,
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you need to use it because they're only going to
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allow you so much of a carryover, So six hundred
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and forty dollars is left, you can carry that over
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to twenty twenty five. Unlike health savings accounts, So if
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you're contributing to an actual health savings acoun because you
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have a high deductible health plan, that amounts that you
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have in there can carry over and continue to increase
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year to year. We're going to go over health savings
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accounts here in a little bit on how you can
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use those to continue to save and put money away
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pre tax especially if you're owner operator or self employed individual.
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How you can use these plans to your benefit medical
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savings accounts. These are those that have self only coverage.
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The plan must have an annual deductible not less than
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two eight and fifty dollars. It's a fifty dollars increase
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from the previous year, but not more than forty three hundred.
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Any increase of one hundred and fifty from the previous year,
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maximum out of pocket expense amount rises to fifty seven
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hundred from fifty five hundred. So you can use these
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great medical savings accounts to do this and help save
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your money. Now, remember in these health savings account or