Joe Dike CPA PFS PC

09/12/2025

Congress Rethinks Taxable Social Security Benefits While Proposing a Tax Increase

Senator Ruben Gallego (D-AZ) has introduced the You Earned It, You Keep It Act, a bill that would permanently end federal income taxation of Social Security benefits while strengthening the program’s long-term solvency.

Currently, up to 85% of Social Security benefits are taxable. Gallego’s proposal would repeal this taxation entirely. To offset lost revenue and ensure Social Security and Medicare remain funded, the bill requires the Treasury to transfer amounts equal to the forgone taxes into the trust funds.

The legislation finances these transfers by increasing payroll taxes on wages above $250,000. At present, earnings above $176,100 are exempt from Social Security payroll taxes. This “donut hole” approach ensures that only higher earners contribute more, while middle- and working-class Americans remain unaffected.

Analyses suggest the measure would both deliver immediate tax relief for retirees and extend Social Security’s solvency into the 2050s. Advocacy groups such as the Senior Citizens League have endorsed the proposal, calling it a fair way to strengthen the program while helping seniors keep more of what they’ve earned.

12/06/2024

https://www.congress.gov/bill/118th-congress/house-bill/5863/text

Text for H.R.5863 - 118th Congress (2023-2024): Federal Disaster Tax Relief Act of 2023

12/06/2024

Court Bars FinCEN from Enforcing BOI Rules

A federal district court in Texas issued a preliminary injunction temporarily barring the federal government from enforcing the Corporate Transparency Act (CTA) and its beneficial ownership information reporting (BOI) requirements. The plaintiffs in the lawsuit claimed Congress exceeded its authority under the U.S. Constitution and the judge for the U.S. District Court for the Eastern District of Texas agreed. The judge enjoined the federal government from enforcing the provisions of the CTA after finding the plaintiffs were likely to succeed in trial based on the merits of their claims.

Under the court order, neither the CTA nor the implementing rules adopted by Treasury's Financial Crimes Enforcement Network (FinCEN) may be enforced and reporting companies are not required to comply with the Jan. 1 deadline for filing BOI reports.

Based on the decision, it appears that FinCEN can't penalize entities that do not file BOI reports.

05/02/2024

IRS Closes its Direct File Pilot Program

The IRS has closed its Direct File pilot program after more than 140,000 taxpayers in 12 states used the system to e-file returns. The IRS implemented the Direct File pilot to test the feasibility of a system that allows taxpayers to file their federal income tax returns directly with the agency for free but has not decided whether it will continue the program.

Since the pilot program began in March 2023, the IRS has collected and analyzed user data. The agency will continue its analysis and plans to issue a report on Direct File's scope, technology and taxpayer experience, customer support, state integration, costs and benefits. Over the next few weeks, the IRS will also meet with a variety of partners and stakeholders to learn more about how taxpayers interacted with the Direct File system.

By the final week of the filing season, Direct File was accepting more than 5,000 returns a day and taxpayers using the system claimed more than $90 million in refunds and reported balances due of $35 million. The states from which the most Direct File returns were accepted were California (33,328), Texas (29,099) and Florida (20,840).

12/07/2023

Retirement Contribution Amounts Increased for 2024

Retirement Contribution Amounts Increased for 2024
The IRS has passed along an early Christmas present of sorts to many taxpayers by increasing the maximum contribution amounts for 401(k) plans in 2024.

The contribution hike covers those employees who take part in 401(k), 403(b), or most 457 plans. Participants in the federal Thrift Savings Plan are also included in the increase. Taxpayers who participate in any of these plans can now contribute up to $23,000 for 2024; that’s up from $22,500 under the previous rules. Catch-up contribution limits for these same taxpayers, however, stay at present levels.

For those with SIMPLE retirement accounts, contribution limits have been raised from $15,500 to $16,000.

The new rules also boost the limit on contributions to an IRA, raising the bar from $6,500 to $7,000. Despite legislation including an annual cost-of-living adjustment (via the SECURE 2.0 Act of 2022), IRA 2024 catch-up contribution limits remain at $1,000 for those participants 50 and over.

02/14/2023

02/13/2023

Thought provoking...

Unfortunately for the Chinese, their balloon didn't make it in time for the Macy's Thanksgiving Day Parade...however, it's made a much bigger splash than the...

02/05/2023

probability of this being a BULL TRAP is HIGH. (WM...

02/02/2023

"Tired of the stress and hassle of preparing your tax returns on your own? Let us take care of it for you! Our team of experienced and knowledgeable tax professionals is here to ensure that you get the best possible outcome on your tax return. Whether you're an individual, a small business owner, or have a complex financial situation, we've got you covered. With our personalized approach and attention to detail, you can rest assured that your tax returns are in good hands. Don't wait until the last minute – contact us today to schedule a consultation and see how we can help you get the most out of your tax return."