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Remember the tax cuts expire after 2025! So even if you benefited, your taxes will likely go up in 2026 unless Congress acts to extend them. I'm already planning ahead by increasing my 401k contributions to offset the expected increase. My situation: family of 4 in Texas (no state income tax). We saved about $3,200/year with the changes - mostly from the expanded Child Tax Credit and lower rates. But I calculated that when things revert in 2026, we'll pay about $2,800 more than we do now.
Do we know for sure they're expiring? I thought there was talk about making some of the changes permanent.
As the law currently stands, most of the individual tax provisions will expire after 2025. Congress would need to pass new legislation to extend them. Some of the business provisions were made permanent, but the personal income tax changes were temporary. There's always talk about extending popular tax cuts, but that requires congressional action. Given how difficult it is to get anything passed these days, I'm planning for the expiration while hoping for an extension. Best to be prepared either way.
Has anyone used TurboTax to model what will happen in 2026 when the cuts expire? I'm trying to do some retirement planning and need to figure out if I should accelerate income into 2024-2025 or defer to later years.
Since everyone's talking about bonuses and taxes, anyone know if it's better to get your bonus in December or January from a tax perspective? My company lets us choose and I never know which is better.
January is almost always better because you defer the taxes for a whole year. I always push mine to January.
I always get pissed about bonus taxes too but then I just remember - you're getting a BONUS! Some extra money is better than no extra money lol. And you'll get some back when you file. Just think of it as forced savings.
Have you looked into becoming an authorized FIRE system user? Our county had the same problem with 1098-F forms last year. You need to complete Form 4419 (Application for Filing Information Returns Electronically) to get a Transmitter Control Code (TCC). Once approved, you can use the FIRE system to upload your forms in the proper format. It's not super intuitive, but it's better than manual filing for sure.
Thanks for mentioning this! I've heard of the FIRE system but wasn't sure if it applied to 1098-F forms specifically. How long did the approval process take for you? We're working on a pretty tight timeline with our new reporting requirements.
The approval process took about 3 weeks for us, but that was during a slower period. If you're approaching year-end or tax season, it might take longer. I'd recommend submitting the Form 4419 application as soon as possible. One thing to note is that you'll need to create files in a very specific format for the FIRE system. The IRS has detailed specifications for each information return type. We ended up using a programmer to help create the proper file structure for our 1098-F submissions.
Just wanted to add that you need to be very careful about the filing requirements for 1098-F. We messed this up last year and it was a headache. Make sure your agency has a clear understanding of which settlements/orders actually require a 1098-F. Not all penalties need to be reported! Only certain ones that meet specific criteria like being related to violation of law, investigation/inquiry by government, etc.
Totally agree with this. We had to go back and review hundreds of cases to determine which ones met the reporting threshold. The IRS guidance is a bit vague. Does anyone have a good checklist or process for determining what needs to be reported on 1098-F?
One thing nobody's mentioning is that the β¬750M threshold is actually pretty high! This only affects the very largest multinational companies. Small and medium businesses (even fairly large ones by most standards) won't be directly impacted by these rules. Also worth noting that the implementation timeline keeps getting pushed back. Originally supposed to start in 2023, now many jurisdictions are talking about 2024 or even 2025 before they have local legislation in place. The US delay is particularly problematic since so many multinationals are headquartered there.
Does that β¬750M threshold apply to the global company or just operations in a specific country? Like if a company makes β¬800M worldwide but only β¬100M in France, would it still be subject to the minimum tax in France?
The β¬750M threshold applies to global consolidated revenue of the multinational group, not the revenue in each specific country. So in your example, a company with β¬800M worldwide revenue would be subject to the minimum tax rules even if they only had β¬100M in France. This is actually one of the key points of the agreement - it's designed to capture large multinationals that might have relatively small operations spread across many countries. The threshold was set to target the largest 10-15% of multinational enterprises while excluding smaller companies that would face disproportionate compliance burdens.
As someone who works with emerging markets, I think the impact on developing countries is being overlooked. Many use tax incentives to attract foreign investment because they can't compete with developed nations on infrastructure, workforce, etc. This agreement potentially removes one of their few competitive advantages. That's likely why Kenya and Nigeria haven't signed on. They see it as developed nations protecting their tax bases at the expense of developing economies' growth strategies. The revenue redistribution under Pillar One is supposed to address this, but the formulas tend to favor larger economies.
KhalilStar
I've owned Energy Transfer LP for years and have always had Box 16 checked. I've never waited for the K3 and never had an issue. My accountant says that unless you have other foreign investments or are claiming foreign tax credits, the K3 information is essentially irrelevant to your return. The way I understand it, the checkbox is basically saying "this partnership has some foreign activity" but that doesn't mean YOU have any foreign reporting requirements. It's similar to how some of these MLPs have tax-exempt income that flows through to you - the fact that the partnership has it doesn't necessarily create a special filing requirement for you.
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Amelia Dietrich
β’Have you ever been audited though? I'm worried that ignoring anything on the K1 could trigger something later. Just because you haven't had an issue yet doesn't mean the IRS won't come back years later.
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KhalilStar
β’No, I've never been audited for this issue. You're not really "ignoring" anything on the K-1 though - you're using all the information that's relevant to your individual tax situation. The K3 just provides additional detail for certain foreign transactions that most domestic investors don't need to report. The IRS generally focuses audit resources on areas where significant tax might be underreported. For most domestic investors in MLPs, waiting for a K3 that won't change your tax liability isn't likely to be a high audit priority. I've been filing this way for over 7 years with multiple MLPs and haven't received so much as a notice.
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Kaiya Rivera
Does anyone know if TurboTax handles this situation properly? When I enter my K1s from my MLPs (MPLX and Enterprise Products), it keeps showing a warning about foreign transactions and suggests I might need to wait for additional information. But from reading this thread, it sounds like I can ignore that warning since I'm only a US investor?
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Katherine Ziminski
β’TurboTax is super annoying with MLP K-1s. I had the same warning last year and called their support. They confirmed that if you're a US-only investor with no foreign tax credit claims, you can override that warning and proceed with filing. There's actually a checkbox somewhere in the foreign income section where you can indicate you have no foreign filing requirements.
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