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National Taxpayer Advocate Erin Collins has urged Congress to preserve IRS funding for taxpayer service and technology amid Republican scrutiny.
The Inflation Reduction Act of 2022 originally authorized nearly $80 billion for the agency, but tens of billions of dollars have already been rescinded.
More IRS funding could be at risk with Republican control of Congress and the White House.

Erin Collins, national taxpayer advocate at the Taxpayer Advocate Service, speaks at a Senate Appropriations subcommittee hearing in Washington, D.C., on May 19, 2021.
Bloomberg | Bloomberg | Getty Images

As the IRS faces scrutiny from a Republican-controlled Congress, the agency’s internal watchdog has urged lawmakers to preserve taxpayer service and technology funding.
The National Taxpayer Advocate on Wednesday released its annual report to Congress, which criticized the “extreme imbalance in funding priorities” when comparing the billions of dollars allocated via the Inflation Reduction Act.

While the tens of billions earmarked for enforcement has “generated controversy,” there’s been “strong bipartisan support” for taxpayer services and technology modernization, wrote Erin Collins, national taxpayer advocate.
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Of the original $78.9 billion Inflation Reduction Act funding, the legislation earmarked 58% for enforcement and 32% for operations support, according to the report. By comparison, the budget allocated 4% for taxpayer service and 6% for technology modernization.  
With sufficient funding for services and technology, “taxpayer experiences will become fairer and more efficient, which likely will improve compliance and reduce the need for costly backend enforcement,” Collins wrote.

During fiscal year 2024, the IRS collected $98.7 billion through enforcement, which was less than 2% of all revenue, according to the agency’s 2024 financial report. The remaining 98% of federal taxes were “self-assessed” via annual tax returns and timely payments. 

If Congress reduces enforcement funding, it shouldn’t include commensurate cuts to taxpayer services and technology, which could “inadvertently throw the baby out with the bathwater,” Collins wrote. 
With added costs to “pull itself out of the pandemic” and yearly appropriations held steady amid rising costs over the past few years, the IRS has needed to spend part of its multi-year funding to maintain current operations, she added.  

Congress rescinded $20 billion in IRS funding as part of a 2023 budget deal, and Republicans have vowed to make further cuts. Another $20 billion was automatically clawed back when lawmakers in December extended the 2023 deal to avoid a government shutdown.  
Further IRS funding cuts could be possible in 2025 with Republican control of Congress and the White House. More

Federal student loan borrowers affected by the wildfires ripping across Southern California have options if they’re worried about paying their bills.
The same holds true for other people with education debt who find themselves grappling with weather and climate disasters.

Fire engulfs a home as the Eaton Fire moves through the area on January 08, 2025 in Altadena, California. 
Justin Sullivan | Getty Images

Federal student loan borrowers affected by the wildfires ripping across Southern California have relief options if they’re worried about keeping up with their payments as they recover.
The same holds true for other people with education debt who find themselves grappling with extreme weather and climate disasters.

“Borrowers impacted by natural disasters may qualify for temporary relief from student loan payments,” said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, based in New York.
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It’s a good idea for borrowers to familiarize themselves with the relief available to them in case they should need it, experts said.
There was a record number — 28 — of billion-dollar disasters in the U.S. during 2023, including wildfires, droughts and tornados, according to the National Oceanic and Atmospheric Administration. By November of 2024, there were 24 confirmed weather and climate disaster events with losses also exceeding $1 billion each.
Here’s what federal student loan holders should know about their options during a natural disaster.

How a natural disaster forbearance works

The Heroes Act of 2003 provides “several forms of relief” to certain student loan borrowers who live in or are employed in an area that is affected by a natural disaster, said higher education expert Mark Kantrowitz. Likely one of the most helpful options will be a natural disaster forbearance.
“Climate change has affected the frequency and severity of natural disasters, making these waivers and forbearances increasingly important,” Kantrowitz said.

At Studentaid.gov, the U.S. Education Department says its federal student loan servicers check the Federal Emergency Management Agency website at least once each business day to identify all impacted areas connected to a disaster declaration.
In many cases, the Department of Education will automatically put qualifying borrowers into a natural disaster forbearance, Kantrowitz said.

Fire engulfs a home as the Eaton Fire moves through the area on January 08, 2025 in Altadena, California. 
Justin Sullivan | Getty Images

“Borrowers generally do not need to apply for this,” he added. Still, borrowers who want to make sure their payments are paused might want to contact their loan servicer.
The natural disaster forbearance lasts for up to 90 days, according to the Education Department. In some cases, borrowers will be granted 30-day extensions. However, the forbearance can’t exceed 12 monthly billing cycles from the date of the disaster. (Loan interest continues to accrue during the payment pause.)
Meanwhile, those who want to decline the automatic natural disaster forbearance because they’re able to make their payments should contact the Education Department to do so.

Relief for current students, delinquent borrowers

Borrowers who are students at the time of a natural disaster may continue to qualify for an in-school deferment, Kantrowitz said, even if they’re not able to complete the school year.
If you’re in default on your student loans and impacted, you or a family member can contact the Education Department and request a three-month suspension of collection activity.

‘Documentation may not be necessary’

Your loan servicer may request certain documents to verify your eligibility for the forbearance, but you should be granted deadline extensions if the disaster makes accessing such paperwork difficult or impossible.
“Documentation may not be necessary, given that documentation is often lost during a natural disaster,” Kantrowitz said. “You just need to show that you are an affected individual. The request can be made orally and does not need to be in writing.” (Showing that you’re impacted may be as easy as providing the address of your home or workplace.)

Climate change has affected the frequency and severity of natural disasters, making these waivers and forbearances increasingly important.

Mark Kantrowitz
higher education expert

If you’ve lost any of your student loan records in a disaster, you can access the information through your Studentaid.gov account.

Ineligible borrowers may have other relief options

If the natural disaster is not federally declared or borrowers aren’t deemed eligible for the forbearance for some reason, they can still request a temporary payment pause by applying for a general forbearance with their servicer, EDCAP’s Rodriguez said.
Borrowers should keep in mind that interest can continue to accrue on their debt during a forbearance, and that they might not get credit toward a debt forgiveness program while they’re not making payments, she added.
You’ll likely have fewer disaster relief options with your private student loans, Rodriguez said.
Still, she said, “it is essential to reach out to private lenders as soon as possible to explore available relief and prevent delinquency or default.”

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“We’re going to try and have a policy where no windmills are being built,” Trump told reporters Tuesday.
The Danish wind turbine manufacturer Vestas and wind developer Orsted fell nearly 7% on Wednesday in the wake of Trump’s remarks.

A Vestas wind turbine near Baekmarksbro in Jutland. 
Afp | Getty Images

European wind power stocks tumbled Wednesday after President-elect Donald Trump said he would prevent the construction of new turbines.
“We’re going to try and have a policy where no windmills are being built,” Trump told reporters at a news conference at his Mar-a-Lago home in Florida on Tuesday afternoon.

The Danish wind turbine manufacturer Vestas Wind Systems and Danish wind developer Orsted fell about 7% on Wednesday in the wake of Trump’s remarks.
The president-elect went on a lengthy attack against wind turbines during Tuesday’s news conference, arguing that they are too expensive, require subsidies and lack public support.
Trump’s opposition to wind power creates further challenges for an industry that has already struggled in the face of high interest rates that have raised the cost of developing new projects. In late 2023, for example, Orsted took a $4 billion write-down and canceled two offshore wind projects off the coast of New Jersey.
Still, wind power has expanded in the U.S., growing from 2.4 gigawatts in 2000 to 150 gigawatts by April 2024, according to data from the Energy Information Administration. Electricity generation from wind hit a record in April 2024 and beat generation from coal-fired plants, according to EIA data.

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Almost half, 48%, of credit cardholders carry debt from month to month, according to a new report.
Most blame an unexpected emergency expense although higher costs and overspending are also factors.
Many borrowers say it could take years to pay down their balances.

Many Americans are starting 2025 a little worse off than before, at least when it comes to credit card debt.
Almost half of cardholders — 48% — now carry debt from month to month, according to a new report by Bankrate. That’s up from 44% at the start of 2024. Of those carrying balances, 53% have been in debt for at least a year.

Roughly 47% of borrowers said they carry a balance due to an unexpected or emergency expense, most commonly medical bills or car and home repairs. Others cite higher day-to-day expenses and general overspending.
“High inflation and high interest rates have been a nasty combination, and while the worst is behind us, the cumulative effects are significant and will linger,” Ted Rossman, Bankrate’s senior industry analyst, said in a statement.
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Overall, Americans’ credit card tab has continually crept higher. 
The average balance per consumer now stands at $6,380, up 4.8% year over year, according to the latest credit industry insights report from TransUnion from 2024’s third quarter.

By way of example: With annual percentage rates just over 20%, if you made minimum payments toward the average credit card balance ($6,380), it would take you more than 18 years to pay off the debt and cost you more than $9,344 in interest over that time period, Rossman calculated.

Meanwhile, 36% of consumers added to their debt load over the holiday season, according to a separate report by LendingTree.
Of those with debt, 21% expect it’ll take five months or longer to pay it off, LendingTree found. 
According to another report by WalletHub, 24% of Americans said they will need more than six months to pay off their holiday shopping debt. In that survey, most consumers said inflation caused them to spend more than they initially planned.
“Many people need months to repay holiday bills after overspending,” said John Kiernan, editor at WalletHub.

The best way to pay down debt

The best move for those struggling to pay down credit card debt is to consolidate with a 0% balance transfer card, Bankrate’s Rossman said.
“You could pay about $300 per month and knock out the average credit card balance in 21 months without owing any interest,” he said.
As it stands, 30% of credit cardholders expect to pay off their credit card debt within a year, while 41% expect to pay it off in 1 to 5 years, Bankrate also found. Another 13% expect it will take more than a decade.
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Nvidia CEO Jensen Huang speaks with the press during the launch of the supercomputer Gefion at Vilhelm Lauritzen Terminal in Kastrup, Denmark, on Oct. 23, 2024.
Ritzau Scanpix | Mads Claus Rasmussen | Via Reuters

Quantum computing stocks dropped Wednesday after Nvidia CEO Jensen Huang declared that useful quantum computers are many years away.
“If you said 15 years for very useful quantum computers, that would probably be on the early side,” he said during Nvidia’s analyst day. “If you said 30, it’s probably on the late side. But if you picked 20, I think a whole bunch of us would believe it.”

Huang said that he believes Nvidia will play a “very significant part” in creating the computers and helping the industry “get there as fast as possible.”

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Rigetti falls on comments for Nvidia CEO Jensen Huang

Stocks tied to quantum computing tumbled in premarket trading on the heels of the comments, with Rigetti Computing plunging 25%, while IonQ shed more than 13%. D-Wave Quantum dropped more than 19%, while the Defiance Quantum & AI ETF fell 3%. Quantum Computing, which announced a stock offering to raise $100 million, sank 21%.
The sector had gotten a lift into the end of 2024 as excitement around quantum computing exploded after Google revealed its latest Willow chip, which it said performed better than its 2019 predecessor at reducing errors.
The excitement boosted shares into year end, with Rigetti and D-Wave rallying 1,449% and 854%, respectively
Many investors, however, have warned that it may be too early to rule out proper winners in the sector and real-world use cases for the technology. More

Your paycheck could be slightly bigger in 2025 due to inflation adjustments to federal income tax brackets.
The change may be smaller than in previous years amid cooling inflation.
Regardless, you should monitor federal and state tax withholdings throughout the year to avoid a surprise tax bill.

Simpleimages | Moment | Getty Images

Why your take-home pay could be higher

If you’re starting 2025 with wages similar to your 2024 wages, your take-home pay — or compensation after taxes and benefit deductions — could be a little higher, depending on your withholdings, according to Long.
“When all the tax brackets go up, but your salary stays the same, relatively, that puts you on a lower rung of the ladder,” he said.

The federal income tax brackets show how much you owe on each part of your “taxable income,” which you calculate by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

“Even if you make a little more than last year, you could actually pay less in tax in 2025 compared to 2024,” because the standard deduction also increased, Long said. 
For 2025, the standard deduction increases to $30,000 for married couples filing jointly, up from $29,200 in 2024. The tax break is also larger for single filers, who can claim $15,000 in 2025, a bump from $14,600.  

‘It ends up nearly balancing out’

Despite tax bracket changes, many Americans won’t feel the pay increase amid elevated prices for certain expenses, said Sheneya Wilson, a CPA and founder of Fola Financial in New York.
“It ends up nearly balancing out,” she said.
While inflation is no longer accelerating, there was an uptick in the cost of groceries, gasoline and new cars in November, according to the Bureau of Labor Statistics.
Whether take-home pay is higher or lower than expected, it’s important to monitor your state and federal income tax withholdings throughout the year, especially during major income or life changes, Wilson said.
Typically, if you withhold too much from your paycheck, you can expect a refund, whereas not withholding enough often results in taxes owed.     More

There’s one upside to your student loan payments: they might qualify you for a tax break.
The student loan interest deduction allows qualifying borrowers to deduct up to $2,500 a year in interest paid on eligible private or federal education debt.

Damircudic | E+ | Getty Images

There’s one upside to your student loan payments: they might reduce your 2024 tax bill.
The student loan interest deduction allows qualifying borrowers to deduct up to $2,500 a year in interest paid on eligible private or federal education debt. Before the Covid pandemic, nearly 13 million taxpayers took advantage of the deduction, according to higher education expert Mark Kantrowitz.

Most borrowers couldn’t claim the deduction on federal student loans during the pandemic-era pause on student loan bills, which spanned from March 2020 to October 2023. With interest rates on those debts temporarily set to zero, there was no interest accruing for borrowers to claim.
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But interest on federal student loans began accruing again in September of 2023, and the first post-pause payments were due in October of that year.
By now, borrowers could again have interest to claim for the full tax year’s worth of payments, experts said.
“All borrowers should explore whether they qualify for the deduction as it can reduce their tax liability,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps borrowers navigate the repayment of their debt.

Student loan interest deduction worth up to $550

The student loan interest deduction is “above the line,” meaning you don’t need to itemize your taxes to claim it.
Your lender or student loan servicer reports your interest payments for the tax year to the IRS on a tax form called a 1098-E, and should provide you with a copy, too.
If you don’t receive the form, you should be able to get it from your servicer.

Depending on your tax bracket and how much interest you paid, the student loan interest deduction could be worth up to $550 a year, Kantrowitz said.
There are income limits, however. For 2024, the deduction starts to phase out for individuals with a modified adjusted gross income of $80,000, and those with a MAGI of $95,000 or more are not eligible at all. For married couples filing jointly, the phaseout begins at $165,000, and those with a MAGI of $195,000 or more are ineligible.

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The Consumer Financial Protection Bureau has finalized a rule that will remove an estimated $49 billion in medical bills from credit reports.
With the change, Americans with medical debt could see their credit scores increase by an average of 20 points, the CFPB reported.
Vice President Kamala Harris also announced more than $1 billion in medical debts have been eliminated.

sturti | E+ | Getty Images

The Consumer Financial Protection Bureau on Tuesday announced it has finalized a rule to remove about $49 billion in medical debt from credit reports, a change that will affect an estimated 15 million Americans.
Individuals who have medical debt on their credit reports may see their credit scores increase by an average of 20 points following the rule, according to the CFPB. It said the change is also expected to result in the approval of about 22,000 additional affordable mortgages every year.

With the rule, consumer reporting agencies will be prohibited from including medical debt information with credit reports and credit scores sent to lenders. In addition, creditors will no longer be able to use certain medical information for lending decisions. The CFPB proposed the rule in June.
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More than 100 million Americans struggle with medical debt, which comprises the largest type of debt in collections ahead of auto loans, credit cards and utilities, according to the Biden-Harris administration.
Consumers are often asked to pay balances that should be covered by health insurance or financial assistance programs, and also frequently report receiving inaccurate medical bills, according to the CFPB.
The consumer finance watchdog agency’s move comes after its own research found medical bills on credit reports are not good predictors of whether someone will repay a loan.

“People who get sick shouldn’t have their financial future upended,” CFPB Director Rohit Chopra said in a statement. “The CFPB’s final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.”

A 2022 report released by the agency found medical bills accounted for $88 billion of debts reported on credit reports as of June 2021. Following those findings, the three major credit reporting agencies — Equifax, Experian and TransUnion — took some types of medical debt off credit reports, such as debts under $500. Credit scoring companies FICO and VantageScore also moved to de-emphasize the impact of medical debt on credit scores.

More than $1 billion in medical debt eliminated

Along with the finalization of the CFPB rule, Vice President Kamala Harris announced that more than $1 billion in medical debt has been eliminated for more than 750,000 Americans in certain states, counties and cities.
Residents have had medical debt eliminated in states including New Jersey and Connecticut; counties including Cook County, Illinois; Lucas County, Ohio; Wayne and Oakland counties, Michigan; and cities including Cleveland and Toledo, Ohio; New Orleans; St. Paul, Minnesota; and Washington, D.C.
Up to $7 billion in medical debt may be eliminated for almost 3 million Americans by the end of 2026 with the support of the American Rescue Plan Act, legislation that was enacted in 2021.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” Harris said in a statement.

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