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As Congress wrestles with a looming decision over trillions in expiring tax breaks, some Democratic lawmakers and experts are calling for higher taxes on corporations and wealthy Americans.
Lawmakers and experts debated several Democratic proposals.
More than 60% of taxpayers will face higher taxes if all the individual provisions from the Tax Cuts and Jobs Act expire after 2025.

Senator Chuck Grassley, a Republican from Iowa and ranking member of the Senate Budget Committee, during a hearing in Washington, DC, on Tuesday, March 12, 2024. 
Bloomberg | Bloomberg | Getty Images

As Congress wrestles with a looming decision over trillions in expiring tax breaks, lawmakers and experts in a Senate Budget Committee hearing debated several Democratic proposals for higher taxes on corporations and wealthy Americans.
Proponents said the plans aim to address income inequality and the federal budget deficit.

Some of the debate included scrutiny of the corporate tax rate, stock buybacks, capital gains tax rates and levies on profits for private equity and hedge fund managers, known as carried interest. They also discussed taxes on unrealized gains, or profits on unsold assets, among other proposals.
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Higher taxes on corporations and the wealthy would “create a more equitable tax system which generates substantially more revenue and promotes growth,” Joseph Stiglitz, professor of economics at Columbia University, said in prepared testimony.
However, many of these proposals, such as reforms to carried interest, have failed to gain broad support even among Democrats, said Sen. Chuck Grassley, R-Iowa.
While carried interest reform was originally included in the Inflation Reduction Act, those changes were removed before the bill passed in the Senate.

Sen. Mitt Romney, R-Utah, said most of the proposed tax increases discussed during the hearing would have “unintended consequences” for the economy.

The debate over expiring tax breaks

President Joe Biden has also called for higher taxes on the wealthy and corporations, saying these taxes would help pay for an extension of expiring tax breaks for filers who make less than $400,000.
The Tax Cuts and Jobs Act of 2017, or TCJA, which was enacted by former President Donald Trump, included lower federal income brackets, raised the standard deduction and doubled an estate and gift tax exemption, among other provisions.

Without action from Congress, more than 60% of filers will pay higher taxes after 2025 once TCJA provisions expire, according to the Tax Foundation.
However, a full extension of expiring provisions will be costly and could add an estimated $4.6 trillion to the deficit over the next decade, the Congressional Budget Office reported in May.
While Trump hasn’t disclosed many tax policy proposals during his presidential campaign, he has expressed interest in fully extending expiring TCJA provisions.
Of course, the future of the legislation ultimately hinges on which party controls Congress and the White House. More

The Federal Reserve held rates steady at the end of its two-day meeting Wednesday, once again pushing back the start of rate cuts and any relief from sky-high borrowing costs.
Higher prices and interest rates have put many households under pressure.

Chris Wattie | Reuters

The Federal Reserve announced Wednesday that it will leave interest rates unchanged. Fresh inflation data issued earlier in the day showed that consumer prices are gradually moderating though remain above the central bank’s target.
The Fed’s benchmark fed funds rate has now stood within the range of 5.25% to 5.50% since last July.

The central bank projected it would cut interest rates once in 2024, down from an estimate of three in March.
For consumers already strained by the high cost of living, there is an added toll from persistently high borrowing costs.
“It’s not enough that the rate of inflation has come down,” said Greg McBride, chief financial analyst at Bankrate.com. “Prices haven’t, and that is what is really stressing household balances.”
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Inflation has been a persistent problem since the Covid-19 pandemic when price increases soared to their highest levels since the early 1980s. The Fed responded with a series of interest rate hikes that took its benchmark rate to the highest level in decades.

The federal funds rate, which is set by the U.S. central bank, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.
The spike in interest rates caused most consumer borrowing costs to skyrocket, and now, more Americans are falling behind on their payments.
From credit cards and mortgage rates to auto loans and student debt, here’s a look at where those monthly interest expenses stand.

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to nearly 21% today — nearing an all-time high.
“Consumers need to understand that the cavalry isn’t coming anytime soon, so the best thing you can do is take things into your own hands when it comes to lowering credit card interest rates,” said Matt Schulz, chief credit analyst at LendingTree.
Try calling your card issuer to ask for a lower rate, consolidating and paying off high-interest credit cards with a lower-interest personal loan or switching to an interest-free balance transfer credit card, Schulz advised.

Mortgage rates

Although 15- and 30-year mortgage rates are fixed and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
The average rate for a 30-year, fixed-rate mortgage is just above 7%, up from 4.4% when the Fed started raising rates in March 2022 and 3.27% at the end of 2021, according to Bankrate.
“Going forward, mortgage rates will likely continue to fluctuate and it’s impossible to say for certain where they’ll end up,” noted Jacob Channel, senior economist at LendingTree. “That said, there’s a good chance that we’re going to need to get used to rates above 7% again, at least until we start getting better economic news.”

Auto loans

Even though auto loans are fixed, payments are getting bigger because car prices have been rising along with the interest rates on new loans, resulting in less affordable monthly payments. 
The average rate on a five-year new car loan is now more than 7%, up from 4% in March 2022, and that’s not likely to change, according to Ivan Drury, Edmunds’ director of insights.
“Until we hit summer selldown months in the latter half of the third quarter, we should expect rates to remain relatively static during the foreseeable future,” Drury said.
However, competition between lenders and more incentives in the market lately have started to take some of the edge off the cost of buying a car, he added.

Student loans

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by the Fed’s moves. But undergraduate students who took out direct federal student loans for the 2023-24 academic year are paying 5.50%, up from 4.99% in 2022-23 — and the interest rate on federal direct undergraduate loans for the 2024-2025 academic year will be 6.53%, the highest rate in at least a decade.
Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are already paying more in interest. How much more, however, varies with the benchmark.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.
As a result, top-yielding online savings account rates have made significant moves and are now paying more than 5% — above the rate of inflation, which is a rare win for anyone building up a cash cushion, according to Bankrate’s McBride.
“Savers are sitting back and enjoying the best environment they’ve seen in more than 15 years,” McBride said.
Currently, top-yielding one-year certificates of deposit pay over 5.3%, as good as a high-yield savings account.
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Inflation pulled back in May 2024. The consumer price index declined to a 3.3% annual rate, down from 3.4% in April.
Prices have eased for consumer staples such as gasoline and groceries. Housing inflation has been stubbornly high, though it’s falling slowly.
The CPI data is likely welcome news for Federal Reserve officials, who may see it as evidence they can soon cut interest rates.

Customers purchase gas at a station in Chicago, Illinois, June 11, 2024.
Scott Olson | Getty Images

Inflation fell slightly in May, as positive trends such as lower gasoline prices were counteracted by others including stubbornly high costs for housing.
Trends under the surface suggest the fight against inflation continues to bear fruit, albeit slowly, economists said.

The consumer price index, a key inflation gauge, rose 3.3% in May from a year ago, the U.S. Labor Department reported Wednesday. That’s down from 3.4% in April.
“I think this report reinforces the disinflationary narrative, that inflation is almost back in the bottle,” said Mark Zandi, chief economist at Moody’s Analytics.

‘Encouraging’ news for interest rates

The CPI gauges how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.
The April inflation reading is down significantly from its 9.1% pandemic-era peak in 2022, which was the highest level since 1981. However, it remains above policymakers’ long-term target, around 2%.

The Federal Reserve uses inflation data to guide its interest rate policy. Economists expect the central bank to leave borrowing costs unchanged — at a roughly two-decade high — at the conclusion of its latest policy meeting later Wednesday.

However, the newest batch of inflation data supports the notion of an interest-rate cut in coming months, assuming the trajectory doesn’t change, economists said.
“We still need several more months of this, but the fundamentals are encouraging,” Paul Ashworth, chief North America economist at Capital Economics, wrote in a note Wednesday.

Food and gasoline inflation fell

While annual data on inflation trends is helpful, economists generally recommend looking at monthly numbers as a better guide of short-term movements and inflation trends.
The monthly reading was unchanged, at 0% in May, down from 0.3% in April and 0.4% in March. To get back to target, economists say the monthly reading should consistently be in the range of about 0.2%.
That downward move was “largely driven” by lower gasoline prices, said Joe Seydl, senior markets economist at J.P. Morgan Private Bank.

U.S. gasoline prices fell 3.6% in the month from April to May, after having increased in each of the prior three months, according to CPI data. Prices are up about 2% over the past year.
Consumers paid an average pump price of roughly $3.58 a gallon at the end of May, according to weekly data published by the U.S. Energy Information Administration.
Gas prices have continued to decline since then: Average prices were $3.43 a gallon as of June 10.

There has also been a broad pullback in grocery prices.
Monthly “food at home” inflation has been at 0% or even negative for the past four months, according to CPI data.
“Food inflation has fallen back really sharply,” said Olivia Cross, a North America economist at Capital Economics.
That’s largely due to falling prices for agricultural commodities, in addition to others such as easing pressures in the labor market, she said.

Housing inflation is falling slowly

Single family homes in a residential neighborhood in San Marcos, Texas.
Jordan Vonderhaar/Bloomberg via Getty Images

Economists also generally like to consider an inflation measure that strips out energy and food prices, which can be volatile, to determine prevailing inflation trends.
That reading, known as “core” CPI, fell to a monthly 0.2% reading in May, down from 0.3% in April, and 3.4% on an annual basis, down from 3.6%.
Some components of core CPI remain trouble spots. Chief among them is housing, which has remained stubbornly elevated, economists said.
Shelter inflation was 5.4% annually in May, down marginally from 5.5% in April.
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Shelter inflation has an outsized impact on CPI numbers because it’s by far consumers’ largest expenditure.
“It’s falling more slowly than people were hoping for,” said Michael Pugliese, a senior economist at Wells Fargo Economics. “It moves at a glacial pace both up and down.”

Prices for household necessities ‘going nowhere fast’

That said, housing inflation is falling. It’s down from a peak over 8% in March 2023.
Economists expect it to continue to decline given prevailing real estate trends, but say it will likely take a while for that cycle to play out.
For example, market rents for new leases are flat and “haven’t gone anywhere for two years,” Zandi said.
“Basic [household] necessities — food, gas, rent — they’re all going nowhere fast, and that’s really very encouraging,” Zandi added.

Aside from housing, other categories with “notable increases” over the last year include motor vehicle insurance, up 20.3%; medical care, up 3.1%: recreation, up 1.3%; and personal care, up 2.9%, the Bureau of Labor Statistics said.
Meanwhile, some categories have seen prices pull back. Broadly, physical goods prices excluding food and energy commodities declined by 1.7% in the past year, including a 9.3% reduction for used cars and trucks; airline fares are also down, by 5.9%.

Services inflation has been ‘slower moving’

Inflation for physical goods spiked as the U.S. economy reopened in 2021. The Covid-19 pandemic disrupted supply chains, while Americans spent more on their homes and less on services such as dining out and entertainment.
Now, “the goods side of the inflation story is pretty much back to normal,” Pugliese said. “It’s really the services side that’s been much slower moving.”
There are many reasons for that, economists said.

I think this report reinforces the disinflationary narrative, that inflation is almost back in the bottle.

Mark Zandi
chief economist at Moody’s Analytics

For example, a surge in new and used car prices a few years ago is likely now fueling high inflation for motor vehicle insurance and repair, since it generally costs more to insure and repair pricier cars, economists said.
The services sector is also generally more sensitive to inflationary pressures in the labor market such as strong wage growth.
Record-high demand for workers as the pandemic-era economy reopened pushed wage growth to its highest level in decades. The labor market has since cooled and wage growth has declined, though it remains above its pre-pandemic level.
Average hourly earnings for private-sector workers grew at a 4.1% annual pace in May, down from a peak near 6% in March 2022.
“From a wage inflation perspective, we’re still too high,” J.P. Morgan’s Seydl said.
However, data suggests wages will continue to cool from here, he added. More

Like hundreds of thousands of Americans do so yearly, Mishima Hughson filed for bankruptcy last December.
Along the way, she joined a much smaller group: those who have managed to get their federal student debt canceled in court.
The U.S. Department of Education found that she was no longer responsible for her $158,182 debt. “I thought it was a joke,” Hughson, 58, said.

U.S. President Joe Biden gestures after speaking about student loan debt relief at Madison Area Technical College in Madison, Wisconsin, April 8, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images

Mishima Hughson filed for bankruptcy in December, joining the ranks of hundreds of thousands of Americans who undergo the process each year.
Along the way, the Roanoke, Virginia, resident also joined a much smaller group: those who have managed to get their federal student loans erased in court. The U.S. Department of Education found that Hughson was no longer responsible for her $158,182 debt.

“I thought it was a joke,” Hughson, 58, said. “I was shocked.”
For decades, borrowers have found it next to impossible to walk away from their federal student debt in bankruptcy. Amid concerns that young people would try to ditch their obligations, policymakers made the bar for the discharge of student debt in court particularly high.
Some people needed to prove a “certainty of hopelessness,” and government lawyers battled most of the requests. Between 2011 and 2019, more than 99.8% of borrowers who filed for bankruptcy did not get their student loans discharged, U.S. lawmakers recently pointed out.
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That’s now changing.

In fall 2022, the Department of Education and the Department of Justice jointly released updated bankruptcy guidelines to make the process for student loan borrowers less arduous. The Biden administration’s updated policy now treats student loans like other types of debt in bankruptcy court, experts say.
“While the government used to fight discharge aggressively in almost every case, there is now a policy to agree when the borrower can show financial need and a history of good faith efforts to pay the loans,” said Latife Neu, a bankruptcy lawyer in Seattle.
“I’ve helped several people take advantage of the expanded ability,” Neu said.

Malissa Giles, a bankruptcy attorney in Virginia who represented Hughson, said she has also helped several other borrowers get their student debt cleared under the Biden administration’s new policy. Collectively, those clients have received more than $1.25 million in relief.
“We have discharged student loans as low as $6,500 for debtors with super minimal income and as high as $203,983,” Giles said.
Consumer advocates say that strong bankruptcy protections are essential to a fair lending system.
“If a lender knows that they are likely to lose a loan through bankruptcy discharge, they are more likely to adopt borrower-friendly policies, such as compromising with borrowers who face severe financial challenges,” said higher education expert Mark Kantrowitz.

‘I was not realistic about how little teachers made’

After graduating college in the 1990s with around $35,500 in student debt, Hughson went on to become a public school teacher in Virginia. Her salary began at around $30,000 and never rose above $50,000 in her over 10-year teaching career.
“You have a false expectancy that when you graduate you’ll land this amazing job, and you’ll be able to pay that debt back,” Hughson said. “But I was not realistic about how little teachers made.”
Hughson was also raising two children at the time, and she couldn’t afford her monthly student loan bill.
“I put in for as many deferments as I could,” she said.
She ran out of ways to postpone her payments and eventually fell behind. Then the Department of Education began garnishing her wages. The government has extraordinary collection powers on federal debts and, in addition to borrowers’ paychecks, it can also seize tax refunds and Social Security retirement benefits.
“Aggressive collection methods for recovering defaulted student loans, such as wage garnishment, reduce the amount of money a borrower has to pay for basic necessities, such as housing, food and medical care,” Kantrowitz said. “They may be forced to rely on credit cards and other forms of debt to pay for basic living expenses.”

Indeed, Hughson’s financial situation only worsened after the garnishment. She used her credit cards to pay her bills and eventually reached an unpaid balance of more than $30,000 across her cards.
She left teaching in her 40s, hoping that she could earn more doing something else. She worked different jobs, including one helping adults with learning disabilities.
Although her earnings improved somewhat, her debt swallowed up most of what she made. Over the decades, her student loan balance swelled to over $150,000.
After she got paid and directed cash to her mushrooming credit card balances, she was left with just around $100 for that pay period.
“I could see that it was a never-ending cycle,” she said.
Last year, she decided to finally file for bankruptcy.
“I was in a hole I couldn’t dig myself out of,” Hughson said. “And now I’m free.”

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President Joe Biden and former President Donald Trump both want to extend expiring tax breaks for most Americans.
That could be difficult amid the federal budget deficit, policy experts say.
Fully extending Tax Cuts and Jobs Act provisions could add an estimated $4.6 trillion to the deficit over the next decade, according to the Congressional Budget Office.

Joe Biden and Donald Trump 2024.
Brendan Smialowski | Jon Cherry | Getty Images

Presumptive nominees President Joe Biden and former President Donald Trump have both pledged to extend expiring tax breaks for most Americans — but questions remain on how to pay for it.
Trillions in tax breaks enacted by Trump via the Tax Cuts and Jobs Act of 2017, or TCJA, will expire after 2025 without action from Congress. This would increase taxes for more than 60% of filers, according to the Tax Foundation.

Expiring individual provisions include lower federal income brackets, higher standard deductions, a more generous child tax credit and more.
But the federal budget deficit will be a “huge sticking point” as the 2025 tax cliff approaches, said Erica York, senior economist and research manager with the Tax Foundation’s Center for Federal Tax Policy.
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Fully extending TCJA provisions could add an estimated $4.6 trillion to the deficit over the next decade, the Congressional Budget Office reported in May.
The cost of extending major parts of the TCJA has grown about 50% since initial estimates in 2018, according to the Committee for a Responsible Federal Budget.

In 2018, the Congressional Budget Office estimated economic growth from the TCJA would cover about 20% of the cost of tax cuts. But the effects were smaller, studies have shown.
“There’s no serious economist who thinks that the Tax Cuts and Jobs Act remotely came close to paying for itself,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. “And nobody thinks that extending it or making it permanent is going to pay for itself.”

There’s no serious economist who thinks that the Tax Cuts and Jobs Act remotely came close to paying for itself.

Howard Gleckman
Senior fellow at the Urban-Brookings Tax Policy Center

Proposals from Biden and Trump

Trump wants to extend all TCJA provisions and Biden plans to extend tax breaks for taxpayers who make less than $400,000, which is most Americans. 
Biden’s top economic advisor, Lael Brainard, in May called for higher taxes on the ultra-wealthy and corporations to help fund TCJA extensions for middle-class Americans. By comparison, Trump has renewed his support for tariffs, or taxes levied on imported goods from another country.
However, these policy proposals are uncertain, particularly without knowing which party will control the White House and Congress. More

The first Supplemental Security Income, or SSI, checks were sent in 1974.
Fifty years later, the federal program is now seeing some improvements that may help people access and qualify for benefits.
Congress may be poised to consider additional changes to SSI’s strict rules.

Martonaphoto | Moment | Getty Images

A federal program for people with disabilities and older adults made its first benefit payments 50 years ago.
In 1974, Supplemental Security Income, or SSI, began sending the first monthly checks starting at around $140 per individual, or $210 per couple.

In 2024, the maximum monthly benefit is $943 for individuals and $1,415 for eligible couples. However, the average monthly benefit for individuals is around $698.
That is well below the federal poverty level, which in 2024 is around $1,255 per month for an individual.
Experts say the program — with more than 7 million beneficiaries who must have little income or resources in order to qualify — could be updated to better fulfill its intended mission as a financial lifeline when former President Richard Nixon signed the program into law in 1972.
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SSI benefits come with strict restrictions. Income from work and other sources may reduce how much beneficiaries receive from the program. Additionally, they must stay under certain asset limits — $2,000 for individuals and $3,000 for couples — or risk suspension or termination of their benefits.

The rules are not only a burden for beneficiaries, but also the Social Security Administration.
“For all the people that receive SSI, it’s really only 4% of our total benefits that we lay out as an agency, yet it accounts for 38% of our administrative overhead and workload,” Social Security Commissioner Martin O’Malley said at a National Academy of Social Insurance event last week in Washington, D.C., to commemorate the program’s anniversary.

Updates aimed at improving benefit access

The Social Security Administration is taking steps to try to reduce some of the restrictions that come with SSI benefits.
The agency has announced that it will no longer count food as unearned income — formally known as in-kind support and maintenance, or ISM — which penalizes beneficiaries when their family provides dinner for them, for example. It is also expanding the rental subsidy policy for SSI applicants and beneficiaries, as well as the definition of a public assistance household. Those changes, which are slated to go into effect starting Sept. 30, should allow more people to access and qualify for SSI, O’Malley said.
Moreover, the agency has also made it easier for beneficiaries to request waivers for overpayments, or excess benefits they may have received. It also increased the SSI underpayment threshold to $15,000 from $5,000, which has helped resolve backlogged cases.

Congress may implement more changes

Congress may further improve the program through additional reforms.
By bringing the Social Security Administration’s operating overhead up to where it was a decade ago, the agency could further work to alleviate disability application approval and phone assistance wait times, according to O’Malley.
“It would not add a single penny to the federal debt, because you already paid for it,” O’Malley said.
Moreover, experts contend raising the SSI’s asset thresholds — which have not been increased in about 40 years — could help beneficiaries achieve better financial security.

Two bills in Congress have proposed significant SSI reforms.
Democrats have proposed the Supplemental Security Income Restoration Act, which calls for increasing the program’s asset limits, setting the minimum benefit at 100% of the federal poverty level, streamlining the claiming process and getting rid of certain reductions in benefits.
Another bipartisan proposal — the SSI Savings Penalty Elimination Act — would increase the asset limits to $10,000 per individual and $20,000 per couple, up from $2,000 and $3,000, respectively. Consequently, it would eliminate the marriage penalty current beneficiaries face.
“There is clear momentum behind the SSI Savings Penalty Elimination Act,” Emerson Sprick, associate director of the Bipartisan Policy Center’s Economic Policy Program, said at the NASI event.
The question is whether Congress can attach it to another legislative effort — perhaps related to spending — to get the proposed changes passed in the near future, he said.

Broader updates needed, advocates say

Advocates say further loosening the program’s current rules would have dramatic positive effects.
Under current limitations, at work, SSI beneficiaries may not be able to contribute to a 401(k) or earn raises. Students may not be able to take a paid internship for fear the income could affect their benefits, said Rylin Rodgers, disability policy advisor at Microsoft.
“In order to be successful, [we] need disabled workers in all job types,” Rodgers said.
“SSI, while critical, is at an influx point where in some cases it’s creating a block to that talent,” she said. 
Individuals who receive both Social Security and SSI benefits may see reductions to their payments. Loosening those rules would help lift more elderly and disabled individuals out of poverty, according to Wendell Primus, a visiting fellow at Brookings and former senior policy advisor on health and budget issues to former House Speaker Nancy Pelosi, D-Calif.
SSI benefit amounts could also be enhanced more broadly for all beneficiaries, said Tracey Gronniger, managing director for the economic security team at Justice in Aging, an advocacy group for fighting senior poverty.

“We need to increase the benefit level significantly … to at least the rate of poverty,” Gronniger said.
The poverty rate may also be improved by helping to increase SSI participation in underserved communities, particularly for people of color, she said.
While recent updates to food and housing policies will help, there is more room to update outdated policies that can interfere with access to benefits, said Jennifer Burdick, divisional supervising attorney at the SSI unit at Community Legal Services of Philadelphia.
“It’d be really great if Congress could just fix the bigger issues with the program so we wouldn’t have to look at other ways to try to come up with solutions to problems that Congress isn’t fixing,” Burdick said.
Correction: Emerson Sprick is associate director of the Bipartisan Policy Center’s Economic Policy Program. An earlier version misstated part of his title.

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The hidden costs of homeownership add up to an average $18,118 annually, or $1,510 a month, according to a new report by Bankrate.com.
“It’s just important to understand that you’re buying a lot more than a mortgage payment,” said Jeff Ostrowski, an analyst at Bankrate.com.

Sturti | E+ | Getty Images

It’s no secret that buying a home has gotten more expensive in the U.S. But the cost of keeping and maintaining a home has gotten significantly pricier, too, which might come as a surprise to some buyers. 
The “hidden costs” of homeownership add up to an average $18,118 annually, or $1,510 a month, according to a new report by Bankrate.com. The national figure includes the average costs of property taxes, homeowners insurance, and electricity, internet and cable bills. It also includes home maintenance, which was estimated at 2% a year of the value of a home.

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The price tag of such hidden costs within a typical, single-family home in the U.S. is roughly 26% higher compared with four years ago, the report found. In 2020, the same expenses amounted to $14,428 annually, or $1,202 a month.
“It’s just important to understand that you’re buying a lot more than a mortgage payment,” said Jeff Ostrowski, an analyst at Bankrate.com. “You’re also buying all these additional costs that you’re gonna have to figure out how to pay for.”
The national median mortgage payment in April was $2,256, up $144 or 6.8% from a year ago, according to the Mortgage Bankers Association.

Older homes can require more repairs

Out of all the expenses used to calculate the national average, maintenance and repair costs often surprise new homeowners more because of how much repair costs can vary, depending on the age of the home, experts say.

“Because of the lack of building, we know that homes that are being purchased are older,” said Jessica Lautz, deputy chief economist at the National Association of Realtors.
“Homebuyers have to make a compromise along the way, and often it’s the age or the condition of the home,” she said.
While available supply on the market is increasing, many of those homes were built decades ago, according to the 2022 American Community Survey by the U.S. Census Bureau. The survey found that the median age of owner-occupied homes in the U.S. is about 40 years old.
A home around that age “may need system upgrades, so think about a new HVAC [heating, ventilation, and air conditioning] unit, or windows, or doors,” Lautz said.
A roof lasts about 30 years on average while vinyl siding may last three to four decades, according to Angi.com, an online marketplace that connects homeowners with professional contractors for home maintenance or renovations.
“Those are the kind of costs that can really add up quickly,” Ostrowski said.

For first-timers, repairs are ‘part of the learning process’

First-time homebuyers especially don’t realize the true cost of maintenance and repairs because such expenses are “part of the learning process of becoming a homeowner,” Ostrowski said.
“Once you’ve been a homeowner for a while, you realize everything that can go wrong,” he said. 

A mistake, however, is spending your entire reserve of savings for the down payment and ending up “house poor,” Ostrowski said.
“Then you move in, and you don’t really have any money left for repairs and maintenance, so you wind up running up credit card debt or taking out some kind of higher interest debt to pay for that,” he said.
In 2023, 46% of homeowners used cash from savings to cover home improvement projects, according to Angi.com. About 20% used credit cards, while 7% refinanced an existing loan and 5% used a home equity line of credit loan, the site found.

Don’t waive a home inspection

In the past few years, many homebuyers on the market waived home inspections, as competition among other buyers was high, said Ostrowski. In many cases, people who were already homeowners and could make cash offers were more likely to waive a home inspection.
“They’re not in the same sort of vulnerable position as a first-time buyer,” or somebody who’s never gone through the process, he said. 
Competition is still hot in some areas.
On average, there are three offers for every home that’s listed for sale, Lautz said.
In April, around 19% of buyers waived the home inspection, down from 22% one month prior and 21% a year earlier, according to NAR data.

But waiving the inspection is risky and not something to do lightly. An inspection is an important safeguard that can help you go into the purchase understanding some of the maintenance tasks and repairs that may be on the horizon.
Otherwise, it can be a factor that can inflate the ongoing costs after you close on a house, Ostrowski said.
“That definitely raises the risk of somebody moving into a house and not realizing that the [air conditioning] was about to go, or the water heater was on its last legs, or the roof needs to be replaced,” he said. More

If you’re living and working abroad and still need to file federal taxes for 2023, the deadline is June 17.
This extension applies if you live outside of the U.S. and Puerto Rico or serve in the military outside the country during the regular tax deadline.
However, American expats may have other reporting requirements, experts say.

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If you’re living and working abroad and still need to file 2023 taxes, the deadline is only one week away.
While the regular tax deadline was April 15 for most taxpayers, there’s an automatic two-month extension to June 17 for those U.S. citizens and resident aliens, including dual citizens, who live outside the country.

There are two ways to qualify for the June 17 deadline, according to the IRS. You must live outside of the U.S. and Puerto Rico or serve in the military outside the country during the regular tax deadline.
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Although the two-month extension happens automatically, you must attach a statement to your return that explains which situation applies, according to the IRS.
Still, you’ll want to pay your balance due “as quickly as possible” because interest accrues after the original April 15 deadline, said Mike Wallace, CEO at Greenback Expat Tax Services.
The “fastest and easiest” ways to make payments are via an IRS Online Account, Direct Pay and the Electronic Federal Tax Payment System, according to the IRS. But there are additional payment options.

There’s still time to file for an extension

If you can’t meet the June 17 deadline, there’s still time to file for a tax extension, which provides an additional four months, said Rachel Martens, managing director at financial services firm CBIZ MHM.
You can request the four-month extension by filing Form 4868 by June 17, which bumps the filing due date to Oct. 15.

Other filing requirements for expats

In addition to income tax filings, some American expats face added reporting requirements. These requirements can be complicated and mistakes can be costly, experts say.
To that point, roughly 1 in 5 American expats don’t feel comfortable filing U.S. taxes while living abroad, according to a recent survey from Greenback Expat Tax Services.

For example, some expats also must report foreign bank accounts by filing the Report of Foreign Bank and Financial Accounts, or FBAR, if the combined account value exceeds $10,000 any time during the year.
Some expats may also need to complete and attach Form 8938, once certain foreign assets exceed yearly thresholds, Martens explained.
Failing to file the FBAR or Form 8938 can trigger penalties of up to $10,000 or higher, depending on the situation, according to the IRS. More