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Many provisions from the Tax Cuts and Jobs Act, or TCJA, of 2017 are slated to expire after 2025, unless Congress passes legislation to extend them.
The federal budget deficit could complicate proposals from former President Donald Trump and President Joe Biden.
Fully extending the TCJA tax breaks 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

The next U.S. president will face trillions in expiring tax breaks. While President Joe Biden and former President Donald Trump have shared early proposals, the federal budget deficit could complicate plans, experts say.
Enacted under Trump, the Tax Cuts and Jobs Act, or TCJA, of 2017 lowered federal income tax brackets, raised the standard deduction, and doubled estate and gift tax exemption, among other individual provisions. Many TCJA tax breaks are temporary and slated to sunset after 2025 unless Congress passes legislation to extend them.

“It’s a massive tax cliff,” said Erica York, senior economist and research manager with the Tax Foundation’s Center for Federal Tax Policy.
The decision on how to handle expiring provisions “affects virtually all aspects of the tax code and affects the vast majority of American taxpayers,” she said.
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However, the federal budget deficit will be a “huge sticking point” amid tax negotiations, York said.
Fully extending the TCJA tax breaks could add an estimated $4.6 trillion to the deficit over the next decade, according to a Congressional Budget Office report released on May 8.

Of course, several economic and political factors through 2025 may impact legislators’ desire to pay for any tax cut extensions.
“You have a game of three-dimensional chess going on,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. “What’s the economy going to be like? Who’s going to be in control of Washington? What’s the public mood going to be?”
“It’s impossible to predict,” he added.

Plans to tackle expiring Trump tax cuts

Biden’s top economic advisor Lael Brainard on Friday proposed higher taxes on the wealthy and corporations to pay for extended middle-class tax breaks from the TCJA.
“It’s clear we need to end the 2017 tax breaks for the ultra-wealthy and scale back costly permanent corporate tax breaks,” she said during a speech to The Hamilton Project at the Brookings Institution. The TCJA permanently reduced corporate taxes by dropping the top federal rate from 35% to 21%.
By contrast, Biden plans to extend expiring TCJA provisions for those making less than $400,000, according to Brainard.
However, with control of Congress in flux, it’s difficult to predict which, if any, legislative priorities will be enacted.  

Meanwhile, Trump called for sweeping tax cuts at a campaign rally in Wildwood, New Jersey, on Saturday.
“Instead of a Biden tax hike, I’ll give you a Trump middle-class, upper-class, lower-class, business-class big tax cut,” he told the crowd.
Other than support for tariffs on U.S. imports, Trump hasn’t shared specifics on how to fund additional tax cuts.

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It can be tempting to follow the crowd as “meme stocks” like AMC and GameStop surge.
But experts say you should only risk money you’re prepared to lose.

Traders walk the floor during morning trading at the New York Stock Exchange (NYSE) on May 14, 2024 in New York City. 
Spencer Platt | Getty Images

Shares of AMC Entertainment and GameStop have surged once again in a new “meme stock” rally triggered by social media.
A social media account named “Roaring Kitty” posted an image for the first time in three years, prompting the trading frenzy. The man purportedly behind the Roaring Kitty account helped lead a meme stock frenzy between 2020 and 2021.

“This is now like watching a sitcom on repeat,” said Dan Egan, vice president of behavioral finance and investing at Betterment.

In some ways, this time differs from when the stocks surged during the Covid-19 lockdown.
Egan pointed out that this time people aren’t stuck at home bored with stimulus check money in their bank accounts that’s hardly earning any interest.
Roaring Kitty’s first post since 2021 is “ambiguous and kind of interpretable in some way,” he said.
This latest buying frenzy can tempt people to want to be part of a perceived movement, Egan said.

Roaring Kitty gives the impression that a guy is in his basement trading stocks instead of big investors like hedge funds and investment banks, he said.
“We want to be on the side of the underdog and supporting him,” Egan said.

‘It’s like going to Las Vegas’

Committing money to meme stocks comes with risks. Egan said that what may start as an edgy, niche community of investors can turn into a lot of upward pressure on the stock as more investors join in.
Betting on these stocks is a form of gambling, said Ted Jenkin, a certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta.
“It’s like going to Las Vegas,” said Jenkin, who is also a member of the CNBC FA Council. “Only play with money that you plan to lose.”
Jenkin said he would tell his clients to be very cautious.
But he told CNBC that he bet on the meme stock frenzy himself — investing $75,000 in AMC on Monday and cashing out eight hours later after he doubled his money.
“You start to see these runs, I mean why not?” Jenkin said. “It’s stupid money.”
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It can be difficult to decide when the right time to sell is, Egan noted.
Investors who weren’t able to profitably sell the stocks in the past may be holding on for a chance to do so now, he said.
Watching the action from the sidelines can be entertaining and a risk-free approach, Egan said.
For those who do decide to bet, it’s best to think of it like a hobby and not risk funds you will need.
“Just don’t bet any money you can’t afford to lose,” Egan said.

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The U.S. Department of Education announced Tuesday the interest rates on federal student loans for the 2024-2025 academic year.
The interest rate on federal undergraduate loans will be 6.53%, the highest rate in at least a decade, according to higher education expert Mark Kantrowitz.

The US Department of Education sign hangs over the entrance to the federal building housing the agency’s headquarters in Washington, D.C., Feb. 9, 2024.
J. David Ake | Getty Images

The U.S. Department of Education announced Tuesday the interest rates on federal student loans for the 2024-2025 academic year.
The interest rate on federal direct undergraduate loans will be 6.53%. That’s the highest rate in at least a decade, according to higher education expert Mark Kantrowitz. The undergraduate rate for the 2023-2024 year is 5.5%.

For graduate students, loans will come with an 8.08% interest rate, compared with the current 7.05%. Plus loans for graduate students and parents will have a 9.08% interest rate, an increase from 8.05% now. Both of those rates haven’t been as high in more than 20 years, Kantrowitz said.
The rise in interest rates could complicate the Biden administration’s efforts to get the student loan crisis under control and relieve borrowers of the pain of interest accrual, experts say. Even as millions of people have benefited from recent debt relief measures, new students will be saddled with more expensive loans for decades to come.

Which borrowers face higher rates 

All federal education loans issued on or after July 1, 2024, will be subject to the new rates.

Sorry, families: You can’t try to evade the rate increase by borrowing ahead of that deadline. Loans for the 2024-25 academic year must be taken out after July 1.
Don’t worry about loans you’ve taken out for previous academic years: most federal student loan rates are fixed, meaning the rates on those existing loans won’t change.
The rate changes apply only to federal student loans. Private loans come with their own — often higher — interest rates.

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Collectively, Americans owe $1.12 trillion on their credit cards, according to a new report from the Federal Reserve Bank of New York.
Although total balances fell in the first few months of 2024, delinquencies are on the rise.
Young adults, who are also burdened by high levels of student loan debt, are increasingly falling behind on the payments, the New York Fed found.

Americans owe a collective $1.12 trillion on their credit cards, according to a new report on household debt from the Federal Reserve Bank of New York.
In line with typical spending patterns after the peak holiday season, credit card balances fell by $14 billion in the first quarter of 2024. But credit card delinquency rates rose — especially among young adults, or borrowers between the ages of 18 and 29, who are burdened by high levels of student loan debt and high costs across the board, the New York Fed found.

These Generation Z borrowers also have shorter credit histories and lower credit limits, making them more likely to be maxed out on their credit cards and miss a payment, the researchers found.
“Overall balance sheets are very good but then clearly, what delinquency rates are showing is that there is increased stress among some segments of the population,” the New York Fed researchers said on a press call Tuesday.
Over the last year, roughly 8.9% of credit card balances transitioned into delinquency, the New York Fed found.

Why more Americans are falling behind

Many consumers feel strained by higher prices — most notably for food, gas and housing — and more cardholders are carrying debt from month to month or falling behind on payments, according to a separate report by Bankrate from January.  
“High inflation and high interest rates are significantly contributing to Americans’ debt loads and making this debt harder to pay off,” said Ted Rossman, Bankrate’s senior industry analyst.

However, those just starting out face additional financial challenges.
Not only are their wages lower than their parents’ earnings when they were in their 20s and 30s, after adjusting for inflation, but they are also carrying larger student loan balances, recent reports show.
Further, if they bought a car or made other significant purchases in the last few years, then they are also saddled with much larger monthly payments due to higher prices and rising interest rates, the Fed researchers said.
“It makes sense that particularly the younger borrowers now are struggling more,” they said.

Credit card rates top 20%

At the same time, credit cards have become one of the most expensive ways to borrow money. Credit card rates, already high in recent years, spiked along with the Federal Reserve’s string of 11 rate hikes since 2022, including four last year.
Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rose, the prime rate did as well, and credit card rates followed suit.
The average annual percentage rate is now more than 20%, according to Bankrate — near an all-time high.
“With the Fed likely to keep rates higher for longer, credit card rates should remain high for the foreseeable future,” Rossman said. “The national average will probably end the year over 20% for only the second time ever.”

What to do if you’re in credit card debt

“Interest rates aren’t going down anytime soon, but you still have options, especially if you have good credit,” said Matt Schulz, chief credit analyst at LendingTree.
If you’re carrying a balance, try calling your card issuer to ask for a lower rate. Or you might consolidate and pay off high-interest credit cards with a lower-interest home equity loan or personal loan, or switch to an interest-free balance transfer credit card, Schulz said.
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To optimize the benefits of their credit card, consumers should regularly compare credit card offers, pay as much of their balance as soon as they can, and avoid paying their bills late, according to Mike Townsend, a spokesperson for the American Bankers Association.
“Any credit cardholder who finds themselves in financial stress should always contact their card issuer to make them aware of their situation,” Townsend said. “They may be eligible for some relief or assistance depending on their individual circumstances.”
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More home sellers now owe capital gains taxes after selling their primary residence, but it is possible to reduce the bill.
There are no taxes on the first $250,000 of profit if you are single, or $500,000 for married couples filing jointly, assuming you meet IRS rules.
You can lower profits above those thresholds by adding to your home’s “basis,” or original purchase price, with closing costs and eligible improvements.

Westend61 | Westend61 | Getty Images

As home values climb, more Americans owe capital gains taxes when selling property. But knowing how to calculate your home’s profit could reduce your bill, experts say.
Most Americans do not owe taxes for selling a primary residence because of a special tax break — known as the Section 121 exclusion — that shields up to $250,000 of profits for single filers and $500,000 for married couples filing together.

However, more U.S. home sales profits now exceed these thresholds, according to an April report from real estate data firm CoreLogic. Nearly 8% of sales exceeded the $500,000 limit in 2023, up from roughly 3% in 2019, the report found.
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There are strict IRS rules to qualify for the $250,000 or $500,000 exemptions. Any profit above those limits is subject to capital gains taxes, levied at 0%, 15% or 20%, based on your earnings.
Capital gains brackets use “taxable income,” which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

Reduce capital gains by increasing ‘basis’

“It is important to track your cost basis of the home,” which is your original purchase price plus closing costs from the purchase, according to Thomas Scanlon, a certified financial planner at Raymond James in Manchester, Connecticut.

You can reduce your home sale profit by adding often-forgotten costs and fees to your basis, which minimizes your capital gains tax liability.
For example, you can start by tacking on fees and closing costs from the purchase and sale of the home, according to the IRS. These may include:

Title fees
Charges for utility installation
Legal and recording fees
Surveys
Transfer taxes
Title insurance
Balances owed by the seller

These could be small amounts individually but have a significant effect on the basis when tallied.
The average closing cost nationwide is $4,243, according to a report from Assurance, but fees vary widely. In the priciest state, New York, the average is $8,039, while California is a close second at $8,028.
“You also get credit for the expenses for the sale of the property,” added Scanlon, who is also a certified public accountant. That includes your real estate commissions and closing costs.
However, there are some fees and closing costs you cannot add to your basis, such as home insurance premiums or rent or utilities paid before your closing date, according to the IRS.
Similarly, loan charges such as points, mortgage insurance premiums, the cost to pull your credit report or appraisals required by your lender will not count.

The ‘best way’ to reduce capital gains taxes

You can further increase your home’s basis by tacking on the cost of eligible upgrades, experts say.
“The best way to minimize the tax owed from selling a house is to maintain an accurate record of home improvements,” said CFP and enrolled agent Paul Fenner, founder and president of Tamma Capital in Commerce Township, Michigan.
An improvement must “add to the value of your home, prolong its useful life or adopt it to new uses,” according to the IRS.
For example, you can increase your basis with additions, outdoor or exterior upgrades, adding new systems, plumbing or built-in appliances.
However, you cannot tack on repairs or maintenance needed to “keep your home in good condition,” such as fixing leaks, holes or cracks or replacing broken hardware, according to the IRS.

Of course, you will need documentation for any improvements used to increase your home’s basis in case of a future IRS audit.
If you do not have receipts, “at the very least, take pictures,” and gather any permits pulled for home projects, Scanlon from Raymond James said.

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GameStop mentions surged on WallStreetBets on Monday after “Roaring Kitty,” the user who helped catalyze the GameStop stock craze in 2021, resurfaced online, data shows.
The user, whose legal name is Keith Gill, posted several times on X on Sunday and Monday, marking his first posts on Reddit or X since 2021.

Tiffany Hagler-Geard | Bloomberg | Getty Images

GameStop has once again become a hot topic on Reddit’s famed WallStreetBets page Monday after the man who helped make it a meme stock reappeared online.
Mentions of the video game retailer on the Reddit forum topped 1,200 for the last seven days as of Monday afternoon, according to market research platform Quiver Quantitative. With Monday’s boost, the stock became the most-referenced stock in that seven-day period, surpassing the SPDR S&P 500 ETF Trust (SPY), a popular fund tracking the benchmark S&P 500 index, and artificial intelligence darling Nvidia.

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GME stock performance year to date

GameStop was the most talked about equity on WallStreetBets on Monday, with more than 1,000 mentions in the last 24 hours. Fellow meme stock AMC Entertainment had the next most references in that period, at more than 500.
Monday’s jump in discussion comes as “Roaring Kitty,” the user who helped catalyze the GameStop stock craze in 2021, posted online for the first time in nearly three years. Roaring Kitty, whose legal name is Keith Gill, posted a picture on X of a video game player leaning forward in his chair, suggesting he’s taking the game seriously.
It marked his first post on Reddit or X since 2021. The post has already garnered nearly 100,000 likes since it went up around 8 p.m. ET on Sunday night.
He followed that up with additional posts to X on Monday, with compilations of clips from popular TV shows and movies.
Multiple Reddit users shared screenshots of their GameStop positions on the WallStreetBets page following the return of Roaring Kitty. However, it appeared that many posts on the topic were being filtered out. One post showed a screenshot of GameStop’s intraday chart with the caption, “Oh we are so back.”
GameStop shares soared in Monday’s session and were halted several times due to volatility. With Monday’s rally, the so-called meme stock was up 73.7% in 2024.

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The 4% withdrawal rule calls for retirees to withdraw that portion from their investment portfolio in the first year of retirement, and subsequently adjust their annual withdrawals for inflation.
But in the decades since the strategy was created, retirement planning has changed.

Wand_prapan | Istock | Getty Images

Guaranteed retirement income is a challenge

Many baby boomers face a challenge of how to maintain their lifestyle once they retire.
Social Security benefits typically replace about 40% of a worker’s pre-retirement income.
Annuities may help provide another source of guaranteed income. However, many people do not seek those products when they retire, due to their complexity and difficulty selecting among the various products.
TIAA has launched a new metric to show why the 4% rule combined with an annuity can provide a higher amount of income than just using the 4% rule alone. (TIAA’s analysis is based on the use of one of its own fixed annuities that provides a guaranteed rate of return.)
For example, if a retiree has $1 million in total savings, the 4% rule would provide them with $40,000 in their first year of retirement.
However, if the same retiree instead converts $333,000 of their $1 million balance to an annuity, that may boost that income to $52,667, according to TIAA. That is based on the combined income of the annuity and a 4% withdrawal on the remaining $666,667 portfolio.
The first-year withdrawal of the annuity strategy — $52,667 versus $40,000 — is 32% higher and $1,056 more per month than just using the 4% rule.
“Retirees never know how much they’re allowed to spend,” said Benjamin Goodman, vice president at TIAA Institute.
“And with an annuity, you know exactly what you can spend, the check, because you’re going to get another one next month,” he said.

One reason more investors do not buy annuities may have to do with their financial advisors.
“It’s rare that we recommend them, but they are applicable in some circumstances,” said Colin Gerrety, a certified financial planner and client advisor at Glassman Wealth Services in Tysons Corner, Virginia.
To be sure, annuities are not a fit for all investors, particularly those who have poor health habits or conditions that may prevent them from living long lives, Goodman said.
But because of the income certainty annuities can provide, they may catch on, Blanchett predicts.
“I think that we’re going to see more and more advisors realize that you cannot create the same kind of outcomes and certainty by managing a portfolio as you can having a retiree allocate their savings to a product that provides lifetime income,” Blanchett said.
Retirees may also get guaranteed income from Treasury Inflation Protection Securities, or TIPS, according to Morningstar. Specifically, a TIPS ladder of bonds with varying maturity dates can provide steady income and inflation protection.

When withdrawal rates may be higher

The 4% rule has its blind spots when applied to today’s retirees, according to recent research from Blanchett.
In addition to ignoring other income streams like Social Security, the 4% model also falls short in that it does not provide a lot of spending flexibility.
Retirees who are depending on their savings to fund essential expenses would want to have a conservative approach.
However, those who have can withstand more market fluctuations may have more flexibility with withdrawal rates.
For those retirees, the 4% rule likely will provide an outdated recommendation.
“It’s going to be too low for most people who are retiring at a reasonable age,” Blanchett said.

While the 4% rule may be useful to gauge how much savings an investor needs when they first enter retirement, it’s not meant to be an ongoing distribution framework, he said.  
The 4% rule is difficult to apply to every single person across the board, particularly as they are subject to different tax rates and have different risk profiles and cash flow needs, Gerrety said.
“Very rarely have I ever seen a client who just withdraws 4% of their portfolio every year, and calls it a day,” Gerrety said. “Things tend to be a lot lumpier and a lot messier than that.”

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Those armed with a newly minted diploma are entering a job market that looks a little less promising than it did a year ago.
Employers now project hiring 5.8% fewer new college graduates than they did from the Class of 2023, according to a recent report. 
Experts share their best advice for landing a job in this market.

Those armed with a newly minted diploma are entering a job market that looks a little less promising than it did one year ago.
Employers plan to hire about 5.8% fewer new college graduates from this year’s class than they hired from the Class of 2023, according to a report from the National Association of Colleges and Employers.

Some companies, in industries such as chemical manufacturing, finance, insurance and real estate, have pulled back after scaling up last year, according to NACE. The decline follows a historic hiring boom in the aftermath of the pandemic, the report found, suggesting that this year’s dip reflects a return to “normal” hiring plans. 
However, there are still pockets of growth, mainly in miscellaneous manufacturing, utilities and professional services, NACE also found.
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In the current job market, Vicki Salemi, career expert at Monster, advises new grads to “stay positive and optimistic.”
While entering the real world without an offer on the table can be daunting, “they can upskill or pick up a side hustle in the meantime, continue to search and be persistent,” she said.

Given continuing education courses, online classes, certification programs and boot camps, there are more opportunities for young people just entering the workforce to ramp up their expertise.
With many companies continuing to offer the flexibility of hybrid work, there is also the added advantage of being able to cast a wider net, which can work in the favor of someone just starting out.
“In terms of the quality and quantity, they can pursue jobs beyond the constraints of a particular zip code,” Salemi said.

Top tips for job seekers

Recent or soon-to-be grads can also stay ahead of their competition by networking with parents, professors, family friends, classmates, neighbors, community groups and an extensive alumni network, both in person and on platforms like LinkedIn, according to Ivan Misner, the founder of business networking organization BNI.com.
“Sometimes, even weak ties can lead to valuable job referrals,” he said.

But first, clean up your online presence, even on platforms you consider more for fun than networking, Misner cautioned.
“Take down those pictures of you partying at a frat house,” he said. “Potential employers review online profiles, so make sure yours reflects positively on you — and you don’t want to make your network look bad if they recommend you.”
Once you have a foot in the door, offer to do a “working interview,” he advised, to best showcase your skills and abilities.
“Say, ‘if there is a project, bring me in, let me show you what I can do'” — that strategy works because very few people offer to do this, Misner said. “That makes you stand out and they are going to remember you.”
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