1. Consider changing your entity status

There are a lot of options for how your company files its tax return, and it may impact the amount of tax you pay. One common entity formation is the single-member LLC, says Daniel Kochka, CPA and managing principal at Integrated Accounting Solutions, LLC. “It’s easy to set up, it’s cost-effective, and it separates your business from your personal life.” Filing as a single-member LLC, unlike filing as a sole proprietor, means your personal assets may be protected from business debts and lawsuits. Additionally, by setting up a business EIN (employer identification number), you don’t have to share your Social Security number each time you onboard as a new client.  

But an LLC can alternatively be filed as an S corporation, which gives you the same legal separation with the benefit of not having to pay self-employment tax. “As long as you’re paying yourself reasonable compensation based on market research, the distributions you take from the S Corp help you avoid self-employment tax,” says Kochka. “However, owners must follow payroll tax rules, including reasonable compensation, and salaries must be at fair market value to avoid IRS scrutiny.”

2. Review your accounting system

During the year, when you’re trying to keep your business moving along, it’s easy to get sloppy with your books, but messy books lead to missed tax-saving opportunities. Payments for subscriptions to trade journals or money spent on a new computer, headphones or office supplies ordered online may get lost if not accounted for properly. 

In addition to reviewing your books at least monthly to make sure they’re in good order, applying for a business credit card may make it easier to keep qualifying business expenses separate. “If you have an expense that’s part business and part personal, paying for it through a business account will ensure it’s recorded and doesn’t get missed even if you end up not deducting the full amount in the end,” says Rachel Richards, CPA and head of tax products at Gelt.

3. Set aside what you can for retirement

There are a variety of retirement options for small business owners to invest in, such as a solo 401k, SEP IRA or a SIMPLE IRA. “[These options are] a great way to, one, reduce your tax liability and, two, start to put money away, which is usually forgotten about as a small business owner,” says Kochka.

If you are in a loss this year or in a lower tax bracket (so tax liability is not a big concern) but you still have money you want to set aside for retirement, a Roth IRA or Roth 401(k) may be a better option. The money in a Roth account is not currently tax deductible, but the growth will be tax-free, and so will the amount you take out in retirement. 

4. Keep up with quarterly payments

The safe harbor requirement, or the amount you should be paying each quarter to the IRS, is typically 90% of the current year’s tax liability or 100% of the prior year’s tax liability (110% if the prior-year income was over $150,000), whichever is smaller. “What a lot of people don’t see on the tax return, because it’s buried on the bottom, is there [are] penalties involved for not making proper estimates,” says Kochka. 

The end of the year is a good time to see if you met that requirement each quarter and make plans for the following year. Keep in mind that if a spouse has payroll withholding, those amounts can help meet safe harbor requirements when filing jointly.

5. Look for additional tax deductions or credits

Small businesses may qualify for additional tax deductions or credits. For example, business owners may be eligible for the qualified business income deduction (QBI), which allows them an additional deduction of up to 20% of their qualified business income. 

The Augusta Rule is another way to reduce taxes by increasing your business expenses. “If you’re hosting a legitimate business meeting or a company retreat, you can rent your home to your business instead of paying an outside venue,” says Richards. If your home is rented for less than 14 days a year, not used as your primary place of business, and you comply with several other rules, you can potentially exclude that rental income from your personal return while deducting the rent payment on your business return.

Additionally, some businesses may qualify for a credit for research activities, for example, if your business is working on developing new techniques or improving existing processes, explains Richards. You don’t have to be a scientist to qualify; the key is in creating technological innovation or process improvements.

At the end of the day, there are numerous variables to consider when you file your tax return. Proactive tax planning helps create a system that minimizes surprises and maximizes savings so your business can thrive.

Photo by Dragana Gordic/Shutterstock

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Keep reading for tips and tricks that you can use now—and in the future—to secure your own retirement plans.

Pinpoint your current situation

The first step is to figure out your current income, savings, and debt—or more simply, your overall assets minus your liabilities. Getting a good handle on your current situation will help you know exactly where you stand. Then, you can figure out how much more income you’ll need to generate to meet your savings goal. 

Don’t forget to include anticipated income sources like social security or pension income. These can add quite a bit to your retirement savings.

A simple calculation

According to Andrew Crowell, vice chairman of wealth management at D.A. Davidson & Co., the general rule is that whatever your lifestyle spending is today, plan on spending about three-quarters, or 80%, of that in retirement. “If a family is living on $10,000 a month today [or] $120,000 a year, [in retirement they are] probably going to [spend] a little bit closer to $8,000 a month because certain expenses, [such as] the amount [you’re spending on gas or] commuting to work, [will fall away],” he says. Because of this, creating a good estimate of your monthly expenses and keeping an eye on those costs is important.

Another common estimate that’s thrown around in the retirement planning community is the 4% rule, which suggests that you “can safely withdraw 4% of your retirement savings each year without depleting your principal over a 30-year retirement period,” says Bobby Mascia, CFBS, founder and CEO of Green Ridge Wealth Planning. “For example, if you need $50,000 per year [in retirement], you’d need a retirement portfolio of approximately $1,250,000 ($50,000 / 0.04).” 

However, Mascia adds that the 4% rule can be limiting, so don’t take it too seriously. “Your safe withdrawal rate may vary based on your risk tolerance, investment strategy and current age, respective to how long you expect to live in retirement,” he says.

Think about where you want to be

The next part is the fun part—this is when you get to dream about your retirement plans. Do you want to take several extravagant trips each year, or would you rather purchase an RV and drive across the country? Will you downsize and move or keep your current home? Envision what you want to do later in life so you can start planning for it now, Crowell says.

Hopefully by the time you retire, your home will be paid off and your kids will be financially independent. Still, there may be additional expenses you hadn’t considered, such as the cost of healthcare, travel and daily leisure activities, explains Mascia. 

“Things wear out, [and] there is deferred maintenance on homes and autos and things like that. So those are going to be ongoing expenses,” Crowell adds. “Do you want to help pay for your grandchildren’s education? That’s another outflow.” Make sure you take into account all these potential expenses so you don’t short-change the lifestyle you want to lead.

What you can do now

The sooner you’re able to save for retirement, the better, due to compounding interest and the growth of investments over time. Putting away $400 when you’re 20 years old will be much more beneficial than putting away $800 when you’re 40.

Still, there are many other ways to increase retirement savings, regardless of your age. For example, you can automate your savings, take advantage of catch-up contributions and cut back on unnecessary expenses, such as automated subscriptions you no longer use. Additionally, do your best to get rid of debt now, such as your mortgage, car payments or student loan payments. “Think about what you can pay down now so that in retirement, you don’t have that outflow any longer,” Crowell says.

Later life gigs

Another popular trend is working a side gig in retirement to earn additional income. “I’ve been [helping people plan for retirement] for almost 30 years, and the gig economy is real and people are using it in very creative ways,” Crowell says. “I have several retiree [clients] that have always been crafty people. [They enjoy] knitting, artwork [and] painting.” In retirement, these individuals sell those crafts on Etsy or at craft fairs. Others drive an Uber in retirement. 

“People are realizing they can’t golf seven days a week or their body wears out,” Crowell adds. “They can’t play pickleball seven days a week because [their] knees and hips and joints [will hurt].” 

People are living longer and often enjoy turning their hobbies into cashflow, so don’t assume that retirement is the end of the line for your income.

Revisit your plan annually

Starting in your mid to late 40s, it’s important to review your retirement projections annually. “Retirement planning is an ongoing process that requires regular review and adjustments,” Mascia says.

No one can predict the future, and life changes all the time. For example, did an older relative come to live with you and increase your monthly spend? Or did you inherit money that changed your base amount of savings? Reviewing your retirement plan each year will prevent you from being caught off guard so you know you’ll have what you need.

At the end of the day, think about the big picture. Where are you now, where do you want to be and how can you get there? The sooner you start thinking about these ideas, the better you’ll be when it’s finally time to start the retirement you’ve always dreamed of.

Photo by Yuri A/Shutterstock.com

The post How to Calculate How Much Money You Really Need to Retire appeared first on SUCCESS.

“It’s the elephant in the room.…It was a bad loan for a long time,” says Kevin Walton, a reverse mortgage loan originator and Registered Social Security Analyst with C2 Reverse Mortgage. Prior to legislative changes that began under the Reagan administration, banks had many avenues to take the equity in a home, Walton says. “They took everything. And so, people getting reverse mortgages today, remember that.… Once that taste is in your mouth, it’s like a lemon. You can’t take it out.”

However, Home Equity Conversion Mortgages (HECM), a form of reverse mortgages insured by the U.S. government, are available through Federal Housing Administration-approved lenders, which provides both legitimacy and security for these mortgages. These types of loans allow homeowners to draw upon home equity for repairs and maintenance and/or to cover or lower living expenses.

Differences from traditional mortgages

Unlike traditional mortgages, with a reverse mortgage, borrowers don’t have to make monthly payments. For many, that’s the greatest appeal. Instead, the loan, along with interest and fees that accrue monthly, is repaid when the borrower no longer lives in the home. So the longer you have a reverse mortgage, the more you pay at the end (as opposed to a traditional mortgage where you gain equity as you make monthly payments to the lender or bank).

For many, reverse mortgages allow them to remain in their homes as they age and/or to supplement their incomes. Federal HECMs are available to those 62 and older; however, private reverse mortgages are also available to those aged 55 and older.

Are they right for you as part of your retirement strategy? Here’s what to know about today’s reverse mortgages, according to the experts.

Who’s right for a reverse mortgage?

There are several reasons people consider a reverse mortgage. Many who seek out a HECM are on fixed incomes and use it to fill retirement funding gaps. “[They] are part of a generation that didn’t prepare for retirement the way we are preparing today. They thought they could rely on Social Security or their companies didn’t offer 401(k)s or IRAs,” says Michelle White, a national mortgage expert with The CE Shop. “When they purchased a home, that was their investment. And so, a reverse mortgage is, for some, a way of taking that money out as if it was their retirement investment.”

Walton says even clients with plenty of retirement savings use reverse mortgages strategically. “[They] just want to have funds as a buffer…They’ve been coached properly that you don’t want to take funds out in a down market, because you’re really cutting the legs off of your investment when you do that. So, you have a buffer in the form of the reverse [mortgage] you could draw from until the market returns,” he observes.

Some borrowers also use the funds to restructure debt, finance large purchases (such as bucket-list trips), or to make home repairs.

However, Walton says the majority of his clients opt for reverse mortgages to pay for home health care so they can afford to stay in their homes instead of moving into retirement communities. 

Updates to reverse mortgages

In the past, spouses who were not part of the reverse mortgage loan were in a predicament if the borrowing spouse died. (A spouse might not be part of the agreement for a variety of reasons, including that they don’t meet the age requirement or aren’t on the property title.) Because they were not on the loan, they had to immediately refinance, pay off the mortgage, or lose the home.

However, thanks to a 2014 change to the Reverse Mortgage Stabilization Act, surviving, non-borrowing spouses may continue to live on the property after a spouse’s death, or after the spouse has to move into a long-term health care facility as long as a few conditions are met. For example, the non-borrowing spouse must be named on the lending paperwork up front and must have lived in the home when the mortgage was taken out, as well as after their spouse’s death.

Under the current lending program, HECM borrowers must also now participate in counseling sessions to discuss their eligibility, payouts, and what will happen when the mortgage becomes due. White says this education has created big shifts for homeowners and their heirs. “Family members are also being encouraged to take the class with the family member that is getting the reverse mortgage, so that the heirs of the estate will know exactly what’s going on and they’re not getting blindsided,” she says.

Pitfalls of reverse mortgages

Reverse mortgages have several legal requirements that are important to consider upfront. First, heirs can’t take over the mortgages. This is a big turn off for many borrowers who want to leave inheritances through home equity. “[Heirs] typically have six months or less to refinance or pay off the debt,” says Ryan Dossey, co-founder of SoldFast home buying service.

That can be challenging for heirs, particularly if they don’t have good credit. “Overextending beyond what you can do or what your heirs can do is a risk. That’s important [for reverse mortgage holders] to think about, because they might not consider their heirs’ financial picture,” Walton says.  

Dossey also warns against the pitfalls of a home being “underwater” — in other words, borrowing more equity in the reverse mortgage than the home is ultimately worth when the mortgage becomes due.

Another potential drawback is that homeowners must keep on top of home repairs and they aren’t always able to do so. “If you fail to maintain the home (which seniors may lose the ability to do physically), it can trigger a foreclosure,” Dossey says. The homeowner must also keep their homeowner’s insurance and property taxes current.

Reverse mortgage interest rates are typically higher than traditional first mortgages, which may also make potential borrowers hesitate. However, this gap has decreased, according to Walton. “About 10 years ago, the rate differential was about 4%. Now… depending if the loan is structured, [it’s] maybe 1¼ to 1¾ [percent] difference,” he says.

Finally, the dwelling must also be the homeowner’s primary residence. While second homeowners and “snowbirds” (people who spend several months out of the year in warmer climates) may want to think twice about reverse mortgages, Walton says the bank only looks closely if the homeowner has been out of the property for 12 consecutive months. “Six months and one day per calendar year is classified as owner occupied,” he says.

Options beside reverse mortgages

If a homeowner’s financial picture has them considering a reverse mortgage, there may be other viable solutions that better suit their needs. For example, the potential borrower could move in with a relative, ask for financial assistance from family, apply for programs that assist low- or fixed-income individuals with utility bills, sublet rooms in their home or use “house hacking.” “House hacking is when you buy a duplex (or similar property) and live in one unit while leasing the rest. Becoming a landlord is not for the faint of heart, but it’s an option worth exploring,” Dossey says.  

Overall, Walton hopes people no longer consider reverse mortgages as a loan of last resort. “It’s not just for people in dire straits anymore…Give it a second look. It’s had some major improvements to make it a safer, more viable, user-friendly product,” he says.

Photo by Natee Meepian/shutterstock.com

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Which cryptocurrencies are included in the U.S. crypto reserve?

Following a January executive order, the U.S. appears to be moving forward with its cryptocurrency reserve plan, signaling a major push toward incorporating digital assets into its financial framework. Announced by Trump on March 2, the Crypto Strategic Reserve will include Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL) and Cardano (ADA). Among the cryptocurrencies announced as part of the new strategic crypto reserve, Tether (USDT), USD Coin (USDC) and Binance Coin (BNB) were notably absent.

News of the reserve set off a short-lived but intense surge in trading. Bitcoin, the leading cryptocurrency by market value, hit a peak over $94,00 upon the announcement Sunday, and Ethereum surged to over $2,500. One of the smaller tokens, Cardano, managed a gain of more than 60% over the weekend. The total cryptocurrency market rose by approximately 10%, adding over $350 billion in value within hours of the announcement. However, the overall market cap is still under what it was a month ago, even with these recent surges.

The concept had already taken shape earlier this year, with reports of a plan for a “strategic national Bitcoin” stockpile that would include Bitcoin seized by the U.S. government in law enforcement actions. The U.S. government already holds approximately $17 billion in Bitcoin, making it one of the largest Bitcoin holders in the world. Despite this being the first official plan for the government to hold multiple cryptocurrencies, uncertainties remain regarding the scale of holdings and the possible inclusion of other assets.

Crypto leaders push for Bitcoin-only model

Coinbase CEO Brian Armstrong, reportedly the richest American in crypto, with a net worth estimated around $9.6 billion, advocated for a Bitcoin-only reserve as a more straightforward strategy. Bitwise CEO Hunter Horsley echoed this view, stating, “Bitcoin is the undisputed store of value for the digital age.”

Unlike Bitcoin, which has established itself as a relatively stable store of value, altcoins tend to be far more volatile. Legal battles with the U.S. Securities and Exchange Commission (SEC) have plagued many cryptocurrencies, including XRP and Solana. Though many cases have recently been dropped, the commission’s lawsuit against Ripple, in particular, remains active as it pursues an appeal. Holding assets like these in a government-backed reserve could create new legal complications and damage public trust. 

As all nations race for dominance in crypto prosperity and blockchain resilience, the reserve still stands as a crucial asset for the U.S. in the push to become the global crypto capital. Supporters argue it could enhance stability, foster long-term trust and security in digital assets and pave the way for clearer regulation and broader accessibility, ensuring wider participation in the crypto economy. Those less idealistic say it could lead to favoritism and overreach. 

There are clear benefits though. The U.S. government’s crypto holdings could serve as a market mediator, stepping in during volatile times to stabilize prices and protect investor confidence. With the ability to buy and sell digital assets strategically, the government could reduce sharp fluctuations and lower the risk of market crashes. This hands-on approach would not only shield investors, but also create a more predictable and secure market. 

Is the U.S. crypto reserve a step toward stability?

From within the crypto bubble, it is easy to see why some are doubtful—the crypto and digital market was built to operate independently and free from mainstream intervention. Though the reserve could introduce significant oversight and protections, it may still fall short in preventing market manipulation from the top. With so many uncertainties at play, it’s difficult to claim with confidence that the reserve will be a steadfast force in building long-term trust. 

Even without government involvement, the crypto market still faces battles of its own in trust and security. Since cryptocurrency first gained recognition in 2009, the industry has grappled with countless hacks and fraud incidents. In 2024 alone, over $2 billion was stolen, marking the fourth straight year of billion-dollar losses. The U.S. crypto reserve may promise oversight, but with years of billion-dollar losses and cautious public interest, trust remains a currency yet to be earned. While the new reserve seeks to bring order, its true test will be curbing manipulation, preventing fraud and restoring faith in an industry poised for massive growth.

Photo by Aleksandr Khmeliov/Shutterstock

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The abundance mindset 

People have been writing about abundance and money for a hundred years. Books like those of Wallace D. Wattles (The Science of Getting Rich, 1910) and Napoleon Hill (Think and Grow Rich, 1937) went a long way toward creating a popular discourse around the role of abundance in our lives. The term abundance mindset was coined by Stephen R. Covey in The 7 Habits of Highly Effective People. Covey presented this concept to counteract what he called a scarcity mindset. Abundance means having more than what you need. He argued that by adopting an abundance mindset, we would come to accept the notion that there are sufficient resources and opportunities for everyone to succeed.

Yet often this swings too far in the other direction, leading us to grasp at abundance while pushing away scarcity. Together, they create an abundance–scarcity cycle that can have an outsized impact on our lives and detract us from the bigger question of how much is enough.

The consequences of overconsumption

The overuse of external resources is real. If we continue to prioritize strategies that emphasize material growth, our economy will eventually both implode and explode. We see it happening now with climate change, overconsumption and overpopulation. Our world is both heating up and flooding over at the same time. Our external environment mirrors the imbalance within each of us, forcing us to ask: Have we gone too far?

If we consider our current definition of success within the abundance–scarcity cycle, the more assets we have, the wealthier and more successful we are. The more we earn, the higher our net worth. As a society, we buy into the misguided assumption that our intrinsic self-worth is determined by our net worth. Regardless of whether we realize it, we mistakenly think we are trapped in this scarcity cycle. We also believe that money is responsible for either getting us out of or keeping us in this position.

No wonder we all have so much emotion around money and finances. In this world of scarce resources, the only way to have more self-esteem is to get more money. In this scenario, our sense of self becomes tied to the ups and downs of our bank accounts. When we align our need for well-being to the accumulation of material resources alone, we mistakenly believe that our experience of wealth needs to come from an external source. We place money and profit above all else. And here is the funny thing: No amount of abundance of scarce resources can get us out of this mess. An abundance mindset cannot solve the problem of scarcity; they are opposite poles of the same cycle.

The power of enough

If we blindly play the game of accumulating scarce resources, we will never realize the power of enough. If we keep buying into the collective fallacy that our worth as a person is equal to the amount of material resources we have accumulated, we risk conflating money and profit with people and purpose.

I invite you to challenge the modern tale you have been told about money. In taking this step, you might just find that money is more of a companion and a guide, rather than a guardian at the gates of some mythical utopia where everyone is fulfilled because of their bank accounts.

Excerpted from The Power of Enough: Finding Joy in Your Relationship with Money by Elizabeth Husserl (New World Library, 2025).

Photo by In Her Image Photography

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But she has just one more thing to get off her chest before she finishes her day. Gatti Tassin takes her plight to Instagram Stories, broadcasting to more than 250,000 followers. This time, it’s a spiel on how “aesthetic capitalism co-opts things that are naturally healthy” to sell women more items, such as hyaluronic acid-infused eye patches, under the guise of wellness.

“This trend feels dark because of the cultural context that produced it,” Gatti Tassin writes. “One which is rarely concerned with the genuine well-being of women and girls, unless it’s a means of selling them something.”

Connecting the dots

This is where Gatti Tassin excels, and it’s what sets her apart from other “finfluencers,” or financial influencers.

Gatti Tassin, 30, heads Morning Brew’s podcast The Money with Katie Show (MwK), which has 9 million lifetime downloads and counting. She’s also created tangible resources for her audience, such as a free early retirement mini course and a wealth planner that helps users understand where they are on their financial journey. Gatti Tassin authors a prolific blog and an insightful weekly newsletter that has nearly 200,000 readers, while maintaining an engaging presence on social media.

Watching her Instagram stories is like FaceTiming with your most passionate—and smartest—friend. The cadence of her speech is quick, fervent and pointed—much like her innate ability to connect with her audience while providing accessible personal finance content that intersects popular culture.

“That gives me the opportunity to paint with a way broader brush,” Gatti Tassin says. “I can really talk about anything, because money touches everything…. Sometimes, I think people just want help making sense of the world around them.”

Her well-researched social-financial commentary has touched topics ranging from “trad wives” (married women who practice traditional gender roles in marriage) and overconsumption to gaining financial independence. She covers anything that intrigues her with thoughtfulness, insight and finesse.

Embracing growth

Gatti Tassin started documenting her own financial journey to “#RichGirl” status on her “side hustle” blog, Money with Katie, in 2020. She left her marketing job at Southwest Airlines in 2021 to pursue content creation full time. A year later, media company Morning Brew acquired the MwK brand, growing her audience and team from a literal one-woman show.

Gatti Tassin’s advice to aspiring entrepreneurs is concise: Move through the discomfort. “Just start doing it and get comfortable figuring it out as you go,” she says. “There’s no substitute for actually doing the thing that you want to do….”

One of Gatti Tassin’s biggest areas of growth has been critical thinking—and realizing that she can be whatever she wants to be. “I’m far less sheltered than I used to be,” she says. “Once I started to learn more about how things really work and how things really are, I just kind of couldn’t get enough.”

An evolving audience

Much of Gatti Tassin’s content focuses on women’s relationship with money. (“Finance bros are out, #RichGirls are in,” her podcast description reads.) But she’s piqued the interest of people of all genders, backgrounds and ages.

“I do have a lot of fun with trying to see if I can scratch at something beneath the surface,” she says. “Nothing feels better than when something like that resonates with people.”

And resonate, it does. What started as Gatti Tassin talking to her peers, fellow 20-something women navigating the financial ramifications of adulthood, has evolved into a larger conversation with a broader audience. One listener billed the show as “life-changing, hilarious, addicting.” Another says they feel “richer by association.”

Being self-conscious

Initially, when Gatti Tassin realized that people with “more life experience” were listening, it made her “a little bit self-conscious,” as she’d imagined her audience as similar to herself.

“Ultimately, I feel like if people who are in a different stage of life, or who have a completely different background than I do, still find something that I have to say interesting and valuable, then I am happy with that,” she says.

But she tries to stay in her “lane of either lived experience” or topics she feels strongly about “because I know enough about it to speak with authority.”

One of Gatti Tassin’s most popular topics has been childcare costs. She doesn’t have children, but that doesn’t stop her from tackling the topic in her signature way. She keeps it light, joking that “your favorite childless cat lady” is weighing in on parenting. (Her tabby cat, Sam, makes frequent appearances on MwK’s Instagram Stories.)

Gatti Tassin’s approach is ubiquitous. “A lot of this stuff is so universal, and I think people, regardless of age… feel and react to these same forces in many of the same ways.” 

This article originally appeared in the March/April 2025 issue of SUCCESS magazine. Photo courtesy of Katie Gatti Tassin.

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Protect your Ethereum assets using multifactor authentication and encryption

Ethereum stands apart from traditional cryptocurrencies. Unlike Bitcoin, which is primarily a digital store of value, Ethereum enables users to create everything from financial tools to NFT marketplaces—all without relying on traditional banks or institutions. With strong community backing, Ethereum is widely used by developers and investors for transactions, staking and liquidity. Yet, its decentralized structure also presents inherent security concerns. 

Since cryptocurrency first gained notoriety in 2009, the crypto space has endured a significant number of hacks and fraud cases. In 2024 alone, thefts totaled over $2 billion. For the fourth year in a row, billion-dollar losses have been reported, impacting major targets such as Poly Network, Coincheck and Mt. Gox. In response, Bybit and other exchanges are continuously enhancing their safeguards to fend off hackers.

“Cryptocurrency exchanges implement a variety of security measures to protect against hacks and ensure the safety of users’ funds,” according to Charlotte Hill, deputy chair of the Cyber Insurance Association and was previously named Citywealth’s Woman of the Year in Financial Tech and Crypto Innovation in the U.K. “Some of the key security measures include multifactor authentication, cold storage (where a significant portion of users’ funds is kept offline in cold wallets, which are not connected to the internet and are therefore less vulnerable to hacking attempts), multisignature wallets, regular security audits and encryption tools,” she says. 

Storing funds in your cold wallet ensures better protection 

Storing funds in cold storage offers better protection by keeping them offline. Hot storage, which is more accessible for quick trading, is much more vulnerable to cyberattacks. Because cold storage wallets aren’t connected to the internet, they’re not directly accessible to hackers, making them a safer option for securing funds. In this latest case, the cybercriminal took unauthorized control of a Bybit cold wallet and then transferred funds into a warm wallet.

Though not always foolproof, protections like these help services like Bybit keep funds as secure as possible. Hill suggests that these measures should be accompanied by “regular staff training to create a constant awareness of the potential threats to exchanges and other custodians,” as large-scale attacks can erode trust in these systems. 

There’s no official protection for your crypto value 

Cryptocurrencies remain largely unregulated, and the value stored in them lacks official protection. The ethical standards and practices governing how exchanges like Bybit handle and protect client funds also still remain unclear. As stated in Bybit’s own Risk Disclosure Statement, some digital asset transactions may be irreversible, and losses resulting from “fraudulent or accidental transactions may not be recoverable.” Deposits into accounts are also not considered deposits under applicable laws, making them subject to different legal protections. 

“Crypto hacks are becoming more sophisticated, exploiting vulnerabilities in exchanges, wallets and even human behavior through social engineering tactics,” according to Ahmad Maaitah, a lecturer in finance and fintech at University of Southampton, whose research includes a focus on Bitcoin market networks and cyberattacks.  

“One of the biggest risks comes from social engineering attacks, where hackers manipulate users or employees into revealing sensitive information,” he says. To safeguard their assets, crypto users should always consider the most fundamental precautions like diversifying wallets, keeping long-term savings in cold storage and looking into insurance coverage. Maaitah advises caution when using exchanges, noting, “For those who must use exchanges, choosing a reputable, well-regulated platform with strong security practices is vital.” He observes that hacking tactics are evolving swiftly, and with crypto’s growth, cybercriminals are targeting larger rewards.

Maaitah also recommends noncustodial wallets, where users have control over the private keys to their funds. “The common saying in crypto ‘not your keys, not your coins’ is a reminder that if someone else holds the private keys, they ultimately control the funds. By managing their own wallets, users eliminate the risk of losing assets due to an exchange breach,” he advises. 

The crypto market may face larger hacks soon

Every user must stay vigilant in protecting themselves and their funds. According to Maaitah, the Bybit breach is a clear indication of looming risks. “We could be looking at even larger-scale breaches in the near future. The industry needs to act now to stay ahead of these threats, or the consequences could be catastrophic,” he warns. 

Pew Research Center reported that 63% of Americans are already wary of crypto’s safety and reliability, as ongoing lawsuits and potential congressional oversight mar the space’s reputation. 

Despite the obvious allure of crypto, the lack of regulation and protection is a glaring red flag. The recent hack on Bybit has shaken trust, leaving many wondering if crypto exchanges can ever provide true security. With regard to this particular incident, in a rapid response to the Ethereum theft, Bybit’s CEO confirmed on Tuesday that the exchange has now fully compensated the victims. After announcing they were enlisting top external experts to aid in recovery, Bybit managed to recover hundreds of thousands of tokens in under 72 hours, leveraging a combination of emergency loans and large deposits to restore the stolen funds.

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When we have the tools, knowledge and motivation, we can take control of our money and have a more positive impact on our lives. While some inspiring money sayings aren’t going to magically pay the bills, help us get extra cash or create instant wealth, they can help us get into a better frame of mind. Since our mindset can be one of the biggest motivating factors during challenging times, getting the inspiration and motivation we need could lead to some of the biggest financial breakthroughs yet. Combined with financial planning and wealth management strategies, having a positive and growth-oriented attitude about money could help us get ahead. 

To help you get started, here are 66 quotes about money to inspire you to attract wealth, take control of your finances and live a life full of prosperity and freedom. 

Inspirational Quotes About Money 

Feeling inspired is one of the most important steps to start shifting your mindset to a better relationship with money. It can help you see that money is a tool and that you can use it to pursue things you love. Tap into these powerful money quotes to help you get ahead. 

• “Money is multiplied in practical value depending on the number of W’s you control in your life: what you do, when you do it, where you do it and with whom you do it. I call this the ‘freedom multiplier.’” —Timothy Ferriss, The 4-Hour Workweek
• “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires.” —Ayn Rand, Atlas Shrugged
• “You can only become truly accomplished at something you love. Don’t make money your goal. Instead, pursue the things you love doing, and then do them so well that people can’t take their eyes off you.” —Maya Angelou

• “Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor. It’s about stewardship and, therefore, about achieving the good society.” —Robert J. Shiller

Related: 36 Know Your Worth Quotes to Boost Your Self-Esteem

‘Making Money’ Quotes to Help Maximize Your Wealth

Maximizing your wealth doesn’t simply mean working harder and longer hours. It can mean being smarter with where you invest and your choice of vocation. These famous quotes about earning money can help you stay motivated, keep a positive focus and remind you that you can do this. 

• “If you don’t find a way to make money while you sleep, you will work until you die.” —Warren Buffett
• “There is a gigantic difference between earning a great deal of money and being rich.” —Marlene Dietrich
• “Financial freedom is available to those who learn about it and work for it.” —Robert Kiyosaki
• “Making money is a hobby that will complement any other hobbies you have, beautifully.” —Scott Alexander
• “Making money is easy. It is. The difficult thing in life is not making it, it’s keeping it.” —John McAfee
• “Money is usually attracted, not pursued.” —Jim Rohn
• “Making money is art and working is art and good business is the best art.” —Andy Warhol

• “The key to making money is to stay invested.” —Suze Orman
• “The time making money should be greater than the time that you are spending money.” —Sophia Amoruso

Related: 95 Quotes About Achieving Goals to Keep You Motivated

Wise Quotes About Saving Money    

Sometimes you need the advice of someone much wiser than you and farther along in the wealth-building journey to keep you motivated. Whether it’s the importance of saving money or where to put your funds, trusted financial experts can help change your financial life. Money quotes aren’t always about earning more—sometimes they remind us of the power of what we do with what we have. These famous words about saving can help us see our hard-earned cash in a new way. 

• “A simple fact that is hard to learn is that the time to save money is when you have some.” —Joe Moore
• “The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought and so broadens the mind.” —T.T. Munger
• “Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” —Dave Ramsey

• “A penny saved is a penny earned.” —Benjamin Franklin
• “It’s not how much money you make, but how much money you keep, how hard it works for you and how many generations you keep it for.” —Robert Kiyosaki
• “The quickest way to double your money is to fold it in half and put it in your back pocket.” —Will Rogers
• “If you would be wealthy, think of saving, as well as of getting. Away, then, with your expensive follies, and you will not have then so much reason to complain of hard times.” —Benjamin Franklin, “The Way to Wealth”
• “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” —Robert G. Allen
• “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” —Paul Samuelson
• “Get your friends involved. Let your shopping buddies know that you’re on a tight budget, and they can help you out when your willpower starts to weaken at the mall.” —Jean Chatzky

Related: 9 Smart Spending and Saving Tips

Inspiring Quotes About Money And Happiness

Money doesn’t buy happiness, but it can help give you the time and space to cultivate happiness. It’s also in how you earn it and use it towards your most desired values. These thought-provoking quotes can help us explore our money attitudes and what it means to be successful. 

• “Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.” —Franklin D. Roosevelt
• “It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” —George Horace Lorimer
• “Making money is a happiness. And that’s a great incentive. Making other people happy is a super-happiness.” —Muhammad Yunus

• “A wise man should have money in his head, but not in his heart.” —Jonathan Swift
• “Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants. Instead of its filling a vacuum, it makes one.” —Benjamin Franklin
• “If you don’t value your time, neither will others. Stop giving away your time and talents. Value what you know and start charging for it.” —Kim Garst
• “Money is in some respects life’s fire: It is a very excellent servant, but a terrible master.” —P.T. Barnum
• “Friends and good manners will carry you where money won’t go.” —Margaret Walker

Powerful Money Motivation Quotes to Bring Abundance 

Abundance is when you have excess or much more than you need. When you have more than you need, you can help others. Our financial motivation might be to make the world a better place by donating to worthy causes, working less and volunteering at nonprofit organizations close to our hearts or helping others in our lives.   

• “There is no monopoly on becoming a millionaire. If you’re jealous of those with more money, don’t just sit there and complain—do something to make more money yourself.” —Gina Rinehart
• “Financial independence is paramount. My mom always says that when a woman is financially independent, she has the ability to live life on her own terms.” —Priyanka Chopra
• “The reason most people do not recognize an opportunity when they meet it is because it usually goes around wearing overalls and looking like Hard Work.” —Henry Dodd

• “Formal education will make you a living; self-education will make you a fortune.” —Jim Rohn
• “Real wealth is not about money. Real wealth is: not having to go to meetings / not having to spend time with jerks / not being locked into status games / not feeling like you have to say ‘yes’ / not worrying about others claiming your time and energy / Real wealth is about freedom.” —James Clear
• “For me, money is not my definition of success. Inspiring people is a definition of success.” —Kanye West
• “Always try to rub up against money, for if you rub up against money long enough, some of it may rub off on you.” —Damon Runyon
• “Education, leading to financial independence, has surely made women more empowered.” —Sudha Murty
• “Change your focus, from making money to serving more people. Serving more people makes the money come in.” —Robert Kiyosaki

Sayings About Money And Life to Give You Perspective 

Money is only as important as what it can help you do in life. While the pursuit of money is important, it probably shouldn’t take over your life. When thinking about wealth, it’s crucial to regularly give yourself some much-needed perspective about what’s truly important to you. 

• “If you think nobody cares if you’re alive, try missing a couple of car payments.” —Earl Wilson
• “Believe that you are worthy of financial freedom. Do something you love and then all you ever have to do is be yourself to succeed.” —Jen Sincero, You Are a Badass at Making Money
• “Money is like muck, not good except it be spread.” —Francis Bacon
• “Working because you want to and not because you have to is financial freedom.” —Tony Robbins

• “I’m not motivated by money or power or fame. In the end, it doesn’t bring much happiness. The only thing that is driving me is self-satisfaction, self-validation.” —William Clay Ford, Jr.
• “When money realizes that it is in good hands, it wants to stay and multiply in those hands.” —Idowu Koyenikan
• “It is not the man who has too little, but the man who craves more, that is poor.” —Lucius Annaeus Seneca
• “Money withers if you don’t know how to nurse it along: money flies away if you don’t know where to put it.” —Carl Sandburg
• “My father had an expression: Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” —Joe Biden

Short Famous Quotes About Money

Short money quotes can be powerful. Some of the most successful entrepreneurs, thought leaders and financial experts can inspire us to have healthy financial lives. 

• “You must gain control over your money or the lack of it will forever control you.” —Dave Ramsey
• “Money won’t create success, the freedom to make it will.” —Nelson Mandela
• “If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” —Edmund Burke
• “Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.” —J. Paul Getty
• “Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” —Frank A. Clark
• “Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.” —Johann Wolfgang von Goethe
• “I am a great believer in luck. The harder I work, the more of it I seem to have.” —Coleman Cox

• “Empty pockets never held anyone back. Only empty heads and empty hearts can do that.” —Norman Vincent Peale

Spending Money: Quotes to Help You Stay Balanced 

The point of having money is to spend it in a way that helps you live your best life. Of course, there needs to be balance. Use these sayings about spending money to inspire you to stay on track with your goals and budget. 

• “People often spend money on things they don’t need to impress people they don’t like.” —Ethel Hays, Flapper Fanny Says
• “Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” —James W. Frick
• “Time is money. Wasted time means wasted money means trouble.” —Shirley Temple

• “Never spend your money before you have it.” —Thomas Jefferson
• “Spending money is much more difficult than making money.” —Jack Ma
• “I don’t believe in spending money lavishly, now that I’m making money.” —Ansel Elgort
• “Do not save what is left after spending; instead, spend what is left after saving.” —Warren Buffett
• “The secret to creating lasting financial change is to decide to pay yourself first and then make it automatic.” —David Bach
• “Spending money to show people how much money you have is the fastest way to have less money.” —Morgan Housel, The Psychology of Money

Words Can Inspire, Motivate And Shift Our Money Attitudes

Money is a crucial part of life. We need to earn it and manage it well, but it doesn’t need to take over our lives. The key is to focus on what is truly important to you and find a way to use money as a tool to help you. Maybe a few “make that money” quotes can inspire you to go after your dreams, start a business or pursue a strong financial future in a way that’s meaningful to you. Money attitude quotes about things like life, true happiness and the deeper meanings of abundance and wealth can help us shift our thinking in new directions. 

Consider coming back and reading these money quotes again to help you develop a healthy relationship with money or when you need a little boost of financial motivation. 

This article was updated February 2025. Photo courtesy of Pormezz/Shutterstock

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The average American credit card balance rose to $7,236 in 2024. Chances are you fall among this group. If so, don’t worry—hope is right around the corner. Here you’ll learn how to negotiate with debt collectors and achieve financial freedom.

Benefits Of Negotiating With Debt Collectors

When you have unpaid debts, debt collectors can get aggressive. Negotiating with them isn’t just about reducing what you owe—it’s about taking control of your financial future. Benefits of successful negotiations include:

• Lowered Interest Rates or Fees: Negotiating can reduce interest rates and fees associated with your debt, saving you significant money over time.
• Reduced Principal Amounts Owed: Creditors may agree to lower the principal balance, making repayment more manageable.
• Avoidance of Lawsuits or Wage Garnishment: Active negotiation can prevent legal actions like lawsuits or wage garnishment, which could strain your finances further.
• Peace of Mind and Stress Reduction: Resolving debt can reduce emotional stress caused by financial burdens and persistent collection calls.
• Repairing Your Credit Profile and Financial Health: Negotiating debt demonstrates financial responsibility and can help rebuild your credit score over time.

How To Deal With A Debt Collector

Effectively dealing with a debt collector requires knowledge, preparation and a measured approach. To put your best foot forward and maintain control of the interaction, start with these three steps:

1. Understand Your Rights

Debt collectors must adhere to the Fair Debt Collection Practices Act (FDCPA). It prohibits harassment, threats and deceptive practices. Knowing these rights empowers you to stand firm during negotiations. For example, debt collectors cannot call you repeatedly to harass you or misrepresent the amount you owe. Leveraging this knowledge during negotiations will give you greater confidence and control.

2. Verify The Debt

Request a written validation notice to confirm the legitimacy and accuracy of the debt. If you find discrepancies, dispute the debt in writing within 30 days to pause collection efforts. If the debt collector fails to validate the debt, you might be able to have it removed from your credit report entirely.

3. Maintain Professional Communication

Stay calm and professional during all interactions. Avoid emotional responses and focus on discussing practical solutions. Consider involving a third-party credit counselor to assist with negotiations.

How To Reduce Debt Before Negotiation

Want to increase your chances of a favorable agreement? Reduce your debt before negotiating with debt collectors. Showing creditors you’re managing your finances responsibly will strengthen your position. It also boosts your credibility.

Here are some debt-reduction tactics:

1. Cut Unnecessary Expenses

Identify areas where you can cut spending and divert savings toward debt repayment. Cancel subscriptions, reduce dining out and shop strategically to free up cash.

2. Increase Your Income

Consider getting a part-time job, selling unused items or freelancing to generate extra cash for debt payments. Every extra dollar you earn will strengthen your position.

3. Create A Debt Payoff Plan

Use methods like the snowball or avalanche approach to prioritize and tackle your debts step-by-step. Apps like Intuit Credit Karma or YNAB (You Need a Budget) can help track progress.

4. Seek Debt Counseling

Nonprofit credit counseling agencies can provide personalized advice. They can also negotiate on your behalf to reduce interest rates or waive fees.

How To Negotiate With A Debt Collector

Negotiating with a debt collector can feel intimidating, but following these steps can help:

1. Prepare Thoroughly

Know Your Finances

Gather documentation of your income, expenses and other debts. With a clear picture of your financial situation, you’ll be able to make realistic offers.

Define Your Goals

Decide whether you want to negotiate a lump-sum settlement, a payment plan or reduced fees and interest rates.

2. Initiate The Conversation

Reach Out Proactively

Contact the debt collector early to demonstrate responsibility. If you wait too long, your creditor may take legal action. This can make negotiations more challenging or altogether impossible.

Stay Focused

Keep discussions centered on finding a mutually acceptable solution. Avoid sharing unnecessary personal information that could weaken your position.

3. Make An Offer

Start Low

Propose an amount lower than your maximum to allow room for negotiation. For example, if you can pay off 60 percent of your total debt, offer 30 to 40 percent as a starting point.

Be Honest

Explain your financial situation clearly and back it up with documentation such as a budget or proof of hardship.

4. Document Everything

Confirm Agreements In Writing

Ensure all agreements are confirmed in writing to avoid future disputes. A written record protects both parties and provides a clear reference for the agreed terms.

Protect Against Misunderstandings

Written documentation protects you from potential misunderstandings or misrepresentations. This step ensures clarity about repayment schedules, amounts and any special terms.

How To Settle With A Debt Collector

Settling with a debt collector means agreeing to pay less than you actually owe. This can be highly beneficial if you’re struggling to make payments or stay ahead of accruing interest. Here are three steps to achieve a successful settlement.

1. Offer A Lump Sum

Debt collectors typically prefer a lump-sum payment. That’s because it resolves the account quickly and gives them a higher commission upfront. If you have savings or access to funds, use it to negotiate a reduced settlement. For example, a $5,000 offer might be acceptable to settle a $10,000 debt.

2. Propose A Payment Plan

If a lump sum isn’t possible, suggest an installment plan on a reduced balance that fits your budget. For instance, paying $208.33 monthly over two years might be a reasonable alternative to paying $5,000 all at once.

3. Request A Paid-In-Full Status

As part of the settlement agreement, ask the collector to report the debt as “paid in full” to credit bureaus. Otherwise, your credit report will show that you settled the debt for less than the full amount, which offsets some of the benefits. A “paid-in-full” status can improve your credit score and prevent future negative remarks on your report. It can also get you better terms on new lines of credit.

Debt Settlement Pros And Cons

Settling debt on your own might seem like a viable option when you’re overwhelmed by unpaid balances and collection calls. However, it’s important to weigh the potential benefits against the risks. Here are some pros and cons to consider before committing to a settlement:

Debt Settlement Pros

• Debt Reduction: You can negotiate to pay less than the full amount owed, potentially saving you thousands of dollars.
• Avoiding Bankruptcy: Settling debts yourself may help you sidestep the long-term repercussions of filing for bankruptcy.
• Stopping Collection Efforts: A successful settlement can halt aggressive calls and legal threats from creditors.

Debt Settlement Cons

• Long-Term Credit Damage: Settling a debt without a “paid-in-full” status can negatively impact your credit score and remain on your credit report for up to seven years. 
• Tax Implications: Forgiven debt is often considered taxable income, which could result in a significant tax bill.
• No Guaranteed Outcome: Creditors are not obligated to accept your offer, and unsuccessful negotiations can leave you in the same financial predicament.

Overcoming Challenges In Negotiations

Negotiating with debt collectors isn’t always straightforward. From aggressive tactics to unrealistic demands, you may face hurdles that test your patience and resolve. By staying informed, proactive and firm, you can overcome challenges and steer the conversation your way. Here’s how to address common obstacles:

Handling Aggressive Collectors

If a debt collector becomes hostile, report them to the Consumer Financial Protection Bureau (CFPB). Stay firm but respectful, and remind them of your rights under the FDCPA.

Addressing High Demands

If the collector’s demands are too high, counter with a realistic offer. Provide evidence of your financial limitations, such as a detailed budget or proof of income.

Managing Multiple Debts

Consider working with a credit counseling agency to consolidate debts and simplify repayment. Consolidation can reduce monthly payments and streamline the process.

Alternatives To Debt Negotiation

Negotiating with debt collectors isn’t the only way to manage your financial challenges. If direct negotiation isn’t yielding results, consider these alternative options:

Credit Counseling

Work with nonprofit credit counseling agencies to create a debt management plan. These agencies negotiate on your behalf, consolidate payments and potentially lower interest rates.

Debt Consolidation Loans

A debt consolidation loan combines multiple debts into a single payment with a lower interest rate. This approach simplifies repayment and can save you money over time.

Bankruptcy

As a last resort, filing for bankruptcy can provide legal protection and eliminate or restructure your debts. However, it comes with long-term consequences for your credit score and financial stability.

Staying Debt-Free After Negotiation

Negotiating your debt is only the first step. To maintain financial stability it’s essential to adopt smart money management practices.

Monitor Your Credit Report

Regularly check your credit report for inaccuracies or outdated information. Dispute and remove errors like debts you’ve already paid or invalid entries promptly. This proactive approach helps maintain an accurate credit score.

Stick To A Budget

Create an attainable budget to track your income and expenses. Use tools like budgeting apps and spreadsheets to ensure you’re staying within your means. Continually review and adjust your budget to prevent overspending and help reach savings goals.

Build An Emergency Fund

Save three to six months’ of living expenses to cover unexpected challenges like medical emergencies or job loss. Start small by saving a fixed monthly amount and gradually build a reliable safety net.

Use Credit Responsibly

Limit your credit usage to essential purchases. Aim to pay off balances in full each month to prevent interest charges. Keeping your credit utilization low will positively impact your credit score. Aim for under 30 percent of your total limit.

Seek Financial Education

Improve your financial literacy through books, online courses or workshops. Gain a better understanding of interest rates, credit scores and saving strategies. Doing so will help you make smarter decisions and avoid future debt.

Debt Negotiation: A Potential Path To Financial Freedom

Negotiating with debt collectors can be a valuable step toward improving your financial situation and reducing debt burdens. However, it’s important to weigh the potential downsides of debt settlement before deciding if it’s the right approach for you. If you choose to move forward, prepare thoroughly, communicate clearly, secure written agreements and request a paid-in-full status for any settled debts.

Remember, debt negotiation is just one part of the solution. Pairing it with strong financial habits is essential for long-term success. Learning from past mistakes and building better financial habits can help you avoid falling into debt again. With patience and determination, financial stability is within reach!

Photo by Inside Creative House/shutterstock.com

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In October 2024, the IRS released its tax law adjustments for the 2025 tax year, which come into play when preparing your taxes in 2026. These included several modifications to account for inflation; however, these changes were smaller than in previous years. The agency’s income threshold adjustment is just 2.8% in 2025—down from 5.4% in 2024 and even more the previous year.

“The inflation adjustments for next year are sort of more… historical versus the last few years [when] the inflation has just been astronomical,” says John Nowack, a certified financial planner, certified public accountant and the founder of Alo Financial Planning. “These most recent inflation increases [are] probably more on trend with what we’ve normally seen,” he says.

The IRS alters tax brackets, deductions and exemptions to prevent what’s known as “bracket creep,” which “occurs when inflation, rather than real increases in income, pushes people into higher income tax brackets or reduces the value they receive from credits and deductions,” writes economist Alex Durante in a Tax Foundation blog.

Tax bracket updates and what they mean

The IRS has altered each of its seven tax brackets, with higher income caps for each. The smallest tax bracket is 10% and applies to incomes of $11,925 or less for individuals—that’s up $325 from the previous year. But an income cap increase doesn’t just apply to people making this amount or less. It applies to everyone.

Think of the IRS tax bracket system as a set of increasingly large buckets where the first bucket must be filled before starting to fill the second. If you’re earning $100,000, the first $11,925 you earn (or $23,850 or less for married couples filing jointly) is taxed at the lowest rate. Once that bucket is filled, then the next bracket applies. The wider the income brackets the IRS creates—in other words, the bigger the buckets—the better for taxpayers. Their income fills the buckets more slowly, and they’re subject to a lower overall tax rate.

The highest tax bracket is capped at 37%. If that rate has you gripping the device you’re reading this on tightly, keep in mind this rate only applies to single taxpayers with incomes greater than $626,350 and married couples filing jointly whose incomes are greater than $751,600.

The amount taxpayers can claim for a standard deduction—the amount they can automatically deduct from their taxable income without itemizing—is also increasing. Single taxpayers and married individuals filing separately can expect a $400 increase. Married couples filing jointly can look forward to an $800 increase from the previous year—a $30,000 standard deduction.

The child tax credit remains the same ($2,000, with $1,700 refundable), but taxpayers who have three or more qualifying children for the Earned Income Tax Credit can expect an increase of a couple hundred bucks.

Overall, “if you have the same amount of income, you would pay less tax in 2025 than you did in 2024,” says Joanne Burke, a certified public accountant, certified financial planner and founder of Birch Street Financial Advisors. Taxpayers who receive cost of living adjustments of 2.8% or larger raises in their salaries are out of luck, however. They can expect to pay the same or more taxes for the 2025 calendar year.

Tax changes for high earners and retirees

High net worth individuals can look forward to several benefits because of the 2025 tax adjustments. First, the annual exclusion for gifts is rising from $1,000 to $19,000 during the calendar year. That’s the highest amount ever. And that’s per person, so spouses could potentially gift $38,000 to an individual to reduce their tax obligations and without the individual having to pay taxes on that gift.

Estate tax credits are rising, too. Now, individuals can shield $13.99 million from federal estate taxes in the 2025 tax year. That’s up more than $300,000 from the previous year.

Burke, who often works with retirees or those actively planning for retirement, says the higher caps for catch-up contributions in 2025 will be impactful. These catch-up contributions allow people over age 50 to make additional deposits to their retirement accounts. In 2025, people aged 60 to 63 can make contributions up to $11,250—a full $3,750 higher than other caps. “I think that’s pretty powerful,” Burke says.

What’s ahead for the 2026 tax season?

Even more changes could be in store for 2026. Without any changes, many of the tax laws passed during the 2017 Tax Cuts and Jobs Act—one of the most significant tax overhauls in decades—will sunset at the end of 2025. “We’ve had this… tax freezing for the last eight years or so,” Nowack says. “I feel like a lot of the changes are going to catch people off guard… when it does come to filing for 2026.”

If the TCJA provisions aren’t renewed or adjusted, individual tax rates will increase 3% to 5% per bracket, the standard deduction will decrease and child tax credit amounts will roll back.

High earners will have to reacquaint themselves with the alternative minimum tax. This system requires individuals earning a high income to calculate their taxes twice—once under the standard system with deductions and a second time under the AMT—then pay the higher amount. More than 20% of households with income between $200,000 and $500,000 may be subject to the AMT in 2026, compared to 0.3% in 2022.

Owners of pass-through businesses, such as freelancers and contractors, can also expect to pay more taxes since the TCJA includes an automatic 20% deduction for qualified business income.

There are several changes taxpayers can make now to minimize the changes that might be ahead for 2026. Nowack recommends looking at how taxpayers can “accelerate income in 2025.” For example, some people may want to sell appreciated stock or convert a traditional IRA to a Roth IRA in 2025 under a lower tax rate, rather than waiting until 2026. He says taxpayers may want to consider deferring deductions until 2026. For example, some may want to batch charitable donations from several years and hold off taking that deduction until a higher tax rate applies.

Although the TCJA passed under President Donald Trump’s first term, and he’s returning to office in 2025, there’s no guarantee the new administration will extend these provisions. “There is a larger risk than we’ve had in the past that tax rates could be going up just based on the debt, the deficit situation…. We’re at a very tax friendly… place right now. Let’s take advantage of it if we can and if it makes sense,” Nowack says.

Burke is also forecasting a potential TCJA sunset. “We’re… not holding our breath because we would turn blue in the face, but we’re… watching,” she says.

Photo courtesy of fizkes/Shutterstock

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