Rochester, N.Y. — U.S. Treasury Secretary Scott Bessent has been actively engaging with the media, informing taxpayers to anticipate “very large refunds” this year due to the recently passed One, Big, Beautiful Bill Act, which took effect on July 4. This act introduces several tax benefits, such as the elimination of federal taxes on Social Security, overtime pay, and tips.
George Conboy, chairman of Brighton Securities, explained that while the potential for larger refunds exists, the exact amounts will vary significantly for each taxpayer. He highlighted that those over 65 years old could see an additional $6,000 in deductions for Social Security, or about $12,000 per couple, depending on their tax bracket.
For homeowners, there’s an increase in the property tax deduction limit in New York State, rising from $10,000 to $40,000, although high earners may see a phase-out of this benefit. Conboy affirmed that most homeowners would still enjoy significant tax relief.
Additionally, the new regulations permit a deduction of up to $25,000 for tips and $12,500 for overtime pay, although the specifics of state taxes on these are still being determined by lawmakers in Albany.
Despite the optimism surrounding potential refunds, some individuals like Christine Murray expressed skepticism about the process. “I think it’s going to be a hot mess,” she remarked, reflecting the uncertainty that many taxpayers feel regarding how these changes will affect their returns this year. Murray added that she feels uninformed about the logistics, particularly regarding how overtime pay is calculated in relation to the new laws.
Conboy provided advice for those concerned about owing taxes: consider adjusting withholding levels with your employer to mitigate any tax liability in the future. For anyone anticipating a larger refund, he cautioned that a high refund indicates the government has been holding onto their money throughout the year, and taxpayers might benefit from having less withheld so they can use their earnings sooner.
Overall, while there is a sense of caution among taxpayers about the new tax regulations, the hope for increased refunds underpins the ongoing conversations about financial planning and tax strategy for the year ahead.