On Sunday’s episode of The Excerpt podcast: Tax season is in full swing and there are a few changes this year. Not only has President Donald Trump proposed several substantive and not-so-substantive changes to tax policy on the campaign trail, but you might see changes to the tax forms you receive. Also, how will DOGE and the Trump Administration’s cuts to federal workers affect the IRS and you getting your tax return? USA TODAY Personal Finance Reporters Medora Lee and Daniel de Visé join The Excerpt to dig into all of these issues.
Let us know what you think of this episode by sending an email to podcasts@usatoday.com.
Hit play on the player below to hear the podcast and follow along with the transcript beneath it. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
Podcasts: True crime, in-depth interviews and more USA TODAY podcasts right here
Dana Taylor:
Hello and welcome to The Excerpt. I’m Dana Taylor. Today is Sunday, March 30th, 2025.
Don’t panic, but I have to warn you, we’re going to talk about a very unpopular topic today, taxes. Yes. Tax season is upon us yet again, but trust me, you’re going to get some very helpful information from us here. President Donald Trump proposed several substantive and not substantive changes to tax policy on the campaign trail. What’s on the table and what should taxpayers have on their radar for this year? Also, how might Internal Revenue Service layoffs impact filers this year?
To dig into this, I’m joined by USA Today personal finance reporters, Medora Lee and Daniel de Visé. Thank you both so much for joining me on The Excerpt.
Daniel de Visé:
My pleasure.
Medora Lee:
Thanks for having us.
Dana Taylor:
During Donald Trump’s first term, Congress passed the 2017 Tax Cuts and Jobs Act. Those cuts are currently scheduled to expire at the end of this year. Medora, remind us what was in those cuts and how much it would cost to make them permanent. Where are we in that process and how likely is it that they’ll make it happen?
Medora Lee:
Analysts are saying that this will probably reduce revenue, if we extend it, by $4.5 trillion and in order to extend Tax Cuts and Jobs Act items, we will have to cut $1.7 trillion in spending. I know that everybody always talks about how these were tax cuts mostly for the wealthy, but there were actually a lot of things also for everyday people, and some of this stuff included doubling the standard deductions. So a lot of people didn’t have to itemize their taxes anymore, and they also lowered the income tax rate for many, many people by widening some of these tax brackets, cutting the tax rate. And it also included a bigger child tax credit for people, and some of these things will reverse if the Tax Cuts and Jobs Act does not get extended.
There were also a lot of things for businesses too. I don’t want to make that sound like there wasn’t, but there were some write-offs that businesses could take. Some of those have been phasing out. So those are some of the highlights.
Taxes are different this year: what filers should know
President Donald Trump proposed several substantive and not-so-substantive changes to tax policy, but which have become real?
Dana Taylor:
Daniel, the president has mentioned five other tax priorities for Congress that he campaigned on last year. What are they? How will they impact Americans and what are the budget implications?
Daniel de Visé:
President Trump has proposed a whole bunch of tax cuts, small and large on a bunch of different items. It’s hard to keep track of them all. They’re interesting. A lot of them have not been discussed anytime in the recent past. So one of the smaller ones is no tax on tips, and it’s only a couple percent of workers who rely on tips. So it’s a small cut, but economists are fretting about it, and that’s just one example. What about all these other low-wage workers who don’t rely on tips? Would it be unfair to them, for example.
There’s a proposal to not tax overtime, which okay, does that mean employers would then want people to work lots more overtime? It’s kind of unclear how that would play out if that were enacted. There’s a proposal to be able to deduct interest on car loans if the car is made in America. Well, that could be cool, I guess, for American automakers, but as our colleague Bailey Schulz reported, I guess there aren’t very many cars that are entirely made in America. There’s parts that are made all over the place, and so where do you draw the line on whether the car is made in America or not?
Not taxing Social Security, I mean, that would be huge for seniors, for retirees, but enormously costly. I think it gets up to a trillion dollars that our government would not get anymore in revenue over 10 years. It’s a huge sum if you stop taxing Social Security. So all these come down to, “Well, okay, but where do you recoup that money you’re not getting from these various taxes?”
Did I get to all five or was there another one I didn’t mention? Oh, tariffs. Yes, tariffs. I don’t think anybody listening to this doesn’t know about the tariffs. A tariff is a tax. Sue me for saying that. The question is kind of who pays it, but we all know about the tariffs by now.
Dana Taylor:
Taxes do have a big impact on individuals’ budgets, but they also play into the economy in general. One big concern clouding the outlook this year is exactly that, Daniel, tariffs and these could also impact tax revenue as well as GDP. Medora, how are proposed tariffs looking right now?
Medora Lee:
Gee, what day is it? We’ve been whipsawed all over the place, massive tariff threats against some of our major partners, Canada, Mexico on everything, and then things will get delayed because they are going to negotiate. And so that’s where we are right now. I mean, some tariffs have gone through. The ones with China have gone through actually pretty quietly. Nobody’s really made a big deal out of those. It’s the ones that we’ve seen the threats against Canada, Mexico, and now the European Union that we hear a lot about.
We’ve heard things like 25% that we might tax some. Then we hear about retaliatory tariffs where they will match them and then Trump will raise them one, and I’m pretty sure that he said that we were going to have 200% tariffs on European wine and other alcoholic beverages. So right now I think there have been a lot of threats. There’s been a lot of delays. I think the next big date we are looking at is April 2nd. When Trump says that we will have tariffs go into effect on April 2nd, even though the EU has said that they will delay their tariffs until mid-April to try to negotiate something more reasonable.
So it’s always just kind of a wait and see right now. But that has kept people very, very nervous because nobody really knows how this will play out. A reflection of that is we’ve seen in the markets, the stock market has been whipsawed all over the place. The NASDAQ is now officially in correction territory, which is defined as at least 10% from its record high. And the S&P 500, I almost feel like flirts with that level daily, but has been spared that fate as of now. So there are a lot of people who worry that the tariffs will reignite inflation that we’ve worked so hard to bring down because that will raise the cost of almost everything.
Dana Taylor:
Daniel, I briefly mentioned the layoffs at the IRS. These were executed by the Department of Government Efficiency or DOGE. How many people were let go and how might these cuts affect tax filers this year?
Daniel de Visé:
I think that about 6,000 people have been fired, reduced, whatever you want to call it, and about the same number have taken buyouts, so that gets to about 12,000. The workforce of the IRS I think was about a hundred thousand. So some of the news reports have speculated that they were going to halve the workforce down to 50,000 from a hundred thousand, which would be a spectacularly large cut.
More recently, I’m seeing that it’s more likely based on some administration comments that their goal is to dial back the workforce to where it was when Trump left office last time, which would be more like 80,000 people, which is a much smaller cut. What’s more interesting maybe is where they cut people and what effect that has on revenue because the IRS, unlike some other agencies of government, actually brings in money. And if you cut all of the people who audit wealthy people and audit corporations, if those people lose their jobs, then a lot of money that might be recovered in audits would be lost. If they cut customer service people, maybe you have to wait a lot longer on the phone to talk to somebody.
Dana Taylor:
Now, let’s pivot to the current tax season. Daniel, what are you hearing about filings so far this year?
Daniel de Visé:
Total returns received are down a couple percent. The number of refunds that have been issued is up a couple percent. So if the agency’s been hobbled by people not finding their desks, being ordered back to work, being fired, being laid off, what have you, it hasn’t seemed to have a huge impact. And this is good, right? Because if you’re filing your return waiting for your refund, this is good news. The average refund is $3,324, which is 6% up from last year. So it seems like things are going pretty smoothly.
Dana Taylor:
Medora, what is IRS Direct File? Elon Musk claimed on X that it, “Has been deleted.” what’s the latest on it? Can people still use it? Are there other free ways to file federal and state?
Medora Lee:
Elon Musk? Maybe he doesn’t file his own taxes, but he was wrong. It’s not deleted. I’m not sure exactly what he meant there, but Direct File is a system that the IRS created itself. So Direct File is open and it’s actually expanded this year. It’s available in 25 states. It allows people to prepare and file their federal taxes online directly with the IRS. It’s free. It’s supposed to be easy to use, and it’s supposed to be accurate and secure, and you just need to make an IRS online account with a Social Security number or an individual taxpayer identification number, and it’s actually supposed to be expanded this year. Not only can more people use it, but it also covers more circumstances.
Not everybody will be able to use it because if they have complex taxes, they may not be able to accommodate for that. People who earn $84,000 or less in adjusted gross income, the IRS partners with tax software companies, and you can use that to file your taxes for free. And then they also have fillable forms online where you can fill out the forms yourself, and those are free as well. Also, IRS Free File Program, which is partner with tax software companies through this Free File Alliance, it allows a lot of people to prepare and e-file their federal taxes for free as well.
Dana Taylor:
Daniel, are there any other groups that you have advice for, like gig workers or disaster victims?
Daniel de Visé:
The IRS maintains a long list of disasters in different states, different parts of the country, and if you’re in those areas, you routinely get a lot of extra time to file your taxes. I can’t even remember anymore. There were so many disasters over the past year, but if you’re in one of those areas, and certainly if you look in that paper there, you’ve probably heard about it, but the IRS can go right to their website and figured this out. And as for gig workers, Medora, do you know anything about gig workers?
Medora Lee:
I do know something about gig workers, actually.
Daniel de Visé:
Let’s turn the mic over to Medora, she knows more about gig workers.
Medora Lee:
Okay, well, it’s not just gig workers, but it’s anyone who accepts money basically through Venmo, PayPal, a third-party payment platform. This is kind of important to know this year. So that includes probably gig workers, people who sell things on Etsy or eBay or whatever. But if you get paid through one of those, you are going to get a 1099-K this year from those third-party platforms. This doesn’t include Zelle though, but the reason is because when Biden was still president, they wanted to try to make sure they could account for everybody’s money and transactions so they could get taxed.
The original plan is that anything that’s $600 or more a year, you would get these 1099-Ks, but everybody cried foul. They couldn’t implement that quickly enough. So now we’re phasing it in. So for 2024, the amount is $5,000 totals. So when you get these 1099-Ks, obviously some people use Venmo because, “I went to lunch with you and I’m going to just Venmo my half to you.” So that makes things a little bit complicated. So as a business person, if you are accepting payments through Venmo, PayPal, et cetera, you should try to opt to make sure that you note that it’s a personal exchange of money, or you may get a 1099-K for that. And so you better keep very good records of what you are getting because you don’t want to report and pay taxes on that. You only want to pay taxes on the income.
Dana Taylor:
A lot of helpful information here. Daniel and Medora, thank you both so much for being on The Excerpt.
Daniel de Visé:
Our pleasure.
Medora Lee:
Thank you.
Dana Taylor:
Thanks to our senior producer Shannon Rae Green and Kaely Monahan for their production assistance, our executive producer is Laura Beatty. Let us know what you think of this episode by sending a note to podcast@usatoday.com. Thanks for listening. I’m Dana Taylor. Taylor Wilson will be back tomorrow morning with another episode of The Excerpt.
