FED Rate Cuts: Impact on Tax Filers Explained

In September, the Federal Reserve initiated its rate-cutting cycle, impacting not just investors but everyday individuals during the approaching tax filing season. Eric Boner, BNY Pennsylvania Chairman, emphasizes the importance of early planning for tax filers. He suggests understanding the implications of reduced interest rates on tax liabilities and the potential for increased consumer spending. Boner advises individuals to consult their financial advisors to explore loss harvesting strategies, charitable contributions, and establishing donor-advised funds. Additionally, he highlights key considerations like reviewing estate plans and wills to ensure they align with current financial strategies. With the IRS offering tax relief for Hurricane Helen victims, taxpayers have until May 1st to file their returns. Thus, it’s essential for individuals to start their tax planning early, especially with significant changes on the horizon from the tax cuts and jobs act due to sunset by 2025. The proactive approach to tax preparation allows for better management of future cuts and impacts on both current and multigenerational financial planning.