Brian Lehrer: Brian Lehrer on WNYC. Tomorrow is Tax Day, April 15, the deadline. For those of you who filed in January, give yourself a well-deserved pat on the back. This segment is for everyone else. We're joined by Tara Siegel Bernard, who covers personal finance for The New York Times, and published a comprehensive guide to navigating this year's filing season, because this is not a normal tax season.

The IRS has shed thousands of workers under DOGE pressure, the Trump administration passed that sweeping new tax law, the so-called One Big Beautiful Bill that took effect for 2025 returns. There are new deductions you may not have heard of, and some old ones that have been tweaked, and can a depleted IRS even process your return without long delays? With all that going on ahead of Tax Day, we welcome Tara Siegel Bernard back on the show. Tara, hi. Welcome back to WNYC.

Tara Siegel Bernard: Hi there. Thanks for having me.

Brian Lehrer: Listeners, you're invited. If you have a tax question you've been afraid to ask, or didn't have your own private accountant to ask, here's your chance. 212-433-WNYC. Tara's a journalist. She can't give specific tax advice to individuals, but maybe with her descriptions of the law and things like that, we can still help give you some guidance and reassurance.

I will say that a couple of months ago, she and her colleague Ron Lieber published a piece with the headline, It's Time to File Your 2025 Tax Return. Here's What to Know, so ask her a question. 212-433-WNYC, 212-433-9692. Call or text. Tara, let's start with no tax on tips, and no tax on overtime. Two of Trump's biggest campaign promises on taxes. Are those actually in effect for the return people are filing now?

Tara Siegel Bernard: They are. They are in effect for tax year 2025, so it started this year, and it will be in effect through tax year 2028. For tips, if you're working in a job where tipping is typical, so you're a masseuse, a bartender, wait staff, et cetera, you may be able to deduct up to $25,000 of your tips from your federal income this year, but there's a fair bit of nuance on some of this on overtime in particular.

People who work overtime are also subject to, are also eligible for this, potentially, for this new overtime deduction, but not everybody will be able to claim it. Only Americans who, and this is the nuance, according to the Fair Labor Standard Act, must be paid time and a half for working 40 or more hours in a week can claim it. Even then, there's a little bit more nuance here. Only a portion of your overtime pay, the additional half in that time and a half is exempt from federal income tax, but still, with all that being said, there are still millions of people who are eligible, and have already claimed it.

Brian Lehrer: Interesting. People who are 65 or older may have a new deduction they don't know about. What's that?

Tara Siegel Bernard: Sure. Yes. The new enhanced deduction for seniors. This was originally billed as no tax on Social Security, but that's not really what the actual deduction is. People who are 65 and older by December 31st of the tax year you're filing, are eligible for tax break of a tax deduction of up to $6,000 for singles, or $12,000 for married couples, as long as both spouses qualify.

Brian Lehrer: What about the SALT deduction, the State and Local Tax deduction SALT, which is a huge deal here in New York and New Jersey. What did change, and who actually benefits?

Tara Siegel Bernard: Sure. Yes. Well, before a lot of people were just taking the standard deduction, because, during the President Trump's first term, Congress passed the Tax Cuts and Jobs Act, and that created a cap, a $10,000 cap on this deduction that so many people love, people that own homes, and you were able to take only up to $10,000 on your federal tax return for state and local taxes if you itemize your deductions.

That cap was put into place, because it offset the cost of a lot of the other tax breaks in the tax law at the time, so many residents in high tax states like New York, California, New Jersey took a big hit, so this year that's changing. The cap is going away for a lot of people. For tax year 2025, that cap is rising to $40,000, and then the full deduction decreases incrementally for single people and married joint filers. If you have modified adjusted gross income of more than half a million, and the $10,000 ceiling returns for those who have income of $600,000 or more.

Brian Lehrer: There's a sliding scale there. Susan in SOHO has a question. Susan, you're on WNYC. Hello.

Susan: Hi, Brian. Do you want me to say my question?

Brian Lehrer: I think that would be a great idea. [chuckles]

Susan: Thank you. I have filed my taxes with the IRS on paper for many years, and for the last few years, somebody recommended I use service, a computer service, which I did, and it always worked well. It costs a little money. I think this year it was three times as much as I ever had to pay. As I was doing it, I couldn't sign, you know where you sign it, in the end, you have to put your signature, and it wasn't taking my legal signature that is on all of my credit card, bank accounts, and with the IRS, and it kept putting me back.

I spent several hours re-scrolling through the pages, and where the signature goes, there was an AI bar on the top, and that kept putting my name in, and then the-- It had a red thing, "Check your legal name," and I call-- Oh, I went on the chat line on this service. I'm wondering what is the impact of all this AI, because I went on the chat line, which I've never used. The service always worked very, very well, and it-- The chat line settled--[crosstalk]

Brian Lehrer: Let me get you to the point, because we're short on time. Are you saying that AI hallucinated that you were not really you, and you had to work around that?

Susan: Yes. Well, finally, after several hours, I figured it out myself, and it had my legal name without the middle initial that I was using, so it finally accepted.

Brian Lehrer: Interesting.

Tara Siegel Bernard: I looked on my credit card. I got a message right away from my credit card, "Did you approve this $70 charge?" Which the chat person on the tax website said with $5 question.

Brian Lehrer: Susan, I'm going to leave it there, [crosstalk] but Tara, it's a new world.

Tara Siegel Bernard: Yes, it is, and I might-- If you're having some question of how the IRS is viewing you, you can create an account on the IRS website, and when you log in, you can get some information about your past filings and whatnot, and that might provide some clues on how they're viewing you, and how to align all the names across everything correctly.

Brian Lehrer: Susan, I hope that was helpful. Thank you for your call. I'm sure there were heads nodding out there saying, "Oh yes, jeez, these AI tools."

Tara Siegel Bernard: Yes. [chuckles]

Brian Lehrer: Here's a question I imagine a lot of our listeners have in the post-DOGE era, if we can even call it that. Should I be worried that my refund is going to be delayed, given how many IRS workers have been fired, or laid off, or should I be worried that a lot of people are going to get away with tax cheating, which is going to deprive the government of tax dollars because they defunded the people who are monitoring that?

Tara Siegel Bernard: Right. Well, those are great questions. They are operating with close to 30% less staff this year, but this is why so many people-- This is why you're encouraged to file electronically. A lot of their processes are automated, so the IRS emphasizes this, the tax preparers emphasize this. It's really important to file electronically. It takes far less time to process a paper return than an electronic one, but you can see statistics on their website.

Even with the reduced staff, refunds and returns are being processed pretty much in line with a year ago figures. They've already received close to 100 million returns, and that's only down like 1.6% from last year, and most of those have been processed, so that's some good news. Then, you were asking about privacy, right? A lot of bad actors can file fake returns in your name.

There were some concerns about privacy and data, so what the IRS does offer is a identity protection pin. This is a six-digit number that prevents someone else from filing a return in your-- With your Social Security number, so it's a special code that just you get, and then you could use for your returns, and that's a good way to bolster security, make sure nobody is filing in your and then stealing your potential refund. [chuckles]

Brian Lehrer: Listener has this question in a text. "Charitable donations, a $1,000 without itemizing, so is there a limit for that without itemizing?" Did something change in what you can deduct this year with respect to charitable donations?

Tara Siegel Bernard: Sure. Well, there's two different things happening, and they actually take effect in the 2026 tax year, so now, so if you make a donation now for when you file next year in 2027. First, if you take the standard deduction, this is for 2026, you can still deduct some charitable contributions. You'll be able to deduct up to $1,000 in cash contributions. Couples who are married and filing jointly can do twice that, $2,000, but you can't use that deduction if you donate to specific vehicles like donor advised funds, and certain other entities.

Then, there's some limitation for more affluent filers who itemize their deductions starting in this 2026 tax year. Again, filing next year, people in the 37% tax bracket won't get the full benefit of the deduction for their charitable contributions. Instead, they'll get a deduction as if they were in the 35% bracket.

Brian Lehrer: One more question before we run out of time. Listener writes-- Where did it go? Listener writes, "Oh, are Wall Street bonuses eligible for the no tax on tips?" Is that considered a tip?

Tara Siegel Bernard: [chuckles] I think that is a little bit different then-- It's not really the target audience. Yes, I can't state that with 110% certainty, but I don't think Wall Street [chuckles] bonuses are considered tips.

Brian Lehrer: Right. I would be very surprised, even though I don't know for sure either. There we will leave it with a few last minute tips on this April 14th from Tara Siegel Bernard, who covers personal finance for The New York Times. Tara, thanks for so much good information.

Tara Siegel Bernard: Thank you.

Brian Lehrer: That's The Brian Lehrer Show for today, produced by Lisa Allison, Mary Croke, Amina Srna, Carl Boisrond and Esperanza Rosenbaum. Our interns this spring are Arlo Bivens and Jack Walker. Zach Gottehrer-Cohen produces our daily Politics podcast, and Megan Ryan is the head of Live Radio. Juliana Fonda and Milton Ruiz at the audio controls. Stay tuned for Alison.

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