Posts made in September 2025

Tax Tip | Traveling for Work? Here’s What You Need to Know About Business-Related Travel Deductions

Business travel deductions are available when employees travel away from their tax home or principal place of work for business reasons. The travel period must be substantially longer than an ordinary day’s work, and there must be a need for sleep or rest to meet the demands of the work while away. Most often, one bills these expenses to the company, but there is some flexibility if they are not.

Some examples of deductible travel expenses include:

Airline, bus, or train tickets or mileage rates to drive
Fare for taxes or other types of transportation between an airport to a hotel and from a hotel to a work location
Baggage fees
Lodging
Dry cleaning or laundry

If you are self-employed, you can deduct your travel expenses using Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁹

Footnotes and Sources

^{IRS.gov, December 5, 2024}

Weekly Market Insights | Fed Cuts Short-Term Interest Rates

Stocks posted solid gains last week, propelled by the Fed’s decision to cut short-term interest rates.

The Standard & Poor’s 500 Index rose 1.22 percent, while the Nasdaq Composite Index climbed 2.21 percent. The Dow Jones Industrial Average advanced 1.05 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.27 percent.^1,2

Third Week of Gains for S&P, Nasdaq

Stocks advanced to start the week following the president’s positive comments on trade talks with China. The news helped push the S&P 500 to close above 6600 for the first time.³

After the Fed announced on Wednesday that it was cutting short-term interest rates by a quarter percentage point, all three major averages fell before rising again in a choppy, mixed trading session.^4,5

After digesting the Fed decision, all three major averages posted solid gains on Thursday, paced by tech names. But small caps stole the day’s headlines, with the Russell 2000 Index gaining more than 2 percent and hitting an intraday record high. Smaller companies tend to disproportionately benefit when the Fed lowers interest rates, given their greater reliance on outside funding than larger companies.⁶

The post-cut momentum continued into Friday; this was the second consecutive week of gains for the Dow Industrials, and the third straight week for the Nasdaq and S&P 500.⁷

Following the Fed

The Federal Reserve decision brought the Federal Funds Rate down to a 4-4.25 percent target range—its lowest level in three years.

While widely anticipated, the real news about the cut was in the finer points made by Fed Chair Jerome Powell in the post-meeting press conference. He said the move was essentially a “risk management” cut. This concept confused investors a bit, resulting in scattered markets.

Powell also said two more rate adjustments are “penciled in” for this year. He suggested another rate change could occur in 2026, followed by another in 2027.⁸

Footnotes and Sources

^{WSJ.com, September 19, 2025}
^{Investing.com, September 19, 2025}
^{CNBC.com, September 15, 2025}
^{WSJ.com, September 16, 2025}
^{WSJ.com, September 17, 2025}
^{CNBC.com, September 18, 2025}
^{CNBC.com, September 19, 2025}
^{CNBC.com, September 17, 2025}

Tax Tip | Tax Benefit and Credits: FAQs for Retirees

Lots of questions can come up about income taxes after one has retired. Some common types of taxable income include military retirement pay, all or part of pensions and annuities, all or part of individual retirement accounts (IRA), unemployment compensation, gambling income, bonuses and awards for outstanding work, and alimony or prizes. A few examples of non-taxable income are veteran’s benefits, disability pay for certain military or government-related incidents, worker’s compensation, and cash rebates from a dealer or manufacturer of an item you purchased.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS¹⁰

Footnotes and Sources

^{IRS.gov, March 30, 2025}

Weekly Market Insights | Stocks Rise Ahead of Fed Meeting

Stocks posted a solid gain last week, riding a rally in megacap tech stocks while overcoming interest rate anxiety, a downward revision to jobs data, and mixed inflation reports.

The Standard & Poor’s 500 Index rose 1.59 percent, while the Nasdaq Composite Index climbed 2.03 percent. The Dow Jones Industrial Average added 0.95 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 1.18 percent.^1,2

Stocks At New Highs

Stocks rose to start the week on renewed AI enthusiasm, with the Nasdaq hitting a new record intraday high. Stocks continued to push ahead on Tuesday despite fresh data showing large downward revisions to job creation for the 12 months through March.³

The rally continued midweek after an unexpected drop in wholesale inflation appeared to boost investors’ hopes for Fed rate moves before the year’s end.^4,5

Investors cheered Thursday’s consumer inflation report, anticipating that the reading wouldn’t be enough to derail a Fed rate move this month. The S&P and Nasdaq posted record intraday highs and closes three days in a row, while the Dow Industrials cracked 46,000 for the first time.⁶

The Nasdaq hit a new record close on Friday, while the S&P 500 flattened out and the Dow posted a modest loss on the week’s last day of trading.⁷

Fed Meets After Mixed Inflation Reports

Wednesday’s Producer Price Index (PPI) report showed wholesale prices fell 0.1 percent in August after a 0.7 percent increase in July. Then, on Thursday, fresh Consumer Price Index (CPI) data showed that retail prices rose a hotter-than-expected 0.4 percent in August—faster than July’s 0.3 percent gain.^8,9

All eyes will be on Fed Chair Powell this week. He is expected to outline his plan to adjust rates at the Fed’s scheduled two-day meeting, which ends on Wednesday, September 17. Investors will be looking for insights about how he plans to guide the economy through this period of sluggish job growth and stubborn consumer inflation.

Footnotes and Sources

^{WSJ.com, September 12, 2025}
^{Investing.com, September 12, 2025}
^{WSJ.com, September 8, 2025}
^{CNBC.com, September 9, 2025}
^{WSJ.com, September 10, 2025}
^{CNBC.com, September 11, 2025}
^{CNBC.com, September 12, 2025}
^{WSJ.com, September 10, 2025}
^{WSJ.com, September 11, 2025}

Tax Tip | Learn About Backup Withholding

Backup withholding is when a taxpayer must withhold at the current rate of 24%, taken from any future payments, to help the IRS receive the tax due on this income; this can happen for many reasons, including failing to provide a correct taxpayer identification number (TIN) or failing to report or underreport interest and dividend income.

Many types of payments are subject to backup withholding, and you can view the complete list on the IRS’ website, but some include:

Interest payments
Dividends
Rents, profits, or other gains
Commissions, fees, or other payments for work you do as an independent contractor
Royalty payments

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁸

Footnotes and Sources

^{IRS.gov, October 8, 2024}

Weekly Market Insights | Megacaps Up, Jobs Decline

Stocks made gains last week, even as megacap tech gains outweighed economic concerns.

The Standard & Poor’s 500 Index advanced 0.33 percent, while the Nasdaq Composite Index rose 1.14 percent. The Dow Jones Industrial Average descended 0.32 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.04 percent.^1,2

Tech Gains, Jobs Slow

Markets started the week on shaky ground. The Dow Industrials, S&P 500, and Nasdaq each slipped downward more than half a percentage point. Tariff uncertainty rose again, as a court ruling injected fresh doubt. Meanwhile, rising Treasury yields amplified volatility and rattled megacap tech names.³

By Tuesday, stocks managed a partial rebound, and market direction shifted. Tech bounced back the next morning—led by two megacap tech stocks’ gains—with one soaring after avoiding an antitrust penalty.⁴

On Thursday, softer private hiring data and rising layoff trends fueled hopes of an imminent Fed rate move, with the S&P hitting a fresh record close. Treasury yields dropped significantly on rate-cut speculation, reinforcing risk appetite. The mood shifted again on Friday. A surprisingly weak jobs report undercut market optimism.^5,6

Focus on Jobs

Friday’s employment report fell short, as employers created fewer jobs last month.

Unemployment increased to 4.3 percent in August from 4.2 percent the prior month, hitting a 4-year high. Job growth slowed to 22,000 jobs in August, after much higher expectations of 75,000. In addition, a revision of the June estimate decreased the number by 27,000 jobs.⁷

Footnotes and Sources

^{WSJ.com, September 5, 2025}
^{Investing.com, September 5, 2025}
^{CNBC.com, September 2, 2025}
^{CNBC.com, September 3, 2025}
^{CNBC.com, September 4, 2025}
^{WSJ.com, September 5, 2025}
^{MarketWatch.com, September 5, 2025}

Tax Tip | What to Know About Nonemployee Compensation

If you hire an independent contractor for your business, you are generally not responsible for withholding income taxes, Social Security, or Medicare taxes from their compensation. However, by law, business taxpayers who pay nonemployee compensation of $600 or more must report these payments to the IRS.

You can report these payments using Form 1099-NEC, Nonemployee Compensation. Generally, Form 1099-NEC is due by January 31. The compensation you report is subject to backup withholding if your business has not provided a Taxpayer Identification Number to the payer or the TIN doesn’t match. It’s important to be aware of this rule regarding nonemployee compensation because employees and contractors are taxed differently, but you need to note if your payments exceed the $600 limit.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁹

Footnotes and Sources

^{IRS.gov, July 29, 2024}

Weekly Market Insights | Investors Step Back Ahead of Holiday Weekend

Stocks ended the week slightly lower as mixed economic data led to some profit-taking by investors ahead of the holiday weekend.

The Standard & Poor’s 500 Index edged down 0.10 percent, while the Nasdaq Composite Index slipped 0.19 percent. The Dow Jones Industrial Average slid 0.19 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, skidded 1.53 percent.^1,2

Stocks Rise, Then Falter

Stocks initially rose but then took a breather as investors continued to process Fed Chair Powell’s comments from the Fed’s annual symposium.³

Stocks regained momentum midweek as investors waited for the Q2 corporate report from the nation’s most influential artificial intelligence (AI) company. The AI chip maker posted results Wednesday night, with a mixed reception in after-hours trading. On Thursday, the stock rallied, which helped the S&P 500 close above 6500 for the first time.^4,5

On Friday, the Fed’s favorite inflation gauge, the Personal Consumption Expenditures (PCE) Index, aligned with expectations. Still, stocks were under pressure from the opening bell as investors appeared to take profits ahead of the Labor Day weekend.⁵

Mixed Economic News

Revised gross domestic product (GDP) numbers showed the economy grew more quickly in Q2 than initially thought, which was a win for the economic bulls. However, the economic bears pointed out that orders of durable goods declined and the trade deficit was wider than expected. The PCE report, while in line with expectations, was at a 2.9 percent annual rate in July.^6,7,8

Investors are closely watching every piece of economic data for insights about what the Fed will do with interest rates at its two-day meeting, which ends September 17. So expect attention to focus on speeches by Fed officials until the Fed enters its blackout period before the September meeting.

Footnotes and Sources

^{WSJ.com, August 29, 2025}
^{Investing.com, August 29, 2025}
^{CNBC.com, August 25, 2025}
^{CNBC.com, August 27, 2025}
^{CNBC.com, August 28, 2025}
^{WSJ.com, August 29, 2025}
^{CNBC.com, August 28, 2025}
^{MarketWatch.com, August 29, 2025}