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Millionaires Believe Washington Is the Biggest Threat to the U.S. Economy in 2019
Personal Finance
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Investments of all types depend on the performance of the U.S. economy. No one can see into the future, of course, but plenty of speculation exists about what is coming. For some, the fear that the economy is slowing is a big factor in realigning investment strategies and capitalizing on taxation. A change is likely in 2019, most expect. Just on December 19, the U.S. Federal Reserve made it clear that it, too, believes the economy is slowing. Though Chairman Jerome H. Powell stated that the economy is still “solid” and “healthy” in his notes, he also noted there were signs it was softening. Though it still plans to increase its benchmark interest rates in 2019 and raised the rate by a quarter-point this month, it was clear to acknowledge a level of uncertainty exists. What’s behind the risk? What could be causing the full-steam-ahead economy to begin to slow? Numerous possibilities exist. Is Washington to Blame? A survey conducted by CNBC puts the blame squarely on Washington and the policies there. The Millionaire Survey, which was conducted by Spectrem Group, showed that many believe the policies in Washington are a big risk. According to the survey, 37 percent of those millionaires responding reported that government dysfunction is their biggest threat to building personal wealth in the year to come. Another 32 percent blamed the stock market’s less-than-stellar recent performance. It’s clear that political lines are drawn. The survey showed 41 percent of responding Republicans believe the economy will continue to grow in the coming year, while only 8 percent of Democrats responded favorably. And, that disparity in itself could be a key factor in Washington’s inability to work together. Political dysfunction, along with growing government debt, could be key concerns for the economy in the year to come, according to the report. The survey provides a few other key factors. For example, about half of those polled believe the S&P 500 will be up 5 percent or more in 2019. A full 20 percent believe it will be flat. And, 37 percent expect to see returns between 4 and 5.9 percent over the next year. Trade Wars Dragging On Though President Donald J. Trump continues to make statements about the current state of affairs, it is clear that the ongoing trade wars with China will play a role in the strength of the U.S. economy in the coming year as well. Another survey, this time conducted by the Wall Street Journal, showed that the trade war with China is the biggest concern for 2019. This survey, which polled economists in the U.S., found that 47.3 percent believe that the ongoing conflict with China is the biggest risk for 2019. The survey also found 20 percent of economists believe the financial market disruptions are a key factor. And, many stated that a slowdown in the economy was likely. Finding a Conclusion: What’s to Come? What does this mean for investors and those planning to build wealth in the coming year? It’s clear there is looming trouble ahead. Promises of a resolution, negotiations and even a truce have surfaced in the last few weeks in regards to the U.S.–China trade war, and expectations are there will be a lasting impact. Washington will see significant changes, as well, as new representatives are sworn into place in the new year. The only promise here is that individual investors will need to put more attention and care into their portfolio and tax-planning strategies to minimize any impact of a downturn in the economy as the year plays on. This could become a critical factor for many.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
