Menu

Tax & Accounting News

TaxBuzz Top 5 - TD Bank Hit With $3 Billion Fine, Social Security Wage Base Jumps Significantly & More

by
Rebekah Barton
on
10/11/2024
TaxBuzz Top 5 - TD Bank Hit With $3 Billion Fine, Social Security Wage Base Jumps Significantly & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. TD Bank to Pay $3 Billion in Historic Money Laundering Settlement

TD-Bank-GettyImages-1683756724-2500
Credit: James Wagner/Getty Images

TD Bank will pay $3 billion to settle charges of failing to monitor money laundering by drug cartels, regulators announced Thursday. Per CNN, the settlement includes a record $1.3 billion fine to the US Treasury Department’s Financial Crimes Enforcement Network and $1.8 billion to the US Department of Justice (DOJ). TD Bank will also plead guilty to violating the Bank Secrecy Act.

The DOJ criticized TD Bank for its "long-term, pervasive, and systemic deficiencies" in monitoring suspicious transactions, enabling three laundering networks to transfer over $670 million. Between January 2018 and April 2024, more than 90% of TD’s transactions went unmonitored, according to a legal filing.

CEO Bharat Masrani admitted the failures occurred under his leadership and pledged reforms, including hiring 700 anti-money laundering specialists and improving financial crime detection processes. US officials condemned the bank for prioritizing profit over legal compliance, with Deputy Treasury Secretary Wally Adeyemo pointing out the harm done to American communities.

TD will also face four years of oversight from US regulators as part of the settlement.

2. Social Security Announces 2025 COLA and Higher Tax Limit for High Earners

Social-Security-GettyImages-1203882906-2500
Credit: Michael Vi/Getty Images

The Social Security Administration (SSA) has announced two key changes for 2025: a 2.5% cost-of-living adjustment (COLA) for beneficiaries and an increase in the Social Security tax limit. The tax limit, also known as the wage cap, will rise by 4.4%, bringing it to $176,100. This means higher-income earners will pay Social Security payroll taxes on a larger portion of their income next year.

The Social Security tax rate remains 6.2% for employees, with employers matching that contribution. For workers earning over $168,600 in 2024, this increase will result in more of their earnings being taxed in 2025. For example, an employee exceeding the 2024 wage cap by $10,000 saves $620 in Social Security taxes. The higher the income above the limit, the greater the savings.

These adjustments are designed to keep pace with inflation, although the COLA and tax limit are calculated using different metrics. Kiplinger issued a reminder that self-employed individuals should note they must pay the full 12.4% Social Security tax.

3. Trump Proposes New Tax Breaks, Including Deduction for Car Loan Interest

Trump-GettyImages-2172740180-2500
Credit: Scott Olson/Getty Images--2500

Former President Donald Trump unveiled a series of tax proposals on Thursday, targeting key voter blocs -- this time the auto industry in the Motor City -- as Election Day nears. Speaking at the Detroit Economic Club, Trump promised to make interest on car loans fully tax deductible, likening it to the popular mortgage interest deduction. The plan aims to stimulate domestic auto production and make car ownership more affordable for working families, particularly in Michigan, a key swing state.

CNN shared that Trump also vowed to renegotiate the US-Mexico-Canada Agreement and promised to end double taxation for Americans living abroad, though he provided few details on how that would work. These new proposals follow earlier promises to eliminate taxes on tips, overtime pay, Social Security benefits, and lift the $10,000 cap on state and local tax deductions.

Critics, however, see these proposals as campaign pandering. Howard Gleckman, a tax expert at the Urban-Brookings Tax Policy Center, noted that the car loan interest deduction would not benefit most Americans, as many do not itemize their tax deductions. Nonetheless, Trump’s proposals continue to target specific voting groups as the election approaches.

4. West Virginia Lawmakers Approve 2% Income Tax Cut, Child Care Tax Credit

West-Virginia-GettyImages-813257578-2500
Credit: Photo by Mike Kline (notkalvin)/Getty Images

Bills aimed at reducing West Virginians' income tax burden are headed to Governor Jim Justice’s desk for approval. One bill reduces the state personal income tax by 2%, while another provides a tax credit to help families afford child care. Both proposals cleared the final legislative hurdles on Tuesday during a special session called by the Republican governor, who is expected to sign them into law.

Justice, nearing the end of his second gubernatorial term and running for the U.S. Senate, had originally pushed for a 5% income tax cut but revised it to 2%. The tax cut, set to take effect on January 1, 2025, will return approximately $46 million to taxpayers, according to an AP report.

While Republican lawmakers supported the move, Democrats raised concerns over the lack of transparency regarding the source of the savings used to fund the cuts. Critics, like Del. Kayla Young, questioned the impact on state programs, particularly as West Virginia leads the nation in foster care rates. House Minority Leader Sean Hornbuckle criticized the cut as negligible for working-class residents, yielding just $21 annually for most taxpayers.

5. Oregon Rebate Proposal Promises $750 Per Resident, Sparks Debate Ahead of Nov. Vote

Oregon-GettyImages-157321866-2500
Credit: Jordan Siemens/Getty Images

Oregon voters will decide this November on the “Oregon Rebate,” a groundbreaking initiative that proposes to send every resident a $750 annual rebate, funded by raising taxes on large corporations. If passed, Oregon would become the first state to implement a guaranteed income by increasing the minimum tax on major businesses.

The measure has garnered significant public interest, reports Stateline.org, with supporters highlighting its simplicity and appeal. “We received an extremely positive response,” said Antonio Gisbert, spokesperson for the Yes on Measure 118 campaign. Proponents argue it would alleviate poverty and boost household incomes.

However, the proposal has sparked opposition from both business groups and politicians across party lines. Critics fear the initiative could lead to budget shortfalls and discourage other states from pursuing similar programs. Some worry that broad universal income measures, like Oregon’s, may not effectively address underlying social and economic issues.

Though guaranteed income programs have been piloted in other states and cities, typically for specific populations in need, Oregon’s broader plan marks a new frontier in the debate over universal income. Detractors argue such initiatives are costly and could disincentivize work, while advocates highlight their potential to combat poverty.

Which headline this week most interests you?

Feature Image by James Wagner/Getty Images

share this post
Search for matches...
Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

Recommended Professionals

In the face of economic uncertainty, TaxBuzz is the industry's most up-to-date tax information.

Join 60,000 who get our weekly newsletter. No spam.

Need help selecting a firm?

Use our specialized search engine and get matched to the best accounting and tax firm for your needs.

Get Started

Related Posts

Latest Posts