As the specter of a potential government shutdown looms, furloughed federal workers confront the unsettling possibility of no back pay. In particular, the market is rattled by rising inflation expectations. Recent data from the New York Federal Reserve suggests that this has really depressed consumer expectations.
The impact of a government shutdown goes much further than federal workers. Looking in the rear-view mirror, performance data of the S&P 500 index presents a mixed picture of the shutdown aftermath following ten past shutdowns. Remarkably, though, the overall index keeps setting new records, challenging many predictions of doom in this time of economic upheaval.
The Internal Revenue Service (IRS) has just taken a major step. Due to recent happenings, they disclosed federal income tax brackets and standard deductions for the tax year 2026. This new example illustrates the revised income tax brackets and specifically how much is owed on each portion of taxable income. Single filers making more than $640,600 would have their income taxed at the top rate of 37%. For married couples filing jointly, this marginal rate kicks in above $768,700.
The IRS has announced it will raise the standard deduction in 2026. This new conversion will allow Knoxvillians to do a little more to take tax burden off of them. Advisors point out that this move is a huge win for taxpayers. Retirees, especially, can benefit from what many call the IRS’ “best-kept secret.” Knowing what to expect between pretax vs. Roth 401(k) contributions will be key for everyone hoping to make the right financial moves for their long-term futures.
Experts warn that many functions of the federal workforce are ripe for serious disruption. This has been especially the case in the face of continued tax reforms and economic pressures. These changes may change what roles look like and how employees interact at work, adding to the uncertainty for employees who have been furloughed.