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How President-elect Trump may impact investors in these 8 market sectors

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Brandon Bell | Getty Images News | Getty Images

As Inauguration Day nears, investors are trying to unravel what booms or busts lay ahead under President-elect Donald Trump.

Trump’s campaign promises — from tariffs to mass deportations, tax cuts and deregulation — and his picks to lead federal agencies suggest both risks and rewards for various investment sectors, according to market experts.  

Republican control of both chambers of Congress may grant Trump greater leeway to enact his pledges, experts said. However, their scope and timing is far from clear.

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“There’s so much uncertainty right now,” said Jeremy Goldberg, a certified financial planner, portfolio manager and research analyst at Professional Advisory Services, which ranked No. 37 on CNBC’s annual Financial Advisor 100 list.

“I wouldn’t be making large bets one way or another,” Goldberg said.

Sectors often fare differently than expected

Past market results show why it’s difficult to predict the sectors that may win or lose under a new president, according to Larry Adam, chief investment officer at Raymond James.

When Trump was elected in 2016, financials, industrials and energy outperformed the S&P 500 in the first week. However, for the remaining three years and 51 weeks, those same sectors significantly underperformed, Adam explained.

“The market is known to have these knee-jerk reactions trying to anticipate where things go very quickly, but they don’t necessarily last,” Adam said.

What’s more, sectors that are expected to do well or poorly based on a president’s policies have sometimes gone the opposite way, according to Adam.

For example, the energy sector was down by 8.4% during Trump’s first administration, despite deregulation, record oil production and a rise in oil prices. Yet the energy sector climbed 22.9% under Biden as of Nov. 19, despite the administration’s push for renewables and sustainability.

For that reason, Raymond James ranks politics eighth for its potential impact on sectors. The seven factors that have more influence, according to the firm, are economic growth, fundamentals, monetary policy, interest rates and inflation, valuations, sentiment and corporate activity.

Here’s how Trump’s policy stances could influence eight sectors: autos, banks, building materials and construction, crypto, energy, health care, retail and technology.

Automobiles

Monty Rakusen | Digitalvision | Getty Images

The auto sector — like many others — will likely be a mixed bag, experts said.

Trump’s antipathy for electric vehicles is likely to create headwinds for EV producers.

His administration may try to roll back regulations like a Biden-era tailpipe-emissions rule expected to push broader adoption of EVs and hybrids. He also intends to kill consumer EV tax credits worth up to $7,500 — although states like California may try to enact their own EV rebates, blunting the impact.

Losing the federal credit would make EVs more costly, driving down sales and perhaps making “per unit economics even less favorable” for automakers, John Murphy, a research analyst at Bank of America Securities, wrote in a Nov. 21 research note.

Some companies seem well-positioned, though: Ford Motor (F), for example, “has a healthy pipeline of hybrid vehicles as well as traditional [internal combustion engine] vehicles to supplement the EV offerings,” Murphy wrote.

'Gradual electrification' is becoming more common in the auto industry, says fund manager

Tariffs and trade conflict pose threats to the auto industry, since the U.S. relies heavily on other nations to manufacture cars and parts, said Callie Cox, chief market strategist at Ritholtz Wealth Management.

They “could affect the cost and availability of cars we see in the U.S. market,” Cox said.

Economists expect tariffs and other Trump policies to be inflationary.

In that case, the U.S. Federal Reserve may have to keep interest rates higher for longer than anticipated. Higher borrowing costs may weigh on consumers’ desire or ability to buy cars, Cox said.

However, lower EV production could be a boon for companies that manufacture traditional gasoline cars, experts said.

Trump has also called for a “drill, baby, drill” approach to oil production. Greater supply could reduce gas prices, supporting demand for gas vehicles, experts said. But trade wars and sanctions on Iran and Venezuela could have the opposite impact, too.

—Greg Iacurci

Banks

In this 2017 file photo, President Donald Trump stands next to Jamie Dimon, chief executive officer of JPMorgan Chase & Co., left, in the State Dining Room of the White House in Washington.

Andrew Harrer | Bloomberg | Getty Images

Trump’s first administration eased certain regulations for banking rules, fintech firms and financial startups.

Likewise, Trump’s second term is expected to usher in lighter financial regulations.

That may help bolster profitability in the sector, and therefore stock prices, said Brian Spinelli, co-chief investment officer at Halbert Hargrove in Long Beach, Calif., which is No. 54 on the 2024 CNBC FA 100 list.

“The larger banks probably benefit more from that,” Spinelli said.

Less regulation — combined with the prospect that interest rates could stay higher — will provide a net positive for the bank industry, since they may be able to lend out more risk-based capital, said David Rea, president of Salem Investment Counselors in Winston-Salem, North Carolina, which is No. 8 on the 2024 CNBC FA 100 list.

One issue that emerged this year that could resurface is concern about regional banks’ exposures to commercial real estate, Spinelli said.

“It wasn’t that long ago, and I don’t think those problems disappeared,” Spinelli said. “So you question, is that still looming out there?”

—Lorie Konish

Building materials and construction

Bill Varie | The Image Bank | Getty Images

The housing market has been “frozen” in recent years by high mortgage rates, said Cox of Ritholtz.

Lower rates would likely be a “catalyst” for housing and associated companies, she said.

However, that may not materialize — quickly, at least — under Trump, she said. If policies like tariffs, tax cuts and mass deportations stoke inflation, the U.S. Federal Reserve may have to keep interest rates higher for longer than anticipated, which would likely prop up mortgage rates and weigh on housing and related sectors, she said.

The whims of the housing market impact retailers, too: Home goods stores may not fare well if people aren’t buying, renovating and decorating new homes, Cox said.

Home buyers are accepting higher mortgage rates, says Compass CEO Robert Reffkin

That said, deregulation could be “absolutely huge” for the sector if it accelerates building timelines and reduces costs for developers, Goldberg said.

Trump has called for opening new land to builders and creating tax incentives for homebuyers, without providing much detail.

Housing policies will be “one of the most-watched initiatives coming out of the next administration,” Cox said. “We haven’t gotten a lot of clarity on that front,” she said.

“If we see realistic and well-thought-out policies, you could see real estate stocks and related stocks” like real estate investment trusts, home improvement retailers and home builders respond well, Cox said.

—Greg Iacurci

Crypto

Republican presidential nominee and former U.S. President Donald Trump gestures at the Bitcoin 2024 event in Nashville, Tennessee, U.S., July 27, 2024.

Kevin Wurm | Reuters

Trump’s election has brought a new bullishness to cryptocurrencies, with bitcoin nearing a new $100,000 benchmark before its recent runup ended.

As president, Trump is expected to embrace crypto more than any of his predecessors.

Notably, he has already launched a crypto platform, World Liberty Financial, that will encourage the use of digital coins.

Those developments come as new ways of investing in crypto have emerged this year, with the January launch of spot bitcoin ETFs, and more recently, the addition of bitcoin ETF options.

Yet financial advisors are hesitant, with only about 2.6% recommending crypto to their clients, an April survey from Cerulli Associates found. Roughly 12.1% said they would be willing to use it or discuss it based on the client’s preference. Still, 58.9% of advisors said they do not expect to ever use cryptocurrency with clients.

“The number one reason why advisors aren’t investing in cryptocurrency on behalf of their clients is they don’t believe it’s suitable for client portfolios,” said Matt Apkarian, associate director in Cerulli’s product development practice.

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Even for advisors who do expect they may use crypto at some point, it’s “wait and see,” particularly regarding how the regulatory environment plays out, Apkarian said.

However, investors are showing interest in cryptocurrency, with 90% of advisors receiving questions on the subject, according to research from Christina Lynn, a certified financial planner and practice management consultant at Mariner Wealth Advisors.

For those investors, exchange-traded funds are a good starting place, since there’s less chance of falling victim to one of crypto’s pitfalls like scams or losing the keys, the unique alphanumeric codes attached to the investments, according to Lynn. Because crypto can be more volatile, it’s best not to invest any money you expect you’ll need to pay for near-term goals, she said.

Investors would also be wise to think of cryptocurrency like an alternative investment and limit the allocation to 1% to 5% of their overall portfolio, Lynn said.

“You don’t need to have a lot of this to have it go a long way,” Lynn said.

—Lorie Konish

Energy

U.S. President Donald Trump gestures after delivering a speech at a Double Eagle Energy Holdings LLC oil rig in Midland, Texas, on Wednesday, July 29, 2020.

Cooper Neill | Bloomberg | Getty Images

As of Nov. 19, energy has been the top-performing sector under President Joe Biden, with a 22.9% gain, even with the administration’s push for renewables and sustainability, according to Raymond James.

Yet it remains to be seen whether that performance can continue under Trump, who has advocated for more oil, gas and coal production. The outlook for the sector could change if Trump acts on a campaign threat to repeal the Inflation Reduction Act, a law enacted under Biden that includes clean energy incentives.

If Trump continues to make it easier to create more oil supply, that might not be a great thing for oil companies, according to Adam of Raymond James.

“Because there’s more supply, it may tamp down on the price of oil, and that’s one of the biggest drivers of that sector,” Adam said.

Eagle Global Advisors, a Houston-based investment management firm that specializes in energy infrastructure, is “cautiously optimistic” about Trump’s impact on the sector, according to portfolio manager Mike Cerasoli. Eagle Global Advisors is No. 35 on the 2024 CNBC FA 100 list.

“We would say we’re probably more on the optimistic side than the cautious side,” Cerasoli said. “But if we know anything about Trump it’s that he’s a wild card.”

Republican districts are biggest beneficiaries of the IRA, despite attempts to repeal

A lot of the Inflation Reduction Act may stay intact, since the top states that benefitted financially from the law also handed Trump a victory in the election, according to Cerasoli.

When Biden won in 2020, there was a lot of panic about the outlook for energy, oil and gas. In a third quarter letter that year, Cerasoli recalls writing, “I don’t think it’s going to be as bad as you think.”

Four years later, he has the same message for investors on the outlook for renewables. In the days following Trump’s January inauguration, Cerasoli expects there may be a deluge of executive orders.

“Once you get past that, you’ll get a sense of exactly how he’s going to treat energy,” Cerasoli said. “I think people will realize that it’s not the end of the world for renewables.”

—Lorie Konish

Health care

Medicine vials on a production line.

Comezora | Moment | Getty Images

Trump nominated Robert F. Kennedy Jr. as head of the Department of Health and Human Services.

RFK would be a “huge wild card” for the health care sector if the U.S. Senate were to confirm him, said Goldberg of Professional Advisory Services.

RFK is a prominent vaccine skeptic, which may bode ill for big vaccine makers like Merck (MRK), Pfizer (PFE) and Moderna (MRNA), said David Weinstein, a portfolio manager and senior vice president at Dana Investment Advisors, No. 4 on CNBC’s annual FA 100 ranking.

Cuts to Medicaid and the Affordable Care Act, also known as Obamacare, are also likely on the table to reduce government spending and raise money for a tax-cut package, experts said.

Publicly traded health companies like Centene (CNC), HCA Healthcare (HCA) and UnitedHealth (UNH) might be impacted by lower volumes of Medicaid patients or consumers who face higher healthcare premiums after losing ACA subsidies, for example, Weinstein said.

Robert F. Kennedy Jr. during the UFC 309 event at Madison Square Garden on Nov. 16, 2024 in New York.

Chris Unger | Ufc | Getty Images

Medical tech providers — especially those that supply electronics with semiconductors sourced from China — could be burdened by tariffs, he added.

Conversely, deregulation might help certain pharmaceutical companies like Thermo Fisher Scientific (TMO) and Charles River Laboratories (CRL), which may benefit from faster approvals from the Food and Drug Administration, Goldberg said.

Vivek Ramaswamy, a former biotech executive who Trump appointed as co-head of a new Department of Government Efficiency, has called for streamlined drug approvals. But RFK has advocated for more oversight.

“There’s a real dichotomy here,” Weinstein said.

“Where do we end up? Maybe where we are right now,” he added.

—Greg Iacurci

Retail

Thomas Barwick | Digitalvision | Getty Images

Analyst: Trump's tariffs could lead to a double-digit increase of apparel prices in the U.S.

Home Depot sources more than half its goods from the U.S. and North America, but “there certainly will be an impact,” CEO and president Ted Decker said Nov. 12 during the firm’s Q3 earnings call.

“Whatever happens in tariffs will be an industry-wide impact,” Decker said. “It won’t discriminate against different retailers and distributors who are importing goods.”

It’s a good idea for investors to own “high quality” retailers without a lot of debt and with diversified inventory sources, Goldberg said. He cited TJX Companies (TJX), which owns stores like TJ Maxx, Marshalls and HomeGoods, as an example.

“Direct imports are a small portion of [its] business and TJX sources from a variety of countries outside of China,” Lorraine Hutchinson, a Bank of America Securities research analyst, wrote in a Nov. 21 note.

Deregulation may be positive for smaller retailers and franchises, which tend to be more sensitive to labor laws and environmental and compliance costs, Goldberg said.

—Greg Iacurci

Technology

Former President Donald J. Trump speaks about filing a class-action lawsuits targeting Facebook, Google and Twitter and their CEOs, escalating his long-running battle with the companies following their suspensions of his accounts, during a press conference at the Trump National Golf Club on Wednesday, July 07, 2021 in Bedminster, NJ.

Jabin Botsford | The Washington Post | Getty Images

The technology sector continued its strong run in 2024, thanks in large part to the Magnificent Seven — Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia and Tesla.

Even broadly diversified investors may find it difficult to escape those names, as they are among the top weighted companies in the S&P 500 index.

Information technology — which includes all those stocks except for Amazon and Google parent Alphabet — comprises the largest sector in the S&P 500 index, with more than 31%.

Trump is poised to have an influence on looming antitrust issues, amid considerations as to whether Google’s influence on online search should be limited.

Any tariffs put in place may also prompt some sales to decline or the cost of raw materials to go up, said Rea of Salem Investment Counselors.

Nevertheless, Rea said his firm continues to have a “pretty heavy” tech allocation, with strong expectations for generative artificial intelligence. However, the firm does not own Tesla, due to its expensive valuation, and has recently been selling software company Palantir, a winning stock that may have gotten ahead of itself, he said.

Technology valuations are trading well into the high double digits on a price to earnings basis, which often signals forward returns will decline, according to Halbert Hargrove’s Spinelli.

Consequently, prospective investors who come in now would basically be buying high, he said.

“If you think you’re going to get the same double digit returns in the next five years, sure it could happen on a one-year basis,” Spinelli said. “But your chances historically have been that your returns come down.”

—Lorie Konish

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Disability advocates sue Social Security and DOGE to stop service cuts

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A Social Security Administration (SSA) office in Washington, DC, March 26, 2025. 

Saul Loeb | Afp | Getty Images

A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.

Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.

The complaint was filed in the U.S. District Court for the District of Columbia.

The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities, Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.

“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.

In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.

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“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.

The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.

With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.

The Social Security Administration did not respond to CNBC’s request for comment.

“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”

Lawsuit alleges reform is ‘administrative vandalism’

People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025. 

Nathan Layne | Reuters

The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.

DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.

Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.

The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.

The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14. 

The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.

“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.

Beneficiaries face long waits, overpayment issues

The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.

One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.

Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.

Fiserv CEO on the nomination to Social Security Commisioner role

Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.

Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.

Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person. 

Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.

The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.

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Amid trade turmoil, ‘you do not want to time the market’

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Pres. Trump unveils sweeping tariffs: Here's what to know

As President Donald Trump rolls out sweeping new tariffs on goods imported into the United States, Americans are growing increasingly pessimistic about their financial fate.

Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market

As of Thursday morning, futures tied to the Dow Jones Industrial Average were down 1,200 points, or 2.8%. S&P 500 futures sank 3.4%, and Nasdaq-100 futures lost 4%.

But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.

“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”

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Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.

Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.

“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.

Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.

Top-yielding online savings accounts currently pay 4.4%, on average, well beyond the savings account rates at some of the largest retail banks, which average just 0.41%.

“Taking action is the best way to feel more resilient,” she said.

It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity for dollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.

This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.

Timing the market is a losing bet

Talk yourself down from making any sudden financial moves, Chatzky advised.

Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.

And, although stocks go up and down, the S&P 500 index has an average annualized return of around 10% over the past few decades.

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How to file for a free tax extension if you can’t make April 15 deadline

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Galina Zhigalova | Moment | Getty Images

If you can’t file your taxes by the April 15 deadline, there’s a free, easy way to submit a federal tax extension online, experts say.  

Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.

As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agency’s latest reporting shows.

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Many natural disaster victims have an automatic tax extension, which varies by jurisdiction. Military members serving in a combat zone also have more time to file. 

However, the federal tax deadline for the majority of taxpayers is April 15. It’s possible to push that due date to Oct. 15 by filing for an extension.

But “it’s an extension to file, not an extension to pay,” said Jo Anna Fellon, managing director at financial services firm CBIZ.

“It’s an extension to file, not an extension to pay.”

After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.

That’s cheaper than the failure-to-file penalty, which applies when you don’t submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.

But you’ll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.

You can estimate your taxes owed by creating a “pro forma return” — or mock version of your filing — using as many tax forms as possible, Fellon said.

The ‘easiest way’ to file an extension

There are a few free options to file a tax extension.

For federal taxes, you can complete Form 4868 and mail it to the IRS. But it’s better to file digitally to avoid processing delays amid the agency’s shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.

The “easiest way” is by choosing “extension” when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“It takes all of five minutes,” and you can double-check the transaction via your IRS online account, he said.

IRS Direct Pay

Internal Revenue Service

Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.   

For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But there’s no income limit to file an extension, Lucas said.

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