Minnesota Increases Minimum Wage Rate to $11.41 for 2026
Starting January 1, 2026, Minnesota’s minimum wage will rise from $11.13 to $11.41 per hour. For workers under 20 years old in their first 90 days of employment, the training wage will increase by 2.5% to $9.31, according to the Minnesota Department of Labor and Industry. The department also highlighted that Minneapolis and St. Paul have their own local minimum wage laws, which set higher pay rates for jobs within those cities.
Employers must display state-required notices where employees can easily see them. An updated minimum wage poster will be available for download this fall. Furthermore, employers are required to provide written notice to employees before any changes take effect, including updates to their pay rate.
U.S. Congress Returns with One Month to Avert Government Shutdown
As Congress reconvenes this September, lawmakers face a tight deadline to pass funding legislation and avoid a partial government shutdown. With less than a month to finalize approximately $1.8 trillion in discretionary spending, deep partisan divides—intensified by the Trump administration’s prior spending cuts and tax reforms—are complicating negotiations. Democrats are pushing back on Republican-led funding reductions and are demanding stronger guarantees that bipartisan agreements will be honored going forward.
The path to a resolution remains uncertain, as both parties brace for potential political fallout. Democrats may use the deadline as leverage to address healthcare cuts, while Republicans aim to maintain momentum under a slim majority. With past shutdowns as a cautionary tale and the national debt now at $37.25 trillion, the pressure is on for Congress to act swiftly and cooperatively.
The House Appropriations Committee is set to vote on September 3, 2025, on a fiscal year 2026 funding bill that would significantly cut budgets for the IRS, SEC, and other federal agencies. The vote comes as Congress faces a looming September 30 deadline to fund the government, raising the risk of a shutdown if temporary measures aren’t passed. The proposed cuts reflect ongoing political battles over federal spending and regulatory oversight, with the financial services package serving as one of 12 key appropriations bills that must be finalized in the coming weeks.
Capital Gains Relief? Investors Explore 351 Conversions from Stocks to ETFs
After years of market growth, many investors—especially high-net-worth individuals—are sitting on sizable unrealized gains in taxable accounts. Selling those assets can trigger significant tax liabilities and capital gains. A lesser-known strategy, known as a 351 conversion or exchange, offers a way to defer those taxes by contributing appreciated assets into a newly launched exchange-traded fund (ETF). In this structure, the investor becomes a seed participant in the ETF and receives shares in return, with taxes deferred until those shares are sold. While this approach has historically been used by large institutions, it’s now becoming more accessible—though typically only to investors with portfolios of $1 million or more.
The appeal of 351 conversions lies in the ETF’s tax-efficient structure. ETF managers can rebalance portfolios without triggering capital gains, and certain public ETFs now allow participation from smaller firms and individual investors. However, the strategy isn’t without complexity. To qualify for tax deferral, the transferred assets must meet strict diversification requirements—no single stock can comprise more than 25% of the assets, and the five largest positions must stay below 50%. Additionally, mutual funds, private equity, and crypto assets are typically ineligible. Advisors emphasize the importance of understanding these technical rules and ensuring the resulting ETF aligns with the investor’s broader asset allocation and goals.
Despite its benefits, the strategy isn’t for everyone. Financial planners caution that once assets are transferred, investors are often “locked in” to the ETF, with limited options for exit unless another 351 exchange opportunity is available—which is rare. Selling shares later would trigger the deferred capital gains taxes. As a result, advisors recommend a careful evaluation of the ETF’s structure, long-term fit, and potential trade-offs. While 351 conversions can be a powerful tool for managing taxes, they are best suited for investors with complex portfolios, long-term horizons, and a willingness to take on the intricacies involved.
IRS Reminds K-12 Educators of $300 Expense Deduction Eligibility
As the new school year begins, the IRS is reminding K–12 educators of the Educator Expense Deduction, which allows them to deduct up to $300 in unreimbursed classroom expenses from their taxable income for 2025. Married educators filing jointly can deduct up to $600 total, but no more than $300 each. To qualify, individuals must work at least 900 hours during the school year in a role such as teacher, principal, aide, or counselor at a school providing elementary or secondary education under state law.
Eligible expenses include items such as books, supplies, computer equipment, professional development costs, and PPE or disinfectants. For physical education, only athletic supplies qualify. Because the deduction is “above the line,” it can be claimed even without itemizing. Educators must use Form 1040 with Schedule 1 to claim it. However, the allowable deduction may be reduced by other tax-free education benefits, such as certain savings bond interest, 529 plan distributions, and Coverdell ESA withdrawals.
