Reviewed and updated Thursday, Dec. 21, 2023 Yes, you've got a lot to think about during the holidays, but add this tax task, too, if you're older and have a tax-deferred retirement plan. Don't miss the Dec. 31 RMD deadline. We're just days away from Christmas, so here's my tax tip gift to all my readers of a certain age. Take your required minimum distribution. Now. But definitely by the end of the year. If you're a septuagenarian and saved so you wouldn't have to rely solely on Social Security, you probably already know that the Internal Revenue Service wants…

Women are making some advances in workplaces, but still face challenges when it comes to saving for a secure retirement. (Photo by Christina @ wocintechchat.com on Unsplash) I’ve spent most of my professional life writing and, for the most part, I’ve enjoyed it. But I’ve also, for the most part, looked forward to tapping away at a keyboard because I want to, not because I have to. That’s part of the reason I shifted to freelancing. The freedom of being an independent contractor is, (one more time) for the most part, the best thing about the arrangement. So that I…

Reviewed and updated Nov. 23, 2023 Tom and Tillie Turkey take care of their youngsters, like these three young Bourbon Red poults. But poultry and the rest of the animal world doesn't have to send their offspring to college. (Photo by Jennifer Kleffner via Flickr CC) A recurring phrase uttered at holiday season family gatherings is "you've grown so much since I last saw you!" What that usually means for many parents of those youngsters is that they will soon be heading off to college. And that move to campus means that mom and dad will have to come up…

Updated Wednesday, Nov. 16, 2022 You still have time to electronically claim the benefits, but not much. The deadline to e-file is Thursday, Nov. 17. If you missed out on the special COVID-19 relief payments, notably the enhanced Child Tax Credit (CTC), then head to the Internal Revenue Service's Free File website. The IRS is keeping Free File operating through Nov. 17 so eligible nonfilers can e-file a Form 1040 to claim their eligible COVID benefits at, as the name says, no cost. In addition to the CTC, eligible taxpayers may be able to claim some or all of the 2021…

Sifting through all the options during workplace benefits enrollment season can be confusing and frustrating. Here are some things to think about, including taxes, as you evaluate your company's offerings. (Photo by MART PRODUCTION) We're in the heart of the annual benefits enrollment season. Not only is the Affordable Care Act healthcare marketplace open for business, but older Americans are signing up for Medicare. But a big segment of American workers rely on workplace-provided benefits to cover then health care and other needs. If you're checking out your company's benefits, either to enroll for the first time or continue the…

Plus a look at how higher costs of living affect capital gains, youngsters' investment earnings, gifts, and more. Image via Giphy Them that got, are them that get. Not only is that a lyric (and theme) from a fabulous Ray Charles song, it's a good synopsis of the current estate tax law, especially with 2023 inflation adjustments. Many of the current wealth-related tax provisions help the richest among us stay that way. But some of them can help all of us, regardless of our income level, increase our relative wealth. And, as reviewed in this Part 6 of the ol' blog's annual…

If you've been to a doctor recently, refilled a subscription, had to go to an emergency room, or just bought over-the-counter medications, you know that all these cost a lot more than in previous years. It's enough to make you sick, or at least nudge up your blood pressure a bit. However, the tax code might have an Rx that can help. There are a variety of medical tax breaks that can help lower your federal tax bill. Several of them are adjusted each year to account for inflation. Here, in today's Part 5 post of the ol' blog's annual…

Very few of us share the same tax circumstances. However, there is one thing every taxpayer can agree on. We all want to pay the least amount of federal tax as possible. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a major way of reducing our annual tax bill. But wait. There's more. There are the adjustments to income, listed on Form 1040 Schedule 1 and still known as above-the-line deductions. You can claim all of these 25 tax breaks regardless of whether you itemize or take the standard deduction.…

Tax year-in and tax year-out, most filers claim the standard deduction instead of itemizing. The standard option has always been appealing because it's easy. There are no receipts to save, no added calculations. Even better, the Internal Revenue Service provides the standard amount you can claim, based on your filing status, right there at the bottom of the first page of Form 1040. The standard deduction train picked up even more passengers after the Tax Cuts and Jobs Act (TCJA) of 2017 essentially doubled the standard amounts. And those now more valuable deduction amounts are getting even better, thanks to the…

Following these youngsters' example could pay off in more money from Uncle Sam. The IRS is notifying individuals and families who didn't have to file a 2021 tax return to take another look and consider submitting one by Nov. 17 to claim valuable tax breaks, like the enhanced Child Tax Credit, that they missed. The Internal Revenue Service is still trying to distribute tax benefits to 9 million families that have yet to claim them. The yet-to-be-collected tax breaks are COVID-19 economic impact payments available as the Recovery Rebate Credit (RRC), the Child Tax Credit (CTC), and the Earned Income…

The Child Tax Credit (CTC) has always been a popular tax break for families. During the COVID-19 pandemic, millions of taxpayers with children came to depend on it even more. Now, some parents who usually don’t have to file a tax return can still get this tax break, which could be as much as $3,600 per child. But they must act by Nov. 15. Pandemic pumped-up credit: The CTC was enhanced as part of 2021’s American Rescue Plan Act coronavirus relief legislation. It upped the usual $2,000 per child credit for qualifying youngsters. For the 2021 tax year, the CTC…

Photo by Vidal Balielo Jr. The Child Tax Credit was expanded in 2021 to help families coping with the adverse economic effects of the COVID-19. During the height of the pandemic, the American Rescue Plan Act (ARPA) temporarily bumped up the amount available via the already popular CTC. It went from $2,000 per qualifying child to $3,600 a year for children younger than age 6, and $3,000 per child for youngsters ages 6 to 17. The credit amounts were phased out once tax-filing families hit certain income levels. More of the increased CTC also was refundable, meaning that if the…

School is back, and that means homework. College students and their parents especially need to review some lessons on ways the Internal Revenue Code can help pay many higher education costs. The table below offers a look at two popular educational tax credits, the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC is the one most undergraduate students (or their parents) will claim. The LLC is for additional educational costs beyond the first four years, including classes you take after getting out of school. Education Benefits ComparisonTax Year 2022 Criteria AOTC LLC Maximum benefit Up…

CT and NJ shoppers get sales tax relief on classroom clothing and, in the Garden State, more at the end of this month. And then there were five. That’s how many states remain in the August back-to-school tax holiday list. Three of them — in Illinois, Maryland, and Massachusetts — are this weekend. The other two, in Connecticut and New Jersey, will close out this month. Since most of the 19 states offering tax holidays this year have by now held their no-tax shopping events, all y’all know the drill. The table below has specific dates and links with tax-free…

Photo by Daniel X. O’Neil via Flickr CC With things more or less back to whatever now counts as normal, kids (and parents) are counting down the days until school restarts. They’re also looking, especially with inflation bumping up prices, for ways to save on necessary school supplies, which a recent National Retail Federation (NRF) survey found are expected to be around $864 this year. Sixteen states are offering ways to help their back-to-school shoppers. They’re offering state (and in some cases local) sales tax holidays in August. Florida’s two-week back-to-school tax holiday began July 25 and continues through midnight…

Photo by Vlada Karpovich Immediately after the U.S. Supreme Court overturn the constitutional right to abortion, talk turned to the longer-term ramifications of the Dobbs v. Jackson Women’s Health Organization ruling. The ending of the 49-year-old federal right to an abortion means states now can determine under what circumstances the medical procedure is allowed. Most that have enacted anti-abortion laws or reinstated pre-Roe statutes do not allow or severely limit the time frame in which it can be performed. Some even have granted an unborn fetus personhood, or have introduced legislation to ban abortion by establishing fetal personhood, according to…

Summer’s winding down, with schools opening their doors across much of the country in just a few weeks. So of course, you’re thinking of one last getaway to escape the sweltering dog days. But before you head out to a beach retreat or cooler mountain cabin, take a few minutes for taxes. August is a good time to make some tax moves that could save you some dollars and future headaches. Here are four to consider. 1. Make your tax holiday shopping list: The return this fall of students to classrooms is most welcome by COVID-weary parents who saw much…

Photo by William Fortunato Being a parent is a challenge, even with the best of children. It’s also expensive, especially for parents of infants. And the costs have increased thanks to the recent inflation spike. “Most parents are the poorest they’ll ever be in their kid’s life on the day their kid is born,” Kathryn Edwards, an economist with the RAND Corporation, recently told  Boston’s NPR news station WBUR. “That’s what makes something like the cost of diapers hit really hard, is that you’re hitting people who in 10 years probably have absolutely no problem affording diapers. It’s just really…

Families in Puerto Rico who haven’t filed to claim the enhanced 2021 tax year Child Tax Credit should do so, preferably by using the tax break’s special online simplified filing tool. (Image from IRS Publication 5649) The Internal Revenue Service is still trying to deliver 2021 tax year Child Tax Credit money, this time focusing on families in Puerto Rico. The tax break amount was increased last tax year to a potential maximum of $3,600 for each child ages 5 and younger, and up to $3,000 for youngsters ages 6 through 17. It’s also a fully refundable tax credit for…

Photo by Andrea Piacquadio I’m later than usual posting today because the hubby and I finally cleaned a room that we’ve ignored for way too long. That meant it took longer than if we’d just dusted a bit more regularly. That’s why I’m thinking of hiring a cleaning person. OK, I probably won’t. I do think about it every time we do some major cleaning job, since I find housekeeping a total drag. Just ask the hubby. But I’m not really one for people I don’t really know being in my house. Plus, if we do hire cleaning help, we…

If you’re a young person with a summer job, be aware of the tax implications. (Photo by Andrea Piacquadio) Your teenager has a summer job lined up, and you’re thrilled. So is your youngster. But before the young worker heads off for the first day of gainful employment, it’s a good idea to consider the tax implications. Here are five common tax issues that young workers, and their parents, face. 1. The teen likely will have to file some sort of tax return.The U.S. tax code is wonderfully egalitarian when it comes to filing. Anyone who makes a certain amount…

If you live in one of them, the state tax break is a nice add-on to the federal Child Tax Credit, which this year reverted to its lower, pre-COVID amounts. Child tax credits, at the federal level and in 10 states, can have the parents of these youngsters jumping for joy, too. (Photo by Guduru Ajay bhargav) The expanded federal Child Tax Credit (CTC) helped millions of households cope with finances stretched thin due to COVID-19 layoffs and even total business closures. During the height of the pandemic, the already popular CTC of $2,000 per qualifying child was increased. The…

Photo by Jill Wellington Summer doesn’t officially start until the solstice a bit later this month, but that doesn’t stop us from celebrating the unofficial arrival of lazy, hazy days today, June 1. But before heading out to the beach, a cool mountain retreat, your favorite amusement park, or distant family members you haven’t seen in ages, it’s tax time. Yes, Tax Day was six weeks ago for most of us. But even if you got an extension to file your 2021 return, there still are some tax moves you should make or at least consider this month. I know…

One of our neighbors made sure we all knew they had a new, cool graduate. (Photo by Kay Bell) I swear, my nieces and nephews were just in kindergarten. And wasn’t that neighbor kid trick-or-treating as a dinosaur a couple of years ago? So how am I getting high school and college graduation announcements for these young people? Most of them will get a nice, actual paper congratulations card. A few will find a gift card tucked inside. However, a couple of these newly minted young adults will get actual gifts. But they won’t be items that have to wrapped.…

NOTE: You can find an updated version in my Oct. 13, 2023, post about tax myths and eclipse superstitions pegged to the Oct. 14. 2023, annular eclipse. Here are this weekend's full Flower Moon eclipse stages. The moon moves right to left, passing through the penumbra and umbra, leaving in its wake an eclipse diagram with the times (Eastern time zone) at various stages of the eclipse. Visualizations by Ernie Wright, NASA Scientific Visualization Studio. Click here for the video version. And if it's cloudy where you live, you can livestream the eclipse. It's Friday the 13th, the only one…

The Child Tax Credit (CTC), already a popular tax break, was enhanced for the 2021 tax year. In addition to being larger — up to $3,600 for each child younger 6 and up to $3,000 for each youngster age 6 through 17 instead up the usual $2,000 per qualifying child — it was available to more families. Most eligible households got half of their qualifying CTC amount last year as monthly advance payments. They were sent automatically to taxpayers who had filed returns in prior years. Families who didn’t have to file, usually because they earned less than the amount…

Taxes don’t typically prompt celebrations like that of these school children welcoming May with a traditional Maypole dance. But thinking about tax moves this month can help you avoid costly faux pas. (Photo by Paul Barnett via Wikimedia Commons) May is supposed to be the month full of flowers from the previous month’s showers. Unfortunately, this year the month is starting off on a decidedly unmerry note. In the wake of the devastating Kansas tornadoes, forecasters are warning of multiple rounds this week of severe thunderstorms, including tornadoes, across the Plains, Midwest, and South. That’s why heeding weather warnings and…

via GIPHY So, you missed Tax Day. It happens. Don't panic. But don't dawdle. The Internal Revenue Service is serious about wanting your tax forms and, of course, any taxes you owe. If you miss the annual deadline, regardless of exactly when it falls, then you'll likely end up facing filing-related penalties, the harshest of which is for not filing at all. Below are four things you need to do now to get out of that penalty jam with as little damage as possible. Plus, there's a fifth tax move that could pay off for folks who aren't legally required to…

Photo by Vidal Balielo Jr. via Pexels Filing status is one of those tax matters that seems so simple, but which often trips up taxpayers in real life. As noted (shameless plug warning) in my 5 filing status choices item for the April Tax Tips page, most folks’ status stays the same from tax year to tax year. But a change (or two, or more) in your personal situation could mean you need to revisit how you file your return. The head of household (HoH) status is a frequent source of confusion. Here, an unmarried person takes care of the…

Do check out these following related — and legitimate — tax write-offs Sometimes your home is indeed located at the intersection of favorable tax breaks. Sometimes it’s not. Below is a look at the difference between some questionable and acceptable residential (and more!) write-offs. Every tax-filing season, the great quest by filers is to find the most tax breaks. But there are some deductions and credits you should steer clear of. These expenses that don’t meet Internal Revenue Service guidelines mean the agency will stop processing your tax return to give it second (or third, or …) look. At best,…

President Joe Biden’s fiscal year 2023 budget proposal of a minimum tax on the wealthiest Americans, as well as a levy on unrealized gains on assets (including stock holdings), is getting the most attention. Biden’s plan to collect at least a 20 percent tax on U.S. households worth more than $100 million would apply to about 20,000 households, but more than half the revenue would come from households worth more than $1 billion, according to White House estimates. It also would, says the administration, help reduce the nation’s budget deficit by $1 trillion over the next decade. Wish list only:…

It’s not a literally blank computer screen, but the IRS and White House Child Tax Credit portals aren’t accepting input until after Tax Day on April 18. (Photo by cottonbro from Pexels) The increased Child Tax Credit (CTC) has been a boon for many U.S. families. The American Rescue Plan Act (ARPA) bumped up the tax break for the 2021 tax year from $2,000 per each eligible child to $3,600 for children age 5 or younger, and $3,000 for youngsters ages 6 to 17. Now, however, an online tool that the IRS created to make sure all who were due…

Scenic overlooks, like this view of the Austin skyline from my suburban neighborhood, can be lovely. But when it comes to taxes, you don’t want to overlook tax breaks. (Photo by Kay Bell) If you’re like most taxpayers, when you finally decide to do your taxes, you want to get it over with as soon as possible. But don’t pay a price for you haste. If you rush through filling out your Form 1040, you could cheat yourself out of some tax savings. It happens every year. Folks overlook deductions, whether they itemize on Schedule A or claim above-the-line breaks…

Today is EITC Awareness Day! OK, Jan. 28 isn't an official holiday to celebrate the Earned Income Tax Credit, usually referred to (at least in the tax world) by its acronym EITC. But it is an annual event promoted by the Internal Revenue Service. Every year in late January, the tax agency focuses on getting the word out about the EITC. The reason is simple. Millions of individuals regularly overlook the EITC and surrendering thousands of dollars they could use. The EITC itself, however, is not so easy to claim. That's why a lot of folks ignore it. The IRS…

If the IRS letter about your third COVID economic impact payment or advance Child Tax Credit has the wrong amount, the agency says to file anyway, using your “best information.” (Photo by Andrea Piacquadio from Pexels) Did the letter you got from the Internal Revenue Service about last year’s economic impact payment (EIP) or advance Child Tax Credit money have your amount(s) wrong? The Internal Revenue Service says don’t let that dissuade you from filing your 2021 tax return. In fact, IRS Commissioner Chuck Rettig, during a conference call with reporters to discuss today’s start of the annual tax filing season, urged all…

You’re expecting a refund, so you’re planning to file your tax return soon. Wait. You might want to take a step or two back. First, you need to make sure you have all the information you need to properly fill out your 2021 Form 1040. You can get an idea of that material in my post examining some common tax statements you need to complete your filing. Second, you need more than paperwork. You need to take a good look at your personal situation and answer some questions. The responses could affect your filing. This checklist can help. Start with…

It’s the first week of January and some people are already working on their taxes. They’re expecting a refund and they want the Internal Revenue Service to have their forms as soon as possible so the agency can process them when tax season 2022 officially starts. Those enthusiastic filers, however, might want to take a break. In order to properly file their 2021 tax returns, many likely will need one or both tax statements the IRS is sending out this month. One is a notice of how much an individual got as the third Economic Impact Payment (EIP) issued in…

Photo by olia danilevich via Pexels For the past two years, COVID-19 has wreaked havoc on tax deadlines. In 2021, Mother Nature joined in the chaos, with major disasters changing due dates in several states. But there’s still a calendar tax constant. Dec. 31. That last day of the year remains the deadline to take care of some tasks that could affect your full year’s taxes. Here are some common end-of-year tax timing situations. Getting married: If you say “I do” on 12/31, then the Internal Revenue Service considers you married for the whole year. That means when you file…

A lot of families were smiling the last half of 2021 as they received early Child Tax Credit payments. (iStock) On Dec. 15, the Internal Revenue Service distributed the last of 2021’s Advance Child Tax Credit (AdvCTC) payments. The monthly tally came to just more than $16 billion. Since the $300 per child for kiddos age 5 or younger and $250 for youngsters ages 6 to 17 started going out in July, nearly $93 billion has been issued to qualifying families, according to the U.S. Treasury. Recipients of their portions of those early billions can claim the Child Tax Credit (CTC) remainder…

This holiday season, some families are getting an added gift: their final Advance Child Tax Credit payment for 2021. An estimated 36 million families will see their final Advance Child Tax Credit arrive in their bank accounts today, Dec. 15. The bank deposit will be labeled CHILDCTC. Those getting the early 2021 tax year payments by mailed paper Treasury checks should have their money soon. Then what? Today’s end of the pre-payments is the start of another process. When filing season starts next year, eligible families will claim the remaining Child Tax Credit (CTC) amounts for this year on their…

Photo by Charlotte May from Pexels Schooling has changed a lot during the COVID-19 pandemic. Remote learning is more common. Where students have returned to classrooms, they and their teachers must deal with physical re-arrangements. One thing, though, remains the same. Education costs continue to climb. That’s particularly true for college expenses. But there is a popular way to save for your youngsters’ secondly educations and get a potential tax break, too. As long as you act quickly. When you contribute to a child’s 529 plan, many states allow you to claim a state tax deduction. And in many states,…

A close-up of some of our Christmas tree ornaments, including the newest one showcasing Austin icon El Arroyo’s sign wisdom. (Photo by Kay Bell) Ho, Ho, Ho! The jolly month of December is here, bringing the official start of winter, Christmas and other holidays, and taxes. Yeah, that last December item might harsh your holidays. But the tax moves you make over the next 31 days could make your 2021 and 2022 tax situations happy and bright. Here’s a look at 6 December tax moves you at least want to consider. 1. Keep an eye on Congress. Yeah, too often…

Do you need to tweak the Advance Child Tax Credit (AdvCTC) amount you’ve been receiving? You can adjust December’s final payment as long as you let the Internal Revenue Service know by Monday, Nov. 29. Specifically, you need to update your Child Tax Credit data at the agency’s special online website by 11:59 p.m. Eastern Time on Monday, Nov. 29. Last payment of 2021: The American Rescue Plan, the COVID-19 relief measure that became law in March, bumped up the Child Tax Credit amount for the 2021 tax year. The law also instructed the IRS to issue half of the…

For some, this Thanksgiving was quieter than normal. Their youngsters spent Turkey Day with their parent as part of the alternating holidays agreement reached in the divorce decree.

Single parenting can be challenging, especially at tax time and you and your ex-spouse are vying for the same child-related tax breaks. (Photo by MART PRODUCTION from Pexels) For some, this Thanksgiving was quieter than normal. Their youngsters spent Turkey Day with their parent as part of the alternating holidays agreement reached in the divorce decree. Breaking up is always hard. It’s also complicated when it involves lawyers, court hearings and the Internal Revenue Service. It’s can get even more complex when children are involved. I’m not a lawyer. I don’t play one on the ol’ blog. And I don’t…

Photo: Satya Murthy Happy Thanksgiving! This holiday obviously is about acknowledging all we have to be thankful for in the past year and beyond. It’s best when spent with family and friends. And, of course, it’s about eating! Turkey and dressing. Green bean casserole. Double-stuffed baked potatoes. Celery stalks overflowing with pimento cheese. Fruit salad. Pies. Lots of pies. That was what I grew up eating. We lived in the same West Texas town as grandparents, so the fourth Thursday of November definitely was a beloved routine. My Mom always helped out my Mam-ma, her mom, and on most occasions…

This Thanksgiving for the first time in months (or years) families will be getting together to share and make new memories. (Photo by Photo by cottonbro from Pexels) This Thanksgiving week, many of us are seeing family for the first time in months, if not years. (Thanks, no thanks, COVID-19.) If your family members include aging parents, in addition to lots of long hugs and catching up and crying, you probably should spend some time making sure they’re doing OK when you’re not around. If you do find Mom and Dad could use a little, or even a lot of…

Thanksgiving is the traditional time for families to gather. But not all families are traditional.

A tax credit for dependents offers a break for older children, extended family members, and even non-relatives. Thanksgiving is the traditional time for families to gather. But not all families are traditional. That’s evident in real and tax life. The family-friendly tax break that’s been getting most attention of late is the Child Tax Credit (CTC) and the advance payments for 2021 that are going out through December. I’m guilty, as a perusal of the ol’ blog quickly shows. But some families aren’t eligible for the CTC, either the money being distributed now or when they file their annual tax…

Photo by August de Richelieu from Pexels Happy National Family Week! Yes, this is a real commemoration that officially kicked off on Sunday, Nov. 21. It runs through the 27th. The week was launched around a half-century ago by a couple Indianapolis public school staffers. Since the 1970s, U.S. presidents have acknowledged National Family Week. President Joe Biden’s proclamation cites “the importance of spending time with relatives,” which explains why the week that Americans celebrate Thanksgiving was selected for National Family Week. Biden’s statement also noted the “commitment to investing in our Nation’s families.” Increased tax credit help for families: One of those…

AMT law changes plus annual inflation adjustments mean that this parallel tax aimed at the wealthy is no longer such a broadly-based ATM for the tax collector. The political and legislative battle over how to collect from the wealthiest taxes, which was mentioned in yesterday’s Part 6 tax inflation post on (among other things) estate taxes, is not new. It’s been going on for decades. The Alternative Minimum Tax, or AMT, is one way that Washington, D.C., came up with to ensure that the rich pay at least some taxes. This post, Part 7 of the ol’ blog’s 10-part inflation…

Current political talk (OK, fights) on Capitol Hill is full of discussions (OK, fights) over how and how much to tax the rich. The discussions (OK, fights) are driven by the fact that the tax code already is full of provisions that help the wealthiest among us stay that way. But some of the tax laws can help all of us, regardless of our income level, increase our relative wealth. And some of those Internal Tax Code components are adjusted each year for inflation. This Part 6 of the ol’ blog’s annual tax inflation series looks at how these annual…

Medical matters have been front and center for the last two years due to the COVID-19 pandemic. Even without a global health crisis, taxpayers know they need to keep an eye on not just their wellbeing, but also on how medical expenses could create a tax outcome that’s healthier for the filers rather than the Internal Revenue Service. There are a variety of medical tax breaks. And several of them are adjusted each year to account for inflation. Here, in this Part 5 of the ol’ blog’s annual tax inflation series, is a look at those changes for the 2022…

There’s one thing that every taxpayer, regardless of their financial situation, can agree on. We all want to pay the least amount of taxes to Uncle Sam as possible. The key way to get our taxable income to the lowest possible level is by claiming deductions, either the standard option by itemizing as discussed in Part 2 of the ol’ blog’s annual inflation adjustment series. Either option helps lower your taxable income. But there are additional deductions we should check out at filing time, like the above-the-line deductions anyone can claim. Then there are tax credits, which are a better…

Photo: Juan Pablo Serrano Arenas from Pexels The Internal Revenue Service has a holiday gift for eligible families who’ve yet to collect their Advance Child Tax Credit payments. If sign up by Monday, Nov. 15, for the early-issue amounts, which are up to $300 per month for each child younger than age 6 and up to $250 per month for each child ages 6 through 17, you’ll get all the money you qualify for in mid-December. That definitely could challenge Santa for the seasonal present delivery crown. Bumped up and early tax break: The Child Tax Credit (CTC) already was a popular…

Tax year-in and tax year-out, most filers claim the standard deduction instead of itemizing. The option has always been appealing because it’s easy. There are no receipts to save, no added calculations. Even better, the Internal Revenue Service provides the standard amount you can claim, based on your filing status, right there on the first page of Form 1040. The standard deduction trend got even more participants after the Tax Cuts and Jobs Act (TCJA) of 2017 essentially doubled the standard amounts. And those now more valuable deduction amounts still usually get a boost at the end of every year thanks…

Family income affects just home much Child Tax Credit can be claimed. It also matters in the distribution of the 2021 increased amounts that are being delivered monthly through the end of this year. (Photo via Shutterstock) The Internal Revenue Service will be delivering two more Child Tax Credit payments this year, on Nov. 15 and Dec. 15. Eligible families need to make sure the IRS has the correct data for the payments. It could make a difference in both the amount of credits distributed this year and the families' tax returns filed in 2022. Notably, any changes to income…

The Child Tax Credit (CTC) was expanded as part of the COVID-19 relief bill signed into law by President Joe Biden. Instead of $2,000 per child, the CTC in for the 2021 tax year is $3,600 per child age 5 or younger. It's $3,000 for children ages 6 to 17. Part of the 2021 credit money is going out through the end of the year as advance payments. The October payments went out last Friday. Two more rounds, on the 15th of November and December, will be issued. Few of us will turn down money, so the credit increase and…

Millions of Americans rely on their workplace benefits to cover then health care and other needs. Most of them also are paying even more attention to those job-based benefits this year in light of the persistent COVID-19 pandemic. Medical insurance is a top priority. But other benefits also are getting added attention during this annual fall period, during which many U.S. companies allow workers to enroll in or change their benefits for the coming coverage year. Many of the office-based benefits also offer some tax advantages. Here are five questions with an Internal Revenue Service-inspired perspective to ask yourself as…

Young boy feeding the chickens. (Photo by ArtHouse Studio from Pexels) As we wind down the first weekend in October, Democrats are continuing to fight amongst themselves and with Republicans over how big President Joe Biden’s economic plan should be and how to pay for however much it ultimately is. But one group of taxpayers is happy about what isn’t in the mix. Potential changes to the tax treatment of inherited property are off the table, at least for now. There had been talk that the stepped-up basis rule would be eliminated. This tax rule allows heirs to set the…

Photo via Pexels There have been some stumbles with the delivery of Advance Child Tax Credit (AdvCTC) payments this summer, the most recent happening last month when some were delayed. That’s understandable. The AdvCTC distribution is yet another new job for the Internal Revenue Service, which already is struggling to handle its regular jobs during a persistent pandemic. Still, it’s frustrating for folks depending on the money, which has been increased for the 2021 tax year to $3,600 for each child younger than age 6, and $3,000 for each youngster ages 6 to 17. Many missing the money: Half of…

In addition to visiting your local pumpkin patch this month, make time for these October tax moves. (Photo by James Wheeler via Pexels) It’s October. I know I say this every month, but wow, this day got here quickly. And it’s just the start of a busy month. This first full month of fall means it’s time to winterize your house if you live in a place with changing seasons. You’ve got candy to buy so trick-or-treaters won’t be disappointed. But take it from me, don’t buy the sweets too soon or you’ll have to buy more by the time…

But despite the technical problem, IRS says still use online tool to make changes, including stopping Advance Child Tax Credit payments for the rest of the year. You'd think that by the time the Internal Revenue Service issued the third Advance Child Tax Credit (AdvCTC) payment, things would be automatic. Well, you've got another think coming. The IRS did deliver in mid-September around 35 million AdvCTC payments totaling $15 billion. But unfortunately for some eligible families, their money didn't show up on time. The explanation was the usual one. It was a technical issue. Yeah, I rolled my eyes, too. But then,…

Advance Child Tax Credit (AdvCTC) payments are producing a financial benefit to more than the families receiving the money. The early tax credit amounts, which started going out in July and will continue through December, also appear to keep more workers on the job. That's a finding from a report by Humanity Forward, which partnered with researchers at the Washington University of St. Louis, Appalachian State, University of North Carolina-Greensboro, and the Urban Institute to examine the potential effects of the tax break. In addition, the tax credit also is encouraging some to follow through on entrepreneurial plans. Popular tax…

Are you missing out on monthly Advance Child Tax Credit (AdvCTC) payments? Sign up today to get in the system and start getting checks starting next month. The Internal Revenue Service will keep sending out the amounts to eligible taxpayers for the next four months. The payments are up to $300 per month for each qualifying child younger than age 6 and up to $250 per month for each child age 6 through 17. They are either directly deposited if you have a financial account or a paper U.S. Treasury check is mailed around the 15th of each month. And…

Even before the COVID-19 pandemic created a plethora of economic problems, student debt was a national concern. Student loans are among the largest contributors to household debt, according to a recent U.S. Census Bureau analysis. It cites Department of Education estimates that in 2017 the total amount owed in federal student loans was $1.37 trillion. That figure no doubt has grown dramatically in the last four years, exacerbated by the recent job losses caused by the coronavirus. Federal student debt relief moves: As the higher education debt dollars pile up, Washington, D.C., is working on ways to deal the costs…

The Child Tax Credit, particularly the advance payments now being distributed by the Internal Revenue Service in monthly installments through the rest of 2021, are getting a lot of attention. But that's not the only tax credit that offers help to families. These tax breaks are particularly helpful because, as tax credits, they offset dollar-for-dollar any tax liability you might have. A few are even refundable, meaning they'll net you a tax refund once they wipe out any tax you might owe. Such help from Uncle Sam is welcomed by all taxpayers, but especially families working to make ends meet.…

The parents of these youngsters are as happy as their offspring, thanks to the Advance Child Tax Credit payments. But some moms and dads still have questions about the money. With the delivery of the second Advance Child Tax Credit (AdvCTC) payments last week, the Internal Revenue Service now has sent out roughly $30 billion to around 36 million families. That dollar amount will continue to grow as half of the tax credit, which was bumped up for the 2021 tax year, is mailed or directly deposited at the middle of the coming months. But this weekend, as we mark…

Photo by Juan Pablo Serrano Arenas from Pexels On Friday, the second of this year's Advance Child Tax Credit payments were directly deposited to accounts of families who signed up to get the tax relief measure that way. Those awaiting an actual paper Treasury Department check should see them arrive in their snail mail boxes in a few days. In most cases, the money, which is a prepayment of the Child Tax Credit (CTC) is welcome. But in some instances, the early money could cause payback problems for families whose tax situations changed this year. Child Tax Credit benefits and bump…

Photo by FRANK MERIÑO from Pexels With the Delta variant fueling a resurgence of COVID-19 cases, focus has fallen on folks who are choosing not to get jabbed. Vaccine resistors offer many reasons for not getting the shot (J&J) or shots (Pfizer and Moderna). One of them is that they can't afford to take time off work. Uncle Sam is encouraging employers to cut their job-focused unvaccinated workers some slack. Eligible businesses who let their employees have paid time off to get the vaccine will get a tax break. And he just expanded the situations to which the business tax…

You got your first Advance Child Tax Credit (AdvCTC) this month. The added $300 for each of your kiddos age 5 or younger or $250 per child if your youngsters are age 6 through 17 is nice. But your 2021 financial situation has changed, and you've done the math. The calculations show that this COVID-19 relief money, authorized by the American Rescue Plan Act and which the Internal Revenue Service is sending based on your 2020 tax year filing data, no longer applies. In fact, since you're making a bit more money this year, if you keep getting the AdvCTC…

Everybody needs some help now and then. On Friday, July 23, and Saturday, July 24, the Internal Revenue Service is providing assistance to those in 16 metropolitan areas who need to file a 2020 tax return so they can get various COVID-19 relief payments. The first of six scheduled Advance Child Tax Credit (AdvCTC) payments hit bank accounts and U.S. Postal Service boxes last week. The bulk of these initial payments — the Internal Revenue Service says it sent out $15 billion to about 35 million families — were dispersed automatically. The recipients, who had previously filed returns or used…

Millions of parents are as happy as these youngsters, thanks to the first Advance Child Tax Credit payment that arrived this month. Others, however, are wondering why they got less. The first of six scheduled Advance Child Tax Credit payments have arrived, and for the most part, the recipients are elated. Paul Williams, an economist and writer, has collected many of the happy recorded (or recreated) reactions in an entertaining Twitter thread. Some folks, however, aren't so thrilled. In fact, they're wondering why they didn't get the full $300 per month for each dependent child younger than age 6 and…

Don't fall for scammers who falsely say they can help you get, or get more, of the enhanced Child Tax Credit amounts that started going out this week. Instead, get help from a tax pro or use the Internal Revenue Service's online tools. The Advance Child Tax Credit (AdvCTC) payments started showing up in bank accounts today. Folks who'll get the enhanced early credit amounts by snail mail should see those U.S. Treasury checks soon. The Internal Revenue Service says it delivered today the first batch of the early Child Tax Credit payments, worth roughly $15 billion, to around 35…

These youngsters' parents will join them in jumping for joy if the expanded Child Tax Credit, which was expanded for the 2021 tax years, is extended or, as some in Congress want, made permanent. On the eve of the expanded Child Tax Credit going out to millions of families, a group of Democratic members of Congress want the enhanced tax break to become a permanent part of the Internal Revenue Code. Under the American Rescue Plan Act (ARPA), the COVID relief measure that became law in March, the Child Tax Credit (CTC) was increased, for qualifying families, to $3,000 for…

July has become a big month for the Internal Revenue Service. Last year, in the heart of the COVID-19 pandemic, July 15 was the delayed regular tax return filing deadline. This year, July 15 is the kickoff date for Advance Child Tax Credit payments and resumption of some IRS collection and enforcement efforts. This summer month also a welcome time for folks who early in 2021 filed tax returns reporting all their 2020 unemployment benefits. The IRS announced today that around 4 million of those taxpayers are about to get refunds for their tax overpayments. Where the IRS has taxpayers'…

Cleaning up after customers. (Photo by RODNAE Productions from Pexels) Some businesses reopening after the lifting of COVID-19 pandemic restrictions have struggled to hire workers. The big debate is whether coronavirus relief, primarily Uncle Sam's added unemployment benefits, or low wages is why so many jobs are going unfilled. That argument is likely to continue, along with the Congressional battle to raise the federal minimum wage. Earlier this year, the effort to increase it from $7.25 per hour to $15 an hour failed. Some state, city minimum wages hiked: Wage increase advocates, however, have had more success at other governmental levels. Higher…

Your youngster might not have enjoyed the Fourth of July fireworks (I'm right there with you, kiddo, when it come to the noise!), but your son or daughter could make you eligible for Advance Child Tax Credit payments starting this month. Hello, July! Yeah, I know my welcome to the first full month of summer is a bit late. But admit it. You don't really focus on the month either until after July 4th. Since it's the midpoint of the tax year, July usually is a great time to look into some tax saving tasks (more on this a bit…

Need help filing a 2020 tax return so you can get Advance Child Tax Credit payments? The IRS and community groups in 12 metro areas are holding events to help you do just that. In a few weeks, the Internal Revenue Service will start sending out advance payments of the Child Tax Credit. The early credit amounts will go out automatically to taxpayers who, based on their 2019 or 2020 tax filing data in the IRS system, qualify for the family-friendly tax break. But not everyone who's eligible for the Child Tax Credit, which generally will be $300 a month…

Advance payments this year of some of 2021's Child Tax Credit amounts can be a nice helping hand for some families. But the early distributions aren't for everyone. Those who want to wait to claim the tax break when they file in 2022 can go online to let the IRS know they'd rather wait. (Photo by Juan Pablo Serrano Arenas via Pexels) The Internal Revenue Service is finalizing distribution of advance payments for the last half of 2021 to families that qualify for the newly enhanced Child Tax Credit. The Advance Child Tax Credit (AdvCTC) payments of $250 or $300…

Almost 40 million U.S. families could get monthly Child Tax Credit payments this year. The extra money no doubt would be a big help, but some might discover they have to pay back the advanced amounts when they file their 2021 tax returns. (Photo by August de Richelieu via Pexels) You're fully vaccinated. Your company is open again, with everyone returning to the office. You got your kiddos, who also got jabbed, into a summer day camp. Hello, sort of normal summer! Even better, you're about to get some added monthly cash from Uncle Sam thanks to early Child Tax…

Being a parent is tough when there are two adults to share the responsibilities. Child rearing sometimes is darn nigh impossible when there's just a single parent in charge. Most single-parent families are headed by mothers. But there's a substantial number of dads facing these challenges, too. U.S. Census Bureau data show that of the 35 million fathers of minor children, 1.7 million, or roughly 2 percent, are single fathers living with at least one child younger than 18. On Father's Day 2021, we salute all you nearly 2 million dads who are doing your best to take care on…

Millions are awaiting Advance Child Tax Credit payments, which will start going out in July, but only to those for whom the IRS has info in its system. If you haven’t had to file a return for a while, the agency has a new online tool you can use to register for the payments. Some folks don’t have to send the Internal Revenue Service a Form 1040 every year. The reason, though, is not necessarily a welcome one. They don’t have to file because they don’t make enough money to require telling Uncle Sam about it. And since the COVID-19…

Photo by Min An from Pexels Among the many welcome events that are returning as we continue to move beyond complete COVID-19 lockdown are weddings. Congratulations and best wishes to all the brides and grooms out there who finally are enjoying their long-planned celebrations. My gift to all y'all newlyweds is a few words of marital tax advice. With apologies for the spare gift wrapping, here are some tax tasks you need to take care of now, or at least as soon as you get back from your honeymoon. 1. Make sure everyone knows your new name. After marriage, some spouses…

A letter from the Internal Revenue Service can be scary. But for 36 million families who soon will find such correspondence in their mail boxes, the news could be good. Very good. The document will have information on the Child Tax Credit (CTC), which was expanded under American Rescue Plan Act (ARPA) provisions that became law back in March. The $2,000 tax break was hiked for the 2021 tax year to $3,600 for each child age 5 and younger and to $3,000 each for those between ages 6 and 17. Even better, the entire credit is fully refundable for 2021.…

Joe Biden's campaign slogan "Build Back Better" now is part of his presidency's agenda. Many promises he made in 2020 now are part of the Biden Administration's first federal budget proposal. President Joe Biden's first federal budget proposal, which is for the 2022 fiscal year that starts Oct. 1, comes in at $6 trillion, detailed in more than 1,700 pages. The White House projects its changes will bring $3.6 trillion to the Treasury over the next decade. It also projects a $1.84 trillion deficit. That's a substantial number, up from 2019's $984 billion deficit, but a sharp decrease from the…

The American Rescue Plan Act (ARPA) that became law in March gets most attention for creating a third round of COVID-19 economic impact payments. But it also made changes to some tax laws to help put more money into families' hands. One of those changes was bulking up the Earned Income Tax Credit, or EITC, for tax year 2021. Quick EITC history: The EITC has been in the tax code since 1975. It was created as an outgrowth of President Lyndon B. Johnson's War on Poverty as a way to help middle- and lower-income workers. Even though the EITC can provide…

Since the American Rescue Plan Act (ARPA) was enacted on March 11, the Internal Revenue Service has distributed approximately 159 million COVID-19 economic impact payments (EIPs). Those deliveries come to more than $376 billion. This third round of coronavirus pandemic payments, worth up to $1,400 per person, has been going out in batches. Recipients include taxpayers who've filed 2020 returns, Social Security recipients, and veterans and their families. Still, there are some folks who aren't on the IRS' EIP delivery list. These are, for the most part, people who haven't file a tax return because they're not legally required to…

Last March, parents were frantically searching for day camps to enroll their kiddos once school let out for the summer. Then COVID-19 arrived. Most camps shut down or dramatically pared back operations and parents added teacher and summer activity director to their already long list of de facto titles. We're still not sure whether or how many summer day camps will resume this year, but things are looking better thanks to expanding coronavirus vaccinations across the country. That means that parents might be able to once again take advantage of the child and dependent care credit in connection with certain…

Happy International Women's Day (IWD), the global commemoration and celebration of women's successes. But it's also recognition that more work is needed before gender equality is achieved. Organized efforts to focus on women's accomplishments and goals have been conducted globally since 1911, with the official March 8 date set in 1914. This year, the IWD theme chosen by the United Nations is, not surprisingly, Women in leadership: Achieving an equal future in a COVID-19 world. The official IWD website is highlighting the #ChooseToChallenge on social media. #HappyInternationalWomensDay We can choose to challenge & call out gender bias & inequality. We…

A VITA volunteer helps a taxpayer prepare and e-filer her tax return for free. (IRS video screenshot) Tax software works fine for millions of taxpayers. Another sizeable chunk of filers opt for more personal service from a tax professional. Then there are people for whom software just doesn't cut it. They need or want more help and assurance that their taxes will be filed correctly. But they can't afford a tax preparer. Say hello to Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). Trained volunteer tax filing help: VITA programs across the United States offer free…

Last year, as companies and employees were struggling with operational changes necessary to safely deal with the COVID-19 pandemic, the Internal Revenue Service IRS provided relief that allowed employers to tweak benefits plans so that employees had increased flexibility to make mid-year changes to dependent care spending accounts. This change helped parents who had set aside tax-deferred money in child care accounts, but because their kids were at home while mom and/or dad also worked at home, did not need as much care account funds as they anticipated pre-pandemic. Today, the IRS has issued additional guidance on the latest coronavirus…

I’m not sure if Luisa Madrid is a tax professional, but her winning caption for the New Yorker magazine contest sure hits home at filing season. One of the oldest tales of pushing the tax return envelope is taxpayers who try to claim pets as dependents. Children. They’re a challenge. They’re a joy. They cost a lot. A whole lot, if you ask parents. They also provide some tax breaks. And if the Biden Administration and some in Congress have their way, children could be worth even more in the proposed next round of COVID-19 relief. Things are still in…

The Earned Income Tax Credit (EITC) is the federal government’s largest refundable federal income tax credit for low- to moderate-income workers. In 2020, more than 25 million taxpayers received over $62 billion in EITC. The average EITC amount received last year was $2,461 per return. The EITC also is regularly overlooked. The Internal Revenue Service estimates that one of five eligible taxpayers do not claim the credit. That oversight could change this filing season. The COVID-19 pandemic pushed millions of American workers into lower income brackets last year as their work was reduced. That could make them eligible for this…

Even though we definitely are more than ready for 2020 to end, the celebration of its official departure in a few hours — that's for us here in the United States; Happy New 2021 to all y'all on the other side of the International Date Line — likely will be subdued. Thanks, no thanks, COVID-19. May you, too, be gone soon in the coming 12 months. But even if the ringing in the New Year will be in smaller, pandemic-precautioned pods, some adult beverages will be raised as the clock strikes midnight. And among those celebrating the most will be…

Most of us are cheering the rapidly approaching end of tumultuous 2020. I definitely am right there with you with some pre-New Year's Eve joyfulness. But take a little time off from your anticipatory year-end celebrations to check out these tax moves. These final three tax tasks for the final three days of the year could pay off at filing time in 2021. 1. Know the value of donating items instead of cash.You have until Dec. 31 to donate to an IRS-qualified charity so you can claim the gift as a deduction on your 2020 tax return. If you still…

I spent most of today taking care of home repairs that I felt confident doing. It’s not a long list. I am not really a do-it-yourself kind of person when it comes to most things around the house.

We need to follow Santa Claus' example this month. Just as he checks his naughty or nice list, we need to check on tax moves to make by Dec. 31. It's December. 2020 and its craziness is almost over! Are you ready? Specifically, are you ready for the holidays? For those of us still committed to pandemic precautions, it's going to be a different, and yes, a bit less jolly, season. But one thing is the same as in previous Decembers. We still need to make some tax moves before Jan. 1. Some December tax moves will demand a little…

For those of us of a certain age, and with a skewed sense of humor, one of the best Thanksgiving-themed programs ever was the 1978 "Turkeys Away" episode of WKRP in Cincinnati. The sitcom that brought us memorable characters like radio DJs Dr. Johnny Fever and Venus Flytrap, good-intentioned but inept newsman Les Nessman and 1970s fashion plate sales manager Herb Tarlek, also gave us, in the episode's words, the greatest turkey event in Thanksgiving history. No turkeys were harmed in the making of the show. In fact, we never see what happened outside the Ohio shopping center. Instead, in…

It's said that dogs have owners, while cats have staff. It looks that way for this tabby, even though he doesn't seem too interested in this particular breakfast in bed. (Photo by Milda Puga via Pexels.com) I'm not really a big Thanksgiving fan. The holiday, that is. Which is kind of odd given that I enjoyed Turkey Day as a kid. We lived in the same small West Texas town as my Mom's parents, so all her sisters' families showed up there twice a year for the holidays. It was fun to see my cousins. And the food was good.…