Four years ago, Congress forced the Internal Revenue Service to again use private collection agents (PCAs). This third deal with debt collectors came after the IRS ended two previous arrangements when they proved to be, shall we say, problematic. Now it looks like the current IRS PCA collaboration also has some issues. Low collection rate: A recent Treasury Inspector General for Tax Administration (TIGTA) report says that the private tax debt collectors currently under IRS contract have brought in just a fraction — 1.79 percent of the total value of accounts — of the $30 billion in unpaid tax they’ve…

If you file your tax return as early as you can, mark Feb. 12 on your calendar. That's the day this year that the IRS will start accepting and processing 2020 returns. Are you ready for another wild tax season due to the coronavirus pandemic? Neither am I, but it looks like that's what will happen, at least to some degree. When the Internal Revenue Service today opened Free File, its online, no-cost tax preparation and e-filing option, at essentially the same time as it did last year, I was hopeful we were getting back to tax normal. But alas,…

Attention early tax return filers. The 2021 tax filing season now is officially, although only partially, open. UPDATE, Jan. 15, 11:20 a.m.: The full 2021 filing season will start on Feb. 12. Details to come shortly in a separate post.UPDATE, Jan. 15, 4:00 p.m.: The IRS opened up its Free File site on Jan. 15. It also announced that it will officially open the full 2021 tax filing season on Feb. 12. That's when the IRS will start accepting and processing all 2020 tax returns, regardless of how they are filed. The Internal Revenue Service announced today that eligible taxpayers now can…

Image via GIPHY If you were part of the millions of taxpayers who didn’t get their refunds — and I am seeing on social media that even into 2021, some people are still waiting … — the National Taxpayer Advocate (NTA) feels your pain. NTA Erin M. Collins included that complaint in her list of the 10 most serious problems facing taxpayers. The list is part of the Internal Revenue Service watchdog office’s Annual Report to Congress, which was released on Wednesday, Jan. 13. Tax fraud fighting delays: There’s a common thread among the 1040s where refunds are delayed. These…

The Internal Revenue Service is already accepting e-filed business returns and says Free File for eligible individuals to do their taxes and electronically file at no cost will open in mid-January. If you use Free File, get ready. The Internal Revenue Service says it will open in mid-January. UPDATE, Jan. 15, 2021: Soon is here! The IRS opened up its Free File site on Jan. 15. It also announced that it will officially open the full 2021 tax filing season on Feb. 12. That’s when the IRS will start accepting and processing all 2020 tax returns, regardless of how they…

I’m feeling a bit like the Internal Revenue Service’s appointments secretary, but this Friday, Jan. 15, is a date when many taxpayers need to take action. Yes, I’m talking about the fourth estimated tax payment due at the end of this week, but also about some final tax year 2019 housekeeping. Specifically, individuals and businesses who were in the paths of some major disasters last year. The timing of those catastrophes prompted the IRS to give taxpayers who had already filed for an extension to finish their 2019 tax returns until Jan. 15, 2021, to complete them. These folks now…

Millions of taxpayers are facing a deadline at the end of this week. No, unfortunately I am not talking about the Jan. 15 mark that the Internal Revenue Service is required by law to meet in distributing the second round of COVID-19 economic relief payments. I’m talking about paying Uncle Sam instead of getting money from him. The final estimated tax payment for tax year 2020 is due on Friday, Jan. 15. Taking care of taxes yourself: Around 22 million individuals file these extra tax payments, which total four if you make them for the full tax year. They are…

Misdirected direct deposits of COVID-19 economic relief payments are getting a lot of attention. They should. But this is not a new problem. Lost electronic tax refunds happen every filing season.  What is new is the mechanism the Treasury Department established at the end of 2020 to deal with errant Internal Revenue Service direct deposits. A new regulation, the final version of which was published in the Federal Register on Dec. 22, 2020, details how taxpayers report this problem and how the IRS should handle it and get filers their misdirected money. Previously, not the IRS’s problem: More of us…

Have you received your $600 COVID-19 economic impact payment (EIP)? If not, then you’re probably doing the same thing as Purcival Fairweather. You’re checking, double checking and rechecking yet again your bank account to see if the coronavirus cash is finally there. $600 check? More like check my account 600 times. — Purcival Fairweather 🍾 (@purcival) January 2, 2021 But your obsessive bank badgering won’t have to go on very much longer. If your EIP doesn’t arrive by Jan. 15 or shortly thereafter it’s sent out as a debit card or paper U.S. Treasury check, then you’re not getting it.…

Photo by Olya Kobruseva via Pexels Happy New Year! Oh, sorry. Was I typing too loud? I’m glad you were able to festively, and I hope safely, ring in 2021. Now that it’s here, it also brings a new tax filing season. The Internal Revenue Service’s delivery of the second round of COVID-19 relief money shouldn’t hamper its handling of 2020 returns, which should officially start later this month. So if the IRS can be ready, so can we. So here are a few tax things to think about and take care of, after, of course, you’re fully recovered from…

Some taxpayers awoke today to $600 (or more!) in their bank accounts. The money is the maximum per-person amount authorized by Congress and signed into law on Dec. 27 as part of the second COVID-19 economic relief measure. The Internal Revenue Service, which once again is in charge of distributing the economic impact payments (EIPs), says the electronic delivery will continue into next week. Some account holders may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of Jan. 4, 2021. Sorry, but you'll just have to wait for the…

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…

Santa Claus, Indiana, is one of many merrily named communities across the country. However, this Christmas-year-round town is the only one with an official U.S. Postal Service Santa postmark. (Photo by tengrrl via Flickr CC) Ho! Ho! Ho! And Merry Christmas Eve from all the holiday themed towns across the United States. There are the municipalities dubbed North Pole in New York, Colorado, Alaska and yes, it's even OK in Oklahoma. For those who revel in the season's greenery we have up the road from me Garland, Texas, as well as virtual forest full of Evergreens. There's an Evergreen in…

There's some bad and not-so-bad news when it comes to the recently discovered hacking of the Treasury Department. Since we're still in god-awful 2020, let's start with the bad news. The hackers, believed by most security experts and many government officials to be Russian, were able to burrow deeply into the U.S. Treasury's computer operations, breaking into systems that are used by the department's highest-ranking officials. The better news is that the Internal Revenue Service, the largest division within Treasury, appears to be unaffected by the cyber attack. That's a relief to those of us who upon hearing that Treasury…

Congress plans to pass this evening its second round of COVID-19 help for millions of Americans. It’s a huge bill. Granted, much of its 5,593 pages of dense legislative language cover the funding bills required to keep the federal government open through fiscal year 2021. Lawmakers decided to incorporate some pandemic relief measures into this must-pass bill. Obviously, there are associated tax implications. I’ll be writing about some of those coronavirus-related tax matters in the coming days once they are officially enacted and I’ve had a change to read and decipher them. Some checks, but not as big as the…

OK, I can't confirm that the Greek dramatist Sophocles said this. But it's on the internet, so…. What is irrefutable is that bad advice is too often given and worse followed, especially when it comes to taxes. (Image by Quote Coyote) That cheering you hear is, well, everyone as 2020 finally is winding down. This mess of a year can't end too soon for most of us. But in our enthusiastic anticipation of the Year of COVID-19, we still must get ready for the upcoming tax season. At the start of the month, I offered some year-end tax moves that…

No, there isn't an electric version of Chevrolet's iconic Corvette (because who would want that!), but you have lots of other electric vehicle options that could get you not only a new car, but a nice federal tax credit. There are a couple of television commercials I look forward to every holiday season. There's the Corona Extra "Oh Tannenpalm" spot that's been airing for 30 years. And, of course, there's Hershey's Kisses handbell choir, which has been running even longer. Not as welcome, but as inescapable this time of year are the automaker ads with cars bearing giant bows. I've…

The Internal Revenue Service has a bit of good, although very belated, news for taxpayers still waiting for their 2019 tax return refunds. The agency says it plans to issue most of those delayed refunds by the end of the year. Coronavirus pandemic mail pile-up: The problem stems, of course, from COVID-19. In the spring, most of the federal government and many private companies instituted pandemic protocols. Among those put in place by the IRS were closures at most of its campuses nationwide. That meant tax work that had to be handled in-office went undone. The closures also produced a…

It's been a tough year for millions. In addition to worrying about keeping themselves and their families safe during the coronavirus pandemic, millions have lost their jobs. But there may be a little bit of help for those relying on government payments as 2020 winds down. The House and Senate are working on a compromise COVID-19 relief bill. It's huge and there still are congressional hurdles to overcome, but right now the proposal calls for a federal unemployment benefit of $300 a week for 16 weeks. That's welcome news for the nearly 13 million Americans who, without Congressional help, are…

Hi, I'm Kay and I'm a smartphone addict. I carry my phone from room to room in my house. Back pre-COVID-19 when I left my house, if I realized I somehow forgot to pick it up, I had to turn around, regardless of where I was in my journey, and go back and get it. And its apps are crucial to my coronavirus increased streaming, letting me find out where I saw that "Hey, it's that guy!" actor before or find out more about a great soundtrack tune. I am not alone in my dependence on this iteration of Alexander…

… The end of the disappearing stream water feature in our backyard. The installation was a home improvement. My work today to shore up a part of it was home maintenance. The differences have tax break implications. (Photo by Kay Bell) …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. Still, even though I’ve worked from home for years, being stuck here more than usual because of the COVID-19 pandemic has…

Most of us agree that technology has enhanced our lives. It's simplified myriad daily tasks with just a voice command, touch of a device screen or stroke of a keyboard. It's also made things easier for crooks. Identity theft is a snap when criminals can electronically snag your personal and financial data. High tech's illicit aspects quickly spread to the tax world. When the Internal Revenue Service shifted to electronic transactions, tax identity thieves slipped through that digital door, stealing taxpayer identities and filing fake returns to collect fraudulent refunds. Now, though, the IRS is adding an extra electronic lock…

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…

Have coronavirus money troubles forced you to break into some of your next eggs? COVID-19 legislation made getting to retirement money easier, but you probably will still owe tax on the early withdrawals and must deal with a new form to report your distributions (or paybacks) to the IRS at filing time. With the holidays here and no additional immediate COVID-19 economic relief payment in sight, some folks likely have or are considering tapping their retirement accounts. That option was made easier as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27. It provides…

A VITA volunteer talks with a taxpayer. Check out the IRS' video on VITA and TCE programs for more on them and how you can participate. Every November, millions of Americans take time around Thanksgiving to acknowledge all the things in their lives for which they are grateful. This year, the coronavirus pandemic is affecting not only how we celebrate Turkey Day, but our assessments of our blessings. It's also reshaped how many of us look at ways we can share our good fortunes. One option is donating to charitable groups that can help out those who have fewer thanks…

Welcome to Part 9 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates.That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates.In today's post, we look at taxpayer penalties for filing (and paying) late,assessments on tax pros and how unpaid taxes could limit international travel. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022.For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes,…

It's no secret that COVID-19 wreaked havoc on the 2020 tax filing season. In addition to law changes and a delayed mid-summer filing deadline, previously implemented Internal Revenue Service precautions like shutting down offices are continuing to cause problems. Those closures likely helped prevent coronavirus infections among IRS personnel, but they also produced a massive mail backlog, estimated at one point by none other than the agency's commissioner at more than 12 million pieces of U.S. Postal Service material. Those snail mail envelopes included tax payments. But since they weren't opened, the IRS didn't account for them and its automated…

Among those who need to pay particular attention to this coronavirus money deadline are some college students, families who get government benefits and homeless individuals. If you didn't get a COVID-19 economic relief payment or didn't get all to which you were entitled, you can still apply for the financial help this year. But act soon. Really soon. The deadline to let the Internal Revenue Service know you're due some of the relief money is 3 p.m. this coming Saturday, Nov. 21. Note not only the date but also the time. That's 3 p.m. Eastern Standard Time, not your local time if…

As we continue to deal with the coronavirus pandemic, everyone is thinking about masks. The Internal Revenue Service, however, has been working on masking rules for a while and, coincidentally in this year of COVID-19, has taken steps to offer added protection for taxpayers. The IRS masks are not literal covers. In fact, they lessen, not add. But the reductions will mask — that is, make it more difficult to see — personal and business identification numbers and information on common tax documents. And that should help reduce tax identity theft. Last four Social Security digits: This summer, the IRS…

Millions of Americans still are without jobs. Money from the first COVID-19 economic relief package is long gone. And there's no telling when (or if) Congress might approve more pandemic stimulus. And on top of paying rent or feeding families, some people are facing an added and intimidating bill. They owe taxes to Uncle Sam. The Internal Revenue Service has long heard cries of poverty from folks with large tax bills. In response, the tax agency has instituted systems to work with financially strapped taxpayers. When the pandemic complicated every aspect of everyone's lives earlier this year, the IRS created…

Technology is great, until it isn't. That's how a lot of people are feeling after recently trying to use the Internal Revenue Service's Income Verification Express Service, or IVES. Financial community members use the program to expedite loan processing. This week, though, that wasn't happening. Expedited income confirmation: The IRS created the service so that registered users can more quickly confirm borrowers' incomes. Once taxpayers give a lender the OK to use IVES to check their earnings, the lender logs on to the IRS website to request the loan applicants' transcripts. That tax return, W-2 and 1099 transcript information generally…

Welcome to Part 2 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates.That item also has a directory, at the end of the post, of all of next year's tax-related inflation updates.Today we look at standard and itemized deductions, certain limitations on some Schedule A claimsand the sort-of still around personal exemption amount. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022.For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15,…

Photo via Office of the U.S. Postal Service Inspector General One of the downsides of the Internal Revenue Service closing most of its offices earlier this year as a COVID-19 precaution was that taxpayer returns piled up. And it was a huge pile of mail, estimated at one point to be more than 12 million pieces. Some of that snail mail stack included tax payments. But since they weren't recorded, the compliant taxpayers still got automated tax-due notices. To the agency's credit, when it realized it was sending out erroneous notices demanding already delivered money, it stopped. But now, the…

The continuing COVID-19 chaos, plus an extended 2020 filing season for those coping with this year's natural disaster onslaught, could create more challenges in 2021 for taxpayers and the Internal Revenue Service. Are we — and the agency — ready for it? 2020, a year that many of us would just as soon forget, will end in just more than two months. This federal tax filing season, however, will continue for folks who've endured some of the notable natural disasters that have helped make 2020 so terrible. Last week, the Internal Revenue Service issued more disaster-related tax relief in connection…

While Congress is still, sort of, working on a second round of COVID-19 stimulus payments, the Internal Revenue Service is trying to get the first batch out to people who've yet to collect money for which they're eligible. For the most part, these are individuals who usually don't have to file a tax return. Since the IRS is using this tax filing information to distribute the economic impact payments (EIPs), these non-filers are out of luck. But they can get their data to the IRS by using the agency's online registration tool at the IRS.gov special Non-Filers: Enter Info Here…

Free tax-preparation and filing help is offered through groups like United Way, which partnered with volunteers at this Rutherford County, Tennessee, VITA office. Not only does the IRS train the tax assistors, each year it awards grants to keep the sites running across the country. Meeting your tax responsibilities can be a challenge for many — OK, most — of us. But things can be even more difficult when you can't afford to hire help to finish your returns or your advancing age makes doing your taxes tougher. There are some dedicated volunteers who work every year to meet the…

Uncle Sam is always on the lookout for people who try to evade taxes by hiding money in foreign accounts. To keep track of taxable money abroad, the federal government relies on two agencies, the Internal Revenue Service and its sister agency within the U.S. Treasury, the Financial Crimes Enforcement Network, usually referred to as FinCEN. FinCEN requires a special filing from some of Form 114, Report of Foreign Bank and Financial Accounts, usually referred to as FBAR. FBAR filings have long been a pain for Americans who hold assets abroad. A couple of years ago, Treasury tried to make…

My local H-E-B Grocery smartphone app's barcode reader helps me discover the price of a product if it's not shown on the item packaging or store shelf. I love the technology almost as much as I love potato chips! I love my grocery store app. Not only does it offer digital coupons, it lets me make shopping lists, find the aisles where the products I want are located and if there's no price sticker on the item the shelf, I can use the app to scan the package's barcode code for that info. Now the Internal Revenue Service is becoming…

A quick Social Security note about for folks not yet at or near the benefits age about taxes on that pre-retirement income. More of it, known as the wage base, will be subject to the Social Security payroll tax. Details are in this post. Retirees checking on their investments. The income could make their Social Security benefits taxable. Today's a good day for millions of Social Security recipients. The Social Security Administration (SSA) has announced that benefits will increase a bit next year. Older folks who get regular monthly Social Security payments, along with those who receive Supplemental Security Income…

…It’s a bit hard to keep track if you’re still isolating due to the coronavirus pandemic, but welcome to another Monday federal holiday. Today is Columbus Day. Yes, it’s still an official federal holiday. The White House issued an announcement lauding namesake Christopher Columbus that’s getting a lot of pushback on social media from folks who prefer to use this October day to celebrate the United States’ indigenous populations. We should use this day to learn about the history of indigenous people.#IndigenousPeoplesDay so for the next 24 hours this account will be a flood of me RTing Native excellence, educational…

John McAfee's banner image on his Twitter account. If you've waiting until the upcoming October extension deadline to file, chances are you wanted the extra time to ensure that you got your filing right. That's smart. Making mistakes or overlooking tax breaks could cost you, not only money but also time if you end up having to answer Internal Revenue Service questions about your filing. And when an audit — or examination as the IRS likes to call the process — definitely doesn't go your way, you could end up in more trouble. That's what happened to John David McAfee.…

We're exactly one week away from Oct. 15, the day you must finally file your 2019 tax return that you extended earlier this year. Don't miss it. After next Thursday, there's no more time. And the IRS will start adding penalties and interest to any tax you might discover at this late date that you owe. Here are 8 tips and reminders to help you finish filling out that Form 1040 during these next seven days and get it on its way to the Internal Revenue Service by the deadline. 1. Gather all your tax material.OK, time to find all…

There's been one positive for the Internal Revenue Service this coronavirus-affected tax filing season. The agency says that Free File has hit a record percentage increase in new users. And there's still just more than a week before the partnership between the IRS and tax software manufacturers shuts down on Oct. 16. Free, but previously not that popular: The online tax preparation and e-filing products that, as the Free File moniker indicates, allows eligible filers to complete and electronically transmit their tax returns at no cost, has been available since 2003. However, despite the growing popularity of do-it-yourself tax filing…

An impending tax deadline just got a little less imposing. The Internal Revenue Service is giving people who've yet to register for a COVID-19 economic impact payment (EIP) until Nov. 21 to supply their tax information. The November date is five weeks later than the Oct. 15 deadline the IRS set when it originally sent out letters to the almost 9 million potential stimulus recipients. These individuals didn't file a 2018 or 2019 tax return because they didn't make enough money to require them to do so. However, they still could qualify for some coronavirus relief. But to get the…

Donald J. Trump posted this photo in 2016 on Twitter, saying it represented the size of his tax return filing. When we got a glimpse of Donald J. Trump's federal 2005 tax year filing back in 2017, one thing was very clear. Trump's personal tax situation is why during his initial presidential campaign he called for the elimination of the federal Alternative Minimum Tax (AMT). The New York Times' recent exposé of more than two decades of Trump tax information, underscores his adversarial relationship with this parallel tax system. In the few years that Trump did pay federal income tax,…

Hello, October!  You're always welcome at my house. I love your cooler temperatures that let me open windows and doors and put an end to exorbitant air conditioning costs. I love the color changes of trees and shrubs. And I love the candy that I accidentally (really!) over-buy in preparation for the young ghouls and goblins that knock on our front door each Oct. 31. I suspect I'm not alone in appreciating the arrival of autumn. But amid all these annual fall festivities, we need to make at least a few tax moves that could help out our upcoming tax…

The Tonight Show host Jimmy Fallon tousles Donald J. Trump’s hair during the Republican candidate’s Sept. 15, 2016, appearance on the late-night television program.

Depending on your personal situation, your deadline to claim any or additional coronavirus stimulus money is Sept. 30 or Oct. 15. Miss the deadline, and you'll have to wait until next year for much-needed COVID-19 cash. Since it's still unclear if or when we might get another COVID-19 relief payment, it's even more important that every person who's eligible get all they can from the first stimulus payout. And to do that, a lot of folks need to officially touch base with the Internal Revenue Service. Soon. Like in a couple of days for some families. Wednesday, Sept. 30, is…

Earlier this month, the Internal Revenue Service implemented a push to encourage folks who didn’t get COVID-19 economic relief payments to touch base with the tax agency to see if they’re due any of this money. Overall, nearly 9 million individuals, or 8,863,344 to be exact, might be eligible for the stimulus help. That’s a maximum of $1,200 per person, double that for married couples filing joint tax returns, plus $500 for each qualifying child. Millions of these economic impact payments, or EIPs, were sent automatically to qualifying individuals who had filed tax returns for the 2018 or 2019 tax…

If you’re hoping for a second COVID-19 stimulus check, it’s looking like you’re going to have to wait until after the November election for Congress to act. However, there is better financial pandemic payment news for millions of folks who didn’t get the first coronavirus economic impact payment (EIP). Non-filers left out of first payments: Nearly 9 million individuals missed out on the first payment, notes the Internal Revenue Service, because they didn’t file a tax return for the 2018 or 2019 tax year. That was the info the IRS used to send out the EIPs that were authorized back…

Taxpayers and their tax pros have faced many and new hassles this filing season, primarily because of COVID-19 challenges. Do any of these 2020 tax season situations qualify as an acceptable reason to waive associated filing penalties? Maybe.   Technology, and especially tax tech, is great. Until it isn’t. That was my reaction when I learned that a lot of tax professionals were left in the lurch yesterday when their tax software provider’s e-file system crashed just as they were submitting — or trying to — businesses clients’ tax returns that were due Sept. 15. The issue, as you can…

No gasoline necessary for electric vehicles like this Chevrolet Bolt, which instead is plugged in to recharge for the road. If you opt for an IRS-certified electric auto or light truck, you might get some tax break help on your purchase.   Climate change is getting more coverage lately. People are paying attention to what's happening with Mother Nature here in the United States thanks to the opposing environmental takes by the two presidential contenders. On a more personal level for many Americans is that we're in the midst of one of the most active hurricane seasons ever — we're already…

Couple waiting to get married at San Francisco City Hall. (Photo by Brian Kusler via Flickr) One good thing has come of my self-imposed pandemic lock down. Seeking a distraction from the news channels I usually watch, I'm finally getting more of my money's worth from our cable account. I've been exploring the many channels the hubby and I typically tend to click right past. For the last week or so, I've tuned in to WEtv because of its run of CSI: Miami episodes. No judging, please! Actually, the TV is more like a talking lamp (really!). The dramatic intonations…

Man signing papers (Photo by Andrea Piacquadio via Pexels.com) The Internal Revenue Service continues to go more digital, at least temporarily to make filings easier as we continue to deal with the effects of the coronavirus pandemic. Late last month, the IRS announced 10 forms that previously had to be signed in ink on their printed paper version. You can read about this first group of forms to be granted digital signature status in my Aug. 28 post. On Sept. 10, the tax agency added another six forms to the digital signer list. They are: Form 706, U.S. Estate (and…

If you get money that's not subject to income tax withholding, then this weekend's Saturday Shout Out posts are for you. Tuesday, Sept. 15* is the due date for the third quarter payment of estimated taxes. Our tax system is pay-as-you-earn. That's typically done by withholding from wages. But when there's no per-paycheck tax collection mechanism in place, the payment responsibility falls on the person getting the money. And the way it's done is through estimate tax payments. The type of earnings that typically trigger are full-time self-employment or occasional gig work income, investment earnings, rental income, certain alimony payments,…

Kansas City Chiefs star quarterback (and Texas Tech alum) Patrick Mahomes is back in action tonight as the NFL kicks off its 2020 season under special COVID-19 rules. (Image via GIPHY) The United States is going to try a bit of normal tonight with the kickoff of the 2020 National Football League season. Sure, America’s favorite spectator sport is not quite there. The coronavirus pandemic means that the stands at Arrowhead Stadium won’t be full as the reigning Super Bowl champion Kansas City Chiefs take on the Houston Texans. But most of us will be watching the NFL on television,…

More than 160 million people have received the COVID-19 economic impact payment (EIP) that was approved in late March. Still, says the Internal Revenue Service, that’s not everyone who’s eligible for the relief money. In fact, the tax agency says around nine million Americans still are due the stimulus. But to get it this year, they need to contact the IRS. And the IRS will be sending them a special letter later this month to encourage them to file for the relief payment, preferably by Oct. 15. Don’t have to file, but qualify for COVID cash: These nine-or-so million folks…

Updated, Labor Day Monday, Sept. 6, 2021: It’s 2021 and we’re still dealing with COVID-19. That means many people also still are dealing with losing their jobs. The updated taxes and unemployment insurance questions and answers — yes, the $10,200 exemption situation is noted — in this post from this time last year still apply. It’s Labor Day weekend. This holiday usually is time for end-of-summer revelry, with a little leftover celebration of the workers whose efforts are recognized on the first Monday of each September. This year’s a bit different. Social distancing during the coronavirus pandemic have, for the most…

COVID-19 has forced taxpayers and their hired preparers to maintain social distance during return completion this year. Electronic tax processes have helped, but some forms require real signatures, meaning in-person contact. Until now. The IRS is temporarily accepting electronic signatures on certain documents that still must be snail mailed. Photo by Andrea Piacquadio via Pexels.com Some, including me and many in the tax professional community, have long argued that the Internal Revenue Service has been its own worst enemy when it comes to moving the agency into electronic era. Sure, Uncle Sam's tax collector has been encouraging, and in some…

Are your spouse's debts are costing you? The IRS has a bit of good news for some husbands and wives. They'll be getting back the coronavirus payment portion they were shorted due to their spouses' unpaid child support. (Photo by Gustavo Fring) Congress and the White House may be struggling to reach a deal on additional COVID-19 economic relief payments, but the Internal Revenue Service has stepped up to get some of the original stimulus money to few more folks. The agency says that next month it will send catch-up Economic Impact Payments (EIPs) to about 50,000 individuals. These are…

The growing acceptance of electronic financial transactions has pretty much put an end to paper checks. Pretty much, but not totally. Some people still send old-school paper checks. And some of them sent such pen-to-paper payments to the Internal Revenue Service earlier this year to cover their due taxes. Unfortunately for the payers, their checks arrived at IRS offices that were closed as part of the agency's coronavirus pandemic precautions. And now that the IRS is digging those payments out of its massive mail backlog, there's a possibility that some of the months-old checks could bounce. But the agency is…

Almost 14 million U.S. taxpayers are getting a few extra dollars from Uncle Sam. If you're one of them, you can thank the Internal Revenue Service and the COVID-19 changes to the 2020 filing season. Pandemic tax season timing tweaks mean that these regular refund recipients also will be getting some interest — an average of $18 — in addition to their expected tax-back amounts. Interesting deadline days: The IRS announced the upcoming interest payments back in late June. Now it's making good on that promise, which was necessitated by this year's Tax Day delay. The postponing of the filing…

The Internal Revenue Service heard the complaints about incorrect unpaid tax notices and has acted. It announced yesterday, Aug. 21, afternoon that it is temporarily halting the mailing of three nonpayment notices. The decision came on the heels of public outcry, some of it among taxpayers and the professional tax community on social media, as well as letter from the chairman of the House Ways and Means Committee. COVID-19 mail complications: The notice problem was the result of, what else, the coronavirus pandemic. The IRS closed most of its physical operations in March, but mail kept coming. That was because…

When you hit birthday milestones, like the one my Mom, the lovely lady in red, and her fellow Senior Center pals did a few years ago, you might qualify for some special tax benefits afforded older filers. (Photo by Kay Bell) …Aging is not for sissies. I definitely can attest to that since, as the saying goes, I’m now a woman of a certain age. But with age also comes wisdom (or so I’ve been promised!). And getting older also provides some tax benefits. On this National Senior Citizens Day 2020 — yes, it was made official by President Ronald…

Ways and Means Chairman Richard Neal (D-Massachusetts), right, and his colleague, the late Rep. John Lewis (D-Georgia), conduct a hearing in pre-pandemic days. (W&M Committee photo) In a recent post about the Internal Revenue Service sending out nonpayment notices that it knew were wrong, I asked now what? Ways and Means Committee Chairman Rep. Richard Neal has one answer. The Massachusetts Democrat is calling on the IRS to stop sending tax bills until the agency catches up on its huge mail backlog. Stop the notices: In a letter to IRS Commissioner Chuck Rettig, Neal noted that this summer, following IRS…

Times are tough for Uber and Lyft operations in California. Both ride-hailing services are threatening to temporarily shut down in the wake of a Golden State law that took effect in January and, more notably, a recent San Francisco Superior Court order that the companies classify their drivers as employees instead of contractors. This battle between the popular transportation option and California officials is playing out as the Internal Revenue Service continues its efforts to educate gig workers about their tax responsibilities. A recent Government Accountability Office (GAO) report has some ideas on how to make sure more freelance workers…

We all should learn from our mistakes. That's especially true of tax mistakes. And now that learning — and correcting — process is getting easier. The Internal Revenue Service now will accept some electronically filed amended returns. There's just one hitch. This long-awaited electronic filing process, which the IRS promised earlier this summer, is available for making corrections only to tax year 2019 Form 1040 and Form 1040-SR returns. Those were the ones you filed (or got an extension file) this year by July 15. If you have an earlier filing you need to fix, you'll still have to use…

Photo via Office of the U.S. Postal Service Inspector General And the crazy that is COVID-19 tax season 2020 keeps on coming. The recent buzz on tax social media was/is about Internal Revenue Service balance-due notices that arrived in folks' mailboxes. However, the people who got the notices did file on time and did pay when they filed. So what gives? The problem, in most cases, is that the payments were/are stuck in the agency's huge — 10 million pieces — U.S. Postal Service mail backlog. Since those initial concerns were aired on social media (thank you #TaxTwitter!), things seem to…

Being your own boss is a challenge even in good times. Now, with the COVID-19 pandemic disrupting your personal and professional life, keeping your individual enterprise operating is particularly dicey. So you probably were thrilled when Donald J. Trump took executive action last weekend to establish a temporary payroll tax holiday. Since you're both the boss and employee, that means that you pay both those components of the Federal Insurance Contributions Act (FICA) payroll taxes. Getting to hold off paying at least some of your employee portion certainly could help with your cash flow. Or not. Right now, Trump's executive…

The U.S. Postal Service (USPS) has become a flash point in the coming election. On Capitol Hill, the constitutionally decreed national delivery service has been at the center of it's become a battle highlighting Republican claims of mail-in voter fraud (largely unsubstantiated) and Democratic concerns about Postal Service funding (not enough) and slowing down of services (too much). The mail also is a practical issue for the Internal Revenue Service and taxpayers. Despite increasing efforts to shift to digital tax transactions, the federal tax agency still relies on old fashioned snail mail for many of its tasks and those that…

My desk in my home office, which I deduct when I file my taxes. …Not that I’m paranoid, but sometimes it seems like unseen others somehow know what’s going on in my life. The latest example is tax related. Earlier this week, a #TaxTwitter pal asked that social media group about home office tax deductions. Granted, this is not an unusual question since the coronavirus pandemic has meant many of us have been working from home, a lot of us for the very first time. Today, the Internal Revenue Service issued a tax tip on what taxpayers need to know…

Hello August! These annual hot and, here in Central Texas, sticky days of late summer usually are a transitional time. Families take one last summer vacation. Parents and kiddos (but mostly parents) get ready for the return of school. Not so in 2020. The coronavirus pandemic continues to keep much of our lives on hold, like those final holiday trips and school openings. Taxes, though, are more persistent. Yes, COVID-19 did delay Tax Day until last month. But as far as the rest of the tax realm is concerned, there still are some matters that must be considered. That means…

Remember the Michigan man who lost his property because he underpaid by $8.41 the overdue real estate tax bill? The state's highest court says the how the tax sale of Uri Rafaeli's house was handled was wrong, at least as far as the transaction's proceeds. Because of that finding, the Michigan Supreme Court said Rafaeli, an 85-year-old retired engineer, is due financial compensation for the loss of his home to the tax collector. That means Rafaeli soon should be depositing more than $24,000 from the county. High Court speaks: "[G]overnment shall not collect more in taxes than are owed, nor…

It's been almost a week since Tax Day 2015. That's why today's Tax Form Tuesday is celebrating Form 1040. Actually, this week's feature includes not just the actual tax return you recently sent to the Internal Revenue Service, but also the many forms and schedules that accompanied your return, plus all the associated documents you used to complete it. Yep, we're talking tax record keeping. There's no federal tax law or IRS regulation detailing a preferred way to keep your tax records. That's because every taxpayer situation is different. But the one constant is that you do need to hang…

Image courtesy SimpsonsWorld via Giphy.com Do you remember your first phone number? I'm talking about the one when you were a kid. The one you parents made you memorize in case you needed to call home for any reason. For younger folks, that's not a problem. But when you reach a certain age, not that I'm confessing to any chronologically specific range, those early memories tend to fade. Despite that natural process, some of us still remember our childhood phone numbers. You'll have to trust me on my numerical recall. I'm leery enough of hackers, con artists and other assorted crooks to not disclose…

Beyond Tax Day! Dealing with the filing extension deadline and the tax tasks that are still ahead in 2020.   Happy New Tax Year 2021 Update: I’m a bit slow in getting the ol’ blog’s standing features switched over to reflect the brand spanking New Year. So until that happens (soon, I promise!), the Weekly Tax Tips in early January 2021 will be added to this list. We did it! We made it through the delayed Tax Day 2020 of July 15. Now what? Well, there is the Oct. 15 extension deadline, which thanks to the coronavirus tax postponements now…

via GIPHY The long-delayed Tax Day 2020 came and went yesterday and you weren't part of it Maybe you were distracted by COVID-19 worries or financial concerns brought about by the pandemic. I get it. Family crammed together for weeks, savings are running low and every ache sends you online to check coronavirus symptoms. Taxes just don't seem that important. But Uncle Sam and his tax folks are back at their jobs and they're doing them. To ensure that you don't run too afoul of the Internal Revenue Service, here are four steps you need to take as soon as…

Hello Tax Day 2020. We've been waiting for you for such a long time. In fact, a whole lot of folks have been waiting for July 15, according to research by from IPX 1031. Ultimate tax procrastinators: It's not unusual for millions to wait to file. Last year, Internal Revenue Service data showed almost 18 million filed during the last week of that tax season. That procrastination delay remained and even increased after COVID-19 pandemic precautions pushed 2020's Tax Day into the summer. IPX 1031's look at geo-targeted online search data showed that more than 22 million Americans have taken advantage…

Meanwhile, the rest of us regular taxpayers say thanks for the offer and, as Tax Day 2020 looms, continue to look for ways to keep from paying so much on our nowhere-near-a-million earnings. If you're still working on your tax return instead of jetting off in your private plane to a luxury destination, then you might agree with the latest tax-the-rich plea. You also might need some of the tax-saving tips listed later in this post. With July 15, aka coronavirus Tax Day 2020, looming, millions of taxpayers are scouring their records and the tax laws looking for ways to…

When the extended and complicated 2020 tax filing season officially ends at mid-week, the IRS says it will resume many postponed normal actions. This means taxpayer payments — including to debt collectors — and other tax matters that have been on COVID-19 hold will go back to what we used to call normal. In this coronavirus era, we all just want things to be like the name of the central Illinois town of Normal, where the historic theater also shares that moniker. The IRS says it's heading that direction this week. (Photo courtesy Wikimedia Commons) The 2020 extended main tax…

July truly is April this year, at least as far as my personal budget. Some of our insurance payments are quarterly. That means every April, we have to come up with that money, as well as cash to cover the first quarter of our estimated taxes. The Internal Revenue Service's calendar when it comes to its second quarter estimated tax payment doesn't strictly follow the Gregorian calendar. Uncle Sam's tax collector wants the tax year's second Form 1040-ES and payment in June. My main estimated tax explainer discusses the timing of these payments, but below is a quick look from…

You’re working on your tax return and discover that you are that close to shaving a few more dollars off what you owe Uncle Sam. Many in this situation are tempted to get creative. Don’t. The Internal Revenue Service has seen it all. OK, most of it. The bottom line is that sketchy tax deduction claims are invitations to IRS auditors. Crazy and possibly costly tax break claims: Earlier this year before Tax Day got pushed to July 15 by coronavirus precautions, Washington Post financial columnist Michelle Singletary talked with some tax professionals about the wild write-offs they’ve seen. Singletary cites…

Got enough coffee to get you through your taxes this final weekend before the July 15 due date? We're finally here. It's the last weekend before our 2019 tax returns are due on Wednesday, July 15. If you're one of the millions of filers who hasn't done your taxes yet, you've got three options: Panic, Get organized now, or Ask the IRS for more time. Your choice depends upon exactly where you are right now in the filing process. (Of course, panic could be a viable option for each of us at any time during tax season, especially if we discover we…

Tax returns AND any tax owed are due next week. Wednesday, July 15, to be exact. (Painted window in Harlingen, Texas, 1939, by Lee Russell; New York Public Library image via Unsplash) We're into the home stretch of the coronavirus extended 2020 tax season. That means that millions of taxpayers (or their tax preparers) are working on 2019 returns or extensions to finish up those 1040s. While you can send the Internal Revenue Service Form 4868 to get until Oct. 15 to submit your actual return, you still must pay any tax you owe by July 15. If you don't,…

Are you one of those folks who's worrying about how you'll pay your tax bill on July 15? If it's an amount that you just can't come up with or cover with a credit card, look into paying off Uncle Sam over time. The Internal Revenue Service offers a couple of ways to spread out your tax bill over several months. As with most tax transactions nowadays, you can apply for a payment plan online. But depending on the way you decide (and qualify) to pay your tax bill also involves some forms. Those documents, Form 9465 and possibly one…

Tax notices are among the pieces of mail delivered by the U.S. Postal Service in recent weeks. Due to COVID-19 complications, those documents detailing IRS questions about earlier filings have later due dates. The deadline for some is this Friday, July 10. It's the first full week of July 2020, meaning that the countdown clock over there in the ol' blog's right column (shameless plug) shows that we're just single digit days away from this year's July 15 filing deadline. And some folks have an even earlier due date. If you recently received an Internal Revenue Service notice, you might…

Do you have a big tax bill, but are down to your last bottom dollar? That's the worry of many taxpayers in this coronavirus-affected filing season. But you do have payment options. (Photo by cottonbro via Pexels) Tax Day 2020 is rapidly approaching and a lot of taxpayers are not ready for it. It's not just their Form 1040 filing that's an issue. They are concerned about paying any tax that's also due on this year's July 15 due date that was postponed by coronavirus precautions. The audit defense company TaxAudit reports that more than a third — 37 percent…

If you want to pay your taxes in cash, you now have more retail locations from which to choose. But make your choice soon. It takes days to set up a cash tax payment. If you dawdle, you could end making a late cash payment and owing Uncle Sam penalty and interest charges, too. Do you like paying by cash? Then you'll be thrilled by the Internal Revenue Service's latest tax payment move. Ace Cash Express and Casey's General Stores across the country have joined 7-Eleven stores in offering a way for taxpayers to pay their tax bills with cash.…

I know you're tired of taxes continuing into July. I know you just want to be done with your filings and the Internal Revenue Service and move on to other things. But I also know that most of you, especially if you're facing coronavirus-related financial difficulties, don't want to just hand over money, possibly hundreds of dollars to Uncle Sam. You'll do just that if you were due a tax refund on your 2016 taxes and didn't file for it during the 2017 tax season. That's the situation for an estimated 1.4 million individual taxpayers. If they don't claim those…

Hello July, which according to this year's goofy tax calendar is April. That means instead of heading to the beach, which is closed anyway due to COVID-19, or taking a longer trip to Europe, which isn't letting U.S. residents in, again due to COVID-19, we're spending mid-summer focusing on taxes. The main one, of course, is filing 2019 returns by the new Tax Day 2020: July 15. That date also is key for several other tax tasks to take care of in July. Here are six that you need to deal with in these two weeks before the 2020 tax…

The tax agency has made it clear that the July 15 filing deadline is firm. But you still can get an extension to file, giving you until Oct. 15 to submit your Form 1040. Just ask for it by July 15. Plus, there other filing extension options (and forms on this Tax Form Tuesday!) for other tax circumstances. If you were hoping the Internal Revenue Service would push Tax Day 2020 beyond July 15, sorry. The agency says the already-delayed filing and tax paying deadline for 2019 returns is firm. When the IRS announced that decision late Monday afternoon (or…

If you're still waiting for your federal tax refund, the Internal Revenue Service has a bit of good news for you. When you finally get the amount that you overpaid on your 2019 taxes, Uncle Sam will tack on a bit on interest to make up for your wait. Actually, it's more than a bit if you compare it to current interest rates for most accounts. The IRS this week announced this week that it will be paying a 5 percent annual interest rate on refunds issued between April 15 and June 30. Since the IRS adjusts its interest earning and…

Did you get your COVID-19 stimulus money, either as direct deposit, debit card or a check like this? If so, you also should have received a letter discussing the payment and amount. The IRS says you need to keep that letter in your tax files. Congress might be working on another round of COVID-19 economic relief payment (EIPs). I say might because although the House in mid-May approved the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act and its provisions for even more stimulus money, the Senate and White House are dragging their heels. Not quite the max: Democrats, in…

Tax professionals have always played an important role in the lives of taxpayers. Their value has been underscored during coronavirus tax time, with the many new COVID-19 tax laws. (Yes, I'm looking at you Paycheck Protection Program.) But, as with just about every aspect of life, tax preparers aren't perfect. Specifically, some let their own tax tasks slide, according to a recently released Treasury Inspector General for Tax Administration (TIGTA) review. In reviewing Internal Revenue Service data, TIGTA uncovered 10,495 preparers who prepared more than 2 million 2016 tax year returns for clients, but who but did not file their…

Rhode Island’s flag offers hope. Its individual tax return offers other emotional indicators. It’s less than a month until federal Tax Day 2020, which everyone knows was moved to July 15 to accommodate the disruptions, tax and otherwise, of COVID-19 to our lives. That date also is when most folks who also must pay state income tax also have to get those forms to their state tax officials. Like federal filings, most states allow — nay, encourage — their taxpayers to submit their taxes electronically. And most of those states also have given their taxpayers until July 15 to file…

One of the reasons the Internal Revenue Service has called more of its staff back to their offices is so they can deal with the backlog of tax notices. When the agency sent most personnel home earlier this year as a coronavirus pandemic precaution, some previously-printed balance due notices didn't get mailed. Now with some IRS operations restarting across the county, these notices will be delivered to taxpayers by the U.S. Postal Service in the next few weeks. Original notices, old dates: These notices, however, won't be updated versions produced by staffers who now are back at their desks. They…

Free File is under fire again. The annual tax season program, in which some tax software programs participate via a special Internal Revenue Service website, was created 17 years ago to offer no-cost tax filing to low-to-middle income taxpayers. The current agreement private/public tax filing deal is in place through Oct. 31, 2021. This year, eligible taxpayers — that's those with adjusted gross incomes of $69,000 or less, regardless of filing status — can use Free File to meet the coronavirus-delay July 15 tax filing and payment deadline. Those who decided to get an extension can use Free File until…

Photo by fauxels from Pexels Working from home is a major lifestyle change wrought by COVID-19 and efforts to stem its spread. That's produced good, bad, ugly and tax results. The good is no commuting. The bad is family members who think since you're home, you still can do everything else, too. The ugly is the attire most of us wear as we work from home, except for the times we put on a clean shirt for Zoom meetings. Then there's the matter of taxes. Workers' locations, new tax nexus? Since shutdown orders went into place in mid-March, businesses have…

We're heading, finally, into the heart of tax return filing season 2020. Even if you fill out and submit your Form 1040 electronically, as most of us do, you still need the documents that provide the figures you transfer to your return. One area of interest to millions every filing season is interest. In some cases, the interest you pay on certain loans can provide a tax break. In another, it could mean you owe Uncle Sam a bit more. This week's Tax Form Tuesday looks at three common interest-related tax documents. (Quick note: the forms' names below are linked…

Finally! That's what every taxpayer who's ever had to file an amended return is saying now that the Internal Revenue Service has announced that the process is going digital. As long as I've been blogging about taxes, I've included in every post about correcting previous tax filings some version of this instruction — An amended return cannot be filed electronically. You must use snail mail, using the appropriate address shown in the 1040X instructions. But in the summer of 2020, that changes. The Internal Revenue Service announced today that "later this summer" the Form 1040-X, Amended U.S Individual Income Tax…