I've been rearranging some upcoming doctors' appoints that I made months ago, well before anyone had heard of COVID-19, much less watched as it overtook our lives. A couple were able to be conducted as teleconferences with my physicians. Some, however, require actual in-office visits. Like getting jabbed for blood work. I'm also rescheduling some appointments originally set for June. These are being changed not because of the coronavirus pandemic, but because of new medical insurance. The dates are now late instead of mid-summer in the hopes that the new policy transition goes smoothly and I won't have to hassle…

Photo by Suzanne Walker from Pexels Memorial Day 2020 has an added poignancy. This solemn day to commemorate those who gave their lives in military service to the United States is overshadowed by the coronavirus. Almost 100,000 COVID-19 deaths have been recorded, with reporters often referring to military casualty numbers to put the pandemic's human cost in perspective. The Memorial Day events that we are used to seeing or participating in have been altered by COVID-19. Rather than community gatherings to share our sorrow and thanks, most now are limiting attendees or are being done virtually. There is so much,…

We're less than two months from Tax Day 2020, which was pushed to July 15 due to the coronavirus pandemic. Or are we? There's been some talk and a few actual reports in the media that the White House is contemplating pushing the tax deadline back again, possibly to Sept. 15 or even mid-December. Just talk, so far: An NBC News report noted that talks of an even later Tax Day are preliminary. In that same article, Trump Administration officials stressed that no tax date change decision has been made. But some in the tax community are still a little…

Sorry, but no matter how much your cat "helps" in your home office, the feline will not qualify as an employee, whose costs are tax deductible. However, you might be able to write off a part of your personal residence's homeowner's policy. (Photo by Lisa Omarali via Flicker CC) The hubby and I are still in self-quarantine, but while we've put the brakes on most of our regular activities, one part of our life is continuing as usual. Our house. Every homeowner will tell you that in addition to being the complete kings and queens of your (for the most…

And what you might be able to do about it. But not until next year. The hubby and I recently got our COVID-19 economic impact payment, despite my grumblings last month about not being able to get into the Get My Payment online tracking tool. We knew that due to some financial moves we've made in recent years in preparation for retirement, we wouldn't get the full possible payment. In case it's slipped your mind, that's $1,200 per individual, twice that for married couples who file a joint return. If you have qualifying dependent children younger than age 17, you…

Providing bank data for direct deposit of coronavirus relief payments will get you added more quickly to the growing number of folks — around 130 million so far — who've received their COVID cash. Photo by Alexander Mils from Pexels More than 130 million COVID-19 economic impact payments have been delivered, according to the Internal Revenue Service. That means the tax agency is nearing the end of its distribution of the money that is intended to help folks cover a few of the costs they've incurred due to the impact of coronavirus on the U.S. economy. And even though the…

Click image to watch the Mos Eisley cantina scene, in which these musicians provide the catchy background tune, from the 1977 Star Wars movie that launched the acclaimed sci-fi film franchise. Welcome to the first week of May 2020. It's a decidedly weird month, in large part because of the coronavirus pandemic. When the deadly COVID-19 infection started spreading in force across the United States, most of the country shut down to some degree. Now many states are loosening their stay-home orders and things are starting to some degree to get back to normal, or what will pass as that…

Some suddenly out-of-work people are taking a double hit. Not only must they deal with the loss of income, but also the loss of their workplace-provided medical coverage. This week's relatively good COVID-19 pandemic economic news is that the latest count of folks who filed for unemployment benefits was down. The bad news? The U.S. Department of Labor reported today that another 3.8 million people filed claims for jobless benefits last week. While that's a drop from the previous week's 4.4 million unemployment claims, overall more than 30.3 million have applied for state help to make ends meet now that…

When your job doesn't pay much, the Earned Income Tax Credit (EITC) can be a big help. This tax break for lower- and middle-income workers has been a part of the tax code since 1975's Tax Reduction Act. It was a logical extension of the 1960s-era War on Poverty, creating a way for lower-paid workers to offset the Social Security taxes that take a relatively bigger bite out of their smaller paychecks. Since it's a tax credit, the EITC provides a dollar-for-dollar offset of any tax owed. And since it's a refundable tax credit, eligible recipients can get any EITC…

The first two estimated tax payments for 2020 aren’t due this week because of COVID-19 changes, but it’s still time to look at how much you owe via 1040-ES and how best to figure those amounts. I’ve paid estimated taxes for almost as long as I’ve filed taxes. These payments, in case this tax is new to you, are the equivalent of withholding. With estimated taxes, however, we taxpayers must cover the income (and usually other) tax on things like freelance earnings or investment payouts since we get the money without anything being taken out beforehand for Uncle Sam. There…

Each of the 50 U.S. states has its own tax system. Most have opted during this year of COVID-19 to follow the federal decision to push Tax Day 2020 to July 15. (Map with state capitals, in case you want to use it for home schooling during the coronavirus stay-home duration, is via SafetyMagnets.) When 2020 began, this week was the target day for millions of taxpayers. Then the coronavirus pandemic struck. COVID-19 has upended everything. Obviously, health considerations are paramount. As we individually deal with ways to protect ourselves and our families, tax officials also have been working to…

Have you checked your bank account? It might have some added money in it. The Internal Revenue Service announced via social media on Saturday that it had delivered the first batch of coronavirus economic impact statements. #IRS deposited the first Economic Impact Payments into taxpayers’ bank accounts today. We know many people are anxious to get their payments; we’ll continue issuing them as fast as we can. For #COVIDreliefIRS updates see: https://t.co/hEEWmgHA9V pic.twitter.com/2bSHOTjMAS — IRS (@IRSnews) April 11, 2020 The turnaround is pretty darn impressive. The Coronavirus Aid, Relief and Economic Security (CARES) Act that created the (so far) one-time…

July is America's big celebratory month. The major time to party is, of course, on the United States' birthday, July 4. But in 2020, the tax community's revelry will be on July 16. That's the day after this year's revised Tax Day of July 15. And now we tax geeks, gurus and everyday Joe and Jane Taxpayers will have even more to celebrate since the Internal Revenue Service has expanded the July 15 due date to more tax situations. Below is a review of the key tax deadlines that now fall on July 15. Tax return filing and payments: Individual…

The Internal Revenue Service is beginning the process of sending out COVID-19 economic relief payments. Americans who filed a tax return in 2018 or 2019, as well as folks who got Social Security retirement or disability payments or Railroad Retirement benefits, don't have to do anything. The IRS will use the tax return or other government payment information on file to send the money, which could be a maximum of $1,200 per individual or $2,400 for married couples who file jointly, to these eligible recipients. Some people, however, don’t fall into these already on-record categories. The most notable group here…

UPDATE, Friday, April 10, 2020: The Internal Revenue Service says it is working on "Get My Payment." This new online tool will allow eligible people a chance to give the agency their bank account information so they can receive their COVID-19 relief payments more quickly than waiting for a paper check to arrive via snail mail. The operational date for Get My Payment is the week of April 13.  The Treasury Department is about to kick off the distribution process that will get some much-needed cash to millions of Americans who are struggling because of COVID-19's effects. The good news…

Photo by Vera Arsic via Pexels The biggest problem for most of us in coronavirus lockdown with our families, whether ordered by state or local officials or self-imposed, is figuring out how to not get on each other's last nerve. For some, however, the forced togetherness is deadly serious. Possibly just deadly. Domestic violence since COVID-19 appeared has spiked as victims find themselves forced to stay home with abusers, according to those who work to protect people, still primarily women, from abusive partners and spouses. It's happening globally, across the United States and here in Texas. "During a time of…

Just can't get motivated to do your taxes? You are not alone. It's April, but the pandemic has shifted the tax focus this year from filing, which has a new July 15 deadline, to the coronavirus economic relief payments. Still, if you're due a refund — and yes, some folks who get tax money back still dally when it comes to sending in their returns — you might want to go ahead and get to work on that 1040. The main reason to file is that you'll get your 2019 tax year refund. That's not going to happen until the…

Photo courtesy MoneyBogNewz via Flickr CC This weekend many businesses and their tax advisers are still trying to sort out the complexities of Small Business Administration Paycheck Protection Program.  It's part of the $2 trillion federal coronavirus relief package, officially known as the CARES Act, that became law on March 27. The Paycheck Protection Program, or PPP, was created to get cash relatively quickly to small business owners whose operations have taken hits due to the pandemic and efforts to stem it, such as forced closures. It's supposed to have less red tape than the existing SBA loan programs and…

Treasury backtracks and now says Social Security recipients who qualify for the COVID-19 payments will get the money without having to file a tax return. Never underestimate the power of the older population. The U.S. government learned that lesson this week, when the Treasury Department announced, contrary to its prior assurances (and a new law), that folks on Social Security would have to file a tax return if they wanted to get their share of the coronavirus relief payments. Last night, Treasury Secretary Steve Mnuchin reversed that requirement. (Yes, on April 1. No, it was no an April Fool's Day…

"No action needed" by most, says IRS, to get COVID-19 stimulus payments. But some, including Social Security recipients, will have tile a "simple" tax return to get the money. This has changed. See second update below in the Q&A section. Adobe Stock The coronavirus checks will soon be in the mail, or rather headed directly to your bank account. That's the official word from the Treasury Department and Internal Revenue Service. The agencies announced on Monday, March 30, that the economic impact payments authorized by the Coronavirus Aid, Relief and Economic Security (CARES) Act will begin going to eligible taxpayers…

The law that created coronavirus stimulus payments just took effect yesterday and we're weeks at best from getting actual money. But tax planners have been thinking about COVID-19 tax intricacies since the illness exploded in the middle of this tax season. These payments just add a new tax filing wrinkle, since what we put on our 2019 returns could be a key part in the relief amount's ultimate dollar calculation. Tony Nitti, a CPA and tax partner with RubinBrown in Aspen, Colorado, has a good preview of what our tax filing actions now could mean to our potential coronavirus payments…

Thank you, Internal Revenue Service. The tax agency has confirmed that 2019 tax year contributions to individual retirement arrangements (IRAs) and health savings accounts (HSAs) can be made as late July 15. These accounts are among the very few areas where a tax break doesn't have a Dec. 31 deadline. In normal tax seasons, contributions to an IRA or HSA can be made and claimed for the prior tax year as late as April 15, which is the usual tax filing deadline. However, this year, as everyone already knows, the chaotic convergence of COVID-19 and taxes prompted the IRS to move…

Retailers aren't the only ones closing their doors to customers during the coronavirus crisis. So is the Internal Revenue Service and other tax-related operations. As cases of COVID-19 increased, the IRS has acted to protect not only taxpayers but its employees. The goal is the new global mantra — to flatten the curve of the potentially deadly virus' transmission. IRS in-person actions curtailed: "We're taking several immediate steps to protect employees while still delivering on the mission-critical functions," said IRS Commissioner Charles Rettig, in a message to his staff that also is posted on the tax agency's website. These virus-affected…

We're in what during normal times would be the annual tax season's big push to the end (or an extension). But these are not normal times. Instead, it feels more and more like we're living in a tax version of Bill Murray's classic "Groundhog Day." That's because for the second time in three days the Treasury Department and Internal Revenue Service have moved the deadlines for filing and paying taxes. Friday, March 20, morning Treasury Secretary Steve Mnuchin decided that an earlier decision that split the usual April 15 deadline for tax filing and paying should be changed. So he…

The Senate also addresses this year's tax filing and payment deadline, as well as those for 2020 estimated tax payments, in its coronavirus relief bill. Keep reading for more on this latest change and check out this Q&A for elaboration from the IRS on some specific tax considerations under the new mid-July deadlines.  2019 tax year returns and any due payments now will be due on July 15, 2020, according to a Treasury Department announcement this morning. And yes, I drew that sloppy circle and scribbled the info on my own calendar. I should have had a cup of coffee…

Unemployment claims are skyrocketing across the United States as more businesses close as a precaution to stem the spread of the coronavirus. The latest on claims for unemployment benefits was released today by the U.S. Department of Labor. For the week ending on March 14, around 281,000 Americans filed first-time claims for the benefits. That's up 33 percent from the 211,000 benefits claims the week before. Percentage wise, the increase was among the largest one-week spikes on record. Here in the Lone Star State, the Texas Workforce Commission reports that from March 8 to March 14 it received 16,038 unemployment…

UPDATE, 2:15 p.m. CDT, Wednesday, March 18, 2020: The Treasury and Internal Revenue Service have issued an official statement about the April 15 tax payment grace period. The portions that answer some of the questions raised earlier in this post are now added as yellow highlighted sections within the original post with any additional notations by me in red. Our world has been upended by the coronavirus pandemic, but we're still trying to hold on to some semblance of normal life. One of those life constants this time of year is taxes. Yesterday, March 17, Treasury Secretary Steve Mnuchin joined a coronavirus…

How are you feeling? That's the question everyone is asking themselves, family and friends as we adapt to the changes forced upon us by the coronavirus pandemic. Social distancing — limiting your interactions with others, either at work or in recreational (remember those?) settings — is the new norm. For the introverted hubby and me, it's simply our norm. We both work from home and don't go out much. We used to joke that our self-imposed isolation works against us when we do venture into the wider world. We don't have an immunity to basic ailments. The hubby gets a…

States also are coping with COVID-19 and tax return timing, with a handful already delaying some returns. UPDATE, March 21, 2020: Tax Day 2020 has changed again. Now taxpayers have until July 15 to file their 2019 returns and pay any due tax. This latest change was announced March 20 and the IRS issued some guidance on the changes on March 21. This window's timely admonition usually is good advice as April 15 nears. This year, however, Tax Day may be pushed back due to the spreading coronavirus. (Painted window in Harlingen, Texas, 1939, by Lee Russell; New York Public…

Happy Pi Day 2014. March 14 is the annual celebration of pi, usually indicated by the Greek letter π, since the 3/14 calendar format is a close representation of pi's first three digits. What exactly is pi? Naturally, I went to the internet to find out, so math experts please cut me a slice of slack here. The consensus is that pi is a number that originally was defined as the ratio of a circle's circumference to its diameter.  It's a mathematical constant, meaning it isn't changed by the size of the numbers it is used to equate. It's also…

If you're freaking out about the approaching April 15 tax filing deadline, the Internal Revenue Service might have some welcome news for you. There's talk in Washington, D.C., of postponing the regular tax filing deadline. The reason (you guessed it) is the coronavirus that's spreading across the country. Mass gatherings — social, political and cultural — already have been halted or dramatically limited in many places. Such actions have hit home for me. Here in Austin, we're — well, they, not really we, as I long ago quit going to the thing — in mourning over the cancellation of South…

I feel like one of the wrung out wacky clocks in Salvador Dalí's "The Persistence of Memory" every time we have to spring forward and lose an hour. (Oil on canvas, 1931 © Salvador Dalí, Gala-Salvador Dalí Foundation/Artists Rights Society (ARS), New York. Photograph taken in 2004. Image via About.com, fair use, Wikipedia Commons) Time and tax deduction method changes It's that time again, literally for most of the United States that switches from Standard to Daylight Saving Time (DST). Whether you like the shift to DST, which provides more sunshine at the end the day. Or hate it since…

You finished your tax return and the news is not good. You owe Uncle Sam money. Don't freak out, at least not yet. Your payment isn't due until April 15. That gives you time to figure out how to come up with the cash and/or get it to the U.S. Treasury. The Internal Revenue Service, naturally, has some suggestions. Let's start with the agency's new favorite tax payment method. Yep, I'm talking electronic. You have several digital options. 1. Credit, Debit or Digital Wallet: Paying by plastic is one of the oldest and most popular tax e-pay methods. As the…

UPDATE, March 24, 2020: As the coronavirus spread across the United States, the Internal Revenue Service and many associated tax programs have been adversely impacted. Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites were among those affected, with most closing earlier this tax season. If COVID-19 conditions improve in some clinic areas before the new July 15 tax filing and payment deadline, some VITA and TCE operations may reopen. Meanwhile, some are offering phone help. Check with your local clinic (details on how to do that in the post below). Volunteer tax preparers help Florida…

Princess Bride impatience via Giphy.com Refunds are the focus (and goal) of millions of Americans every tax-filing season. They intentionally withhold too much money during the year, creating a forced savings account from which they can withdraw their refund in the next year. Then they file early to get their tax cash back as soon as they can. But every year, they also fall for some refund myths, misconceptions and just plain wrong information they think will help them get their money sooner. Some of these are relatively benign beliefs, at worst slowing down refunds. Others can be costly. Here are a couple…

Photo: Nashville Metro Police Department via Twitter Spring storm season came early and with a vengeance to the southern United States last night. At least 25 people lost their lives when a tornado roared through the Nashville area early today. Tornado sirens started sounding around 2 a.m. Central Time on March 3. By the time the twister completed its rampage, it had become Tennessee's second-deadliest March tornado. More than 150 were injured. Residents and officials are still assessing property damage. Volunteer State residents are living their home's motto today, as they not only work through their losses, but also helping…

Law schools and their students, like these at Georgia State University College of Law, are major contributors to the success of Low-Income Taxpayer Clinics nationwide. (Photo courtesy Philip C. Cook LITC) Sometimes, taxpayers encounter issues more serious that just filing their returns. They discover that the Internal Revenue Service has some questions about a prior return or an appeal of an agency decision isn't going as expected or that the federal tax collector is taking his name to heart and initiating collection procedures. What to do? Specifically, what to do if you don't have much money? Find your nearest Low-Income…

A revised version of this post was published on Jan. 27, 2021.  (Pixabay via Pexels) When you're in the military, taxes are likely far down on your list of concerns. Members of the military, however, bear the same tax responsibility as do all U.S. citizens. The one bit of good tax news here is that the tax code and Internal Revenue Service take into account the special circumstances that armed services personnel face. Here are some tax highlights for military taxpayers. Affected armed forces: Military tax benefits typically apply to active duty or reserve members of the armed forces. The…

Millions of Americans are self-employed. In the Internal Revenue Service's Statistics of Income count for tax year 2017, more than 26 million of U.S. nonfarm taxpayers filed as sole proprietors, submitting Schedule C along with their annual Form 1040 individual tax returns. The great thing about Schedule C is that is offers lots of ways sole proprietors, of which I'm one, can reduce our gross self-employment earnings. But one of those deductions that many likely claimed on their 2017 Schedule C has in subsequent years become a source of confusion and consternation. The tax break for business meals and entertainment…

To make sure you, not the U.S. Treasury, gets more of these, don't overlook possible tax deductions and credits. At tax time, filers are always searching for ways to reduce their final tax bill. You can claim deductions, either by itemizing if that gives you more than your standard deduction amount or by claiming some income adjustments, still referred to (by me, at least!) as above-the-line deductions that reduce the amount of income that's taxed. There also are tax credits, which are even better because the directly reduce what you owe Uncle Sam dollar-for-dollar and in some cases could produce…

Texas doesn't have a personal income tax, but there are plenty of other levies we Lone Star State residents must pay. Most U.S. taxpayers also must file a state return every spring. Only those of us who live in one of the seven states — Alaska, Florida, Nevada, South Dakota, Washington, Wyoming and my home Texas — don't have to mess with state income tax forms. Some more local jurisdictions, generally large cities, also levy income taxes. And most of those other 43 states (and cities et al) plus the District of Columbia also follow the federal April 15 deadline.…

Millions of us file taxes every year. And millions of us, even those who get refunds, dread it. Why? We worry that we'll make a mistake. That's a legitimate concern. Despite lawmakers' perpetual promises to make our tax lives easier, they somehow seem to screw up that political pledge. Yes, I am looking at you Tax Cuts and Jobs Act (TCJA), with your new forms and confusing tax breaks even when they provide some relief. Thanks, Congress! But sometimes, we filers have to bear some of the blame. We make things worse by making easily avoidable mistakes when we fill…

Photo by Carlos Cuadros via Pexels It's prime tax-filing time! That's not just my observation. The Internal Revenue Service itself says it typically sees a surge in filings in the final two weeks of February. One of the main reasons for the rush is that folks finally have the tax statements they need. Most of those documents were required to be issued, or at least in the snail mail, to taxpayers by Jan. 31. Even given U.S. Postal Service delays, it's now been plenty of time for the documents to arrive. The crucial document for most filers is the W-2…

Today technically is George Washington's Birthday, but we've come to call it Presidents Day in honor of all our commanders in chief, like these four greats on Mount Rushmore National Memorial. (Image courtesy Mount Rushmore Facebook page) Happy Washington's Birthday. I know, most of us, including all the retailers offering us sales savings, tend to call today President's (or Presidents'; the apostrophe is mobile) Day. But officially on the federal level, the third Monday in February is Uncle Sam's day to honor the birth of the Father of Our Country.  George's actual birthday is Feb. 22, 1731. We've celebrated it…

Even with increased e-filing, taxpayers still don't seem to be in a big hurry to send their 1040s to the IRS. At the start of every filing season, there's a lot of talk and media coverage (guilty!) about how folks are champing at the bit to get their returns in to the Internal Revenue Service. And for the last five years, taxpayers have said "meh," at least as far as filing as soon as they can. Comparing IRS filing data for early February from 2016 through 2020, we see:   Filing Season   Week Ending   # Returns Filed %…

First comes love.Then comes marriage.Then come two filing as oneWhen it comes to their taxes. OK, "marriage" and "taxes" in my opening verse don't rhyme, which is why I'm a journalist, not a poet. But since I focus on taxes and today is, so romantics tell me, the most important day of the year for couples, I thought I'd give the marrying of taxes and wedded bliss a try. Here are five love and tax considerations. 1. Marriage date mattersSure you marry for love. But you might want to consider when you formally tie the knot. It could affect your…

You're working on your tax return and discover you owe Uncle Sam more than you expected. It happens. And in most cases, you're stuck with that larger Internal Revenue Service bill. After all, the 2019 tax year is long gone. It's too late to make those year-end moves that could have helped cut your tax bill. But wait! In a couple of instances, you still might be able to reduce last year's taxes with some tax saving moves that are allowed as late as the April 15 filing deadline. You can make a potentially tax-deductible contribution to a traditional IRA.…

Every salaried worker is well aware of payroll taxes. These are taxes that come out of our earnings and go toward the Federal Insurance Contributions Act (FICA) programs, or what we know as Social Security and Medicare. Or, as the old first-time worker joker goes, "Who the heck if FICA and why is he getting some of my money?" FICA for now: Each FICA component is a percentage of a workers' pay and is paid by both the employer and employee. The total Social Security tax is 12.4 percent, split evenly between the two tax sources every pay period. The…

I finally got the final 1099 I was waiting for yesterday. Yay! Now I can file my return. The 1099 situation for a retired Southern California dentist, however, didn't go so smoothly. David Powell, got a 1099 from MetLife insurance showing he was paid $1,500 for dental work he says he never performed. Since MetLife also sent that 1099 to the Internal Revenue Service, this meant Powell was on the hook for taxes on money he never earned. Double check documents immediately: Powell's case is why you always need to look at every tax statement — 1099s, W-2s, bank, brokerage…

Millions of taxpayers finally got their tax statements this week and promptly filed their returns. Millions more of us are still in the data gathering stage — Hey, it's not my fault! One of my 1099s still isn't here. — and will file soon. But all of us still are potential tax identity theft targets. Yes, even early filers. Crooks know these taxpayers generally are expecting refunds, so they tailor their deceptive approaches accordingly. Look out for IRS pretenders reaching out to you to say there's a problem with your filing. It can only be fixed, say these scammers who…

If this filing season is anything like previous ones, millions of taxpayers have already sent their 1040s to the Internal Revenue Service. One of the perennial questions is how many filers use tax software, specifically the options offered by the IRS-tax software industry partnership known as Free File. Again, if the 2020 filing season is like most before it, the news isn't likely to be good. Despite efforts by the IRS over the years, the Free File program is just not that popular with taxpayers. And making things worse for the program is a just-released report that says more than…

Updated Saturday, Feb. 12, 2022 Thanks to a 2018 Supreme Court ruling, many other states have joined Nevada in accepting bets on sporting events. But casino operations like this one in Las Vegas still get plenty of action on days like Super Bowl Sunday. Happy Tuesday to everyone who skipped work yesterday. I hope you’ve fully recovered from your Super Bowl hangover. I also hope that at least some of your prop bets on the NFL championship game also paid off. So does the Internal Revenue Service. All your Super Bowl winnings, as well as any other gambling proceeds are…

The shortest month of the year is a little longer in 2020. It's a Leap Year. What will we do with that extra day, Feb. 29? Of course, we're going to devote those additional 24 hours to our taxes. OK, maybe not. For many, this first full week of February is getting off to a slow part, thanks to the annual Super Bowl Sunday hangover. Others simply aren't ready to think taxes yet. It's not their fault. They, and that includes me, are still waiting for necessary tax-filing statements. And some eager and on-the-ball taxpayers don't want to think about…

What would you do with an extra $2,504? That's the average amount received by taxpayers who claimed the Earned Income Tax Credit (EITC) in 2019. Overall, the Internal Revenue Service says that across the country last year, 25 million taxpayers received more than $61 billion from this tax break for lower-and middle-income workers. Every tax year, however, folks who qualify for the Earned Income Tax Credit don't claim it. Many don't know about the tax break. Others don't realize that changes in their marital, parental or financial status means they now qualify. That's why for more than a decade, the…

Even before the Tax Cuts and Jobs Act (TCJA) greatly increased the standard deduction amounts, most people opted to claim the standard deduction amount. But one thing that the latest tax reform law didn't change is the ability for many to get some added deductions without itemizing. These used to be called, at least by the tax community, above-the-line deductions because. They got that moniker because pre-TCJA they appeared in the last section of the old long Form 1040, just above the last line of that form's first page where your adjusted gross income (AGI) was entered. (A handful also…

The first day of tax filing season essentially is the tax version of Black Friday, with taxpayers — mostly those expecting refunds — rushing the Internal Revenue Service’s digital doors. (Screenshot of eager Black Friday shoppers from Jerry Bailey’s YouTube video) Today is the first day of the 2020 tax filing season and already folks are wanting to know when they’re get their refunds. That question is totally understandable. Despite last year’s refund confusion caused by the Tax Cuts and Jobs Act (TCJA) changes, the average federal income tax refund was in 2019 was $2,869 based on returns processed through…

The second filing season under the Tax Cuts and Jobs Act (TCJA) is about to start. This one will be easier, right? Right? Maybe. At least this year, we and the Internal Revenue Service aren't dealing with the longest federal government shutdown in history. Plus, folks got a good look with their filings last year at how the massive Republican tax reform law affects them, although some areas are still a bit fuzzy. And of course, everyone adjusted their payroll withholding so there won't be a replay of 2019's reduced/no-tax-refund drama. Yeah, I'm rolling my eyes at that statement, too.…

This cat apparently is expecting something to be delivered by his postal carrier. Many taxpayers share this feline's anticipation this time of year, when annual tax forms are on their way. The hubby and I have some investments in addition to our retirement accounts. We're hoping these assets will be a nice bonus to the funds dedicated totally to paying for our retirement years. That means we're among those folks who are waiting on some tax documents so we can file our 2019 tax return. And we're also among those folks who'll be waiting a bit longer. Mutual funds vs.…

If past years are any indication, when the 2020 tax filing season officially opens on Monday, Jan. 27, millions of taxpayers will hit the send button to electronically deliver their annual returns to the Internal Revenue Service. But millions more of us have to wait to file. We're still waiting on at least one tax statement that has information we need to finish filling out our Form 1040. Form deadline is Jan. 31: Technically, most of these tax documents aren't even required to be on their way to us until Jan. 31. Employers and other businesses that issue wage and/or independent contractor earnings…

Yes, that's a photo of my filing season mess, er, process, which explains why I never seem to be able to submit our joint Form 1040 early in the filing season. Getting your tax stuff together is just one of the reasons to not file early. The Internal Revenue Service will start accepting 2019 tax year returns next Monday, Jan. 27. A lot of folks already have filled out their 1040s and put them in the queue for IRS processing next week. Good for them. Their annual tax task is done. But there also are some reasons why you might…

If you live in one of the 43 states or the nation's capital, then in addition to filing your federal tax return you probably also must send a form (or two) to your state's tax collector. In most cases, states use at least some federal tax return information as the basis for their returns. So if you do your taxes yourself, you're probably looking for a tax software option that can handle both. The Internal Revenue Service and Free File Inc. say that their joint tax prep and e-filing venture Free File has some tax software company participants that can…

Reviewed and updated March 3, 2023 Before you can file your taxes, you need some tax statements. The key among them for most of us is the W-2. Here's a look at all — and there's a lot — that's on this document. Taxes are all about the numbers. That includes the numerical names of tax documents. For wage earning taxpayers, the most important form is the W-2 they get early (hopefully!) each year. Officially titled Wage and Tax Statement, it has (true to its name) the details on earnings and taxes paid throughout the past tax year. This form…

This post was reviewed and updated on July 21, 2021. You just read my post on tax filing requirements (thanks!) and discovered you don't have to file a Form 1040 this year. So, as fictional television attorney (though not a tax specialist) Jimmy McGill might say, "'S'all good, man." Right? Not necessarily. Sometimes even if you don't have to file a federal tax return, it's to your benefit to do so. Here are 10 situations when you should send the Internal Revenue Service a return: You're due a refund. This often is the case if you had federal income tax…

Broad City image via Giphy.com Do you have to file a return? Sorry to be the bearer of bad news, but the answer usually is yes. Believe it or not, some people make it through tax-filing season without any hassle. That's because the Internal Revenue Service doesn't require them to file taxes. Unfortunately, most of us aren't that lucky. So just who has to file a tax return? Generally, if you are a U.S. citizen or resident you must consider three things when determining whether you have to file a tax return: your age, your filing status and your income. General filing requirements: The…

IRS building by David Boeke via Flickr CC A lot of former Internal Revenue Service employees take the lessons they learned on that job and create second careers as tax advisers and preparers. That's a nice professional segue. Going from being part of the U.S. tax collection machine to helping folks pay Uncle Sam as little as legally possible. But it needs to be done after IRS employees leave their government job. One current IRS staffer in the agency's Andover, Massachusetts, service center was, to borrow a tax term, double dipping. Worse, federal prosecutors say she filed almost 600 false…

Ready to file your taxes? Ready to do so for free? The Internal Revenue Service is ready, too. Its Free File tax preparation and electronic filing option is open for business. As usual, the online no-cost way for millions to complete and electronically file their taxes is available before the IRS actually starts accepting and processing returns. That won't happen until Jan 27. But you can still get a jump on your annual tax filing obligation. The Free File program you select will simply hold your return until Jan. 27 and then submit as soon as the IRS officially kicks off…

Image via GotCredit.com The year's first obvious and, for some, painful acknowledgement of taxes is next week. Jan. 15 is the due date for the final estimated tax payment for the 2019 tax year. That upcoming deadline day is this weekend's By the Numbers figure. Generally, if you expect you'll owe more than $1,000 in taxes, then you must pay estimated taxes throughout the year. If you've been paying estimated taxes for a while, you already know that these payments cover earnings that aren't subject to withholding. This includes things like investment earnings that pay out periodically during the year…

Topher Grace is known by millions of fans as Eric Forman of television’s “That ’70s Show.” But when he’s not acting, he also has a side gig.

The 2020 filing season starts on Jan. 27 and millions of taxpayers already are ready to send their 1040s to the Internal Revenue Service on that day. Most of these folks are expecting refunds. But that's just one reason to file your taxes early. Here are six reasons to finish up your Form 1040 and get it to the IRS ASAP. 1. To get your refund sooner.Yes, a tax refund is always the top reason to file your taxes as early as you can. I could go on (and on and on) about how it's better to adjust your withholding…

MoneyBlogNewz via Flickr CC It's official. The Internal Revenue Service will start accepting, and more importantly for folks expecting refunds, processing 2019 tax year individual returns on Monday, Jan. 27. Way to give me some breathing room (NOT!), IRS, after my post earlier today about the opening of business tax filing tomorrow, Jan. 7. OK, only kidding (sort of) about the back-to-back business and individual filing season blog items. It's always good news for all when the IRS announces filing season starting dates. Almost ready to go: The annual announcement of the individual tax return filing season means the tax…

Click image for a large, clearer view. Ready to do your 2019 taxes? The Internal Revenue Service says it will be on Jan. 7. Yep, that's tomorrow. But whoa up there, cowpokes. This starting date is just for IRS acceptance of business returns. On the Modernized e-File (MeF) Operational Status page noting the Jan. 7 starting date for business returns, the IRS also says, "Individual tax returns will begin at a date to be determined in early 2020." Still, it's a good sign that Uncle Sam's tax collector is looking at any return processing date in early January. Business returns…

Last year, some tax software companies allegedly hid their Free File option on their corporate websites, instead sending otherwise eligible free filers to paid products. That won't happen again, says the IRS, under a new Free File agreement that was just signed and takes effect for the upcoming 2020 tax-filing season. The only thing people like more than getting their annual tax refunds is getting things for free. The IRS says that this coming tax-filing season, its new agreement with tax software companies will help ensure that eligible taxpayers will know that they can combine those loves via Free File.…

Paying property tax bills by Dec. 31 used to be a surefire way for many filers to bump up their Schedule A deductions enough to make itemizing more advantageous than using the standard deduction. That's no longer the case thanks to the Tax Cuts and Jobs Act (TCJA). In addition to capping state and local real estate tax deductions at $10,000, the tax reform bill also nearly doubled prior tax law's standard amounts. So fewer folks are worrying about paying tax bills that may be due later, like the end of next January here in the Austin area, by year's…

"Do nothing" has long been the derisive descriptor attached to the U.S. Congress. Actually, though, the House and Senate could more accurately be described as a legislative body that does things that don't have any chance of becoming law. That's the case most recently with a bill that would eliminate, at least temporarily, the $10,000 cap on tax deductible state and local taxes, referred to by the acronym SALT. Cutting SALT in the tax diet: The House last week narrowly passed, by a 218 to 206 margin, H.R. 5377, dubbed the Restoring Tax Fairness for States and Localities Act. The…

Congress played Santa this week, averting a government shutdown and approving a wide variety of anticipated tax breaks. Merry Christmas U.S. taxpayers. H.R. 1865, the Further Consolidated Appropriations Act, 2020, is now law. In a surprise move earlier this month, House and Senate negotiators cobbled together a massive bill that not only, as the name indicates, assures that the federal government stays open, but which also included some long-awaited (at least by those who will benefit) expired tax provisions. In addition, lawmakers corrected — and by corrected, I mean repealed — some obvious — and by obvious, I mean universally…

Christmas is next week! So of course you’re thinking about filing your 2019 tax return. Maybe not this coming week. But you will soon. And when you do think about it, if you’re like most U.S. taxpayers, you’ll use tax software. E-filing encouraged: The Internal Revenue Service encourages us — and in the case of most paid tax preparers, requires — to use the tax preparation programs and accompanying electronic filing option. We follow those prompts and pushes. This year, more than 138 million returns were e-filed. That was almost 89 percent of all the 1040s and other annual returns…

December is, for the most part, a festive month. The holidays and all that accompanies them, from songs to movies to the joy of youngsters and young at heart, bring out the best in most of us. But things aren't quite so bright and jolly for everyone. Despite an economic recovery that's lifted people out of poverty in most areas of the country, poverty increased in at least one county in every state between 2016 and 2018. The poverty rate — defined as the percentage of people in households earning less than the current $25,750 threshold for a family of…

If you moved this year and rely on the U.S. Postal Service for your interactions with the Internal Revenue Service, make sure that agency (among others) is on your list of those who are informed of your new address. I've always been a fan a snail mail. I know. OK, boomer. And December is my favorite month for good old U.S. Postal Service deliveries. I like thumbing through the colorful holiday catalogs, even if I do order online when I find a gift that would be perfect for a friend, family member or myself. I also love the annul batch…

This summer the Internal Revenue Service launched an effort to make sure cryptocurrency owners comply with tax law. The IRS treats the online money as an investment, not cash. It sent more than 10,000 Bitcoin et al investors letters to educate them of their tax responsibilities, encourage them to report their transactions and get payment where due. The IRS crypto asset outreach appears to have worked. Positive taxpayer and IRS responses: Not only did the IRS get responses to the letters (which is what you should always to when you get a notice from the federal tax collector), in many…

Welcome to Part 9 of the ol' blog's 2020 series on tax inflation adjustments. We started on Nov. 6 with a look at next year's income tax brackets and rates. Today we look at how much tax penalties could cost you or your tax preparer next year. Note: The 2020 figures in this post apply to 2020 returns to be filed in 2021.For comparison purposes, you'll also find 2019 amounts to be used in filing 2019 returns due April 15, 2020. IRS agents don't throw flags like football referees, but the tax agency isn't afraid to blow the whistle on and…

Welcome to Part 2 of the ol' blog's 2020 series on tax inflation adjustments. We started on Nov. 6 with a look at next year's income tax brackets and rates. 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 2020 figures in this post apply to 2020 returns to be filed in 2021.For comparison purposes, you'll also find 2019 amounts to be used in filing 2019 returns due April 15, 2020. Historically, around 70 percent of filers have claimed the standard deduction on their tax returns…

It's that time of year again. Actually, that time was at 2 a.m. today (Sunday, Nov. 3, 2019). That's when most of us said goodbye to Daylight Saving Time and hello to the return of Standard Time.  As we deal with the timepiece trickery, a lot of us (me!) suffer a sort of jet lag as our body clocks adjust to the new time and impending earlier arrival of sunsets. But the fall back to Standard Time also is a good reminder that standard is a good thing for millions of taxpayers. A couple of tax standards, the standard deduction amounts…

These ghostly trick-or-treating dogs are more cuddly than scary. But ghost tax preparers can be terrifying. Don't let one haunt you. There's one thing that scares the Internal Revenue Service and taxpayers alike. Tax scams. One such ploy that popped up during the summer is making rounds again this Halloween season in a new, shall we say, costume. It's the one where the calling crook pretends to be from the Social Security Administration. "In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim's SSN. It's yet another…

Halloween is almost here. Are you still looking for a costume? Here's a suggestion. Go as the Internal Revenue Service. On this annual night of frights, Uncle Sam's tax collector offers plenty of scares. Here are four terrifying tax situations to get you in a Halloween mood. Be afraid, but also be prepared, on this Oct. 31 as well as year-round. 1. Audit: There's no need to build up to this scare, which can occur any time of the year. Fear of an IRS audit is one of the biggest tax terrors for most people, even (or maybe especially) those who…

Around 2 million Individual Tax Identification Numbers (ITINs) must be renewed by year's end. Here's a look at these special tax identification numbers, who uses them and how to renew or get one if you're not eligible for a Social Security number. Numbers obviously are what the Internal Revenue Service is all about. There are special identification numbers for a variety of tax circumstances. There are earnings amounts and tax code references and line numbers on forms and of, course, identification numbers of both tax professionals and taxpayers that must go on returns. For most individual filers, a Social Security…

It's Columbus Day. Stop. Before you start with the emails, yes, I know this second Monday in October is a controversial holiday.  In recent years, many jurisdictions beyond the federal government have opted to spend today commemorating the original inhabitants of our country. That's why you'll read and hear about Indigenous Peoples' Day events today. pic.twitter.com/l2LymtmS2J — Bobby (@Bobbyobbo) October 14, 2019 But, like it or not, today still is officially Columbus Day, a celebration of Christopher Columbus' accidental discovery of North America. And it's still a federal holiday in the United States.  Holiday tax effects: A federal holiday can…

Attention, tax preparers. Next week is a big one. The filing extension deadline is Tuesday, Oct. 15. Then the very next day, the renewal season opens for paid Preparer Tax Identification Number (PTIN) applications and renewals. Also note that while there won't be any requirement to pay a user fee to obtain or renew a PTIN, this likely is the last time that the identification number assignments will be free. Last week, as the U.S. Supreme Court began its new term, the justices decided not to hear the case that reinstated the fees for PTINs. That means the ruling affirming…

Millions of taxpayers will be working on their 2018 tax returns this weekend, frantically filling out forms to meet the Oct. 15 filing extension deadline. Some of them will likely take advantage of Free File, the Internal Revenue Service partnership with the tax software industry that allows eligible filers — this year that's those whose adjusted gross income is $66,000 or less — to prepare and electronically file their returns at no cost. Free File came under fire earlier this year when Pro Publica reported that some of the tax prep major players that participate it the program also used…

I’ve dealt with bill collectors over the years. Fortunately for me, it’s been on behalf of a couple of relatives who found themselves in over their heads financially. Fortunately for my family members, after much — way too much — and often contentious back and forth, we were able to come to a satisfactory resolution. That’s why I tend to share former Taxpayer Advocate Nina Olson’s skepticism about the way that private collection agencies, or PCAs in tax-acronymese, interact with folks who owe taxes. But despite my, Olson’s and many others’ lingering distrust of these operations, private debt collect is here to…

You've now got one week, until next Tuesday, Oct. 15, to file your 2018 Form 1040 that you extended earlier this year. During these next seven days, you need to at least get a start on that return. The deadline will be here before you know it. And this time, there's no more time. Here are 9 tips and reminders to help you get that 1040 on its way to the IRS by next week. 1. Gather all your tax material.By now you should have every document you need to file your taxes. Double check. Now. There's no give beyond…

Relationships, even in the best of circumstances, are hard. When one partner is abusive, then things get untenable. October is Domestic Violence Awareness Month. During this month, the National Coalition Against Domestic Violence (NCADV) and similar groups are highlighting the victims and survivors, their children and families, their friends and family and their communities that are impacted by domestic violence. More importantly, these organizations are providing assistance and counseling to those in abusive relationships and looking for ways to leave them. Financial as well as physical abuse: While most of us immediately think of physical harm when we hear of…

The Internal Revenue Service's form revision process isn't quite the red-pencil technique used on text documents, but it gets the job done. The latest group of revised tax forms will affect corporate taxpayers. (Photo via pxhere) Many business taxpayers and their tax advisers are working this week on the Form 1120 returns that that they extended until Oct. 15. Next year, though, these corporate filers will be looking at a new return. The Internal Revenue Service is continuing to tweak a wide variety of returns, many in response the changes made by the Tax Cuts and Jobs Act (TCJA). The…

We've yet to see autumn leaves here in Central Texas. It's still too hot and dry. But the arrival of October does bring another seasonal certainty: the Oct. 15 tax deadline. October is here and I've got to say that although it's still early, the month so far is disappointing. Here in Central Texas, by now we're usually enjoying daytime temperatures in the 80s, with overnight lows dropping into the 60s. That typically means our windows are open 24/7 to get full enjoyment of autumn weather. Not in 2019. We're at least 10 degrees higher both days and nights. One…

The wealth-tax proposal advocated by Sen. Elizabeth Warren includes a hefty marriage penalty, according to one leading economist's analysis. (Photo courtesy Warren's Facebook page) It's another weekend, so that means it's time for another look at wealth tax proposals. Yeah, I know it seems like I'm in a bit of a rut, having posted about proposals from Democratic presidential hopefuls in recent weekends (on Aug. 18, Sept. 14 and a Monday, Sept. 16). But the suggested ways to get more money from the rich are still getting attention. Wealth tax roadblocks: Personally, I don't think any of these sweeping measures…

The tax gap is holding as steady as this gap on the old Florida Keys bridge. (Photo by Ewen Roberts via Flickr) We might want to revise Benjamin Franklin's famous tax saying. The new version could read, "In in this world nothing can be said to be certain, except death, taxes and the tax gap." The tax gap is the difference between the amount of tax that filers should pay and the amount that they actually hand over voluntarily and on time to the Internal Revenue Service. And IRS data continues to show that while tax years come and tax…

It's Friday the 13th and a full moon will rise late tonight. Werewolves and Friday the 13th. Scared yet? Take a breath. Depending on where you live, and how superstitious you are, tonight might not be so bad. The Farmers' Almanac says folks in the Pacific, Central and Mountain time zones will get to gaze on the full moon before midnight this Friday, Sept. 13. However, if you live in the Eastern time zone, the moon won't be full until 12:33 a.m. on the less spooky Saturday, Sept. 14. Micro Harvest moon: Plus, it won't be a very big full…

If you read last week’s September tax moves post (thanks), you might remember that one of the four suggested actions was to pay your estimated taxes. Not to be a nag, or a reminder as I insist to the hubby, but I’m putting that tax task out there again today. The third installment for the 2019 tax year is due Sept. 16. Yes, that’s a day later than normal, but the usual 9/15 due date falls on Sunday. So you get an extra day, next Monday, to either snail mail your 1040-ES voucher and check or money order to the…

Andrew Luck announces his retirement from the NFL's Indianapolis Colts. The main reason the young quarterback quit the game was injuries. A bonus to his departure: no more jock tax calculations. The National Football League's 2019 season kicks off tomorrow night, but Indianapolis Colts quarterback Andrew Luck won't be on the field. The 29-year-old stunned the sports world on Aug. 24 when he confirmed rumors that he was retiring from the sport. Colts owner Jim Irsay estimated that Luck could be giving up as much as $450 million in future salary. Luck, however, obviously thinks he has made enough money from…

Arizona home to be auctioned to pay federal tax debt. I've seen a lot of estate sale signs lately. Either it's an indication of the changing demographics of my part of Austin or folks are trying to fancy up their garage sales. An estate (or renamed garage) sale basically is a way to dispose of most of an owner's property either because family doesn't want their deceased relative's items or the goods need to be sold to make a move easier. Uncle Sam regularly holds his own versions, but in many instances these government sales are to settle tax debts.…

The Internal Revenue Service is continuing to tweak tax forms, releasing yet another version of the document workers use to figure out their paycheck withholding. The new draft of Form W-4, updated as of Aug. 8 and shown below, incorporated suggestions that Treasury and the IRS got on the version it made public at the end of May. The changes are being made (again) to ensure that taxpayers adjust their withholding to most accurately reflect the tax code changes made by the Tax Cuts and Jobs Act (TCJA).  Click image to see the full Aug. 8, 2019, draft 2020 Form…