You filed your tax return. Now the Internal Revenue Service has questions about your Form 1040. While hearing from the tax collector about your return is always a little unnerving, it doesn't necessarily have to be a big deal. A notice does not mean you are under audit. Neither does it mean that your return was incorrectly filed.  And in many cases, any issues the IRS has with your 1040 can be quickly resolved. Here are 10 tips to help you deal efficiently and effectively with an IRS notice or letter. 1. Don't panic.You are not alone. The IRS mails…

Happy May 4, the unofficial holiday of Star Wars geeks and punsters worldwide. I admit it. I've already intoned "May the 4th be with you" several times today, but I'm justified. I've always been a sci-fi fan. And I discovered more of them when I went off to college, where I got to be a part of a class at Texas Tech that analyzed the genre through the eyes of professors in ancient world history, classics and modern literature, archaeology and anthropology. It's also where I penned my first science fiction short story and got encouragement from one of the…

What's worse than going to file your federal tax return and discovering your identity has been stolen? Finding out you're dead. OK. Technically you're still with us if you're trying to file a 1040. But when you're as good as dead to Uncle Sam, you are out of luck in collecting your tax refund. That's what happened to Sarah Jewell of Sparta, Michigan. Sarah Jewell explains how being declared deceased poses tax filing and other problems to Darren Cunningham of Fox17. Jewell discovered her mistaken demise when she filed her federal tax return in February. Instead of the refund she…

This post was updated Feb. 13, 2018. After starting a bit late, the 2018 filing season is well underway. That means that millions of filers have already sent the Internal Revenue Service their tax returns, mostly because they're expecting a refund. The total number of refunds issued so far in 2018 is a bit smaller than those issued early in last year's filing season. Of course, this year's filing season opened a week later than it did in 2017. IRS Action Through Feb. 3, 2017 Through Feb. 2, 2018 Percentage change Tax returns received 20.181 million 18.302 million -9.3 Tax returns…

The IRS commissioner wasn't kidding. Weeks before the 2015 tax filing season started, John Koskinen warned both his employees and the taxpaying public that many calls for help were likely to be ignored. "For the upcoming filing season, we estimate that only about 50 percent of taxpayers who call can reach us over the phone," Koskinen said in an email to Internal Revenue Service staff back in December. Turns out he was being optimistic. Telephone tax help troubles: A new Treasury Inspector General for Tax Administration, or TIGTA, examination of the interim results of the 2015 filing season found that the number of calls…

April came and went without your tax return. Either you filed Form 4868 to get an extension until Oct. 15 to finish your paperwork. That's good. Or you didn't file anything. Not good. Here's a look at what you should do next in either situation. Before we get to specifics, however, a quick caveat. This advice is aimed at folks who owe taxes. If you don't owe or are due a refund, you still should file, but since penalties and interest are based on taxes you still owe, you're not in as dire shape. Now, ultra tax procrastinators, let's get…

Admit it. You'd love to know how much taxes your friends, coworkers, family members pay.  Sorry. I can't help you find out those amounts. But I can offer an alternative to your tax voyeurism. Check out the president's and vice president's 2014 tax returns. What the Obamas owed: President Barack Obama and wife Michelle filed their joint Form 1040 a few days before the April 15 deadline. Click image to see the Obamas' complete 2014 tax return. The 38 pages, which includes worksheets, gives you a good idea of how the First Family gets its money and what steps the Prez and First Lady took…

April 15 is for more than just filing last year's taxes. There are six other individual tax-related tasks that are due today. Ready. Set. Go. 1. Open and/or contribute to an IRAThe April filing deadline is the last chance you get to make a contribution to your traditional or Roth IRA and have it count as if you put the money in by last Dec. 31. For some filers, that prior year traditional IRA contribution could count as an above-the-line deduction on Form 1040 or 1040A. And that could help lower their tax bills. 2. Pay your estimated taxesIf you must…

"Laughing and crying, you know it's the same release." Although that Joni Mitchell line from People's Parties has no connection to taxes, the sentiment seems perfect for April 15. Today's filing deadline is full of gnashing teeth, cries of frustration, fits of anger and sighs of relief. For better or worse, the annual tax task is over for most taxpayers. Broad City animated image courtesy Giphy For millions, however, the tax rite has only been postponed. File for an extension: If you find today that you just can't finish your 1040 (or 1040A or 1040EZ; yes, even some filers of…

Electronic tax filing continues to grow. The Internal Revenue Services had received almost 91 million e-filed returns through April 3. That's slightly ahead of the e-filing numbers at the same point a year ago. And it represents more than 91 percent of filers. But that means 9 percent of folks — literally millions of filers — are sticking with old fashioned snail mail.  Reasons for paper tax returns: Some people resist e-filing their taxes because they're concerned that their personal tax and financial data might be compromised. Others simply prefer pull out the old adding machine and run their tax…

April 15 is Wednesday. Don't panic. You can do it. I know because I'm in the same boat. I've spent the last few hours sorting through my documents — and yes, finally downloading some 1099s from my online accounts — and putting things in order so that I can plug it all into my tax preparation software. It is daunting. I don't know why I wait so long every year. And, yes, most years — probably this one, too — I'll file for an extension. You don't have to do as I do, though. You still have plenty of time…

Every year, we have to deal with a few new tax laws. This year the biggie is the Affordable Care Act, known by its acronym ACA or its popular nickname Obamacare. Millions of us this filing season are reporting our health care coverage to the Internal Revenue Service or figuring any penalty we owe for not having health insurance for all of 2014 or calculating whether we must pay back any of the advance premium tax credit we got to buy a medical insurance policy via a state or federal exchange. There have been problems. Errors on taxpayer statements issued by the…

I know I just extolled the virtues of tax credits over tax deductions. But you don't have to pick one or the other. Claim all the credits and deductions you can. When deductions are mentioned, most folks think itemized deductions. That's mainly because they have their own special form, Schedule A. But most taxpayers don't itemize. So they're out of deduction luck, right? Wrong. Deductions above and beyond: There's a collection of tax breaks known as above-the-line deductions. Technically, they are adjustments to income. You subtract them from your gross income, which is all the money you made in the…

Tax deductions, whether itemized or above-the-line, and tax credits can save you money, but they do so in different ways. A deduction lowers the amount of your income on which tax is figured. Less income generally means a lower tax bill. A credit, however, is an even better tax reduction tool. Credits are claimed once you figure your tax liability and they then reduce what you owe Uncle Sam dollar for dollar. That means a $1,000 tax credit could cut your $2,000 tax bill in half. Even better, a few tax credits are refundable. As the name indicates, these credits…

This post was reviewed and some links updated on Thursday, April 6, 2017. It’s one thing to make an innocent mistake on your taxes, or to overlook a tax break that could lower what you owe Uncle Sam. Those tax sins of omission are costly, but usually won’t invoke the ire of the Internal Revenue Service. When you intentionally disregard tax law, however, such willful neglect will get you in real trouble. The IRS defines willfulness as a voluntary, intentional violation of a known legal duty, specifically your tax filing and payment responsibilities. Such intentional tax violations could lead to…

Tuesday was a dark day at the Internal Revenue Service. Literally. The tax agency's downtown Washington, D.C., headquarters was among buildings in the national capital hit by a blackout. The White House also was affected, along with many of the city's popular museums and some Maryland suburbs, including the University of Maryland in College Park. The National Portrait Gallery in Washington, D.C., goes dark. Generators kicked in for many offices, but not at the IRS. Unable to work, the tax HQ closed early yesterday afternoon. The good news is that the outage did not affect any tax processing or tax return filing operations, a spokesman said.…

This post was reviewed and updated Wednesday, April 5, 2017 A sin of omission basically is a failure to do something you can and should do. They happen all the time in our daily lives, often inadvertently.  Even, or many would say especially, at tax time.  Tax sins of omission typically are failing to claim tax breaks for which we're eligible. And while the annual April consequences of overlooked tax breaks aren't quite as severe as their Biblical counterparts, tax sins of omission could be very costly. To ensure that your annual interaction with the Internal Revenue Service this year isn't…

We're two weeks away from the annual tax return filing deadline. For most of us, that means we're stuck tax-wise with what we've got. The chance to make tax-saving moves ended, in most cases, last Dec. 31. But there is one last tax move you can make now that could affect your current tax filing: contribute to an individual retirement arrangement (or account, as most of us say). You have up until the April 15 filing deadline to put money into a Roth or traditional IRA and designate that money as a prior year — 2014 in this case — contribution. Three reasons for an…

You're finally ready to sit down and do your taxes. Are you sure?  The only thing worse than filling out your 1040 and all those other forms is finding that you forgot something and have to file an amended return. A tax-filing checklist will help ensure you have all the information you need to complete your federal income taxes correctly. Generally, the documents and materials you need stay pretty much the same from tax year to tax year. For 2014 returns, however, there are a couple of new considerations. Obamacare filing issues: This year, millions of folks are dealing for…

Everybody puts on the dog for St. Patrick's Day, even sartorially conscious and/or wannabe Irish pooches. Dog dolled up for St. Patrick's Day. Photo by Michael Shehan Obeysek via Flickr. But the special green suit you bought just for today is not tax deductible unless being a leprechaun is your job. Apparel is deductible as a miscellaneous itemized expense only if it is ordinary and necessary to your line of work. Normal business attire doesn't apply: Before you get too jazzed about a possible new deduction in connection with your 9-to-5 at the cube farm, note that the Internal Revenue Service…

I can't imagine leaving my tax refund in Uncle Sam's hands for years. But then, I usually don't get a refund. Most taxpayers, however, do get at least some tax cash back every year. And every year, some folks don't claim what's theirs. This year, the Internal Revenue Service has around $1 billion for more than 1 million taxpayers who didn't file a 2011 tax return. The parceling out of that billion or so bucks to the 2011 tax year nonfilers could produce a nice chunk of change for some folks. The median refund check, says the IRS, is $698. 2011…

Tax filing can be confusing and frustrating for most of us. Even criminals. Take the crook who stole Seth Rouse's personal information and filed fake federal and state tax returns in the legitimate Chicago taxpayer's name. The felonious filer, however, made a big mistake. He didn't change the address to which the fraudulent refund was to be sent. Click the bad refund check image to see the Chicago CBS affiliate's story on the tax identity theft screw-up. So instead of going to the fraudster, the $5,571 check showed up at Rouse's home. The federal refund arrived just a day after…

It's not unusual that the big news this filing season is the growing concern about tax identity theft as a way to get fraudulent refunds. But it is a bit surprising that the crime has spread so quickly and widely to state tax departments. That's why many tax officials across the United States are employing creative ways to stop tax ID thieves. Take, for example, Ohio. The Buckeye State is requiring some filers to take an online quiz to prove that they are legitimate taxpayers who are due the refund shown on returns the tax agency has received. The Ohio…

Are you a tax lion, aggressively hunting down tax breaks? Or are you a tax lamb, cowering before the complicated Internal Revenue Code? Whatever your March tax persona, this last full month of the tax-filing season offers plenty of time and ways to cut your 2014 tax bill. It's also a good month to make some moves to lower your coming 2015 tax debt. Business focus: Business filers need to take care, as the start and middle of the month are critical deadlines. Farmers and fishermen who didn't make their final estimated tax payment on Jan. 15 must file and…

In an effort to speed up things for folks visiting some Internal Revenue Service Taxpayer Assistance Centers (TACs), the agency began on Feb. 23 offering appointments. You can set up a specific time — the links below will offer details — to talk with an IRS rep if you're in: Atlanta, Georgia (Atlanta-Woodcock) Austin, Texas Birmingham, Alabama Chicago, Illinois (Dearborn) Denver, Colorado Fresno, California Hartford, Connecticut Plantation, Florida San Antonio, Texas Seattle, Washington This is only a test in those 10 locations. But if it works, the appointment option could be expanded. Overall, the IRS has more than 350 walk-in…

February sure lived up to its status as the shortest month of the year. We got to the end of it, and the potential tax moves to make, so dang quickly. Today means we're almost halfway through with the 2015 tax filing season, which officially began on Jan. 20. So far, the Internal Revenue Service reports receiving almost 50 million tax returns. That's about a third of third of what the agency expects to get this year. As usual, especially early in the filing season, most of the 1040s have resulted in refunds. Through Feb. 20, that's the case for…

A kinder, gentler Internal Revenue Service was born back in 1998 when the IRS Restructuring & Reform Act was enacted. Now the Affordable Care Act appears to have given us the forgiving IRS. Premium tax credit considerations: Earlier this month, the IRS announced that it will waive some possible penalty charges in connection with calculations of the advance premium tax credit. This tax break was created to help Obamacare purchasers cover some of the cost of the required health insurance coverage. Most who are eligible for the credit got it in advance when they bought their policies. If, however, things changed…

While the Internal Revenue Service has long been on high alert for fake tax filings, fraudulent returns now are a major concern for state tax departments. And that's posing problems for folks who are untouched by tax identity theft. Many refunds are being slowed as state officials take added fraud precautions. Some state tax refunds are not being issued in the form taxpayers expect. Beyond TurboTax: Earlier this month, the country's leading tax software program TurboTax temporarily halted e-filing of state returns when more than two dozen states reported indications of possible tax fraud in connection with some of those…

This post was updated Feb. 15, 2018. The long Presidents Day holiday is this weekend and chances are you will be working on your taxes. This three-day February weekend typically marks the beginning of the busiest time of the annual tax filing season. By now, the 1099s and W2s and other statements needed to fill out returns are in most taxpayers' hands. And when folks start workings on their 1040s, even with software help, they tend to have questions. That's why the days before and after Presidents Day are, according to the Internal Revenue Service, also is one of the…

The only thing worse than messing up your own taxes is paying someone who can’t do the job. If you’re looking for professional tax help, make sure that person is competent.

Taxes and Friday the 13th are perfect partners. I mean, really, there's not much that's scarier than taxes. Today's Daily Tax Tip looks at six tax terrors and ways to overcome them. You can get the specifics at the tip, but here's a preview of these half dozen common tax fears: Struggling through the complicated filing process, Missing a tax deduction or credit, Making a costly mistake, Hiring a bad, or worse, crooked, tax pro Facing an audit, and Having a tax bill that's too big to pay. Scary ACA, ID theft: This filing season, we can add a couple…

No tax season ever runs without any hitches. 2015 is no different. So far this year we've seen some early season frustration with new Affordable Care Act requirements, as well as tax identity theft fraud scares that slowed processing of some returns. But all in all, despite preseason worries, the 2015 federal tax filing season is off to a booming start. Just ask the recipients of the almost 7.6 million refunds that were sent as of Jan. 30. The Internal Revenue Service says that number of refunds is almost twice what it issued by the end of January 2014. Of…

If you can afford to hire a tax professional to help you file your returns, good for you. A lot of folks, however, are not able to come up with the money for a paid preparer. Free File can be a big help, allowing anyone with adjusted gross income of $60,000 or less to use the no-cost online tax preparation and e-filing service. But if you want a more personal tax help touch, you've got options, too. Free tax help from trained volunteers: There are more than 12,000 free tax preparation sites — those numerous tax help locations earn this…

After being in limbo for about a day, TurboTax this afternoon resumed its state e-filing services. TurboTax, the popular tax preparation program produced by Intuit, had suspended e-filing of state returns because of tax fraud concerns across the nation. The hold was in place for around 24 hours. The decision came after several states, including Minnesota, Utah and Alabama, reported an increase in suspicious filings and tax refund fraud attempts using stolen taxpayer information. Minnesota Department of Revenue officials took things up a notch on Thursday, refusing to accept state returns completed via the software. The state had heard from two…

Three days of the shortest month of the year — and tax-filing season — have already passed. I guess it's true what they say: time flies when you're having tax fun. The celebrations began on Feb. 1, at least by the Patriots fans. The IRS also enjoyed the day since all those Super Bowl winning bets are taxable. The NFL championship game is just one special, and tax-related, day in February. There's Groundhog Day on Feb. 2. It's a perfect reminder that you don't want to be caught in a Bill Murray loop and end up doing your taxes over…

What do Super Bowl bets and missing tax forms have in common? They're all part of this week's Daily Tax Tips. Yes, the end of January is hectic for sports fans, particularly NFL aficionados or folks who love Super Bowl ads and halftime shows, as well as taxpayers. Since it's been a crazy five days, and Friday isn't even over yet, you might have missed these and the other tax tips that were posted, as the pointing finger indicates, in the upper right corner of the ol' blog's home page this week. Don't worry. We're good tax teammates here at Don't Mess…

Political wonks are distraught today. Mitt Romney will not seek the presidency in 2016. He told a small group of advisers of his decision in a conference call this morning. Tax geeks also are upset. No Romney run also means we won't get any further tax return revelations. President Obama meets with Mitt Romney in the Oval Office following their White House post-election lunch on Nov. 29, 2012. (Official White House Photo by Pete Souza) I don't know about y'all, but I was really looking forward to seeing if the 2012 Republican presidential nominee amended his tax returns. Reclaiming tax…

Tax software was supposed to put an end to the tax professional business. Right. Congress, unwittingly (insert your own joke) or not, has helped keep the tax preparer business alive by continually changing the tax code. And we're not talking just small tweaks. Some of the modified and new tax laws are outrageously complicated, by design as well as due to unintended consequences. Just look at the Affordable Care Act tax issues that taxpayers and tax pros alike are wrestling with for the first time this filing season. Turning to a pro: Even if tax software can do the job…

Around eight million individuals got health coverage in 2014 through an Affordable Care Act exchange. If you're among that group, pay attention to your mail in the coming weeks. You'll be getting a Form 1095-A in connection with your Obamacare coverage. Important health care exchange info: Form 1095-A is a new tax reporting document. It is sent only to individuals who obtained health insurance coverage through the Health Insurance Marketplace, either the federal or a state exchange. This new two-page form includes information about your exchange-purchased insurance coverage, any household members covered under the policy, the monthly premium you (and…

If you used TurboTax Deluxe software last year, check your email box. The maker of the leading tax preparation software is sending you a message detailing how it wants to make things right in the wake of changes that will force some users to upgrade this filing season to a more expensive version. Not only is TurboTax apologizing, it's saying I'm sorry with cash. Refund offer: Intuit, the maker of TurboTax, is offering $25 refunds to customers who had to buy a more expensive version of the company's software to complete their 2014 tax returns because of this year's software…

We made it through the first official week of tax filing season 2015! A lot of folks were champing at the bit to get their 1040s to the Internal Revenue Service on Jan. 20's opening day. Good for them for being obsessive-compulsive so prepared. Some of us, however, will need a bit longer to complete our annual tax task. Either we're still gathering all the material we need to file, or we're still searching for possible tax breaks, or both. Daily Tax Tips: Our Daily Tax Tip feature can help whenever you're ready to file, as well as suggest some tax moves…

Do you hear that? It's the rustle of tens of thousands of taxpayers sending in their 2014 tax returns. That's what must have awoken me at the unusually early, for me, hour of 6:20 a.m. That's OK. I understand the excitement. Tax filing season begins today, Jan. 20. OK, maybe you're not as happy as this Zach Galifianakis character, but c'mon. It's tax season 2015! Ready. Set. File. Wait: As I type, the Internal Revenue Service is now accepting both snail mailed paper tax forms and 1040s filed electronically. Speaking of electronic taxes, folks eligible to use Free File got…

Remember the warning from the Internal Revenue Service that we taxpayers shouldn't expect much help from the agency this filing season? Budget cuts, said IRS Commissioner John Koskinen, mean fewer staff to answer phone callers questions. Well, the same is true for tax professionals. On Friday, the IRS alerted tax pros that the agency's e-Help Desk hotline is cutting back its hours. The same budget woes that could, according to the most recent National Taxpayer Advocate report, lead to less than half of individual taxpayer calls being answered, also are being blamed for the end of the e-Help Desk's extended…

Today's big tax news is that Free File is now open to qualifying taxpayers. Fourteen tax software companies are offering their services to help you prepare and file your 2014 federal tax return at no charge. They are, in alphabetical order, 1040.com, 1040NOW, ezTaxReturn, FileYourTaxes.com, Free1040TaxReturn, FreeTaxUSA, H&R Block, Jackson Hewitt, Liberty Tax Service, OLT.com, Tax Simple, TaxACT, TaxSlayer, and TurboTax. Remember, these versions are not the same as the companies' for-sale products, online or on store shelves. They are designed for the Free File program. You can get an idea of what Free File services they are offering at…

I had a great time today talking with all the wonderful folks at Freelance Austin about taxes. The timing was perfect, too. Not only is January the start of the annual filing season for the prior year's tax returns, it's also time to start thinking about moves to make this year to keep your coming tax bill low. And tomorrow, Jan. 15, is the due date for the final estimated tax payment of 2014. Today's Daily Tax Tip has the skinny on filing estimated taxes. Click voucher image for full Form 1040-ES package as PDF from the IRS. Ways to…

About a month ago, Internal Revenue Service Commissioner John Koskinen met with the media and warned that the coming tax-filing season was going to be a pretty miserable few months for both his agency and taxpayers. That same day, Dec. 18, the commissioner sent the same gloomy message to his staff. Now, in what could be one of the worst employee pep talks ever delivered, Koskinen has reiterated to IRS employees the dire outlook for the 2014 filing season. In his latest email to IRS works, sent yesterday (Jan. 13), Koskinen offered "some important new details about what the 2015…

A week from today, on Jan. 20, the Internal Revenue Service will start accepting our 2014 tax returns. I am in far better tax-filing shape this year than I’ve been previously. I finally paid attention to my own advice about getting prepared and organized! I’ve gathered all my preliminary income statements — the hubby’s last pay stub and my invoices for my 1099-MISC earnings — so I have an idea of what we earned. I’ve tallied the taxes we paid, both the hubby’s payroll withholding and my self-employment estimated taxes. And I have a good idea of the expenses we…

The annual tax filing season is here, with the Internal Revenue Service preparing to accept 2014 tax year returns on Jan. 20. Many of those returns submitted in the coming weeks will be the work of paid tax professionals. More than half of U.S. taxpayers hire someone to help fill out and file their 1040s. That number could increase this year, as millions of taxpayers will find themselves having to answer Affordable Care Act questions in order to figure out what they owe, or will get back, from Uncle Sam. The new Obamacare tax wrinkles are just one reason that…

In addition to updating tax forms and instructions and getting its computer systems ready for the Jan. 20 start of the 2015 tax filing season, the Internal Revenue Service has been touching base with tax preparers who've had some recurring problems with some returns. Rather than penalizing the tax pros who have filed questionable claims for clients, the IRS is, for now, opting for pre-season tax filing reminders encouraging more diligence and a little bit of homework. In November 2014, around 2,500 preparers (according to Kiplinger Tax Letter) received letters recommending the recipients, in the IRS' words, "consider taking continuing education…

OK, I swear that I'll quit highlighting the Daily Tax Tip soon. But today's advice on 7 ways to get organized for the tax-filing season is good! It's so good, in fact, that I just talked with a writer at The Street about this important matter. Here's some of our discussion. Old 1040, new filing guide: Start with last year's tax return. It's a good guide/reminder of what's likely to be on your 2014 return if your life hasn't changed that much. There is a method to my personal tax filing madness organization system, honest! It includes rough drafts on paper,…

Yes, it's the holiday season. Christmas is less than a week away, and you've got a house to clean, meals to plan and cook and gifts to buy. But you also need to think about some year-end tax moves. You probably checked out the 10 tax tasks to take care of by Dec. 31 that appeared a few weeks ago as a Weekly Tax Tip. Thanks. Now here's my gift to you, an 11th tax move. Hire a tax professional. True, this isn't one you necessarily need to do by year's end. But you do need to think about hiring…

Well, well, well. I'm going to pull my crystal ball (yes, that's it pictured there) out of storage and dust it off. It seems like I've got a bit of my predictive mojo back. That hasn't been the case very much in recent years, at least not where the U.S. Congress is involved. Remember the estate tax? Nobody, including me, thought those fools lawmakers would let it expire at the end of 2009. But they did. And they took us over the fiscal cliff, albeit only for a couple of days. Still, logical people, who are most folks who don't…

Even if the IRS can get the 2015 filing season started on time, which despite my optimism* is still questionable given the late passage of the 2014-only tax extenders, next year's full filing season is likely to be a rocky one for both Internal Revenue Service employees and taxpayers. *Good News (sort of) Update: The IRS expects next year's tax season to start on time, but still be a mess for other reason. The main reason for potential problems? Not enough workers at the IRS. The IRS employees who are there are it. The agency is freezing new hires. And…

Have you filled up your car lately? If so, you were probably like me. Very pleasantly surprised. Gas prices have been falling. Just last week when I snapped the price board at a nearby station, a gallon of regular was $2.45. That's 15 cents less than AAA's national average price of $2.60 on Dec. 12. And fuel industry experts expect the prices to drop even more. With pump prices the lowest they've been in four years, many say that now is the perfect time to raise the federal gasoline tax. That tax has been 18.4 cents a gallon since 1993.…

The Internal Revenue Service's problems are far from over. The Treasury Inspector General for Tax Administration (TIGTA) is poring over some recently recovered emails to/from Lois Lerner that could (or could not) shed light on the agency's bungled 501(c)(4) nonprofit application review process. Regardless of TIGTA's findings, you can bet Republicans, who will control both the House and Senate in the incoming 114th Congress, will use their combined majorities to keep the pressure on the IRS. And with the tax extenders bill stalled, it's looking more likely that the 2015 tax filing season will be delayed. That's terrible news for…

A lot is going on in the next eight weeks. The holidays are almost here. Got your turkey yet? Made your Santa wish list? Meantime, you're also checking out the year-end tax moves you need to make to ensure you pay Uncle Sam the lowest possible 2014 tax bill. And you need to do some 2015 tax planning. Sorry, but it's true. So this week's By the Numbers figure is 2015 in recognition of the many inflation adjustments that will affect next year's tax bill and tax plans. Back on Oct. 30, I posted next year's ordinary tax rates and…

This post was reviewed and updated Friday, April 27, 2018. I been on a tidying up kick of late. As the before and after photos below show, I finally found my office's floor. The old material at left was filed or tossed. Mostly filed. I also sorted through my grocery coupon collection. Fighting all my hoarder instincts, I threw out old ones, some I've had for decades, finally admitting I'd never use them. I know the employees at my local grocery store will be happy that I won't be tempted by these old savings slips. When I did use a "no expiration…

Back in 1998, one of the provisions of Internal Revenue Service Restructuring and Reform Act called for the tax agency to get 80 percent of its returns electronically by 2007. Targets are all well and good, but as anyone who has dealt with Uncle Sam knows, he tends to run on its own, usually slower, timetable. That's what happened with the mandated suggested e-filing target. The IRS did get 80 percent of individual filers — actually 81 percent — to file electronically, but not until 2012. But since then, the number of e-filing individuals has grown steadily. Through mid-May this…

The year's second tax-filing deadline isn't as much fun as Sharknado 2, but for many taxpayers it can be just as frightening as the campy Syfy channel classic. Folks who've put off filing until the absolute last minute — and I must admit I was one of the millions of procrastinators, filing our 2013 federal return just last week — often find themselves still working on their taxes on Oct. 15. That's OK. You have until midnight local time to e-file it. Or until your post office's last mail pick-up for an Oct. 15 postmark if you're sending paper forms.…

The Supreme Court earlier this month gave same-sex couples the ability to get married in five more states when it refused to hear appellate cases that had struck down the states' bans on such ceremonies. Gay and lesbian couples in Indiana, Oklahoma, Utah, Virginia and Wisconsin lined up soon after the High Court non-ruling to exchange vows. Now the affected state tax departments must adjust their rules to accommodate the newlyweds. Virginia is for all lovers: The Old Dominion's tax officials were quick to act. On Oct. 7, the day after the Supreme Court inaction, Virginia's Department of Taxation issued…

Do you have Columbus Day off? Most office workers do. If you're in the retail business, however, you're probably at work, most likely dealing with customers who are taking advantage of Columbus Day sale bargains. Yep, the running joke is that even the most reverential of federal holidays have in our consumer-oriented society become a way to market products. Although some argue that Columbus Day isn't really a national holiday, Uncle Sam counts it among the 10 federal holidays he recognizes. That's good enough to make 10 this week's By the Numbers figure. But the numeral also gets honored because…

The drop-dead filing deadline for 2013 tax returns is just a few days away. So of course the Internal Revenue Service is putting up a "closed" sign. OK, it's more like a "taking a long lunch" sign. But the bottom line is that many of the agency's systems will be offline starting at 5 p.m. Eastern Daylight Time today. They will stay unavailable until approximately 5 a.m. EDT on Tuesday, Oct. 14. Affected operations include: e-Services Transcript Delivery, Taxpayer Identification Number (TIN) Matching, e-file Application, and Modernized e-file (MeF) and the legacy e-file systems, including both the MeF Production and the Assurance Testing Systems. "This annual…

I filed our 2013 federal tax return yesterday, a whole eight days before it was absolutely, positively due. But some of the 3 million or so filers (out of 13 million who filed for an extension back in April) will wait until Oct. 15 to send their 1040s to the Internal Revenue Service. Most of them already paid their tax bills, or close to what they owe Uncle Sam, when they submitted Form 4868 to get six more months to finishes their paperwork. So those filers don't have to worry about coming up with more, or at least a lot…

Are you frantically trying to finish your 1040 by the Oct. 15 extended filing deadline? Yes, it is just a week away, so you need to get to work. But don't be in such a hurry that you miss out on some tax breaks. There are lots of ways to reduce your tax bill, as this week's Weekly Tax Tip highlights. Some of the 10 often overlooked tax breaks are for itemizers only. Others can be claimed by any filer. Philanthropic filers should double-check their contribution records. You don't want to miss out on Schedule A deductions for noncash charitable…

I finally finished up our 2013 tax return this week. Quick reminder to my fellow procrastinators: You've got to get your 1040 to the Internal Revenue Service by Oct. 15. One of the several reasons the hubby and I (OK, me alone, since taking care of our taxes is my job) put off filing each year is that our returns typically involve a lot of forms. Even with tax software, it takes time to fill them out and I'm usually pretty busy during filing season. One of those IRS forms is Schedule A for itemized deductions. Itemizing still works for…

Welcome to October! Or as I like to call it, TaxtoberFest, a month-long celebration of ways to deal with taxes. OK, maybe it's not as famous as the similarly named OktoberFest. But it could be much more lucrative if you make some smart tax moves to cut your taxes. File by the 15th: The biggie is, of course, the filing extension deadline. I'm serious all you procrastinators — and I was one, too, until finishing our 2013 return yesterday — the Internal Revenue Service will not let you go past Oct. 15. So use the first half of this month…

UPDATE, April 7, 2017: Michael Sorrentino is in tax trouble. Again. Mike, or "The Situation" as he was known when he was one of the stars of the MTV hit "Jersey Shore", and his brother Marc were indicted Friday, April 7, 2017, on additional charges of alleged tax evasion. As noted in this post from 2014, the Sorrentino brothers were indicted in 2014 for tax offenses and conspiring to defraud the United States. Under the new charges, Michael now also faces charges of tax evasion and structuring funds to evade currency transaction reports. Marc is now also charged with falsifying records to…

The good news is that in 2013 the Internal Revenue Service was able to stop $24.2 billion worth of fraudulent tax refunds. The bad news is that in that same year, the IRS still paid an estimated $5.2 billion in fraudulent identity theft refunds. Not to dwell on the negative when the federal tax collector is doing a better job at stopping fraud, but that disturbing fake refund dollar amount is this week's By the Numbers figure. The dubious honor is not only for the $5.2 billion, but also the hassles that the real taxpayers endured because they were victims of ID…

He who controls the purse strings makes the rules. Although this popular quote uses "he" in the general, universal sense to make a money point, the pronoun is the operative word in most domestic violence cases.  Not to get all wild-eyed feminist, but as the recent spousal abuse cases in the National Football League have underscored, women generally are the victims when relationships take a physical turn for the worse. No money, continued abuse: In addition to physical violence, abused spouses and partners also often face financial abuse. The spouse or partner who makes the most money uses that resource to…

It's deadline day for payers of estimated tax. The third installment of these four extra tax filings/payments each each year is due today, Sept. 15. This third 1040-ES payment covers money you got but didn't pay withholding taxes on between June 1 and Aug. 31. Those three months and today's third estimated tax deadline earn 3 the latest By the Numbers honor. But there are other figures that come into account as you figure your estimated tax payments. Amounts used to figure estimated tax: The biggie is your expected adjusted gross income, or AGI, for the year. This includes any salary upon…

Last week I signed onto the Electronic Federal Tax Payment System, known in acronym-speak as EFTPS (eff-tips), and authorized our third quarter estimated tax payment to be made by our bank on Sept. 15. Click image to download full 1040-ES package. I've used EFTPS for eight years and although there were some early bumps, I'm pretty happy with the system. A lot of folks, though, are put off by EFTPS. One of the biggest complaints is that it takes some time for the account to be operational. The IRS has speeded up the process, but if you are thinking today…

Well that was fun. Nineteen tax seminars in a little more than two and a half days. I've parceled out a few Nationwide Tax Forum tidbits, both here at the ol' blog and over at Bankrate Taxes Blog, while I've been in Orlando this week. I promise to review my notes and provide some more substantial session posts in the coming days. In the meantime, let me toss out a thought about what filing or not filing Internal Revenue Service tax returns says about a person. During a session on immigration and taxes, the question was raised as to why someone…

Former Virginia Gov. Bob McDonnell and his wife Maureen are on trial, facing charges of taking $177,000 in gifts and loans from Star Scientific in exchange for promoting the firm's dietary supplements. But the former first couple of the Old Dominion has more than just legal and political troubles. Their 38-year marriage is kaput. That was obvious with the defense's first inkling of how it would approach the case: The couple was so estranged that they couldn't have conspired to do anything. As the trial has progressed, with each spouse fielding a separate defense team, the missus is coming off…

Most of the folks who participated in Pew Research Center's 2014 Future of the Internet canvass said they expect robotics and artificial intelligence, or AI, will permeate much of our daily lives by 2025. If that prediction is accurate — and I think it's a bit too soon, personally; I mean, really, we're still waiting for flying cars! — what does that mean for us and our jobs? "Computers had typically been thought of as best suited for jobs that involve routine, repetitive tasks that can easily be reduced to lines of code," writes Drew DeSilver in Pew's FactTank column.…

Every summer our neighborhood newsletter looks like a mini Craig's List. All the kids are looking to make some money. A day every father dreams of courtesy woodleywonderworks via Flickr CC We have teens and preteens wanting to walk dogs, water plants, do more extensive yard work, tutor (class work and sports skills), scoop pets' poop (this kid will get a real job quickly!), fix computer glitches (so will this youngster) and house, dog and/or baby sit. Hooray for such industrious youth. The Internal Revenue Service is cheering my young neighbors, too. If kids are lucky enough to land a…

The Internal Revenue Service has been encouraging, and in some cases forcing, taxpayers to use electronic options for years. But one area that's slipped through the electronic cracks is amended tax filings. And the IRS' continued old-fashioned handling of 1040X forms could cost Uncle Sam billions of dollars. Taxpayers can amend their previous filings, generally within three years of the original due date, to correct errors or claim overlooked tax breaks. 1040X filings typically are done to collect larger IRS refunds. In fiscal year 2012, the IRS received more than four million amended tax returns. A review by the Treasury Inspector…

Did you have a great three-day Fourth of July weekend? Fantastic! Now it's time to focus on taxes. Really. Don't act so surprised. Yes, it is summer. But you did click over here to the ol' tax blog. Photo courtesy of Camp Laurel, Maine And I know you know that taxes continue well beyond the traditional filing season. So don't let more days slip by without making some midyear tax moves that could help keep you on the Internal Revenue Service's good side an help reduce your upcoming 2014 tax bill. Here are five easy tax tasks to take care…

How's your Friday the 13th going? I hope you're not too friggatriskaidekaphobic because today actually is pretty cool. Black cat, Groucho Marx quote poster courtesy Just Cats Today's (Jan. 13, 2014) Friday the 13th coincides with a full moon. It's the first time in nearly a century that this has happened. The moon actually was at its peak at 12:11 a.m. Eastern Time. JAN. 13, 2017, MOON NOTE: In January 2017, the moon technically hit its full phase at 6:34 a.m. Eastern Standard Time yesterday, Jan. 12, 2017. But it will still be pretty bright on this Friday the 13th night.…

We're well into the second full week of June and you know what that means. Yes, it does mean that time flies, regardless of whether you're having fun. And yes, it also means that parents must figure out ways to deal with kids who are now out of school. But it also means that it's time to pay the year's second estimated tax installment. Click image to download the 2014 Estimated Tax package from IRS.gov This week's Weekly Tax Tip looks at what's involved with these four extra tax payments that lots of folks have to make. Who has to…

The Internal Revenue Service today officially adopted a 10-point Taxpayer Bill of Rights. Too bad for the tax agency that it wasn’t put in place sooner. The National Taxpayer Advocate says that the document could have helped IRS employees avoid problems in their review of Tea Party and other organizations’ applications for nonprofit tax status. The rights, already guaranteed taxpayers but spread throughout the Internal Revenue Code (and IRS documents), are now conveniently encapsulated in the updated IRS Publication 1. It says all taxpayers have the right to: IRS Commissioner John Koskinen and National Taxpayer Advocate Nina Olson jointly unveiled…

Are we just a bit too paranoid in the wake of the Edward Snowden National Security Agency revelations? Maybe. Maybe not. Take taxes. (Please! Rimshot.) Social media tax cheating clues: As almost 132 million of us were sending in our federal tax returns on April 15, reports resurfaced about the Internal Revenue Service using online activity trackers to sift through the mass amounts of data available on the Internet. This Web-based information, according to Marketplace, supplements what the tax collector already knows about us, including our Social Security numbers, health records, banking statements and property. "It appears from its public…

The names are pretty self-explanatory. The Stop Wasteful Federal Bonuses Bill. The No Bonuses for Tax-Delinquent IRS Employees Act of 2014. And the pull-no-punches, No Bonuses for Tax Cheats Act. Those are just a few of the bills introduced this week by members of Congress from both parties who are unhappy with the answers they got from Treasury and Internal Revenue Service officials about $1 million in pay awards to just more than 1,000 tax agency employees who had trouble paying their own taxes. Overall, more than 2,800 employees with conduct problems received added compensation, according to a report issued…

May is here. Finally. After a long and brutal winter, May's flowers and warmth are very, very welcome. So are the many May Tax Moves that we can make in the next few weeks. Let's start with the obvious. If you didn't file your 2013 tax return or request an extension to file by April 15, file that 1040 ASAP. If you need help, it's also a great time to hire a tax professional. If you did get six extra months to file last year's taxes, this is a good time to take care of that task or at least…

If you just discovered an error on an old tax return, you might be able to correct it. All you need is Form 1040X … as long as the mistake was made on a return you filed within the last three years. Click image for PDF download of full Form 1040X. Details on filing an amended tax return, which is what you'll do with Form 1040X, are found in the Weekly Tax Tip. I'll let you check out the full tip at your leisure, but here are five key things to keep in mind. First, note the three-year time limit to…

All in all, it was a pretty uneventful tax filing season. The relatively smooth 2014 filings probably are due in large part because we taxpayers didn't have to deal with last-minute changes by Congress in tax laws. That's also probably why the number of returns that the Internal Revenue Service reported receiving a few days after the April 15 deadline, was slightly ahead of last year's filing pace. IRS numbers crunchers report that as of April 18 the agency had received more than 131 million returns. That's 0.7 percent more than at that time last year. The increase that the…

Just days before the April 15 filing deadline, the Internal Revenue Service reported that most taxpayers had already submitted their returns. Of the almost 113 million returns the IRS had in its hands on April 11, more than 85 million resulted in refunds. The latest federal tax refunds are a bit bigger than those received by players of early Monopoly games. The average refund amount as tax-filing season was winding down was $2,751. That's slightly larger than the average refund a year ago. It's also this week's By the Numbers figure. Have your received your refund from Uncle Sam yet?…

Almost 40 million people age 65 or older currently collect Social Security benefits. Vice President Joe Biden is one of them. The 71-year-old veep also is among those who pay income tax on at least some of their federal retirement benefits. Vice President Joe Biden meets with the original six "Rosie the Riveters" who worked in a shipyard during World War II. They, like the veep, are eligible for Social Security benefits. (Office of the Vice President photo.) That revelation was one of the things we learned with the release of the president's and vice president's 2013 tax returns. Barack…

Last week, millions of us filed our 2013 income taxes.  So what are Uncle Sam's plans for our money? Several groups crunched the numbers and offer a look not only at the overall federal spending, but online tools with which we can get an idea of how much our specific tax bills are spent on which programs. The National Priorities Project created the dollar graphic below showing how one dollar in taxes is was parceled out in fiscal year 2013. Social Security and Medicare taxes are not included. Since we all paid more than $1 National Priorities also created an…

April 15 came and went without you. Maybe you had a good excuse for not filing. Much better, I hope, than this guy's glib offering at Twitter's #TaxDayExcuses: The nonfiling excuses are still coming in today over at Twitter. Go ahead and enjoy reading them. But if you are part of that group, you also need to do something about your oversight ASAP. Accruing costs: The bottom line is that despite your reasons for neglecting your Tax Day duties, it's likely costing you. When you don't file your annual federal tax return — and pay any tax due — by…

I’ve occasionally jotted a note on a 1040. Usually it was to bring Internal Revenue Service attention to an attachment I included or to explain why an examiner might find an entry, shall we say, intriguing. But for the most part, I don’t carry on written conversations with the tax man or woman. Donald Rumsfeld, however, takes a different position. The former secretary of defense who most recently served in the George W. Bush administration apparently writes a letter to the IRS each year and sends it along with his tax return. We know this thanks to Rummy’s announcement on…

For most of us, tax filing season 2014 is over. Around 10 million of us, however, asked the Internal Revenue Service for more time, up to Oct. 15, to send in our 1040s. And taxes are a constant consideration, especially if we want to make sure we pay Uncle Sam the smallest possible amount. So the Weekly Tax Tip is back! Every Wednesday, starting today, April 16, and going through the end of the year, you'll find a featured tip in the upper right column of the ol' blog. Check it out for ways to finalize your 2013 return if you…

April 15 is finally here! You can celebrate after you file something. As today's final 2014 filing season Daily Tax Tip points out, you have two choices as to what to send the Internal Revenue Service. You can finish and file your 2013 tax return. Or you can submit an extension request. Choose one option or be prepared to pay the IRS more money. Uncle Sam is serious about getting some sort of official document from you today. He actually has stiffer penalties for not filing than not paying. So get to work on one or the other. Timely filing: The…

It’s one day until the tax filing deadline. Are you panicking yet? Don’t. You’ve got time. Technically, we have a day and a half (sorry for not posting sooner; one of those crazy days) to get our returns done — and by “we,” I mean all y’all planning to send in a 1040 because I’ve already filed an extension. The Internal Revenue Service accepts as timely filed returns that are postmarked or e-filed by midnight April 15 local time, so that gives you today and tomorrow. To help you cope with any still pending tax issues (remember, tomorrow is the…

Despite shutting down its system completely for most of last week after the Heartbleed bug was revealed, the Canada Revenue Agency (CRA) says that the ID numbers of around 900 people were stolen. The national tax agency reopened its computer systems Sunday, April 13, after applying a patch for Heartbleed. But before that was accomplished, the breach allowed the unauthorized access to the 900 CRA accounts. CRA Commissioner Andrew Treusch today released a statement regarding the unauthorized access to the tax system: "Regrettably, the CRA has been notified by the Government of Canada's lead security agencies of a malicious breach of taxpayer…

Good news, Canadian taxpayers. Canada Revenue is back! Canada's taxpayers normally don't have to file their annual tax returns until April 30. Still, our neighbors to the north lost almost a week of tax services when their version of the Internal Revenue Service shut down last week to ensure its online offerings weren't vulnerable to the Heartbleed bug. Canada Revenue Agency (CRA) officials, recognizing the problem that the closure might have caused some taxpayers, is letting individual taxpayers file this year as late as May 5. Those extra days equal the length of the interruption of the national tax agency's…

The hubby and I typically owe Uncle Sam every April 15. Usually not much, but some. We also tend to file for an extension. This is because I fill out our joint return and I have other things taking up my time during the first three-and-a-half months of the year. The six-month delay afforded by submission of Form 4868 also gives me, a sole proprietor, extra time to max out my prior-year contribution to my self-employed retirement account. If you are in the same do-it-later situation as the hubby and I, welcome to a pretty large club. Around 10 million…

Thank you, thank you very much. OK, Internal Revenue Service Commissioner John Koskinen didn't exactly do his best Elvis Presley impersonation. But the sentiment was there in the email that the IRS chief sent Friday, April 11, afternoon to the overall tax community. Many tax professionals say it's the first time they can recall such a thank you being sent by IRS brass to all those involved in getting returns completed and submitted. Here's Koskinen message: "With the end of the filing season just a few days away, I want to take a moment to thank all the tax professionals and…

This old clip from The Simpsons highlights why most of us nowadays, even after the Heartbleed bug online security scare, are e-filing our annual tax returns. Ned Flanders, Homer Simpson & Taxes from Brent Mowery on Vimeo. If you're not an early filer like Ned Flanders and are still working on your return (or plan to this weekend) so you can get it to the post office on April 15 or, more likely, hit "enter" on your keyboard by that day, the Daily Tax Tips could help. Feel free to peruse them all; they started Jan. 6 and will wrap…

As of the end of March, more than 90 percent of taxpayers who had submitted their 2013 federal returns — around 82 million filers — did so electronically. In the wake of the Heartbleed Internet security concern, however, the millions of us who will be finishing up our 1040s in the next few days are a tad concerned about joining the e-file ranks. In case you've been diligently working on your taxes and missed the news, the Heartbleed bug affected the encryption tool OpenSSL that is used by around two-thirds of all websites to secure their customers personal information. Yep, apparently…

Just when you thought tax season couldn't get any crazier, computer problems are plaguing the U.S. and Canadian tax agencies. Let's start below the 49th parallel because as much as I love our neighbor to the north and my Canadian readers, I focus on U.S. taxes and our tax deadline is next week. The Internal Revenue Service is in the same predicament as many computer owners, both individuals and businesses. It still has machines running the Windows XP operating system. The 12½-year-old computer operating system is now officially dead. Sure, it's still on machines, but Microsoft ended free support and security…