This post was updated Friday, April 13, 2018. I admit it. I'm a bit superstitious. I throw spilled salt over my shoulder, knock on wood and avoid walking under ladders, although that last one is because I'm also incredibly klutzy. I do not, however, suffer from paraskevidekatriaphobia or triskaidekaphobia. The first word is the fear of Friday the 13th, the second term is the fear of things or events associated with the number 13. Extra points to anyone who can pronounce either word! Black cat, Groucho Marx quote poster courtesy Just Cats. Joking aside, lots of people do dread 13, especially when their calendar…

Are your kids too old, or think they're too old, to go to day camp? Maybe it's time they got jobs. Summer jobs for teenagers is a time-honored tradition, a first step in the passage to young adulthood. Employment typically ranges from the tried-and-true lawn mowing, baby sitting and life guarding to in-office work as clerks and assistants to helping out mom and dad in the family business. And part of that transition to income earner could, as the Weekly Tax Tip notes, include tax responsibilities for the teen employees. Yep, things can quickly go from being a source of pride — I'm…

The third time is definitely is a charm for the Internal Revenue Service when it comes to bringing bucks back home from foreign tax havens. The tax agency says that its latest offshore voluntary disclosure program, or OVDP which is the term the IRS prefers instead of tax amnesty, has pushed the amount collected in all its efforts to more than $5 billion. In 2009 and 2011, the IRS offered foreign account holders the chance to tell Uncle Sam about their accounts in exchange for lower penalties and the promise of no criminal tax evasion charges. But if folks didn't…

Today's Supreme Court split ruling on Arizona's immigration law isn't going to do anything to quell the debate on this topic, especially in this presidential election year. What's needed is Congressional action on immigration policy, which isn't going to happen in this presidential election. In the meantime, however, some immigration-related tax regulation and legislation is popping up in Washington, D.C. IRS immigration-related regs: First, let's hear from the Internal Revenue Service. The nation's tax collecting entity last week announced interim changes to strengthen its procedures for issuing Individual Taxpayer Identification Numbers, or ITINs. The IRS began issuing ITINs in 1996…

UPDATE: Effective with the 2013 tax year, the Form TD F 90-22.1 has been replaced with an updated form, FinCEN Form 114. You can read more about FBAR and Form 114 here and here. If you have a nice chunk of change in a foreign account, you've got a week to tell the Treasury Department about it. Next Saturday, June 30, is the deadline to submit Treasury Department Form 90-22.1 (TD F 90-22.1), Report of Foreign Bank and Financial Accounts (FBAR). This annual report is required if you have foreign bank accounts or offshore financial accounts or signature authority over such…

Happy Father's Day! Fatherhood generally doesn't get as much appreciation as motherhood. That's understandable. In most societies, moms are more responsible for the daily well being of offspring. Plus, it's a fairly recent development that dads have embraced a more hands-on approach to parenthood. Father and daughter fun by Pink Sherbet Photography via Flickr That behind-the-parenting-scenes style definitely was the case for my dad. Dealing with my brother and me was mainly my mom's job. But we still knew how important dad was to our lives. All those fond memories make me miss dad a little extra when this June…

I know all the careful readers of the ol' blog have already taken note of the left column note that June 15 is a big tax filing day. In addition to being an estimated tax filing deadline, June 15 also is the deadline for U.S. citizens or resident aliens living and working outside the country, as well as military personnel stationed abroad, to file Form 1040. Passport stamps by hjl via Flickr Creative Commons Taxpayers who are out of the country can file online. Those who qualify — individuals with adjusted gross incomes of $58,000 or less — might be…

If your week has been as crazy as mine, then tomorrow's impending tax filing deadline might have sneaked up on you. Don't freak out. You only have to worry about June 15 if you're making estimated tax payments. This extra filing duty, which is this week's Weekly Tax Tip, is required of folks who get income on which there is no withholding, such as self-employment earnings, investment income or even gambling proceeds. In those cases, the filing of Form 1040-ES four times a year is the Internal Revenue Service's answer to the regular pay-as-you-earn system that's generally covered by payroll…

Ginny Hopkins had been waiting and waiting and waiting for her federal tax refund check. After all, $754 was a nice chunk of change and she had some projects that money would pay for. But when the Internal Revenue Service check finally showed up, Ginny got a big surprise. The check was for $434,712. Hopkins, who's worked at Johnny's Downtown in Cleveland for almost 20 years, told the local NBC affiliate WKYC that "I have many best friends now."  Despite fleeting thoughts of using the money for a dream trip to Hawaii or maybe Rio de Janeiro's famous Carnival, Hopkins knew better.…

On June 4, 1912, Massachusetts enacted the first minimum wage law in the United States. The Bay State's wage law was created in response to sweatshops where women and children worked long hours for little compensation. A handful of states soon implemented their own minimum wage laws, but there was no federal minimum income statute until 1933. That year, as part of the National Industrial Recovery Act, a minimum payment of 25 cents per hour for employees was established.  Two years later, the Supreme Court, as it had done in connection to various state minimum wage laws, declared the federal…

Same-sex couples generally must do twice the work at tax-filing time than traditional husband and wife taxpayers. That's because the federal Defense of Marriage Act, or DOMA, defines "marriage" as "only a legal union between one man and one woman as husband and wife." So gay and lesbian married couples must file separate federal returns even though their states allow for a single joint filing. There's also usually a fiscal cost. Not only do the same-sex couples have to pay tax professionals more for the extra work they do. Some of the couples also face higher taxes by not being…

As the April filing deadline neared, I asked did a crook file your taxes? For many folks in Florida, the answer apparently is "yes." A story by Lizette Alvarez in today's New York Times says: With nothing more than ledgers of stolen identity information — Social Security numbers and their corresponding names and birth dates — criminals have electronically filed thousands of false tax returns with made-up incomes and withholding information and have received hundreds of millions of dollars in wrongful refunds, law enforcement officials say. The criminals, some of them former drug dealers, outwit the Internal Revenue Service by…

Today is one of those days that really makes you think twice, or more, about commemorations and the state of today’s world. May 25 is National Missing Children’s Day. It was established in 1983 by President Ronald Reagan. The date was selected because May 25, 1979, was the day that 6-year-old Etan Patz disappeared. Thirty-three years later this week, the New York City police department announced an arrest in this highly-publicized child abduction case. Sadly, Etan’s situation is not an aberration. Thousands of kids go missing every day. Unless you are a parent of a missing son or daughter, there…

Do you travel to other states to do your job? Then you probably know the hassle of figuring out the different state income tax filing requirements. It's often called a jock tax because the taxing practice got a lot of attention by collecting from high-paid athletes and entertainers who play and perform at venues nationwide. But the multiple state tax liability issue applies to all traveling workers. The Mobile Workforce State Income Tax Simplification Act of 2011, H.R. 1864, seeks to make things easier for all such workers and their employers. The bill, introduced by Reps. Howard Coble (R-N.C.) and…

I can't watch Hoarders. First, those people are scary. And their houses are gross. But I also avoid the show because I am a bit of a pack rat and I don't want to be reminded of what could happen if I go over the "it could be useful one day" edge. That said, when it comes to taxes there are some documents you need to keep. Some only need to be stored for just a few years. A few, however, you should hang onto forever. Determining which tax material falls into what category is today's Weekly Tax Tip. Atop…

This post was updated March 30, 2018. When the end of matrimony leads to the start of alimony, each parting partner can feel the tax effects. If you are the ex-spouse getting alimony payments, the money is taxable to you as income in the year it is received. This added income calls for a couple of additional tax considerations for the recipient. In traditional man and woman marriages, this usually meant that the husband made spousal support payments to his ex-wife. But the changing world — including, but not limited to, things like more women working and the nationwide legalization…

Vice President Joe Biden was at it again this weekend being voluble Joe Biden. Appearing on NBC's "Meet the Press" on Sunday, the veep said he is "absolutely comfortable" with same-sex couples getting the same rights at heterosexual married couples. Lucky for Biden, a second top Obama Administration official today deflected some heat from the veep by echoing that position. On the "Morning Joe" program on MSNBC, Education Secretary Arne Duncan said that he supports gay marriage rights. Obviously, the political ramifications are getting all the buzz. But Biden's and Duncan's remarks also offer a chance to remind folks of…

Every year there seems to be a new tax refund horror story. The big one in 2011 was mass delays in processing returns of folks paying back the first-time homebuyer tax credit. There have been some occasional hold-ups on such returns this filing season, but it seems that the Internal Revenue Service's streamlined payback process and changes to the 1040 (enter the payback amount directly on the return and no attachment necessary) have solved a lot of problems, for the IRS and taxpayers. The 2012 filing/refund headache involves Uncle Sam's effort to cut down on tax identity theft and fraud.…

A lot of us have tax filing remorse. No, that's not being upset that we filed. It's wondering whether we could have achieved a better tax bill result if we'd tried a different way of filing. It is entirely possible that using a tax pro instead of software would have given you a bigger refund. Or maybe if you'd used a more expensive tax preparer, she would have found ways to get your more tax savings. Or perhaps a franchise filing operation would have been an economical way to get a smaller tax bill than what you came up with…

Nobody's perfect, especially when it comes to taxes. The Internal Revenue Service keeps track of the top mistakes made each filing season, both by individual filers filling out their taxes on their own and by paid preparers. Yes, even tax pros trip up now and then. And although tax software has been a blessing for many filers, it's no guarantee of a perfect return. The adage garbage-in, garbage-out is the perfect motto for tax time. So it's no surprise that the IRS still sees a lot of mistakes on our returns. Among the most common wrong entries this year are:…

The final tax season grades aren't in yet, but a preliminary evaluation of the Internal Revenue Service's 2012 operations gives the agency a so-so review. The IRS had to deal more returns this year — through early April filings were up 2 percent over last year — but it also encountered more problems early this year in processing the returns, noted The Treasury Inspector General for Tax Administration, or TIGTA, in a March 30 report. TIGTA's examination of the filing season through March 3 revealed that: Early season e-filers experienced delays. The IRS blamed problems with its computer program filters,…

Yes, there is such a thing. And while it's not quite 5 o'clock anywhere in the United States yet, just the fact that it's Tax Day in America makes it worth celebrating. The Income Tax Cocktail is basically a Bronx cocktail (gin, sweet vermouth, dry vermouth and orange juice) with an added dash of aromatic bitters, says home mixologist Nora Maynard. You can find the full recipe in theKitchn. If you're still working on your tax return, I totally understand how the process, especially with the midnight deadline approaching, might indeed be driving you to drink. But I suggest you wait until…

Happy Tax Day, this time for real. This filing season is shaping up like most. A whole lot of us have put off tax filing until the last minute. In 2011, the Internal Revenue Service received more than 145 million individual returns. At this time last year, the federal tax office had in hand only around 97 million returns. Taxpayers are on a bit faster pace this year, with almost 99 million having sent in their forms. But that still leaves more than 46 million of us who have been working on our taxes these last few days. And if historic…

Did you put off filing your tax return until the last minute because you knew you'd owe Uncle Sam? You, my friend, are not alone. Although the vast majority of taxpayers get refunds, there are those of us for whom Tax Day is pay-up day. But if we're short of the cash on April 15 — or this year, April 17 — the Internal Revenue Service does offer us, as today's penultimate filing season 2012 Daily Tax Tip notes, some tax payment options. Short-term installment agreement: While it's true that on Tax Day both your tax return and any tax…

Happy Tax Day! Sorry. I didn't mean to give you a heart attack. But I'm pretty sure that by now every taxpayer knows that this year the tax-filing deadline is Tuesday, April 17. When April 15 falls on a Saturday, Sunday or federal holiday, we get until the next business day to file our returns. So instead of scrambling to get our 1040s filed by midnight today, Sunday, April 15, our federal tax returns normally would be due tomorrow, Monday, April 16. But that's Emancipation Day, a holiday in the District of Columbia. And as we learned when this holiday…

Most taxpayers have multiple taxes to worry about this time of year. At the federal level, in addition to  the 2011 tax year returns, some of us also must pay 2012's first quarter estimated taxes. And as today's Daily Tax Tip notes, most folks also have to file state tax returns. This year that's Tuesday, April 17. Click the map above, from a calendar bought years ago at the Marfa Book Company, for a larger view of Texans' skewed view of the United States. Here in Texas, as well as in Alaska, Florida, Nevada, South Dakota, Washington and Wyoming there's…

The president and vice president released their 2011 tax returns and yes, the Commander in Chief's 20.5 percent tax rate is lower than what his secretary pays. But while he's in the same situation as the man for whom the Buffett Rule is named, it wouldn't affect Obama, at least not this year, because his income is under $1 million. Barack and Michelle Obama's income last year dropped substantially, from $1.7 million in 2010 to $789,674 in adjusted gross income for 2011. Since itemized deductions are no longer phased out, they got the full value of the $278,498 from their…

If last year was the first one in which you worked for yourself, either as your full-time job or by doing some freelance work on the side to supplement your wages, you are likely to encounter a big tax surprise when you file: self-employment tax. Self-employed individuals generally must pay self-employment tax, or SE tax, in addition to the usual federal income tax. Today's Daily Tax Tip looks at SE tax considerations. The SE tax goes toward Social Security and Medicare, similar to those tax amounts that employees see withheld from their working-for-the-man paychecks. In both SE and withholding situations, the…

You put off filing your taxes because you knew you were going to have to pay the IRS. At least Uncle Sam makes it relatively easy, and in a couple of cases fee-free, to pay him electronically. These tax e-payment options are today's Daily Tax Tip. First, here's a look at the e-pay ways that'll cost you: credit or debit card transactions. Service Provider Website and Telephone Convenience Fees on Credit Card Payments Convenience Fees on Debit Card Payments WorldPay US, Inc. payUSAtax.com 1-888-9-PAY-TAX (1-888-972-9829) 1.89% $3.49 WorldPay US, Inc. ValueTaxPayment.com 1-855-9-PAY-TAX (1-855-972-9829) 2.29% $3.49 Official Payments Corp. officialpayments.com/fed 1-888-UPAY-TAX…

If you got a refund from the Internal Revenue Service, you probably filed your 1040 many weeks or months ago. The same is true for folks in the 43 states and the District of Columbia that collect some sort of income tax (mostly on wages, but on some investment income in Tennessee and New Hampshire). But the way that state tax offices deal with refunds is starting to look decidedly different from the federal process. This year, refund recipients in at least five states are getting their state tax cash back in the form of a debit card. That’s right.…

If you still file a paper tax return by mailing it to the Internal Revenue Service, know where you're going on Tax Day. It could save your life. A recent analysis of driving habits on April 15 (or whatever day tax returns must be filed; it's April 17 this year) found that auto fatalities spike on Tax Day. So that your tax-filing trip is a bit safer, use the U.S. Postal Service's online post office locator. You can find the post office closest to you, check out its hours of operation and map a route there. And here are some…

Recent tax policy debate has focused on two proposals: Although these two tax proposals are about different areas of taxation, they share one interesting component. Both are named for a person. Obama was on the road Tuesday (April 10) touting the Buffett Rule, which gets its moniker from financier Warren Buffett. The uber rich Oracle of Omaha ratcheted up the debate over how the wealthy should be taxed with his comments last year about his tax rate vs. that of his secretary. Meanwhile, the current president’s immediate predecessor, for whom our current tax rates are named, was addressing the New…

Three decades ago when I got married, I decided not to change my name. My father-in-law was initially upset that I didn't take the hubby's last name. Then he came to appreciate the surname differences, as it gives him plausible deniabilty when questions of my connection to his family arise. (Kidding aside, we've always gotten along.) My mother warned me it would cause confusion and problems, for me and others. She was correct, but there haven't been any major issues. And I like that I have an automatic indicator that a phone call is from a telemarketer when the person…

One of the most popular tax questions every filing season is "Can I claim my boyfriend as a dependent?" OK, in the interest of gender fairness and not portraying just boyfriends as layabouts, an Internet search shows that there also are a lot of filers wondering about the possibility of claiming girlfriends as tax dependents, too. The answer to each romantic relationship tax query is "Maybe." Who's a tax dependent? There are two ways a person can be a dependent on your tax return. The individual has to be a qualifying child or a qualifying relative. That relative requirement obviously…

A tax audit is among the scariest things in the world. It doesn't matter if it's a correspondence audit, where you and the IRS trade tax information via mail, or a face-to-face encounter with a tax examiner. And the audit process might soon be online. In its effort to do more of its work electronically, the IRS is testing a system that allows taxpayers to get answers to tax questions and problems via live video conferences. CNNMoney reports that the IRS launched the pilot program in 12 locations late last year. Under the system, taxpayers can log into computers with…

The reality is that most of us have to file a tax return. And we must do so this year by April 17. The only consolation is that most who do file a return get a refund. But before you mess with all the forms and schedules, make sure you must send the Internal Revenue Service something. If a few cases, a return isn't required. The IRS has three charts to help us determine our filing responsibilities. Chart A is, according to the IRS, for most people. It breaks down tax filing requirements based on age, income and filing status:…

Two weeks from today, millions of us will be rushing to get something — either our tax return or an extension request — to the Internal Revenue Service. Before you shift into full tax crisis gear, here are a dozen tax blog posts, stories and excerpts from my book that could make the process easier and perhaps a bit less costly: 10 tax law changes that affect 2011 returns 10 overlooked ways to cut your taxes Tax filing preparation checklist Don't deduct that! 5 tests a child must meet to be a dependent Figuring out your filing status Which form…

Smartphones and tablets are the hot technology toys or, depending on your point of view, tools. And the tax industry is trying to take advantage of our love of new gadgets and our tax-filing responsibilities. The New York Times' weekly Most Wanted/Popular Demand feature today examined the top tax-related free mobile apps. As the photo below shows — and yes, it's a scanned image of the print newspaper because, ironically, this item isn't yet on the Times' website — the leading free Apple apps are from the tax prep giants Intuit TurboTax and H&R Block. Android tax apps were a…

It's here. April. The month you've got to file something, either your tax return or an extension request. Even if you ask for more time to get all the I's dotted and T's crossed on your official filing, you'll have to do at least a down-and-dirty return to see if you owe the Internal Revenue Service any money. But don't freak out. Yes. April 17 is drawing near. But you still have time to get your 1040 (or 1040A or 1040EZ) finished. Just don't get in too big of a hurry. That usually leads to costly tax mistakes. Perennial filing…

More of us are using electronic financial transactions and that includes our tax dealings. Millions of us e-file our returns, get our refunds via direct deposit and pay any outstanding tax bills electronically. A popular e-payment method is by credit card. This works for folks who have their credit card balance under control, can pay any charges in full so as to avoid interest and who earn rewards for using the card. Of course, paying your taxes by credit card also will cost you a fee. If you want to electronically pay your tax bill and avoid any extra charges,…

OK, a tax refund is not nearly as big as today's Mega Millions lottery payout, which has now grown to $640 million. But getting some tax cash back from Uncle Sam is a welcome annual ritual for many folks. Yes, the standard spiel now, which I've given myself over the years, is that you should adjust your withholding so you don't give the federal government a year-long interest free loan of your money. The reality is, though, that a whole lot of people like to use over-withholding as a forced savings account. And with interest rates so low on low-risk…

Does doing your taxes drive you crazy? Then you need to meet Willem Buiter. The chief economist for Citigroup says the U.S. tax code almost gave him a nervous breakdown. Buiter recently appeared on Bloomberg Radio primarily to talk about the European fiscal situation. The discussion, however, eventually returned to American shores and Buiter's dismay with the U.S. fiscal system, including taxes. "I had to try and get the data together to give to the person who prepares my tax returns, and I almost had a nervous breakdown collecting the data," said Buiter, who also described himself as a "victim"…

"Is there a 1040 Schedule M form for 2011? I can't find it anywhere. All the Schedule Ms are for 2010 or before," writes blog reader Jeanie. She's not alone in asking this question. I've gotten the same inquiry from a lot of readers. So Today's Tax Tip looks at what happened to Schedule M and the Making Work Pay tax credit for which it was created. The Making Work Pay tax credit is no longer around. That means the Schedule M also is gone. Making Work Pay was replaced in 2011 by the 2 percentage point cut in the…

Many taxpayers are still waiting for their refunds in part because of processing delays caused by Internal Revenue Service changes designed to prevent identity theft and tax-filing fraud. But a recent investigation by the Government Accountability Office indicates that the IRS also needs to be looking inwardly when it comes to tax data threats. The government watchdog office says that despite "numerous controls and procedures intended to protect key financial and tax-processing systems…control weaknesses in these systems continue to jeopardize the confidentiality, integrity, and availability of the financial and sensitive taxpayer information processed by IRS's systems." Computer hacker photo by…

The Internal Revenue Service usually issues weekly statistics during filing season. The details include not only how many returns the agency has received and processed, but also the numbers on electronic versus traditional mail filings, as well as the size of tax refunds, directly deposited or snail mailed, that have been issued. Those figures haven't been posted this filing season. The latest individual filing data report on the IRS site is for the week ending Dec. 31, 2011. That the IRS hasn't been forthcoming with 2012 filing season stats is not that surprising given all the trouble the agency has…

How long does it take you to fill out your tax return? If you are you an average taxpayer, the Internal Revenue Service says it takes you around 22 hours to finish your Form 1040. For 1040A filers, it takes less than half that, just 10 hours. And you only need seven hours to finish a 1040EZ. Bet you are really wishing you had that lost daylight saving time hour back. Me, too. And because the time leap forward costs us an hour during filing season, the 22 hours for finishing up a long 1040 earns this week's By the…

The Internal Revenue Service seems to be making progress on the glitch that's bedeviled its online tax refund tracking system this filing season. Some folks who've been trying to find the status of their tax refunds via the IRS' Where's My Refund tracking tool have been majorly frustrated. In some cases the expected refund dates were much longer than expected. In others, the program said it couldn't find people's 2011 filing information. Taxpayers were getting so angry that the IRS had to admit that the search tool wasn't working and pleaded for patience while the agency's tech people tried to…

And you thought your tax pro was bad! OK, this California accountant wasn't just ticked off at a couple of people he thought were tax clients from hell. The former Internal Revenue Service agent is accused of ordering a hit on at least two former customers as they prepared to testify against him on fraud charges, according to the Associated Press. The two alleged assassination targets reportedly were key witnesses against Steven Martinez, who was charged last year with stealing $11 million by reporting bogus tax returns for customers below their actual incomes and pocketing money from the discrepancies. Martinez…

Sure your 2011 tax return is due in a few weeks, but you might want to put it aside for bit and look at your 2008 records. If you didn't file a return for that tax year, the Internal Revenue Service could have some money for you. In fact, it could be as much as $637 or more. That's the median tax refund amount of all those unfiled 2008 returns, according to the IRS. And that's also this week's By the Numbers figure. Of course, since that's the median amount, your refund could be larger. Or smaller. But every bit…

The IRS has refunds totaling more than $1 billion awaiting claim by around 1 million people who didn't file a federal income tax return for the 2008 tax year. If you're one of them, you must file that prior-year return by this filing season's deadline, April 17. The median possible tax refund from 2008 is $637. But as the list below shows, residents of some states could get more than that … as long as they file their old return by next month's due date.   Number of Nonfilers Median Potential Refund Total Potential Refunds* Alabama 18,400 $641 $15,738,000 Alaska…

Once we're out of our teens, most of us don't look forward to getting older. But at tax time, being a taxpayer of a certain age does have its advantages. Filers age 65 or older get a bigger standard tax deduction amount simply by checking a box on Form 1040 or 1040A. A larger standard deduction amount also is available for taxpayers of any age who are legally blind. Again, all it takes is a quick tick of a box on their tax returns. Today's Daily Tax Tip looks at how qualifying taxpayers can get a standard deduction that could…

Some new Citibank customers got a shock when the financial institution sent them 1099-MISC forms listing a taxable value of frequent flier miles they got for opening their accounts. Now those customers, many of them former customers if you believe their vows to sever ties with the financial giant, have sent Citi a surprise message of their own. They've filed a class action lawsuit claiming that Citibank lured new customers into opening accounts by promising "free" frequent flier miles that actually cost them hundreds of dollars in taxes. Photo by kiwanja/Flickr Courthouse News Service (among others) reports that lead plaintiffs…

We got an extra day last month, but now March is here. Will this be a lion or lamb of a month for your taxes? If you find your tax filing is beastly, there are plenty of ways to tame the process. Consider the many electronic options. Most taxpayers qualify for Free File, the IRS-software manufacturers partnership that provides free online tax preparation and e-filing for filers whose 2011 adjusted gross income (regardless of filing status) is $57,000 or less. If you find you have to pay Uncle Sam this year, one possible online method is via the IRS' Electronic…

Thanks to the baring of personal tax data during the battle to win the Republican presidential nomination, we've gotten good looks at some decidedly uncommon tax returns. Mitt Romney, again the frontrunner after primary victories in Michigan and Arizona, had income of $21.7 million in 2010 and $20.9 million in 2011. But because most of Romney's earnings came from capital gains and his compensation agreement at Bain Equity, which taxed that money as carried interest also subject to the low investment rate, Romney's effective tax rate was just under 14 percent. Newt Gingrich paid around 32 percent in taxes on…

Americans seem to be their most creative when they're doing their taxes. They will try to convince their tax pros and the IRS that a wide range of weird claims are legitimate ways to reduce their tax bills. One area that always gets a lot of envelope pushing is dependents. First off for my friend and fellow feline lover Tracy, I must once again tell you that no, you still cannot claim your cat as your dependent. The answer is the same for dog lovers. Sorry pet owners. Also don't try these wild claims that were caught by members of…

What should we expect from Berkshire Hathaway's corporate tax return? Judging from CEO Warren Buffett's annual letter to shareholders, the filing could make it into the Guinness Book of World Records. In lauding the efforts of many of the company's employees, Buffett cited "the 23 men and women who work with me at our corporate office" and noted how the "group efficiently deals with a multitude of SEC and other regulatory requirements and files a 17,839-page Federal income tax return – hello, Guinness! – as well as state and foreign returns." Yep, the Oracle of Omaha's business return, which is…

Most taxpayers get professional tax help. And there's a lot of advice on how to hire a tax pro that fits your needs. But it's a two-way street. While you must carefully select and check out your tax preparer, the professional with whom you work to meet your tax responsibilities depends on you to get the job done. So today's Daily Tax Tip is the quick list below of ways you can help your tax pro do the best possible job. Be professional: Even if you're a personal friend with your tax pro, tax filing is a business arrangement. So…

OK, the Internal Revenue Service's online refund tracking tool Where's My Refund? is still there at the agency's website. But it just doesn't have correct or up-to-date information for a lot of taxpayers. The refund locator tool problem stems from the same computer upgrades implemented this filing season to stop tax identity theft. As I blogged back in January, the tax anti-fraud IT "improvement" has caused some tax refunds to be delayed. Now that same well-intentioned crime-stopping effort is preventing many taxpayers from even getting an update on the status of their refunds. Yep, technology is great until it isn't.…

Free is good. Free tax help is better. There are lots of good no-cost tax resources via the Internet. To paraphrase the flight attendant spiel as the plane wheels to the gate, I know you have beau-coup options when surfing for tax info. And while I sincerely appreciate all y'all who drop by for the daily posts and tax tips, I'm a firm believer that you can never have too much tax information. So today's Daily Tax Tip is a look at some other ways and places to get some low- or no-cost help when you're working on your taxes…

Rick Santorum, the latest Republican presidential nominee wannabe to give Mitt Romney fits, apparently has had a tax filing epiphany. The former U.S. Senator from Pennsylvania released his tax returns this week. The filings from the last few years show that like most candidates for office, Santorum is sort of rich. On earnings ranging from $660,000 in 2007 to $1.1 million in 2009 to $923,000 in 2010, Santorum paid a tax rate of around 28 percent. That's double the effective tax rate Romney paid on his vastly larger earnings. But Santorum now sees his tax problem. "Look, I do my…

The most romantic day of the year has past. Some folks are very happy today. Others, not so much. If yesterday was a great Valentine's Day and you are now engaged, congratulations! Here's my wedding gift to you: Some tax issues to consider as a married couple. Filing status: The date you choose to exchange your vows will affect your filing status. If you eloped yesterday or are planning to exchange vows soon, then the IRS will likely consider you married for all of 2012. I say "likely" because some of you might find yourself in the same situation as Kim Kardashian,…

It's good to know that most of us are honest, or so we say, when it comes to filing our taxes. Every year, the IRS Oversight Board conducts a Taxpayer Attitude Survey. For 2011, the board found that the vast majority of those surveyed find cheating on taxes unacceptable. That's been the norm over the years. In this latest survey, 84 percent said that it is "not at all acceptable to cheat on one's income taxes." But our honesty has slipped a bit. The 2011 results were down three points from 2010, when 87 percent said that it was not…

NOTE: This post was edited/updated on Feb. 26, 2018, to reflect 2017 tax year numbers and changes coming due to the new tax law's changes for the 2018 through 2025 tax years. Every taxpayer's situation is different, but there are a few tax rules that apply to almost every person who has to file a return. One of the most welcome is the tax exemption. This family will likely jump for joy again when they see how much personal exemptions will save them on their tax return. (Photo by Emergency Brake via Flickr Creative Commons) Like deductions, an exemption helps reduce…

Last year the IRS jumped into the digital tax pool with IRS2Go. This filing season, Uncle Sam has upgraded the app for iPhone and Android. The IRS venture into mobile devices is just one part of the growing tax app world. And a look at those options for filers on the go is today's Daily Tax Tip. IRS2Go 2.0: Let's start with the latest smartphone tax options from the official federal tax office. Watch Us. The IRS videos provide short features on a variety of tax topics. The channel ranks as the fourth most viewed channel among more than 125…

It's a big day in the Silver State. Nevada voters are caucusing to determine how the state's 28 delegates will be apportioned among the Republican presidential candidate hopefuls. Rep. Ron Paul is popular in this western state. The Texas Republican's Libertarian leanings helped him finish second in the Nevada caucuses four years ago, besting eventual GOP nominee John McCain. The road is a little tougher this time. Paul is trailing not only Mitt Romney, who won Nevada in 2008, but also Newt Gingrich. But the 76-year-old candidate is undaunted and doing his darnedest to court Nevada voters. One of Paul's…

You've had a month to think about your taxes. Maybe you've already done them and are waiting for your refund. Good for you and I am very jealous, both that you're done and, despite my frequent admonitions that you should adjust your withholding, that you're getting some cash back from the IRs. But if you're like me, you're still collecting filing data and muttering to yourself, "I'll get to it, I'll get to it." When you do finally get around to filling out your 1040, what method will you choose? Let me and other blog readers know by taking the…

Ah, February. Such a short month, but so many tax moves to make in these 29 days. That's right, 2012 is a Leap Year, providing us with an extra day to go along with the already extended filing deadline of April 17. If you're prepared, you should be able to make each of February's days count toward cutting your 2011 tax bill. There are the perennial tax tasks of making sure you get all the statements you need to complete your Form 1040. And don't forget about adjusting your withholding if you discover you had too much or too little…

Thank you, Citibank, for muddying the tax waters when it comes to frequent flier miles. Folks who opened Citibank savings or checking accounts last year got some airline miles for doing so. Now they're getting some potential tax trouble. The financial institution has sent them 1099-MISC forms, with copies to the IRS, letting the new customers know that the value of the miles they received is taxable income. What the … ? Tax-free miles until now: For ages, recipients of these points for patronizing a specific airline have enjoyed them as a tax-free travel perk. That's because back in 2002…

You're an honest person, right? So you include every penny you make on your tax returns, right? Yeah, I know. But I had to ask. The Internal Revenue Service depends on full voluntary compliance by all of us. And that means reporting all our income, even when we don't get official tax statements listing that income. Technically, a person who pays you for a job isn't required to send you (and copy the IRS) a 1099-MISC if your earnings are less than $600. But that amount applies to the payer's reporting requirement. It has no bearing on your filing requirements.…

Tax refunds via debit cards didn’t work for Uncle Sam last year, but maybe the Empire State will have better luck. The New York Department of Taxation and Finance announced this week that the state’s taxpayers can now choose to receive their personal income tax refunds on a prepaid MasterCard debit card.   Click image to view a video on the NY tax refund debit card option. The option was created to provide folks without a bank account a way to have their refunds directly deposited.  New Yorkers can choose the debt card refund method when they file their tax…

Few folks are as eager as those awaiting a tax refund. Well, there's bad news for some of you early filers. New anti-fraud measures implemented this tax filing season have caused the Internal Revenue Service to be a bit slow in sending out refunds. After getting calls from taxpayers and tax professionals wanting to know why folks were still waiting for refunds — e-filers generally can expect their directly deposited refunds in about 10 days — the IRS announced that the tax cash could be delayed a week because of a new anti-fraud safeguards. Here's the official email word from…

Now we know. The economic downturn also affected millionaire Mitt Romney. Tax data released by the Republican presidential candidate show that he had income of $21.7 million in 2010 and $20.9 million last year. For the 2010 tax year, Romney made public the joint personal tax return he and his wife Ann filed, as well as returns for the Mitt Romney Trust, the Ann Romney Trust, their family trust and the Tyler Charitable Foundation filing. He also released a 2011 estimated return. Details, details: What exactly have we learned from all these electronic pieces of paper? Mitt and Ann Romney are…

There's a lot of talk about hiring a tax professional during filing season. But you also should get expert help any time of the year when your tax circumstances are a bit tricky. Joe Paterno, the former Penn State head football coach of 46 years, died on January 22, 2012 in State College, Pennsylvania. He was 85. His legacy as the winningest coach in college football was tarnished by his inaction in a sex abuse scandal leading to his dismissal in November, 2011. Shown is a statue of him on the Penn State campus on November 10, 2011. UPI/George Powers…

Long-time readers of the ol' tax blog know that in prior tax seasons I conducted several giveaways. That's not happening this year. It's not for lack of opportunity. Neither is it because of issues with the prizes or the companies that made them available. And it's definitely not because I don't love each and every one of you who stops by Don't Mess With Taxes for some tax filing info, tax planning advice or just to catch up on the latest, and goofiest, tax news. It's simply that I'm dealing with some added professional and personal demands this year and…

In 2009, the Internal Revenue Service electronically processed nearly 95.5 million individual tax returns, or roughly two-thirds of all individual tax returns filed that year, according to a Government Accountability Office (GAO) study issued in March 2011 on ways to improve electronic tax filing. In compiling that report, the GAO also noted that the IRS estimated that each e-filed return amounted to a saving of $3.10. That's enough to still get a small cup of coffee in some places. And it is definitely enough to qualify as this week's By the Numbers figure. The precise price comparison is $3.29 to process…

Electronic tax filing began last week. Whether you choose to use Free File, use tax software on your own or seek professional filing help, you still need to do some pre-filing preparation. Today's Daily Tax Tip offers some guidance on how to do just that. Begin by rounding up your tax documents, such as: Last year's federal return. If you live in a state that collects taxes, dig out that old return, too. The personal identification number (PIN) you used to e-file last year. You'll need your PIN or your adjusted gross income (AGI) to verify your identity so you…

One positive thing from the ongoing Republican presidential candidate campaign is the focus it's put on tax rates and income tax brackets. So that you don't have to wonder — or search — as today's Daily Tax Tip you'll find below tables detailing the 2011 and 2012 income tax rates and the amount of income in each bracket to which those rates are applied. The Internal Revenue Code currently has six tax rates. Recent attention has been on the top tax rate, but the lowest one — 10 percent — was created as part of George W's tax cuts. All…

Mitt Romney, still the leader for the Republican presidential nomination, says his tax rate is around 15 percent. That makes sense if you presume (rather than assume, since we all know what happens when we do that!) that most of Mitt's very large (again presuming) income is via investment earnings and/or his Bain Capital carried interest payments. Both of those types of income currently are taxed at a top 15 percent capital gains rate. One of those battling Mitt to be the GOP's eventual White House candidate, Newt Gingrich, released his tax 2010 tax return information. It shows he and…

For all you tax folk in Washington, D.C., mark your calendar for next Wednesday. At 9 a.m. local time that day the Internal Revenue Service is holding its second public meeting on how it can implement "real time" handling of our tax returns. The agency conducted its first public outreach on this topic last month, so this upcoming event earns today's Follow-up Friday honors. As you might recall, IRS Commissioner Douglas Shulman is a big fan of this change which would allow his employees to do upfront matching of tax returns when they are first filed. That would let the…

Welcome to the first day busy tax day of filing season 2012. Today the Internal Revenue Service starts accepting electronically filed returns. If you've already filled out your 2011 return via tax software on  your personal computer, you now can hit "Enter." Or if your 2011 adjusted gross income was $57,000 or less, you now can head to the IRS website and use its Free File program to complete and e-file your taxes. Fifteen companies are participating this year. You can peruse the list or use the program's Help Me Find a Free File Company interactive tool. Finally, don't forget…

The Martin Luther King Jr. holiday has come to mean more than just a break from work. Since the establishment in 1984 of the Martin Luther King Jr. Day of Service in conjunction with the federal MLK holiday, this January day is commemorated by many as a day of personal action in Dr. King's memory. The Corporation for National and Community Service characterizes MLK Day as a day on, not a day off. To that end, the Corporation, a federal agency that coordinates the volunteer efforts of more than five million Americans through Senior Corps, AmeriCorps, Learn and Serve America…

While individuals must wait until Tuesday, Jan. 17, to begin e-filing returns, the Internal Revenue Service has already opened the electronic door for small businesses. In an email to tax professionals last week, the IRS said it successfully completed its annual Modernized e-File, or MeF, system activities and is now accepting tax year 2011, 2010 and 2009 business-related tax returns. So the ol' blog is joining the IRS with a nod to business taxes in today's Daily Tax Tip. Mark your business tax calendar: To help business filers meet all their tax responsibilities and deadlines, the IRS produces an annual…

The first tax filing deadline of the new year is almost here. OK. Technically, it's the final filing deadline of last year. It's time to send in the fourth installment of your estimated taxes. That amount is due on the 15th of January except when, like this year, the date falls on a weekend or federal holiday. Since Jan. 15 is Sunday and Monday, Jan. 16, is Martin Luther King, Jr. Day, all of us estimated tax filers get two extra days to make this payment. Of course, if you plan to file your full 2011 tax return by Jan.…

Sixty-five percent of e-filed tax returns last year were sent in by paid professionals. So it's not surprising that one of the things to look for in selecting a tax pro is that the person you select to do your taxes has received an official Preparer Tax Identification Number, or PTIN. Under new IRS oversight rules, a PTIN is the first step in the agency's effort to make sure paid tax preparers are qualified. What the IRS doesn't specifically say is make sure that PTIN possessing preparer isn't in prison. But perhaps the agency should have included that recommendation. In…

The U.S. Treasury Department hasn't made it official, but there are reports that it won't issue tax refund debit cards this filing season. Last year, the Department of Treasury tried a grand experiment to get tax refund money to people who don't have traditional bank accounts. Known in the financial world as the unbanked, these folks usually get their tax refunds one of two ways: They receive their refund money via a traditional paper check mailed by the IRS, or They utilize tax preparation and filing services that get them their tax money, often time sooner via refund anticipation loans…

UPDATE: See a newer look at Schedule C under the 2017 tax reform legislation in my Feb. 25, 2020, post on Deducting business meals & other expenses on Schedule C. I just ran out to my garage to jot down the odometer reading on my car. I use it for business-related travel and I claim those miles on my Schedule C filing. But I hadn't recorded my annual travel amount until my Twitter buddy CPA Mercedes Infante reminded me. Thanks @MInfanteCPA! Documentation of all your tax claims is critical, but especially so for Schedule C filers. The Internal Revenue Service relies on…

HAPPY NEW YEAR! Oh, sorry. I didn't mean to blast in on you as you're recovering from last night's celebrations. Let me start over, more softly. Happy New Year. Are you ready for 2012? Well, are you at least ready to complete your 2011 tax return that's due this April? That's OK. Me neither. We've got time. In fact, we've got even more time this year. Uncle Sam doesn't expect our 1040 forms until Tuesday, April 17. Why the extra days? April 15 is on Sunday and the following Monday is, as it was last year, the Emancipation Day holiday in…

Those gift packages handed out to the first child born each New Year's Day sure are nice. But if you're hoping your baby might be the recipient of such goodies in early 2012, you might want to change your timing expectations. If your son or daughter enters your life before the ball drops in Times Square, the the new addition will provide you something even better: substantial savings on your 2011 tax return. The full year tax bonus comes because tax law allows parents to claim child-related tax breaks no matter how early or late in the year a child is…

I'm sure that by now all y'all have followed my first piece of year-end tax advice: Do a draft tax return. What? You haven't yet done a dry run to see what you're 2011 tax bill (or refund) might be? I'm as shocked, shocked as Capt. Renault. Well, this time your procrastination seems to have paid off. My tax-blogging colleague William Perez today previews the three major tax preparation software programs' abilities to provide you with an advance look of your 2011 taxes. "Yesterday I sat down to figure out what my taxes might look like for 2011," says William.…

The IRS has cleared one of the biggest hurdles to improving annual tax return processing: technology. That means the agency's goal of a real time tax system is one step closer. The IRS' computer operations have improved enough to allow it to make fundamental changes in how taxes are filed, according to IRS Commissioner Douglas Shulman. The commissioner made that announcement yesterday at the first public hearing on his agency's plan to eventually deal with tax returns in an immediate real time filing system, rather than via notices issued weeks, months and even years later as is the case under…

The IRS wants to deal with taxpayers in the here and now. You say that's what you thought was happening. Not really. Although we filers are very aware of deadlines, like the due date by which we must file our 1040s or estimated tax payments, once the IRS gets those documents, time shifts. Federal tax collectors operate on a "look back" system. Essentially, they don't get around to examining our returns until some time, often a lot of time, after we file them. Back to the tax future: IRS Commissioner Douglas Shulman wants his employees to move to a more…

I got our tax refund this week. I say "I" and "our" because the hubby and I live in a community property state. But even when we didn't, I operated on the practical application thesis that since we were married in Texas, we'd be community property partners regardless of our legal tax domicile. But I digress. No, this post isn't to blast the IRS for not issuing our refund until November. We got an extension and waited until Oct. 11 to get our return on its way to the agency. Plus it was a paper filing because we had to…

What do home foreclosures and credit card transactions have in common? In the wonderful world of Congress and the Internal Revenue Service, a lot. When a housing bill was enacted in 2008 to provide relief to folks facing foreclosure, it included a provision calling for the IRS to keep closer tabs on credit and merchant card, collectively known as payment card, transactions. This reporting requirement also covers third parties contracted by payers. The IRS calls them electronic payment facilitators. You and I know the most popular one as PayPal. The new payment tracking system was devised as a way to…

UDPATED Sunday, Aug. 16, 2020 You just got the biggest scare of your life and it has nothing to do with Halloween. The Internal Revenue Service sent you a notice. Photo by me of a neighbor's yard skeleton Halloween decoration. These letters can indeed be frightening. But don't panic. There are lots of reasons why the IRS is writing. Yes, some notices do request more tax money, but others are less alarming. The IRS also sends out notices to notify you of changes to your return or to request additional information. In many cases, you can deal with an IRS…

Actor Alec Baldwin and Dean Skelos, majority leader of the New York Senate, went at it yesterday over proposals to tax the state's richer residents. There were no physical blows. The heated exchange was via Twitter. The online fight erupted after the avidly liberal Baldwin, Emmy-winning star of NBC's 30 Rock sitcom where he plays a conservative network executive, slammed Skelos, cited by some locals as the state's most powerful Republican lawmaker, after Skelos blasted the actor for supporting higher taxes on the wealthy. The main point of contention was a plan to retain New York's surcharge on top earners,…

Most U.S. taxpayers claim the standard deduction. The figure holds around 70 percent who simply fill in the set amount for their filing status each year. But it's a good bet that many of the taxpayers who are finally getting around to filling out their 1040 today, the final deadline for tax return extensions, also are completing Schedule A. So where do most of the taxpayers who itemize live? Glad you asked. And very glad that the Tax Foundation has the answer in a nifty map format: Click image for a larger map. My former home of Maryland is home…

This is it my fellow tax procrastinators. That extension to file you got back in the spring ends today, Monday, Oct. 17. You've got to get your 1040 to the Internal Revenue Service, or if you send it by traditional mail at least have it postmarked, by today. Even more time for less-than-ideal filing situations: While many of us are scrambling today to meet our filing duties, as I noted in yesterday's filing mistakes post, some folks get a bit more time. Of course, their filing situations are not necessarily optimal. If you've been affected by recent natural disasters, check…

Taxes are confusing, intimidating and generally infuriating. That's why we all try to be done with them as quickly as possible. Even when we get more time to file our returns, when we get around to finally filling out the forms we just want the process to be over ASAP. But don't be in such a hurry that you make preventable mistakes. Before you send your Form 1040 (or 1040A or 1040EZ) off to the IRS, be it by tomorrow's impending extended filing deadline or next April, use this checklist to help you avoid a dozen common tax filing errors.…

Any time you get in a hurry to finish your tax return, be it in April or as the October filing extension deadline nears, you run the risk of missing out on some tax breaks. To prevent that from happening, here are 10 tax breaks, both credits and deductions, that are often overlooked. Make sure you don’t miss them if they apply to your tax situation. 1. Child care costsYou kept track of the after school care for your kids while you were at work. What about this summer? Did you send the kiddos to day camp? That cost also…

The ultimate deadline for filing a 2010 tax return is less than a week away. It's also the last chance to claim the Making Work Pay tax credit. You remember this tax break, right. The $400 tax credit for single filers, double that for married couples filing jointly even where only one spouse had a job. Free money! Yay! Except when it comes to taxes, there is no free money. You have to make sure you qualify and then you have to fill out more tax paperwork. Sometimes it almost doesn't seem like it's worth messing with. OK. I said…