Tax season is done for most filers. We’ve made it through April’s main Tax Day, and this week’s extension filing deadline.

Missing a deadline can be frustrating. Missing a tax deadline also can be costly, thanks to penalty and interest charges. (Photo by Anton Malanin on Unsplash) In most cases, if you missed the Oct. 15 tax extension deadline and didn’t owe any tax, then you don’t have to worry about penalty and interest charges. Those are calculated based on the amount of tax due. The late payment penalty is 0.5 percent of your unpaid balance per month or partial month, capped at 25 percent. The failure-to-file penalty is even steeper. It’s 5 percent of unpaid taxes per month or partial…

Updated, Tuesday, Oct. 15, 2024 Tuesday, Oct. 15, is Tax Day again, this time for most taxpayers who got an extension to file their annual tax return. (Photo by Nataliya Vaitkevich) Another Monday holiday has come and gone. At the federal level, yesterday was Columbus Day. But some states and localities instead celebrated Indigenous Peoples' Day. Even the White House recognizes both, issuing separate proclamations for Christopher Columbus’ landing in the Americas and the native people already here. Technically, Columbus Day still is a legal holiday, meaning U.S. government workers had the day off and no mail was delivered. But…

Photo by Ketut Subiyanto There’s good news for businesses that filed accurate Employee Retention Credit (ERC) claims. The Internal Revenue Service says it has accelerated work on claims of COVID-19 pandemic tax break and is now processing around 400,000 claims. The eligible filings in that group are worth a total of nearly $10 billion. The tax agency was swamped by ERC claims submitted after aggressive, and some potentially predatory, promoters convinced some companies to improperly file ineligible claims well after the pandemic ended. Some promoters called the credit by another name, such as a grant, business stimulus payment, government relief,…

The deadly and destructive aftermath of Hurricanes Debby, Helene, and Milton, prompted the Internal Revenue Service to designate a new statewide federal tax deadline of May 1, 2025, for various tax filings and payments. Hurricane Milton seemed to take a skull shape in this radar image captured as the storm neared Florida on Oct. 8. (Image from post by @MaxVelocityWX on X, formerly Twitter) After Hurricane Debby made landfall in Florida’s Big Bend on August 5, the state got a brief respite. That changed late Sept. 26 when the same area was the target for Hurricane Helene. Helene’s doubling down prompted…

If that sticky note retirement is your goal, then you need to save as much as possible, especially if you're self-employed. And yes, I did put that note on the board. 😉 (Photo by Kay Bell) Most IRA contributions must be made by April’s Tax Day. Unless you’re self-employed and got an extension to file your tax return. That means you also might be able to contribute to, and even establish, a retirement plan for your entrepreneurial endeavor. Here's an overview of some of the more popular, and relatively easy, self-employed retirement plans to which you can still contribute by…

UPDATE, Sunday, Oct. 27, 2024: The Internal Revenue Service granted tax relief to taxpayers in Juneau, Alaska, following the early August glacial outburst flooding in that state's capital city and borough. Affected Alaska taxpayers now have a May 1, 2025, tax relief deadline. UPDATE, Friday, Oct. 11, 2024: The Internal Revenue Service has granted tax relief to all Florida individual and business taxpayers in the wake of Hurricane Milton, which struck the Sunshine State's Gulf Coast on Oct. 9. In addition, the IRS also today announced disaster tax relief and a Feb. 3, 2025, deadline for individuals and businesses of the San…

If you have a big heart like the Tin Man in The Wizard of Oz classic movie, consider helping out fellow taxpayers as a volunteer during the coming tax-filing season. Volunteering is getting a lot of attention right now, as people are doing what they can to help each other in areas ravaged by Hurricane Helene. These good deed doers are as critical as the official government and organized philanthropic organization workers. The Internal Revenue Service also depends on volunteers every filing season. They are the IRS-trained people who staff Volunteer Income Tax Assistance (VITA) and Tax Counseling for the…

Getting mail delivered to your home is convenient. But even individually locked boxes, like these in this community collection area, are not safe from mail thieves. The Internal Revenue Service last week reaffirmed its commitment to modernization, specifically giving taxpayers more digital options, when it announced 24 states will be part of its Direct File program. Direct File is the IRS’ own tax preparation software that eligible taxpayers can use to prepare and electronically file their annual federal tax returns for free. The key for users is free. From the IRS' perspective, a more important part is electronic filing. More…

Updated, Jan. 10, 2025: In announcing the start of the 2025 tax filing season today, the Internal Revenue Service also noted that another state, Illinois, has joined Direct File. This brings to 25 the number of participating jurisdictions, more than double those during the 2024 pilot program. Four more states — Alaska, Idaho, Illinois, and Kansas — will join the Internal Revenue Service’s Direct File next tax season. They join Connecticut, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin, who earlier this year joined the IRS-created-and-operated free online tax preparation and e-filing program. These 13 new…

National Oceanic and Atmospheric Administration/National Weather Service The people whose lives have been devastated by Hurricane Helene obviously are not thinking about taxes. But the Internal Revenue Service has acted to officially ensure that they don’t have to worry about this for a while. The IRS has announced disaster tax relief for all individuals and businesses in seven states that were affected by the deadly hurricane, which made landfall in Florida’s Big Bend as a category 4 and then proceeded to wreak havoc across the south. Major disaster declarations have been issued by Federal Emergency Management Agency (FEMA) for the…

Updated Oct. 3, 2024, to include tax relief in newly declared major disaster areas. Photo by Vlad Chețan October is a scary month. Of course, there’s Halloween. As an adult, I’ve learned one of the most frightening things is a bad Oct. 31 costume party! It’s also the time of year when weather turns colder, sending a chill along the spines of those (me!) who prefer warmer weather. And scariest of all, it’s the start of the final quarter of the annual tax year.  If you got a filing extension, you’ve got to face your fears and submit that extended…

Even the Internal Revenue Service has acknowledged the Employee Retention Credit (ERC) claim process has been beleaguered by fraud and abuse. That’s why the tax agency stopped accepting new ERC filings last year, and has focused on working through existing claims. While some ERC claimants have received tax credit money for keeping staff on payroll during the height of the coronavirus pandemic, others are getting bad news from the IRS. Their ERC claims have been denied. The unwelcome word is arriving as IRS Letter 105-C. The mailed correspondence means the IRS has found the claim ineligible, and has disallowed, or…

The Internal Revenue Service in 2024 offered some U.S. taxpayers a new, online, free way to complete their tax returns and e-file them. The option, known as Direct File, is IRS-created and operated tax preparation software. Eligible taxpayers can use Direct File and avoid having to pay for commercial tax software. For the first Direct File tax season, 12 states participated in the pilot. The Treasury Department and IRS evaluated results in those locations and in May announced that Direct File would be a permanent tax filing option. Federal tax officials also invited all the other states to join Direct…

Regular readers already know this, but since the college and professional football seasons are underway, and we’re about to head into Major League Baseball’s playoffs, it’s time for a reminder. Any winning sports bets are taxable income at the federal and most state levels. Sports betting’s growth: More of us are pocketing a few extra dollars after the games since the U.S. Supreme Court in 2018 ruled that states can decide whether to allow gambling within their borders. That includes online betting. Currently, 38 states and the District of Columbia allow some form of sports betting. Twenty-seven of those states…

If only online privacy was as easy as posting a sign. (Photo by Connor Danylenko) Do you look at your overflowing email box (OK, maybe that’s just me) and wonder why in the heck am I getting all this unsolicited crap? It’s probably because you checked, or didn’t check, a box when you went to some website. You either directly or implicitly consented to let that site pass along your email to “partners” who are now inundating you with unwanted email. That’s a tax issue, too, according to the Treasury Inspector General for Tax Administration (TIGTA). In a just released…

Will the federal government be open or closed on Oct. 1? We should get an idea this week as Congress considers yet another short-term funding bill for Uncle Sam's operations. (Open and Closed sign photos by Tim Mossholder) Here we go again. I wish I was talking about the great Ray Charles’ version of that classic song, but alas this post’s focus is, again, on a possible federal government shutdown. That could happen, at least partially, if Congress and the White House don’t agree on a funding measure beyond this fiscal year, which ends Sept. 30. Without money, Uncle Sam…

Photo by Francisco De Legarreta C. on Unsplash Owing a big tax bill is a terrible feeling. The only thing worse is not being able to come up with the money to pay Uncle Sam. The Internal Revenue Service offers some solutions. You can pay over time by setting up an installment plan with the tax agency. Sometimes, even spreading out payments isn’t enough. Dealing with a huge tax bill: If your tax debt is so large that you know you’ll never be able to pay it all, you can turn to an Offer in Compromise, or OIC. By submitting an OIC…

Unsplash+ in collaboration with Getty Images Congressional proposals to exempt gratuities from income pop up periodically, usually in election years. It’s happening again in 2024. Republican presidential nominee Donald J. Trump suggested tax-free tips during a June campaign stop in Nevada, where workers in tourist meccas like Las Vegas depend on the added income. Vice President Kamala Harris, the Democratic counterpart hoping to hold the White House for the party, endorsed easing taxes on tips in August. So, of course, lawmakers on Capitol Hill got in on the tax-free pledge. So far, bills to exempt tip income have been introduced in the…

Photo by Mikael Blomkvist The third estimated tax payment deadline was Monday, Sept. 16, but today the Internal Revenue Service eased the minds of some Pennsylvanians who missed it. The IRS announced that taxpayers in areas of the Keystone State that were deluged by Tropical Storm Debby as it moved up the country’s east coast are eligible for a variety of tax relief. They’ve been given until Feb. 3, 2025, to meet a variety of tax filing and payment deadlines, including this week’s estimated tax due date. You can read more about the tax relief for storm-affected Pennsylvania individual and…

It’s not unusual, especially here in Texas, for undocumented workers to be employed in industries that depend on manual labor, such as agriculture or construction. (Photo by Zohair Mirza on Unsplash) …“They’re eating the dogs” is now forever part of U.S. presidential campaign lore, for worse or worst since there’s no better take. Following Donald J. Trump’s exclamation of a false social media rumor of pet deaths in Springfield, Ohio, during his Sept. 10 debate last week with Kamala Harris, the municipality about half an hour northeast of Dayton has encountered much unwanted attention. It has included bomb threats to…

The Tax Glossary debuted on the ol’ blog in 2007. Since then, it’s gone through numerous updates and formatting changes, resulting in this version, which wraps up with tax and financial terms for U through Z.

The Tax Glossary debuted on the ol’ blog in 2007. Since then, it’s gone through numerous updates and formatting changes, resulting in this version, which covers tax and financial terms form P through T.

Photo by Alan Cleaver/flickrCC …As noted in the first section (tax terms A through E) of the ol’ blog’s Tax Glossary, trying to decipher the Internal Revenue Service forms and instructions is one of the hardest parts of filing your annual return. You practically have to learn a new, tax-specific language. But Don’t Mess With Taxes is here to help. I’ve gathered some common tax terms and phrases and their plain English meanings in this Tax Glossary. Since the tax code is huge — and keeps growing, thanks (no thanks!) to Congress’ continual fiddling — the amount of tax terms…

The Tax Glossary debuted on the ol’ blog in 2007. Since then, it’s gone through numerous updates and formatting changes, resulting in this version, which covers tax and financial terms form F through J.

The Tax Glossary debuted on the ol’ blog in 2007. Since then, it’s gone through numerous updates and formatting changes, resulting in this version. Check it and your tax term knowledge. And let me know if there’s a term you think should be here and isn’t, or you can add to or clarify a definition that is here.

Boo! No, it’s not Halloween yet, but today is just as scary for some. They suffer from paraskevidekatriaphobia, the fear of Friday the 13th. Fear also is often associated with taxes. With another tax deadline on Monday — the Sept. 16 due date for the third estimated tax payment of the 2024 tax year — today is a good time to acknowledge, and start to overcome the associated fears of, some scary tax misinformation that just won't go away. Here are 13 tax misperceptions that once you know them and the right tax moves to make, you can become a…

UPDATE, Sunday, Oct. 27, 2024 — Glacial outburst flooding in Alaska in early August means Juneau filers have a May 1, 2025, tax relief deadline for a variety of tax filings and payments, including September's estimated amount. UPDATE, Wednesday, Oct. 2, 2024 — Deadly Hurricane Helene has changed deadlines for areas in four states — Florida, Georgia, North Carolina, and South Carolina — that earlier were in Hurricane Debby’s path. Instead of Debby’s Feb. 3, 2025, deadline, affected taxpayers in those states now have a later Helene-prompted deadline of May 1, 2025. UPDATE, Wednesday, Sept. 18, 2024:The IRS today announced tax…

NOTE, Sept. 18, 2024: This estimated tax deadline is extended for taxpayers in officially designated major disaster areas. To date, such extensions apply to today's tax due date (and more) in 20 states and two U.S. territories.  Millions of taxpayers will be sending Uncle Sam some more money next week. Monday, Sept. 16, is the due date for their third 2024 tax year estimated tax payment. At least we — yes, I’m a long-time payer of estimated taxes — have an extra day to fulfill this tax obligation, since the regular Sept. 15 deadline is on Sunday. But we all…

Any kind of saving is good, but for your retirement, a better option is a workplace retirement plan or IRA. A new Saver’s Match will help some when it takes effect in a couple of years. (Photo by Diane Helentjaris on Unsplash) The Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted at the end of 2022, includes a notable change in how eligible individuals can collect the Saver’s Credit. This tax credit turns contributions to popular retirement plans, which already are tax-favored, into addition funds. Qualifying lower- and middle-income savers who put $2,000 into an Internal Revenue Service-authorized…

Treasury Secretary Janet L. Yellen speaking at the Austin, Texas, Internal Revenue Service campus Friday, Sept. 6. The Secretary’s remarks included news of progress collecting unpaid taxes from rich nonfilers. (Screen capture from Treasury YouTube video) …The U.S. Treasury’s balance has grown recently, thanks to Internal Revenue Service’s success in collecting from high-wealth individuals who neglected to file tax returns. Treasury Secretary Janet L. Yellen and IRS Commissioner Danny Werfel this morning announced that to date $1.3 billion has been recovered from wealthy nonfilers. The new collection effort, kicked off in 2023 and led by dozens of senior employees, focused…

Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Maryland, where the hubby and I spent our first married years, is our adopted second home. It's also home of wildlife areas like the Jug Bay tidal wetlands pictured above that we frequently visited to watch birds and wildlife. Now, the Old Line State also will be part of the IRS Direct File program. (Photo of Jug Bay Wetlands Sanctuary by Kevans27 via Wikipedia Commons) The Internal Revenue Service continues to make progress in getting states to sign up for Direct File, the agency’s…

So how was your summer? That’s right, it’s that time of year again. The summer break officially ended on Sept. 1 with the arrival of meteorological fall, which runs through Nov. 30. I know, it’s kind of an arcane tidbit, but we have other more recognizable autumnal indicators. Youngsters across the country are back in classrooms. Their parents are back to the 9-to-5 grind after the long Labor Day holiday, with the next extended break not until the holidays. And temperatures here in Central Texas have dropped into the upper 80s! Yes, that’s early fall weather for us. I hope…

However, opponents of the Internal Revenue Service's option that cuts out private tax software companies still aren't convinced of the program's value or security. UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states will be a part of the Internal Revenue Service’s Direct File program next year. When the 2025 filing season starts, more than 120,000 Maine and 600,000 Wisconsin taxpayers and will be eligible to file via the IRS created and managed free, online tax preparation and e-filing option. The potential Pine Tree State and…

Photo by Katt Yukawa on Unsplash Crowdfunding, a personal way of raising money that’s been supercharged by social media’s reach, has tax implications. Most of us are familiar with charitable crowdfunding. Expect to see a lot more of that in the wake of natural disasters, with solicitations by individuals and groups looking for help for themselves or others. In addition to charitable fundraising, there also are lots of online financial solicitations by and for businesses. Regardless of the crowdfunding reason, the Internal Revenue Service notes that distribution of the funds may be includible in the gross income of the person…

If you’ve glanced at the filing extension countdown in the ol’ tax blog’s right column, you know time is running out to file your extended tax return. The incessantly ticking clock isn’t a reason to panic. It is, however, a reminder that you don’t want to push that Oct. 15 deadline. The Internal Revenue Service doesn’t give you any more time to file your Form 1040. So, you should be thinking about finishing up that paperwork now. Here are some tips to help. Gather your filing documents. This shouldn’t be too much of a problem. You probably used the material…

The Internal Revenue Service continues its efforts to get more taxpayers interacting with the agency electronically. The latest move is enhancing business taxpayer accounts. Upgrades for business filers: The business tax account, or BTA, was launched last fall as a way for certain business taxpayers to view and make balance-due payments online. With the latest expansion, an eligible business taxpayer can use a BTA to pay Federal Tax Deposits (FTDs), and see and make a payment on their full balance due. The account is also now accessible in Spanish with more translations planned. Entities that can open a BTA: You…

If you bought your youngsters new back-to-school clothes, you’re probably looking for ways to dispose of the older outfits. Many parents take advantage of hand-me-downs, either within their own immediate family or sharing with other relatives or friends. Others donate the old, outgrown clothes. Giving them to a charity could be a win-win. The nonprofits' recycling not only helps those looking for bargain priced apparel, but in some cases it provides a tax break to filers who itemize. 2017 tax rule changes: That donation deduction, however, hasn’t been claimed as much since enactment of the Tax Cuts and Jobs Act.…

UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. State participation in the Internal Revenue Service’s Direct File slowly keeps growing. Connecticut and North Carolina are the latest states that will allow some of their taxpayers to use the IRS’ direct tax preparation and e-filing online program next year. They join New Mexico, New Jersey, Oregon, and Pennsylvania as new participants during the 2025 tax filing season. Twelve states — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. — were part…

The Nov. 5 election results will help put the fate of the Republican tax reform law into sharper focus. Provisions that affect individual taxpayers will end on Dec. 31, 2025. The next Congress and president will decide which ones will stay or go. Regardless of who wins the U.S. presidency this November, the next occupant's first year in (or return to) the Oval Office will be during a potentially tumultuous year for taxes. That’s because 2025 is when the Tax Cuts and Jobs Act’s (TCJA) individual provisions expire. So, Congress will be working to save or ax, depending on party…

In addition to moving more valid Employee Retention Credit (ERC) payments through the system, the Internal Revenue Service says it has stopped $5 billion invalid claims of the business tax credit. The Employee Retention Credit (ERC) saga continues, this time with some good news for businesses awaiting the benefits of the tax credit. The ERC was created in 2020 to help businesses and their staff stay afloat during the COVID-19 pandemic. But a rash of recent claims, many of them questionable filings encouraged by aggressive ERC promoters, created problems for the Internal Revenue Service and legitimate claimants. The IRS instituted a…

The Internal Revenue Service has been making use of additional federal funds to crack down on tax scofflaws. Notably, it has collected more than $1 billion from wealthy Americans who had, shall we say, neglected to file returns. However, a recent federal oversight office review indicates that the IRS also needs to take a look within its own ranks. Overall, IRS and contractor employees were 95 percent tax compliant, meaning they filed returns and paid (or were paying) due taxes, according to a recent Treasury Inspector General for Tax Administration (TIGTA) investigation. While just 5 percent not filing or paying…

Photo by Yan Krukau Some classes have already started. Others, like those in my local suburban Austin school district, begin next week. And most will be underway by the end of August. So, families are hitting the stores, especially in places with back-to-school tax holidays, picking up the supplies that will help their youngsters succeed this semester. But parents and guardians aren’t alone. Teachers also regularly spend their own money to make sure that their students have a positive educational experience. If you’re one of those educators who’s shelling out your own money for classroom supplies, save those receipts. You…

We had the second U.S. landfall of the 2024 hurricane season today, and federal disaster (and tax) relief is likely to be announced soon. Meanwhile, those who earlier were in the paths of an angry Mother Nature outburst already are facing new tax deadlines, starting with the one this week for those who endured the fires on Maui and Hawai'i's Big Island. The horrific aftermath of the wildfire that destroyed the historic Hawaiian town of Lahaina on Maui last August. (Photo by U.S. Civil Air Patrol via Wikimedia Commons) Hurricane Debby made landfall as a category 1 early Monday, Aug.…

UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states, New Mexico and Pennsylvania, joined Direct File last week. Direct File is the Internal Revenue Service created no-cost online tax preparation program. Eligible taxpayers can use it prepare and then e-file their annual tax returns for free. It is similar to Free File, the IRS partnership with some in the tax software industry, but Direct File cuts out the private sector and allows taxpayers to take care of filing directly with Uncle Sam. When Direct File launched…

August is the month that brings us the sunsetting of summer. But amid the season's waning days, find some time to take care of some tax tasks. (Photo by Kay Bell) It’s August. Already! How did this final summer month sneak up on us, or at least on me? Maybe it was all the other distractions. The presidential campaign has been unusual, to say the least. The Paris Olympics kicked off with a controversial opening ceremony (I loved it!), and still have more than a week to go. Then there’s the unrelenting heat wave across the United States. And, of…

Photo by Marvin Meyer on Unsplash …I was not an early smartphone adopter. Now I’m addicted to mine. Ditto my tablet. But it’s not all fun and games. I now deal with most of my day-to-day life — banking, grocery shopping, paying bills — via apps that make those tasks and transactions easier. The few that don’t (yet) have mobile apps are accessible via my laptop. I may have been late, but I’m definitely not alone in living electronically. We’re why the Internal Revenue Service is working to improve its digital offerings. Moving IRS into modern mainstream: IRS Commissioner Danny…

When the COVID-19 pandemic was at its worst in 2020 and 2021, Uncle Sam offered help to businesses who kept workers on payroll. But the Employee Retention Credit (ERC), like many tax benefits, was complicated. That's led to wrong claims, so the IRS is asking companies to review their claims, both filed or about to be submitted. The Internal Revenue Service says another major announcement about the Employee Retention Credit (ERC), the tax break created to help companies weather the COVID-19 pandemic’s economic challenges, is on the way. But until then, the agency is urging businesses to re-evaluate their filings.…

UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. GOP members of congress and the Internal Revenue Service are on a collision course when it comes to the agency’s Direct File program. Republican Reps. Adrian Smith of Nebraska and Chuck Edwards of North Carolina last week introduced legislation to block the IRS from continuing its Direct File program. Meanwhile, the Treasury Department also announced last week that another state has joined the Direct File program for the coming 2025 filing season. New Jersey is the latest jurisdiction to allow…

Green Dot Corporation, a bank and financial services company that has worked with Walmart, Apple, and the U.S. government, has been assessed a $44 million penalty in connection with years of harmful consumer practices, including some associated with tax refund fees. The Federal Reserve System Board of Governors on July 19 announced the multi-million dollar penalty, and also issued a cease-and-desist order against the company. “Green Dot violated consumer law in its marketing, selling, and servicing of prepaid debit card products, and its offering of tax return preparation payment services,” according to the Federal Reserve statement. Overall, the 18-page order…

UPDATE, Aug. 2, 2024: The The Internal Revenue Service also has granted the delayed Feb. 3, 2025, deadline to taxpayers in separate disaster areas in Kentucky and Missouri.  Tax relief for Kentucky applies to those in 58 Blue Grass State counties who were affected by severe storms, straight-line winds, tornadoes, landslides, and mudslides that began on May 21. Similar tax relief is provided Missouri residents in 15 Show Me State counties that sustained damages from severe storms, straight-line winds, tornadoes, and flooding that began on May 19. The bold-faced links earlier in this update will take you to the official…

IRS urges social media users to give a thumbs down to bad online tax advice, like the non-existent Self Employment Tax Credit.  How do you use social media? I get suggestions from neighbors for home repair services and local restaurants. I also check out cat videos. Way too many cat videos. I also interact with reputable tax pros I know, leading to innumerable interesting and informative online tax discussions. Again, this is with trained tax professionals, whom I’ve known online (and some in real life) for years. I do not, however, use social media to get tax tips from strangers…

Next Monday, July 15, is Tax Day for residents of disaster areas in three states. This tax deadline applies to taxpayers affected by Federal Emergency Management Agency (FEMA) major disaster declarations in parts of Alaska, Maine, and Rhode Island. The disaster areas are listed below. The bold-type state names are links to the Internal Revenue Service's tax relief announcements for each area. The Wrangell Cooperative Association of Alaska Tribal Nation off coastal Alaska. That area was hit by severe storms, landslides, and mudslides that began on Nov. 20, 2023. Eight counties in Maine that sustained damages from severe storms and…

Photo by Leeloo The First Tax scams tend to slow down after the main federal return filing season, but they never go entirely away. That’s still true as we head into the heart of summer 2024. The Internal Revenue Service is warning taxpayers there is a new scam involving the purchase of clean energy tax credits. This latest scheme, like so many, is based on a real tax break. Legal credit, but limited: The Inflation Reduction Act, which President Joe Biden signed into law on Aug. 16, 2022, contained provisions that dramatically changed federal clean energy tax credits. The law…

The Internal Revenue Service’s long-standing goal of regulating noncredentialed tax preparers got some support from the Electronic Tax Administration Advisory Committee’s (ETAAC) 2024 annual report. Such oversight is one of a dozen recommendations in the latest ETAAC document, released June 26. It is one of three suggestions the panel directed to Congress; the remaining nine ETAAC recommendations are for the IRS. ETAAC goals: ETAAC is a volunteer panel established by Congress in 1988 to provide public input into the development and implementation of the IRS organizational strategy for, as the name says, electronic tax administration. To that end, ETAAC researches,…

Update, Friday, Oct. 11, 2024: Following the devastation of Hurricane Milton across central Florida on Oct. 9, the Internal Revenue Service today granted tax relief to those affected taxpayers, giving them until May 1, 2025, to meet a variety of tax filing and payment obligations. In addition, it granted this relief and new May due date to all Florida taxpayers. You can find details in my post on the IRS move. Update, Thursday, June 27, 2024: The Internal Revenue Service today granted tax relief to Mississippi taxpayers in major disaster areas from early-April severe weather in that state. You can…

Celebrating the newlyweds! (Photo by Chris Dickens on Unsplash) You didn’t invite Uncle Sam to your wedding, but he crashed your big day anyway. Chances are, however, you likely won’t know the effects of his participation until you file your first tax return as a married couple. For June brides and grooms, as well as all couples who said or will say “I do” this year, here’s a look some ways your taxes could change. A different filing status. Now that you’re an official, legal duo, you no longer can file your tax returns as single taxpayers. This is the…

Unsplash+ in collaboration with Getty Images Tipping for services apparently is misunderstood, which helps explain why it sparks resentment in some customers, including some of my own family members, I’m sad to say. So I thought I give unemotional artificial intelligence a shot at explaining it. Here’s what ChatGPT says about tipping. Tipping for services typically refers to giving an additional amount of money to service providers, such as waitstaff in restaurants, hairdressers, taxi drivers, or hotel staff, as a token of appreciation for their service. Tipping customs vary widely by country and culture, but it's generally seen as a way…

Unsplash+ in collaboration with Getty Images The Employee Retention Credit (ERC) was created to help businesses stay afloat and keep staff on the payroll during the height of the COVID-19 pandemic. Basically, this tax credit’s benefits — thousands of dollars per employee that eligible companies kept paying — were for the 2020 and 2021 tax years. It has turned into a major tax headache, for both businesses and the Internal Revenue Service. But, says the IRS, it has made progress on evaluating the plethora of claims filed after the pandemic’s peak. And it has some good news for small businesses…

The only thing worse than getting a notice from the Internal Revenue Service, is getting a wrong one. And the absolutely worst IRS communication scenario is getting a mailing that says you owe Uncle Sam when you are sure you paid your tax bill on time. That happened recently to some taxpayers. Now the IRS is trying to ease these individuals’ concerns. Wrong automatically issued notices: “The IRS is aware that some taxpayers are receiving CP14 (Balance Due, No Math Error) notices indicating a balance due even though payments were made with their 2023 tax return,” said the agency in…

Childcare is a must for working parents, but the costs keep rising. A couple of tax credits could help both businesses and parents. (Unsplash+ in collaboration with Getty Images) Youngsters are school-free for the next few months. That means working parents are searching for ways to keep their children occupied. And supervised. Many teenagers get summer jobs. Parents of pre-teens often turn to day camps to fill a few hours each workday. But when it comes to preschoolers, childcare is a year-round concern, and an increasingly expensive one. Rising childcare costs: A recent report from Child Care Aware of America…

It’s not even officially summer yet, and already taxes are intruding on seasonal fun for taxpayers across the United States. Specifically, June 17 is Tax Day for individuals who are in one of three special categories. Since that’s less than a week away, they need to get to work now so they meet the fast approaching deadline. In most cases, missing it will mean owing even more to Uncle Sam thanks to tax penalties and inters that will be added to any tax due next Monday. Estimated taxes: Millions of taxpayers make estimated tax payments every year on income that’s…

Working in a restaurant is a first job for many young people. It’s also their introduction to taxes.

There’s good news for the Internal Revenue Service’s efforts to get rid of as much paper as possible. The agency’s Document Upload Tool, or DUT, recently received its 1 millionth taxpayer submission. The online option lets taxpayers and tax professionals respond digitally to a wide range of tax issues. One of those issues is potentially underreported income, which prompts the IRS to issue Notice CP2000. With the DUT, taxpayers or their preparers can easily scan the material that answers the notice’s questions and electronically submit it to the agency, said the IRS. DUT growth: The upload tool was launched in…

June is here! Summer officially arrives in a few weeks. And many of us already are making vacation plans. Great! Have fun. But also make some time this month to deal with tax tasks. Really. Taxes definitely aren’t a day at the beach, but some summer tax moves can help make next year’s filing easier, and potentially less costly. Here are five tax moves to make, or at least consider, this June. 1. Pay your estimated taxes. Millions of us must make these extra tax payments each year. The payments cover income we get that’s not subject to withholding, such…

The 2024 hurricane season has just begun, but some people are still dealing with disasters from last and earlier this year. Some of them now are facing a June 17 tax filing and payment deadline. Mother Nature has been Mommy Dearest across much of the United States so far this year. Way too many federal announcements and media reports have included the phrase “A historic severe weather outbreak occurred” in 2024, meaning that millions of Americans have found themselves in major disaster areas. And the current hurricane season has just begun! Unfortunately, the disastrous start to this year was a…

Photo by Chris on Unsplash The tax code is complicated. Even for the most basic situations, there are income levels that determine whether you must file, and if so, what your tax rate is. As your life and finances get more complicated, so do your taxes. That’s why most of us depend on tax software to meet our annual filing needs. Even the tax professionals we turn to for added support go electronic, mostly at the Internal Revenue Service’s insistence. But it never hurts to have a least a rudimentary understanding of our tax system. It is our money that’s…

The Internal Revenue Service recommended, and the U.S. Treasury agreed, that the free tax software program created and operated directly by the IRS will be a permanent tax preparation and electronic filing option. Federal tax officials are encouraging all 50 states and Washington, D.C., to join the expanded Direct File program in filing season 2025. UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. All U.S. taxpayers next year could have another no-cost option to prepare and e-file their federal tax returns. The U.S. Treasury Department and Internal Revenue…

UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. It seems the Internal Revenue Service, or at least its Direct File program, has a new public relations agency. It’s a group of Capitol Hill Democrats and Independents. The U.S. Senators and Representatives signed a May 15 letter to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel lauding the IRS free online tax preparation and e-filing option. The Direct File pilot program, created and run by the IRS, was rolled out this filing season in 12 states. When it…

The tornado that struck Afton, Iowa, in Union County on April 26, 2024. That county is one of eight that have been declared major disaster areas, meaning residents are eligible for a variety of federal assistance, including tax relief. (Photo by Dean Baron via National Weather Service) Iowans in eight Hawkeye State counties that were struck by severe storms and tornadoes last month now have until Oct. 15 to file various federal individual and business tax returns and make tax payments. This latest Internal Revenue Service disaster relief applies to individuals and households that live or have a business in…

The Internal Revenue Service announced today an extension of the current Free File program through 2029.

Some of the March 14 tornado damage in Indian Lake, Logan County, Ohio. (Photo credit: Indian Lake Chamber via Facebook) During the evening of March 14, supercell thunderstorms dropped numerous strong tornadoes across western and central Ohio. By the time things cleared, the deadly twisters also had left trails of destruction across the Buckeye State. The National Weather Service (NWS) confirmed three EF1 twisters, two reaching EF2, and an EF3 across Ohio. The NWS office in Wilmington, just north of Cincinnati, reported a total of 145 miles of combined tornado tracks across the state. Federal Emergency Management Agency’s (FEMA) investigation of…

The Internal Revenue Service is holding refunds sought by thousands of filers it suspects inflated those amounts by improperly claiming some tax credits. While the IRS sorts through these questionable claims, those taxpayers aren’t going to see any refund money. Not even that amount unconnected to the questionable credit claims. The dubious claims delaying the refunds involve the Fuel Tax Credit, Sick and Family Leave Credit, and household employment taxes. “Scam artists and social media posts have perpetuated a number of false and misleading claims that have tricked well-meaning taxpayers into believing they’re entitled to big, windfall tax refunds. These…

Photo by Karolina Grabowska The Internal Revenue Service is about to turn out the lights on the 2020 tax refund party. The chance to get your part of more than $1 billion in unclaimed tax money ends on Friday, May 17. The eligible refund recipients are an estimated 938,800 folks nationwide who didn’t, for a variety of reasons, file a 2020 tax return during the 2021 filing season. Tax law says nonfilers have three years to file and collect their refund money. So why didn’t their deadline come and go on this past April 15? You might recall that three…

To paraphrase the oft-covered pop song, you fought the Internal Revenue Service law, and the IRS won. But that’s not necessarily the end of the process. You have the right to appeal the IRS’ decision. The agency itself says so in its Taxpayer Bill of Rights. And the IRS has a separate appeals office created to deal with these taxpayer-auditor disputes. There are around 1,500 appeals office employees, most of whom were auditors themselves, and generally have legal or accounting experience. I know. You saw that phrase “were auditors themselves,” and are having second thoughts about appealing your tax finding.…

The bulk of tax season wrapped up on April 15. Many taxpayers will be getting the refunds those filings showed. But some individuals will get a less welcome letter from the Internal Revenue Service. The IRS sends notices and letters when it needs has ask a question about a taxpayer’s federal tax return. The correspondence also could be to let filers know about a change the agency made to their account. Or it could be notification that the taxpayers owes Uncle Sam and needs to make a payment. Regardless of the reason for the IRS mail, there are some general…

UPDATE, Nov. 6, 2025: The Internal Revenue Service’s Direct File is officially dead. Its obituary is a brief statement on the program’s home page. UPDATE, May 28, 2025: The Internal Revenue Service recommended, and the U.S. Treasury agreed, that the free tax software program created and operated directly by the IRS will be a permanent tax preparation and electronic filing option. Federal tax officials are encouraging all 50 states and Washington, D.C., to join the expanded Direct File program in filing season 2025. Among the nearly 141.4 million tax returns that the Internal Revenue Service had received by the week ending…

Almost a year ago, the man dubbed Bitcoin Jesus because he made a fortune as an early advocate of the digital currency, was indicted on mail fraud, tax evasion, and filing false tax return charges. We found out about the $48 million tax evasion and other charges this week when the Department of Justice (DoJ) unsealed the June 2023 indictment naming Roger Keith Ver. He was arrested in Spain based on the criminal charges, and U.S. law enforcement officials are seeking Ver’s extradition. The indictment, announced by DoJ on April 30, alleges that Ver formerly of Santa Clara, California, owned…

Photo by Karolina Grabowska Tax Day 2024 is over for most of us. But Tax Day 2021 looms for some this month. No, we are not in some tax time warp. And no, I did not have an adult beverage with my morning cuppa. The tax reality is that this coming May 17, 2024, is the last chance for almost a million people to get federal refund money they were due back in 2021. These individuals didn’t file a 2020 tax year return three years ago. And those three years are, according to tax law, the time limit they have…

UPDATE, June 28, 2024: Today, the Internal Revenue Service and Treasury Department issued final regulations and other guidance related to reporting digital assets. Beginning with the 2025 calendar year, brokers may be required to report certain information regarding digital asset transactions as outlined in the new regulations set forth by the IRS. This includes filing information returns, providing statements to payees, and withholding on certain digital asset transactions. You can find more in the IRS announcement, and this Marcum analysis. Just days after tax season 2024 wrapped on April 16 for most filers, the Internal Revenue Service already alerted some…

Photo by Leeloo The First You didn’t file a tax return on April 15 and you’re still avoiding the task because you owe more than you can pay. That’s a terrible reason. You actually are making things worse. Penalty and interest charges automatically started running as soon as your tax filing and nonpayment became delinquent on April 16. So you need to act now, first by filing a return, and then by exploring ways to eventually pay Uncle Sam what you owe. Failure to file and/or pay penalty costs: Even if you can't afford to immediately pay the full amount…

Photo by Ahsanjaya You just got your federal tax refund it was not what you were expecting. In fact, it’s much less than the amount your Form 1040 calculations showed. What the heck happened? There are several reason why a refund amount could be less that amount on your filing. The most common smaller refund situations involve math errors in computing your tax bill, or the claiming of incorrect credits or deductions. In these cases, you should have heard from the Internal Revenue Service via a notice about the discrepancy. But another common reason your tax refund is much smaller…

April 15 was Tax Day for most of us. That included President Joe Biden and First Lady Jill Biden, as well as Vice President Kamala Harris and Second Gentleman Doug Emhoff. When Biden and Harris took office, they reinstated the annual tradition of our country's top elected officials voluntarily releasing their tax filings. The 2023 tax year returns of the Bidens and Harris/Emhoff earn this weekend's Saturday Shout Out. You can see the details at the White House's official Tax Returns online page. In addition to this year's filings, there are links to the returns filed by the president and…

Photo by Alexander Grey on Unsplash You made it through Tax Day. Now it's time to store all that information you used to fill out your Form 1040. While it's tempting to just toss it all, don't. It often takes the Internal Revenue Service a while to process filings. The agency could come back weeks, months, or even years from now with a question about an entry on your return. Just to be safe, you need to hang on to some of the material for as long as the IRS has to question your filing. Once that statute of limitations…

Getting a tax refund can feel like it's raining money. (Photo by Eugene Lisyuk) You filed your taxes, and now are awaiting a refund. The Internal Revenue Service's data shows the average it had issued as of April 5 was $3,011. That three grand average is a nice chunk of change. Even a smaller amount is welcome. So, what are you going to do with that money? Everyone's personal, financial, and yes, tax, needs are different. But here are some suggestions for all y'all getting a refund. 1. Open or add to a savings account or emergency fund. I know,…

Photo by Ketut Subiyanto The Internal Revenue Service's big tax party was yesterday and you didn't RSVP. Not even by filing Form 4868 to get an extension to show up as much as six months later. In fact, you didn't attend the Tax Day soiree at all. Maybe you had a good reason for not filing a Form 1040 on April 15. Maybe you simply forgot. Or maybe you started your return and got discouraged. While the IRS won't take your failure to file your return and pay any tax you owe personally, the agency isn't going to overlook your…

Federal tax returns get most of the attention during the annual tax season. That's because Uncle Sam's individual income tax laws apply across the country. But state taxes also are demanded of most Americans. And in most of the 43 states and District of Columbia that tax some type of individual earnings, April 15 also is the due date. No individual income tax states: The only states with no personal income tax at all are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Tax savvy readers probably noticed that the Evergreen State is not on that list. That's because while…

Running out of time to finish (or start) your 2023 tax return? Then get more by filing for an extension. (Photo by Jon Tyson on Unsplash) Put down that tax return. You know you aren't going to get it done by Monday, April 15. Instead, file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This Internal Revenue Service form is the tax procrastinator's best friend, whether you've put off filing because, well, taxes or you're still waiting for some tax statements that arrive annoyingly late every year. Yes, I'm looking at you Schedule…

Tax Day 2024 is Monday, April 15. Have you filed your 1040 yet? By the end of March, the Internal Revenue Service had received more than 90 million tax returns. Sounds like a lot, right? But that's just 70 percent of the almost 129 million returns the tax agency is expecting to get this tax season. So a lot of taxpayers (or their tax preparers) are busy this weekend. Of course, not all those 39 million yet-to-be-filed returns will be finished by April 15. A good portion will be extended, giving the taxpayers (and their tax preparers) until Oct. 15…

Millions of people will be celebrating on Monday, April 15. The arrival of Tax Day means they are done with dealing with the Internal Revenue Service for another year. For many others, however, it’s just the beginning of another round of collections. The annual federal filing (and paying) deadline also is the start of the current year’s estimated tax payment cycle. Extra payments for certain income: The U.S. tax system is pay as earn. That’s taken care via paycheck withholding if you’re an employee. But even if you have a job where income (federal and state, if applicable) tax is…

A scenic overlook is always worth a stop when traveling. But when it comes to taxes, you definitely don't want to overlook tax breaks that could save you money. (Photo by Gary Yost on Unsplash) There are two ways to reduce your tax bill. You can take deductions, which reduce the amount of your money that's taxable. You also can claim tax credits, which cut any tax you owe dollar-for-dollar, and in a few cases get you refund. The options are not mutually exclusive. But they don't do you any good if you don't claim the ones to which you're…

Conversations in American Sign Language (ASL) are common. Getting tax help from preparers fluent in ASL, not so common, despite a large hearing impaired or deaf taxpayer community. (Photo by SHVETS production) The U.S. Census Bureau's 2021 American Community Survey (ACS) says about 3.6 percent of the U.S. population, or about 11 million individuals, consider themselves deaf or have serious difficulty hearing. The Hearing Loss Association of America estimates that 48 million Americans have some degree of hearing loss. Deafness not only affects individuals, but also their families and friends, their jobs, and yes, taxes. IRS options for deaf taxpayers: The…

Doing your taxes can be stressful, but don't add to it by making an avoidable filing error. (Photo by Unsplash+ in collaboration with Getty Images) The tax filing, and paying if you owe, deadline is nearly here. Millions of us have yet to send our 1040 forms to the Internal Revenue Service. So next week is likely to be frantic, especially on the part of taxpayers who are doing their own taxes. This also means that these last-minute filers might make some mistakes as they hurry to get their taxes done by April 15. Don't be one of them. Tax return…

Update, Oct. 1, 2024: The Internal Revenue Service announced today that due to recent terrorist attacks in Israel, the agency is providing additional tax relief to affected individuals and businesses, now postponing until Sept. 30, 2025, a wide range of deadlines for filing federal returns, making tax payments, and performing other time-sensitive tax-related actions. Notice 2024-72, posted today on IRS.gov, covers similar groups but is separate from Notice 2023-71, which originally provided relief to taxpayers affected by the Oct. 7, 2023, attacks in Israel. Natural disasters aren't the only catastrophes that affect taxes. Manmade tragedies also are taken into consideration. The Internal…

Updated Thursday, April 4, 2024 via GIPHY Tax Day is less than two weeks away, but some aren't sweating the April 15 filing deadline. They have more time to complete their tax paperwork and, in some cases, may any associated payments. Here's a look at the special situations where taxpayers have more time to file their federal tax returns. International, including military, taxpayers: When it comes to individual taxes, the tax code doesn't care where you live. If you're a U.S. citizen or resident alien, including those with dual citizenship, you must pay tax to Uncle Sam even if you're living…

Daisies enjoying the result of an April shower. (Photo by Kay Bell) Tax Day is almost here, no fooling! We've readjusted, after the COVID-19 pandemic delays, to having Tax Day fall in the middle of this fourth month. This year, it's officially April 15 again for most of us. So filing our return or extension request by then obviously is a prime focus. But there are some other tax matters to consider or complete this April 2024. Here are six. 1. Finish (or start) your 2023 return. Tax Day is just 14 days away, and the Internal Revenue Service is…

The Nov. 20, 2023, landslide near Wrangell, Alaska. (Image courtesy Alaska Department of Transportation and Public Facilities) Residents of Hawai'ian counties that were devastated by wildfires in 2023 got a bit a good news from the Internal Revenue Service last week. The tax agency now is giving them until Aug. 7 to complete some tax filing and payment tasks. Tribal Alaskans who sustained damages from severe storm-induced land- and mudslides also get more tax time. Their new tax deadline is July 15. As is the usual procedure, the IRS tax relief decisions follow official declarations by the Federal Emergency Management Agency…

Internal Revenue Service Commissioner Danny Werfel speaks to students, faculty, and IRS guests at the Kogod Tax Center at American University in Washington, D.C., about the tax agency’s digital transformation plan.

Most taxpayers have always used the standard deduction amount. That group of filers grew even more after the enactment of the Tax Cuts and Jobs Act (TCJA) of 2017, which dramatically increased the standard amounts. But even if you find the easier standard deduction option the way to file, stop. You might be missing some tax breaks that are available to every taxpayers, both those who claim the standard deduction and those who itemize. All taxpayers can also claim any of the two dozen above-the-line tax deductions for which they qualify. Tax law and form changes: When the TCJA became…

The Internal Revenue Service IRS is expected to process more than 160 million individual and business tax returns this filing season. Through March 15, the IRS had received nearly 71.6 million individual returns. Some taxpayers probably put off filing in the hopes that the Tax Relief for American Families and Workers Act would be enacted by Tax Day. Several of its provisions could help both personal and business filers. Whether that will happen is still unclear, as the tax bill that cleared the House has hit a lot of speed bumps in the Senate. Other taxpayers, however, aren’t that concerned about tax…