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U.S. Navy photo by Mass Communication Specialist 1st Class Patrick Gordon Some veterans who received disability severance payments after Jan. 17, 1991, and included that money as income when they filed their tax returns now are due refunds. The former military members have known since February that they were due money. Now the process of getting it has finally begun. But Uncle Sam isn't automatically sending former troops any cash due from the erroneously taxed payments. The veterans need to file an amended tax return using Form 1040X to claim a disability severance payment-related credit or tax refund. Why now?... Read more →


Has anyone really been as happy as this couple when filing their taxes? The IRS hopes the new, shorter Form 1040 will put smiles on more taxpayers' faces. Did you spend your weekend looking at the new Form 1040, which the Treasury Department and Internal Revenue Service officially unveiled on June 29? I didn't think so. That's OK. Most of us, either individual taxpayers or our tax pros helping us file, don't look at literal paper tax forms any more. We use computer software that walks us through the filing process. Still, it's worth reviewing the new form since it's... Read more →


U.S. Treasury Secretary Steven Mnuchin promised that this week we'd see the new, shorter and closer-to-a-postcard Form 1040. Well, the week's almost over and we're still waiting. However, I'm sure Mnuchin will keep his word and sometime today officially debut the new tax return. My faith is not so much in the Administration's top money man, as it is on the fact that I'll be out of my office and offline most of the day due to some personal business I can't reschedule. I'm good at tax timing like that. At least the proposed changes already have leaked. First came... Read more →


The new postcard-sized Form 1040 isn't nearly as pretty as the vintage Austin, Texas, postcard, reproduced as a mural in the Lone Star State's capital city. The tax postcard also isn't nearly as simple as its smaller size — or the Republicans who've long promised it — would have taxpayers believe. Image courtesy Roadhouse Relics Facebook/Instagram The good news about the new postcard-sized Form 1040 is that it is, as promised, smaller. The bad news is that in condensing the form, the Internal Revenue Service removed many popular above-the-line deductions that survived the actual new tax law itself. That's the... Read more →


The world — OK, U.S. tax world — is anxiously anticipating the shrinkage (yeah, I'm now replaying that Seinfeld episode in my head, too; sorry) of Form 1040. The Treasury Secretary last week promised that by the time the 2019 tax filing season rolls around, the longest tax return, which is filed by 68 percent of taxpayers, will be substantially smaller. The goal is the long-promised size of a postcard. But another Internal Revenue Service form that affects even more folks already has been revised. The IRS earlier this month released a draft version of Form W-4 for the 2019... Read more →


Speaker Paul Ryan touts postcard tax return possibilities after House passage of tax reform legislation last November. (Screen shot from Speaker.gov YouTube video) Every year the Internal Revenue Service makes tweaks to tax returns. Often it's simply updating annual inflation adjusted amounts. Other times it's adding or subtracting a line due to law changes. But for 2018's filing material, there will be large-scale form alterations thanks to the major changes made by the Tax Cuts and Jobs Act (TCJA). Among the new law's modifications for the 2018 tax year will be the actual size of the oldest of the tax... Read more →


They're baaaack! Actually, they never left. They, of course, are tax scammers, who the Internal Revenue Service says have tweaked an old scheme using a form used by international taxpayers and non-resident aliens in their latest effort to steal taxpayer identities and cash. As is the case in many tax scams, the form used in this latest identity theft iteration, the W-8BEN, is real. That's an excerpt of the real IRS document, which is titled Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, below. You can click on it to see the full form at IRS.gov.... Read more →


Click image to watch the Mos Eisley cantina scene, in which these musicians provide the catchy background tune, from the 1977 Star Wars movie that launched the sci-fi film franchise. Merry May 4th. Yes, this is another goofy, made-up holiday, but one that's dear to sci-fi fans (and punsters), particularly those devoted to Star Wars. The film franchise's iconic "May the force be with you" greeting is celebrated each year on the similar sounding "May the Fourth be with you." As a long-time sci-fi fan and a college student who waited in a long line to see the 1977 debut... Read more →


Tax Day is less than a week away. But finishing up your 2017 Form 1040 is not the only tax task facing millions of Americans. Here are 10 tax matters that must be taken care of by April 17. 1. File your 2017 tax year federal tax return. Yeah, I started with the easy (so to speak), obvious one. But it is the reason for the tax season. If you don't get your return into or on the way if snail mailing by Tax Day, the late-filing penalty is 5 percent of the additional taxes owed amount for every month... Read more →


Most taxpayers have never itemized their deductions. And the new tax law that took effect this year will ensure that even fewer filers fill out a Schedule A. By nearly doubling the standard deduction amounts, the Tax Cuts and Jobs Act (TCJA) will prompt more folks to use them instead of messing with the record keeping and extra paperwork itemized deductions require. Plus, as I'm sure you've heard by now, starting with the 2018 tax year and running through, for now, 2025, other TCJA changes will make itemizing even less valuable. The amount of state and local taxes, including your... Read more →


The larger standard deduction under the Tax Cuts and Jobs Act (TCJA) that took effect this year has gotten a lot of attention. One of the big pluses, cite fans of the new nearly doubled standard deduction amounts, is that more people will claim them instead of itemizing tax deductible expenses. But regardless of whether you itemize now, plan to under the new tax law or never ever messed with a Schedule A and don't plan to start, there still are some tax deductions you can claim. They are what are popularly known as above-the-line deductions found directly on 1040... Read more →


Since Congress decided to slip some expired tax breaks into the budget bill enacted earlier today and make them retroactive to the 2017 tax year, some folks will be amending the 1040 forms they've already filed. Ignore that smirking sound loud enough to make it onto the internet. It's the perpetually procrastinating hubby being all smug about how sometimes it does pay to put things off for a while. However, if, unlike the hubby, you don't defer tasks and were an early tax filer who now can claim, for example, the tuition and fees above-the-line tax deduction, you're probably already... Read more →


Every tax season, the April filing deadline gets the most attention. But today, Jan. 31, also is a big tax day. It's when most statements with information you need to complete your Form 1040 (or 1040A or 1040EZ) are supposed to be delivered. Technically, the Internal Revenue Service gives these information statements the same leeway it offers filers on Tax Day. Earnings and other tax-related statements due today are considered on time as long as they're on the way, either electronically (if you agree to that delivery method) or via snail mail by Jan. 31. So if you don't have... Read more →


The 2018 tax filing season officially starts today. Many folks have already filed, by using Free File (which opened on Jan. 12), going with software on their own or turning over their tax material to paid preparers. The Internal Revenue Service will now process all those 1040s that were completed earlier this month and were on hold. If you, however, haven't gotten around to filling out your taxes yet, here's a checklist of what you'll need to accurately and easily complete your return. You might not need some of the stuff noted in this latest checklist. Feel free to skip... Read more →


To err on tax returns is human. To forgive is Xtraordinary, and yes, the misspelling is intentional. Tax law lets us correct mistakes we make on our 1040s via another form, the 1040X. Most people file 1040X, which is known as amending your return, because they discovered they didn't claim a tax break that give them a (or a bigger) tax refund. Of course, since the Internal Revenue Service is involved, there are some rules and certain steps you must follow. Here are five key things to keep in mind if you discover you need to re-do a previously filed... Read more →


Some folks have been asking for clarification on disaster loss claims, specifically with regard to the value of a damaged or destroyed home. A Rockport, Texas, home severely damaged by Hurricane Harvey, which made its first landfall on Aug. 25 at the Gulf Coast town. (Photo courtesy National Weather Service, Corpus Christi, via Twitter) At issue is how a home's fair market value factors into a disaster tax claim. I'm sorry to report that a property's high value — I'm talking for sale purposes, not just your personal appreciation and assessment of the house — won't help you get more... Read more →


All U.S. workers know, simply from looking at their pay stubs, that our tax system is pay-as-you-earn. Our taxes come out of our paychecks as withholding, both for federal income taxes, as well as to cover future Social Security and Medicare benefits. We don't have control over those taxes we pay now for federal retirement and hospital coverage when we're older. But we can — and should — adjust our income tax withholding if there are changes in our lives, such as marriage or a family addition or home purchase that can affect a tax bill, or we're getting a... Read more →


You’ve had enough of being a wage slave. It’s time to start your own business. That means it’s also time to consider the tax implications of becoming your own boss. Here are four tax matters to think about as you plan your move from the corporate cubicle to your own self-employed suite. 1. Select a business structure. How you’ll run your business will affect your taxes. You have several choices. The most common forms (and the federal tax forms required) are: Sole Proprietorship (Schedule C or C-EZ as an attachment to your personal Form 1040, along with Schedule SE to... Read more →


As if you and your tax adviser weren't already crunched enough in April, this filing season there's a new deadline for folks who have money or other assets in foreign accounts. FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), is now due on the regular federal individual tax return's April deadline — that's the 18th this year because the 15th is on Saturday and Emancipation Day falls on Monday, April 17 — instead of June 30 as it has been in previous years. The good news is that your FBAR filing can be extended until October. And... Read more →


You have a mortgage. That home's property taxes are waaaay too big. (Note to self: Protest the appraisal.) And you were really generous. All those expenses probably mean that you itemize instead of taking the standard deduction when you file your taxes. Yes, it's more work, but if you take full advantage of all Schedule A has to offer, it can really pay off. Schedule A (Form 1040) Here's a closer look at what you can claim where when you itemize. Medical and Dental Expenses Being sick sucks. Having to pay a lot of out-of-pocket medical expenses is a pain,... Read more →