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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 →


Most of us — Internal Revenue Service data shows around 70 percent of taxpayers — don't mess with itemized deductions. Instead this large group of filers claims the standard deduction. It's easy. The amount to claim is based on your filing status and found directly on the 1040 and 1040A forms; it's included with the personal exemption amount(s) on 1040EZ. It's also adjusted annually for inflation, so generally if you make more the next tax year, your standard deduction is larger. But sometimes standard deduction claimants feel a bit left out at tax time, since so much is written (guilty!)... Read more →


Aquarena Springs in San Marcos, Texas, was famous in its heyday, part of which just happened to coincide with my youth, as a wonderful water park. No visit to relatives in nearby San Antonio was complete until we headed to Aquarena to ride in a glass-bottom boat, marvel at the mermaids and cheer Ralph the swimming pig as he made his famous swine dive. Click fish image for full video view of Aquarena Springs from a glass-bottom boat. The park is gone, replaced by a water research program under the auspices of Texas State University, or Southwest Texas State as... Read more →


Are we having tax fun yet? We did for while last night when it looked like we finally might get a look at Donald J. Trump's taxes. OK. We did get to see part of the new president's 2005 tax return, courtesy tax journalist David Cay Johnston and MSNBC host Rachel Maddow. MSNBC hosts Rachel Maddow and Chris Hayes talk Trump taxes on March 14 with Pulitzer Prize winning tax journalist David Cay Johnston. (Click screenshot to view a segment of the Maddow show.) Trump tells tax all? The tax return provides some basic info, but raises a lot more... Read more →


Most folks have their income taxes, both federal and state, withheld from their paychecks. While your employer (or, in many cases, the payroll company it hires) will take care of the amount that comes out each pay period, it's up to you to make sure it's correct. Filling out your W-4: Your withholding is based on the information you provide on Form W-4. The key factor on this document is your number of withholding allowances. The more allowances you claim, the less tax withheld. The reasoning is that you need the money in hand each payday to take care of... Read more →


Hello February. Although you're the year's shortest month, your fewer days can be full of extremes, like snow this week in the Midwest and Northeast and weather warm enough here in Central Texas for us to turn off the furnace and open windows. Image courtesy Tammy King's February Pinterest Board February's changes can be dramatic. But there's no need to over-react to your taxes this month. There are lots of easy moves you can make over the next 28 days. Collect your tax statements: Filing data on a variety of forms is filtering in this month. If you work for... Read more →


The 2017 tax filing season has been officially underway for just more than a week. Lots of folks have already filed their returns. The Ally Bank fortune cookie I got at FinCon16 last September was already planning for this filing season. And yes, after acknowledging the good tax advice, I ate the cookie! And, according to ecstatic posts on social media, some have received their refunds. Other taxpayers, however, are waiting to file. Form-ulaic delay: Why the delay. In a lot of cases, folks haven't yet received their W-2s, 1099s and other documents with the data necessary to fill out... Read more →


Jan. 31 is a key annual tax deadline. It’s the date employers must send W-2 and 1099-MISC forms to folks who received at least $600 in compensation the preceding tax year. Jan. 31 also now is the deadline for employers to also submit that W-2 and 1099-MISC data to the Social Security Administration (SSA). Earlier reporting to fight fraud: In past years, employers had another month to get the data to Social Security. But in an effort to help the Internal Revenue Service fight tax refund fraud, a provision in the Protecting Americans from Tax Hikes, or PATH, Act now... Read more →


Tax filing season 2017 opens today! Yes, that is cheering you're hearing. It's from folks who file their taxes early, usually because they are getting refunds. They also are fortunate that they have all the materials they need to fill out their returns. The key document for most taxpayers is their W-2 form. Employers aren't required to get these out until the end of the month, but some companies are quite efficient. And some taxpayers this year are going to discover something new on their W-2s. Verification code addition: Around 50 million of these officially named Wage and Income Statements... Read more →


Tax filing season 2017 really is here. Some folks have already filed their tax year 2016 federal return (soooo jealous!) even though the Internal Revenue Service won't start processing the submitted forms until Jan. 23. Others of us are still waiting for the tax documents we need to fill out our forms. If you're in the still-waiting group, now's a good time to consider just what you will need to accurately and easily complete your return. To help, here's the 2017 version of the ol' blog's tax filing checklist. It's a good idea at the start of each filing season... Read more →


Donald Trump doesn't move into the Oval Office for 15 more days, but the Republican-control Congress is working on legislation for him to sign into law shortly after he settles into his new digs. Rep. Chris Collins (R-N.Y.) was on CNBC's Squawk Box this week to discuss House efforts to repeal the Affordable Care Act, often referred to as Obamacare. Click image to watch the full interview. One of the president-elect's campaign promises was to repeal and replace the Affordable Care Act, also known (for a while longer) as Obamacare. That won't be easy, either politically and pragmatically. Delayed repeal... Read more →


The first Friday the 13th of 2017 is lucky for some taxpayers. That's the day that Free File once again opens, allowing eligible folks to electronically prepare and file their 2016 tax returns. The Internal Revenue Service hasn't yet issued an official announcement about Free File 2017, but if you peruse the IRS web site (c'mon, I know I'm not the only one doing this!) you'll find the agency has updated its Free File page, a screenshot excerpt of which is shown above. UPDATE: It's official! The IRS says you can now access Free File by going to IRS.gov and... Read more →


The Internal Revenue Service says taxpayers should use any legitimate tax break to which they're entitled to help reduce their tax bills. Professional boxer Floyd Mayweather, Jr., however, seems to be pushing that recommendation. Floyd Mayweather, Jr. fighting Juan Manuel Márquez on Sept. 19, 2009, at the MGM Grand Garden Arena in Paradise, Nevada, just south of Las Vegas. (Photo by Ian McWilliams via Flickr CC) Mayweather, who counts Money among his nicknames (and shows why in his Instagram account), reportedly sent a Las Vegas strip club a 1099 tax form in an apparent attempt to write off a visit... Read more →


If you have substantial funds in foreign bank accounts or investments, you may need to file a Form 114, Report of Foreign Bank and Financial Accounts. And you need to do so by next Wednesday, June 30. That's a firm deadline. No filing extension is allowed. Because of the no-give for this filing, the due date earns this week's By the Numbers honor. FBAR triggers: The filing is known as the FBAR, which is a sort-of scrambled acronym for the form's name. Although the Internal Revenue Service is intensely interested in tracking potentially taxable money wherever in the world it's... Read more →


Early in my career of writing about taxes my shelves and desk and file cabinets and office floor were covered in tax-related magazines, books, brochures and Internal Revenue Service issued tax booklets and forms. Now it's my email box that's overflowing. The world, including the tax world, has gone more digital. Although, as that photo at left shows, I still have plenty of actual tax and finance books (including -- shameless plug alert -- my "Truth About Paying Fewer Taxes" and the "Future Millionaires' Guidebook" that some of my Bankrate colleagues and I wrote) in my office. One group, however,... Read more →


Sometimes you just have to feel sorry for the Internal Revenue Service. The federal tax agency finally brings its Get Transcript online service back fully online after more than a year and BAM! It gets smacked. Click image to go to the new, more secure Get Transcript website. The Treasury Inspector General for Tax Administration today issued a report charging that that the IRS missed some taxpayers whose information fell into criminal hands in last year's Get Transcript hack. What the crooks were after: The online Get Transcript tool, which now requires a tougher, two-step authentication process in order to... Read more →


It's been more than a year since hackers were able to get into the Internal Revenue Service's online database of taxpayer transcripts. The agency initially thought that cyber crooks got data on around 104,000 filers when they broke into the Get Transcript tool. The hack, which apparently started in February 2015 and was made public three months later, was accomplished by criminals using personal information that they got from sources outside the IRS. By August, the IRS investigation revealed that the hacked tax account tally was closer to 334,000. Your tax life in an alternate form: Tax transcripts aren't just... Read more →