Inflation Feed

The House narrowly passed its Obamacare replacement measure this afternoon by a 217 to 213 vote. Now we await Senate action on the GOP bill. That means there's plenty more debate to come before any flip from President Obama's Affordable Care Act (ACA) to the GOP's American Health Care Act (AHCA). The House voted to repeal Obamacare this afternoon, but we will be waiting for a while before any final replacement of the Affordable Care Act. (Photo by Kay Bell) But both Democrats and Republicans do agree on one thing. The Upper Chamber's action won't be any time soon So... Read more →


One of the big sticks that the Internal Revenue Service wields is penalties for our mistakes or willful disregard of tax laws. Some of the penalties were increased in 2016 thanks to law changes. Others are hiked each year if inflation so warrants. Here's a roundup of some major tax penalties changes ahead in 2017. Don't file, pay more: The biggie for individual taxpayers is the charge for late filing. In 2016, if you filed a return more than 60 days after the due date or any extension to file that you got, then you faced a penalty of the... Read more →


Working overseas can be a wonderful professional and personal opportunity. It also can present some tax problems. The United States has a worldwide tax system. That means that regardless of where you earn your money, if you are a U.S. citizen or resident alien, you owe taxes to Uncle Sam. The bad news is that the Internal Revenue Service is serious about getting this money. The good news is that there are some income tax benefits for U.S. workers abroad. Excluding income abroad: The most notable one is the foreign earned income exclusion, or FEIE. This allows workers abroad who... Read more →


Your business-related driving probably won't save you as much on your taxes in 2017. The reason? The Internal Revenue Service announced today that the optional standard mileage rate for business use of your vehicle is a half-cent less than in 2016. A trip to the vet likely won't count as a tax deductible medical expense, but other allowable miles in 2017 can be claimed at 17 cents apiece. It drops on Jan. 1, 2017, to 53.5 cents per mile. For the final few days of 2016, the business mileage rate is 54 cents per mile. Along with a smaller per-mile... Read more →


Welcome to Part 7 of the ol' blog's series on 2017 inflation adjustments. You can find links to all 2017 inflation posts in the series' first item: Income Tax Brackets and Rates. Today we look at changes to the Alternative Minimum Tax exemption amounts, as well as the previously announced increase in the Social Security wage base. Note: The 2017 figures apply to 2017 returns that are due in 2018. For comparison purposes, you'll also find 2016 amounts to be used in filing 2016 returns due next April. The AMT, or Alternative Minimum Tax, forces some taxpayers to do extra... Read more →


Welcome to Part 6 of the ol' blog's series on 2017 inflation adjustments. You can find links to all 2017 inflation posts in the series' first item: Income Tax Brackets and Rates. Today we look at changes to estate and gift tax amounts, as well as limits on investment income for children, known as the kiddie tax. Note: The 2017 figures apply to 2017 returns that are due in 2018. For comparison purposes, you'll also find 2016 amounts to be used in filing 2016 returns due next April. There's a time for play and a time for generational tax planning.... Read more →


Welcome to Part 5 of the ol' blog's series on 2017 inflation adjustments. We're halfway through the series, and you can find links to all 2017 inflation posts in the first item: Income Tax Brackets and Rates. Today we look at changes to some medical tax provisions. Note: The 2017 figures apply to 2017 returns that are due in 2018. For comparison purposes, you'll also find 2016 amounts to be used in filing 2016 returns due next April. How are you feeling? If not so well, then by all means get to the doctor. And be sure to use some... Read more →


Welcome to Part 4 of the ol' blog's series on 2017 inflation adjustments. You can find links to all 2017 inflation posts in the first item: Income Tax Brackets and Rates. Today we look at changes to some popular credits and deductions. Note: The 2017 figures apply to 2017 returns that are due in 2018. For comparison purposes, you'll also find 2016 amounts to be used in filing 2016 returns due next April. You can jump for joy like these youngsters if you can claim some of these popular inflation-adjusted credits and deductions. The key to paying the least tax... Read more →


Welcome to Part 3 of the ol' blog's series on 2017 inflation adjustments. You can find links to all 2017 inflation posts in the first item: Income Tax Brackets and Rates. Today we look at changes to retirement and pension plans. Note: The 2017 figures apply to 2017 returns that are due in 2018. For comparison purposes, you'll also find 2016 amounts to be used in filing 2016 returns due next April. Save early, save often to create an overflowing nest egg. Even in a contentious election year, there's one thing everyone in all political parties can agree on: retirement... Read more →


Welcome to Part 2 of the ol' blog's series on 2017 inflation adjustments, which kicked off yesterday with the tweaked income tax brackets and rates. Today we look at standard and itemized deductions, personal exemptions and limitations on these tax situations that apply to some wealthier taxpayers. Note: The 2017 figures apply to 2017 returns that are due in 2018. For comparison purposes, you'll also find 2016 amounts to be used in filing 2016 returns due next April. Standard deduction amounts go up: Itemized deductions get a lot of attention. There are several of them and they require more attention... Read more →


It's that special tax time of year, when the Internal Revenue Service releases its annual inflation adjustments for more than 50 tax provisions. This is the first in a series on the 2017 tax year inflation adjustments. Links to the other posts are at this end of this article. For 2017, the total is 55 amounts changes, ranging from the widely used tax rate tables and income brackets and standard deduction and exemption amounts to the more arcane treatment of dues paid to agricultural or horticultural groups and the tax on arrow shafts. As much fun as it would be... Read more →


For the last few months, the standing joke in our house has been that the first words the hubby and I say to each other every morning is, "Can we retire today?" Beach? Mountain cabin? A cruise? Traveling across Europe? What's your retirement dream? Start planning now to achieve it. OK. Maybe we don't ask that question first thing in the morning, but that's mainly because the hubby is not a morning person. But we have been paying closer attention to our retirement stash, as well as checking on what we can one day expect from Social Security. Calculating retirement... Read more →


Time, and time shifting, is always a factor when it comes to taxes. We filed our 2014 taxes in 2015 (some of us earlier than others!), simultaneously looking at what we need to do now so that when we file our 2015 returns in 2016, our tax bills are as small as possible. Keeping up with the tax calendar is as important as tracking all the tax numbers. So it's no surprise that the Internal Revenue Service chose today, Back to the Future Day, to issue its 2016 inflation adjustments for more than 50 tax provisions. Countdown clock in Back... Read more →


The highway funding bill that President Obama signed today may be short-term (money runs out again on Oct. 29) when it comes to providing money for roads and infrastructure, but it will have some lasting tax effects. Here are some of the tax highlights from the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. More mortgage reporting: Mortgage lenders already issue annual statements, either the official Form 1098 or an approved substitute document, to borrowers and the Internal Revenue Service. This form goes to homeowners who paid at least $600 loan interest during the tax year and... Read more →


The Internal Revenue Service recently released its figures on how inflation will affect many federal tax provisions in 2015. But the cost of living also affects states. And these jurisdictions' tax departments deal with annual price increases in different ways. Thanks to the Tax Foundation map below, you can see the various state tax approaches to inflation. Click image for a larger view. The Washington, D.C.-based tax think tank notes that: 23 states fully index brackets to inflation; this number includes the nine states (each marked by an asterisk and listed in the "Notes" box in the map) with single-rate... Read more →


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


This is why people hate taxes. OK. There's no one "this" when it comes to tax loathing. But here's one big reason: confusing dates. Right now we're working on ways to reduce our current year's tax bill. To do that, we must make many tax moves by Dec. 31. But some of those moves will depend on what our tax situations will be like in the coming year. So we've got to juggle two tax years simultaneously. That's two too many tax years for most folks. Still, it's a necessary tax evil. And the latest comparison and evaluation of this... Read more →


The 2013 tax year is finally over. That means it's time to turn your tax thoughts to moves you can make to reduce your 2014 tax bill. A good starting point for any tax planning is with the basics, such as knowing what your tax bill likely will be. While there are a lot of variables that come into play, you can get a general idea by checking out the annual tax brackets. We're still waiting for Congress to finalize many 2014 tax laws, but the seven ordinary income tax rates are the same, starting at 10 percent and topping... Read more →


Itemized deductions get a lot of attention. There are lots of them. They are more complicated to claim. And, let's be honest; tax journalists like writing about things that provide them an opportunity to ramble. But the filing fact is that most taxpayers claim the standard deduction. Every year, around two-thirds of returns arrive at the Internal Revenue Service sans Schedule A. The deduction rule of thumb is to use the deduction method that provides you with the greater tax benefit. If that's itemizing one year, then claiming the standard deduction the next, do that. And if it's claiming the... Read more →


If you're hitting the road to a new destination this Thanksgiving holiday, you've probably been looking at a road map. Take a tax break from those red and blue highways and check out the even more colorful Tax Foundation's map of possible tax bracket creep across the United States. Bracket creep is as icky as it sounds. It flares up, notes the Washington, D.C.-based group, when tax brackets aren't indexed for inflation. Without that adjustment, as a taxpayer's earnings increase, that added money will be taxed at higher rates. You could contract this terrible tax affliction if you live in... Read more →