Tax planning Feed

Texas, according to veteran Lone Star State meteorologists, is the land of perennial drought, broken by the occasional devastating flood. Such flooding occurred today, opening up the possibility that parts of the Texas Hill Country could be deemed major disaster areas. If that happens, affected property owners can claim their losses on their tax returns. Mansfield dam image Excessive rainfall has produced devastating flooding in Central Texas, forcing area officials to open floodgates at local dams. The amount of water flowing into area rivers and lakes is so heavy that even Mansfield Dam in Austin, the structure that holds back... Read more →


Some of my retirement money is in stock funds. They've been going gangbusters. Until this week. I'm fighting the urge to look at what's happened with these plans' value. Did they tank along with the broader market a few days ago? Or are they edging back up with today's sort-of recovery? I'm curious, but I don't need that money right now. And I believe my investment choices are sound. So I'm going to ignore the current market gyrations and just let things ride. That's the advice most financial gurus are offering now. This week's downward trend is just an overdue... Read more →


Today is a great day for my mother. The Social Security Administration announced that she and her fellow Social Security recipients will get a get a 2.8 percent cost-of-living adjustment (COLA) in 2019. The 2019 COLA — the largest since the 3.6 percent bump in 2011 — means the average single retiree's federal retirement benefit will be $1,461 or $39 more a month than this year. My mom is thrilled. Those 30+ bucks will cover her monthly phone bill. Still stretching each month: Unfortunately, the upcoming benefits adjustment won't be enough to make up for more than a decade of... Read more →


IRAs come in two forms, traditional and Roth. You can convert a traditional individual retirement arrangement to a Roth account, but reversing that hits a roadblock under the new tax law. There are lots of good reasons to convert a traditional IRA to a Roth retirement account. There also are lots of good reasons to change your mind about that IRA conversion and switch the account back to its traditional form. But time to recharacterize your Roth IRA, as the reversal is known, is running out. And it will be gone forever, or at least through 2025 under the new... Read more →


Another lingering tax deduction concern created by the Tax Cuts and Jobs Act (TCJA) is finally clearer. The Internal Revenue Service says that half the cost of business meals is still tax deductible as an allowable work-related expense. That's what the pre-TCJA tax law said. But because the Republican tax reform bill was cobbled together so hurriedly at the end of 2017, its legislative language left many confused. And the new law's interpretation created a division among tax professionals (and semantics geeks) as to what exactly is entertainment. Meals or entertainment vs. meals and entertainment: A great number of tax... Read more →


October's here! In addition to making some general fourth quarter tax moves, this month is when many employees get to reassess and choose coming-year workplace benefits, many of which also offer tax advantages. And tax-free help paying off student debt could soon be part of those packages. Millennials have overtaken Baby Boomers as the largest generation in the U.S. labor force. That's why today's employers are trying to figure out exactly what these younger workers want. The traditional worker wishes still apply. All employees want decent pay, regular raises and promotion possibilities. But today's twenty- and mid-thirty-somethings want more, and... Read more →


The Powerball and Mega Millions jackpots already are close to a combined $600 million. As the drawing times near, more people will play, creating even larger eventual jackpots. Of course, the chances of winning both drawings — roughly 1 in 75 quadrillion (that's 15 zeros) by one estimate — is even more minuscule than the general winnings odds of either alone. Still, millions of us will buy lottery tickets. Full disclosure: I'm one of them. Don't judge me. But don't call me either if I win! In fact, whoever wins Mega Millions major jackpot on Tuesday (Oct. 2), which as... Read more →


Do you have thoughts about the Internal Revenue Service's plan to stymie state efforts to work around the new $10,000 federal deduction limit on state and local taxes? You are not alone. On Aug. 23, the IRS issued a proposed rule designed to rein in state efforts to give their residents a way to get a tax write-off for all of their state and local taxes, commonly referred to in the tax world as SALT. In that same announcement, the IRS also said it will hold a Nov. 5 public hearing on its proposal regulation and, leading up to that... Read more →


One thing almost everyone agrees on, both politically and financially, is that we all need to do a better job of saving for retirement. But some young savers are undercutting their own efforts by regularly tapping their workplace retirement accounts early. As part of Labor Day celebrations, Donald J. Trump signed an executive order that, in part, instructed the Treasury and Labor departments to look into ways to make it easier and cheaper for smaller employers to band together to offer 401(k)-type plans for their workers. Expanding these tax-deferred workplace retirement plans is a good idea. With the demise of... Read more →


Trees in September will see their first fall color. (Photo by Jonathan Bloy courtesy Bloy.net) Hello, September. It's nice to have you back. You are a month that offers mostly-welcome transitions. There are beginnings, as students start a new school year. Parents nationwide say "thank you!" There are endings, as summer gives way to fall's cooler temps and foliage changes. Those of us tired of heat waves want to know what took you so long!?! There are expectations, as the end of the year and its many holidays approach. It's never too early to start planning for these. My Christmas... Read more →


One of the first questions I got when states started working on chartable programs that would let their taxpayers get around the new $10,000 cap on the deduction for state and local taxes (SALT) was how any Internal Revenue Service action might affect existing programs. We finally have an answer and it's not good. "Congress limited the deduction for state and local taxes that predominantly benefited high-income earners to help pay for major tax cuts for American families," said Secretary Steven T. Mnuchin in a statement accompanying the regulations. "The proposed rule will uphold that limitation by preventing attempts to... Read more →


A Lyft ride sharing vehicle in Atlanta. (Photo by Daniel X. O'Neil via Flickr Creative Commons) Most U.S. workers meet their annual tax responsibilities via paycheck withholding. Here you give your boss the information needed to calculate just how much income tax should come out of each paycheck so that you're Goldilocks at tax-filing time, not owing the U.S. Treasury too much or too little. The sharing economy has thrown a wrench into this system. Lots of folks with traditional 9-to-5 jobs are hustling on the side to earn extra cash. Others have committed full-time to gig economy work. Job... Read more →


This family, with four generations shown here, likely will feel the effects of the new tax law. (Photo by Azoreg via Wikimedia Commons) Things get complicated when you have kids. Those complications are, well, even more complicated when it comes to tax filing. The Tax Cuts and Jobs Act (TCJA) made a variety of changes, in effect at least for tax years 2018 through 2025, that will affect millions of parents. Here's a quick look at key tax changes for dependents. Exemptions are eliminated: Under prior law, personal and dependent exemptions were excellent. These tax breaks helped filers reduce income,... Read more →


Freelancing means more flexibility, such as where to work and the option to wear more comfortable attire. It also means you have some new tax responsibilities. (Photo by Lulu Hoeller via Flickr) The gig economy in the United States is growing at a phenomenal rate that shows no signs of slowing down. That's the analysis of BMO Wealth Management. A recent survey commissioned by the international wealth management company found that gigs — defined as jobs of short or uncertain duration — are the new normal. BMO's findings appear to support Upwork's annual Freelancing in America study, which was released... Read more →


Couples by Michael Lehet/Flickr CC The hubby and I basically have a pretty equal, albeit traditional gender swapped, marriage. He's more persnickety when it comes to cleaning. So he does much of those household duties, including bathrooms and whole-house vacuuming. I hate that noise, so he vacuums when I'm out; that's one of the reasons I love him! We split kitchen duties, with the person who doesn't cook dinner doing the cleanup. We collaborate on investments, deciding how much and where our money goes. As for the day-to-day expenses, I take care of making sure the bills are paid on... Read more →


One of those hammocks has my name on it, after I finish a few July tax tasks. (Photo by Roberto La Forgia via Flickr CC) School is out. The fireworks have been shot (except for the stashes of my neighborhood's teens, which based on prior post-July 4 experiences, probably will last another week). And the heat is definitely on. That means it's finally, fully summer. And that means that it's time to get down to some serious summertime tax moves. Yes, I know you want to head to the pool or beach or catch up on neglected novels or just... Read more →


Taking a post-vows moment. (Photo by Barney Moss via Flickr) If you were a June bride or groom, congratulations! My best wishes also go out to folks who wed in any other month. I've been a wife a long time and I highly recommend matrimony. You've got someone who, as most vows still say, will be there for all the good and bad times. Plus, you've got a built-in excuse for getting out of things you don't want to do ("So sorry, but we can't make it. The hubby has to work."). There also, as I've noted numerous times here... 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 →


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 →


The hubby and I, like every other person, are getting older every day. That means we're getting closer to claiming Social Security and Medicare benefits. Two recent reports on the status of those federal programs make me glad to be closer to our collection dates. Both Social Security and Medicare, according to the programs' trustees, will run out of money to pay beneficiaries in 16 years and 8 years, respectively. At least the grayer-every-day hubby and I will get some of the full payouts. Sorry about all you youngsters! OK, I'm really not that selfish. But we are a bit... Read more →