Most of these birthday celebrants at an Austin-area senior citizens' center are enjoying the shared festivities. Maybe the man on the right is worried about his upcoming RMD. (Photo by Kay Bell) Did you celebrate your 73rd birthday last year? Congratulations and belated best wishes. The Internal Revenue Service also applauds your milestone, but partly for selfish reasons. Individuals who have certain tax-deferred retirement plans must start withdrawing some of those funds and pay tax due on the amounts once they turn 73. These required minimum distributions (RMDs) are annual. But you can delay your first withdrawal until April 1... Read more →
Feeling flush thanks to your tax refund? If you’re looking for ways to spend it, here are some suggestions. (Photo by Karolina Grabowska) By mid-March, the Internal Revenue Service had sent out almost $163 billion in tax refunds. The average refund amount was $3,271. That's a nice chunk of change. Even if your refund isn't quite that large, or is more, when the money arrives comes the decision on how to use it. Most people already have ideas of what to do with their cash back from Uncle Sam. Some have already put those plans into action. But just in... Read more →
Some roads, like this rural one in Central Texas, don't get much funding from the state. (Photo by Kay Bell) I know, spring just officially arrived last week. But temperatures already in the 80s here in Central Texas have me contemplating summer travel. Thinking back on my family’s summer road trips when I was child, also made me realize that my interest in the tax world was foretold back then. Every time we’d run into a travel delay due to road crews repairing and/or resurfacing our routes across the Lone Star State, my father would announce, “Your tax dollars at... Read more →
The Republican and Democratic leaders of the Senate Finance Committee want to end, or at least reduce, taxpayer reactions like the one above. The bipartisan pair wants your comments on their proposed Taxpayer Assistance and Service Act by the end of March. The Internal Revenue Service and Taxpayer Advocate Service (TAS) are both dealing with outside forces this filing season. The IRS continues to be in Department of Government Efficiency (DOGE) crosshairs. Meanwhile, the Trump administration wants to cut more than 20 percent of the staff at TAS, an independent component of the tax agency that was created to help... Read more →
Photo by Polina Tankilevitch Special needs individuals and those who work with them are understandable concerned about many of the changes being made or proposed by the Trump administration and its Department of Government Efficiency (DOGE) henchmen partners. But the Internal Revenue Service, even though it is dealing with its own DOGE issues, is reminding people with disabilities of how an Achieving a Better Life Experience, or ABLE, account can help. The accounts were created in 2014 by the eponymous Achieving a Better Life Experience (ABLE) Act, a federal law that allows states to create tax-advantaged savings programs for eligible... Read more →
Photo by Kay Bell Spring has sprung, with the accompanying seasonal focus is on spring cleaning. One of our neighbors is focusing on sprucing up their yard. The pile of dirt in the street, shown in the photo topping this post, is now being transferred to flowerbeds. So, of course, it got me thinking about taxes. While this household and other people on our block pay crews to mow their lawns even in the dead of winter (go figure), landscaping generally is seasonal work. These companies tend to make most of their income during the warmer months of the year.... Read more →
Photo by Philipp Deus Every taxpayer and tax circumstance is unique. However, there are some things that trigger trained Internal Revenue Service examiners. As you’re finishing up your 2024 tax return, take another look to see if any of the 10 situations items show up on your Form 1040. They don’t guarantee that your return will be pulled for further attention and possibly a full-blown audit. But they could cause the IRS to conduct a correspondence audit, which is sending you a notice asking for clarification about a questionable item on your return. 1. You have income other than basic... Read more →
Photo by Ksenia Chernaya While Department of Government Efficiency (DOGE) personnel are looking for Social Security benefits they believe were fraudulently sent to very old, probably deceased individuals, Uncle Sam’s official tax watchdog has a different take. The Treasury Inspector General for Tax Administration (TIGTA) recently examined situations where Uncle Sam owes taxpayers who passed away. TIGTA found, in its report 2025-IE-R12 issued March 12, that “Improvements Are Required to Promptly Validate and Issue Manual Refunds Associated With Deceased Taxpayers.” Overall, TIGTA’s analysis found that in the more than 440,000 final filings it reviewed, survivors were owed a total of... Read more →
Some victims report losing more than $10,000 to more sophisticated tax cons. Photo by Nataliya Vaitkevich With Tax Day less than a month away, taxpayers are getting busy. So are the scammers who are hoping that they can intercept some of the money or personal data that filers meant to send to the Internal Revenue Service. Such deceptive activity isn’t anything new. What is different this tax season is that tax crooks are taking advantage of artificial intelligence (AI) to create even more convincing schemes. AI upping tax scammers' games: Sure, some tax crooks on a budget still send out... Read more →
Department of Government Efficiency and Congressional efforts appear to be putting a stop signal for many of the IRS' goals. (Photo by Kari Bluff Nesler via Flickr) The Department of Government Efficiency (DOGE), the quasi-governmental group created by billionaire Elon Musk, contends it has so far found $100 billion in fraud and waste across multiple federal agencies. Even if that’s true, which scrutiny from other organizations questions, the way DOGE, with the White House's approval, is slashing Uncle Sam’s operations could end up costing more than the purported savings. “Just one move — the plan to shrink the Internal Revenue... Read more →
Instead of my usual weekend watching of sports, I’m glued to the Weather Channel. There’s a dangerous and already deadly tornado outbreak rumbling across the south this afternoon. This year is turning out to be awful as far as severe weather and other disasters. We had Southern California’s wildfires in January. In February, a severe winter storm wreaked havoc and left parts of Kentucky and West Virginia deemed major disaster areas. Now, with spring officially here, the severe thunderstorm/tornado season is off to an unfortunately robust start. Billion-dollar disasters in 2024: All this is happening on the heels of a... Read more →
Major flooding in Hazard, Kentucky, in February led to Perry County being declared a major disaster area. It’s just one of the counties in the Bluegrass State where residents are now eligible for tax relief. You can watch the video from which the screenshot above was taken at Live Storms Media's YouTube channel. We’re just more than a month away from the April 15 filing deadline, but some taxpayers will have until Nov. 3 to finish their 2024 returns. They live in areas of Kentucky and West Virginia that were pummeled in mid-February by a severe winter storm that move... Read more →
Getting to a doctor's appointment is challenging for many patients. But the travel costs could count as an itemized tax deduction. (Photo by RDNE Stock project) The Tax Cuts and Jobs Act’s increased standard deduction amounts moved me from an itemizing taxpayer to one who claims the standard deduction. Well, my improved health also helped. Even after the Republican tax reform bill took effect, for a couple of years I still had enough medical expenses — not to get too personal, but the serious medical scares included, even with insurance, some costly surgeries — to make tallying them on Schedule... Read more →
A towering city overlook is always impressive, but you don't necessarily need the telescopic help when it comes to overlooked tax breaks. Tax software, your tax adviser, and yes, the often-missed tax breaks listed below, can help you save on this year's filing. (Photo by Ricky Esquivel) The goal of every taxpayer is to pay Uncle Sam as little as legally possible. Even the Internal Revenue Service has enshrined that goal in its Taxpayer Bill of Rights. It’s number 3 on the 10-point list. A good way to ensure you pay no more tax than required is to claim all... Read more →
Collecting a refund is one of the reasons cited in my post on why you might want to file a tax return even if you aren’t legally required to do so. It always generates a lot of comments, with people baffled as to why someone would just let Uncle Sam hang onto their tax refund. There are some reasons people don’t file their taxes even when it to their benefit, some better than others. More on this later. But regardless of why, every year the Internal Revenue Service reminds a portion of these nonfilers that if they don’t act soon,... Read more →
You were really counting on your tax refund, but the amount the Internal Revenue Service send you was less than you expected. Welcome to the world of debt offsets. (Photo by Nicola Barts) Department of Government Efficiency (DOGE) staff recently obtained read-only access to the U.S. Department of Health and Human Services’ child support database. It’s a continuation of the Elon-Musk-created effort to ferret out fraud and waste in the federal government. In this latest controversial move, denounced by critics as an end-run around taxpayer privacy laws, DOGE ostensibly is looking for potentially wrong or incorrect child-related payments. But many... Read more →
Photo by Porapak Apichodilok You took that job in Rome and things are working out great. But you discovered that there’s one part of the United States that hitched an international ride with you. The Internal Revenue Code. Thanks to our worldwide tax system for individuals, as a U.S. citizen you remain a U.S. taxpayer, regardless of where you live. That makes you responsible for filing federal tax returns on your overseas earnings. Uncle Sam, however, does provide some tax breaks to his citizens living and working abroad. They get more time to file, with a June 15 deadline. And... Read more →
A related, and larger question, is what will happen to all federal student loans if, as the Trump administration also wants, the U.S. Department of Education is dismantled? And if your student loan already has been canceled, your celebration could be dampened if you live in one of 19 states that wants tax on the forgiven loan amount. The entrance to the National Museum of Education, located in the U.S. Department of Education headquarters in the Lyndon Baines Johnson Building, Washington, D.C. (Photo by Carol M. Highsmith for LBJ Building Architecture Gallery at GSA.gov) When the White House announced last... Read more →
We made it through the first week of March. Have you filed your taxes yet? You’ll get no judging from me. I usually file our tax return on April 15 or get an extension, so I’m in no position to chide anyone for being a tax procrastinator. But by the end of February, 54.4 million taxpayers had sent the Internal Revenue Service their returns. And most of those — 51.2 million — arrived electronically. Nearly 24 million of those returns were electronically filed by tax professionals for their clients. The remaining 27+ million were e-filed by individuals. Those numbers are... Read more →