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February 2011

January 2011

The hubby gets a real paycheck, that is, regular money from a company as opposed to my periodic payments from various clients. The much-ballyhooed payroll tax cut showed up in the paycheck he received last week. So now we get to decide what to do with this bit of extra cash. After some discussion, we decided the easiest thing would be for the hubby to bump up his 401(k) contributions by 2 percent. His employer still matches employee money, so this will give him (and by him, I mean us) even more eventual retirement money. The decision really wasn't that... Read more →

Last year, the Internal Revenue Service processed more than 142 million tax returns. Almost 70 percent of those Form 1040s (and 1040As and 1040EZs, plus attached forms and schedules) arrived at IRS centers electronically. The precise number of e-filers, according to the agency's final 2010 filing season data, was 98,740,000. That was a 3.4 percent increase over the previous year's count of taxpayers who electronically delivered their returns. The biggest jump, percentage wise, was in the number of folks who e-filed their taxes themselves. Almost 35 million of us did so, a 8.2 percent increase. But don't worry, tax pros.... Read more →

Take your taxes electronic

I ordered a bedskirt online a couple of weeks ago. Or I tried to. The company's website order process screwed up and didn't provide me with a confirmation page. So I called the customer service line and placed the order by phone. On Friday I got the bedskirt. On Saturday, I got another bedskirt. Apparently, even though the company's website didn't tell me it got my order just fine, it did. I'll be sending one bedskirt back tomorrow, after I make sure the company will pay the return shipping for its bad website order processing. Now you might be thinking... Read more →

The National Hot Rod Association's tax-exempt status could soon be under IRS scrutiny. An anonymous complaint was filed with the agency's Exempt Organizations Division contending that the drag racing group's activities are identical to those organized by for-profit automobile entertainment companies. "Public information reveals that the NHRA operates like a commercial business by providing specific services to its members --whether in the form of prize money to winners or payments to race track operators or other private groups benefiting from the racing events," said Marcus S. Owens, a senior member in the Washington, D.C., law firm Caplin & Drysdale. Photo... Read more →

IRA charitable rollover Jan. 31 deadline

IRA owners age 70½ got a tax benefit back when the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was signed into law last Dec. 17. They once again could transfer money, up to $100,000 a year, from their tax-deferred retirement accounts to qualified charities. This option had expired at the end of 2009. The new tax law retroactively reinstated the option for 2010 as well as extended it for 2011. Such a direct rollover is appealing to IRA owners who must take required minimum distributions (RMDs) from their accounts, but don't need the money to live... Read more →

2011 pension contribution amounts stay at 2010 levels thanks to low inflation rate

If the weekend break from your usual 9-to-5 grind has you thinking about your eventual retirement, you need to be putting as much as you can into your IRA and workplace retirement account now. Contributing to a traditional IRA is one of the few tax breaks still available for the previous tax year. You can contribute up to $5,000 to a traditional IRA by April 18 (remember, we get three extra filing days this year) and have it count as a deduction, if you're eligible for the write off, on your 2010 tax return. If you're age 50 or older,... Read more →

January is a busy month at the IRS because most people get tax refunds and they file early to get their money ASAP. The IRS has for years been pushing direct deposit of refunds and those efforts have paid off. Last year, 68 percent of taxpayers had their refunds sent straight to a bank account. But not everybody who gets a refund has a bank account; the buzzword is "unbanked." So Uncle Sam has come up with a plan this filing season for them. Treasury will send 600,000 low- and moderate-income unbanked taxpayers their refunds via a special prepaid debit... Read more →

I've become a big fan of handling my finances online. But there are two issues with which I continually wrestle. First is all those log-in IDs and passwords. I try to be secure and use different ones to stymie identity thieves. Most of the time, however, the roadblocks slow me, not some hacker, down! So I constantly have to refer to my sign-in cheat sheet. The other issue is remembering to check my accounts for statements. Yes, I do get e-mail notifications that my statement or bill is ready. But I get so much (too much) electronic communication that these... Read more →

State of Union light on tax talk

Given the empty seat set aside for Rep. Gabrielle Giffords, the Arizona Democrat recovering from a head wound suffered a few weeks ago, Obama's calls during last night's State of the Union for national unity and optimism were not surprising. If the video of the State of the Union address does not open in your browser, you can watch it here. Neither was it unusual that the president didn't really get into specifics on any policy issues. The commander in chief's annual talk to lawmakers and the nation, regardless of the Oval Office's occupant, is really just one big cheer... Read more →

Did you claim the first-time homebuyer tax credit? What year? It could make a difference as to whether you owe the IRS more on your 2010 return or get back some money from Uncle Sam. Those are just two tax law changes that could affect your filing this tax season. So before you finish filling out your form, check them out. Related posts: The new tax bill and your 2010 taxes Important 2011 tax season filing dates and deadlines IRS launches smartphone app Taxes? There are apps for that Free File is open for 2011 tax business E-file, Free File... Read more →

And the Oscar, and tax break, go to...

I love movies and I love the Oscars. As with most awards programs, the choices of not only winners, but of the nominees themselves are baffling. But this year, there aren't too many things to quibble about. OK, a little quibbling. That's part of the annual ritual. Christopher Nolan didn't get a best director nomination for Inception, a movie that was totally his. And I think Ryan Gosling not getting a nod for his Blue Valentine role is wrong on so many levels, although there is a a strong best actor field this year. The same goes for Jackie Burkhart... Read more →

You've found the perfect pair of shoes but aren't sure you can afford them. You're waiting for your tax refund to show up in your account before you use your debit card. No worries! Whip out your smartphone, click on the new IRS2Go app to find out the exact status of your refund. Yep, the IRS is the hot, happening, technology embracing federal agency. Really! IRS Commissioner Douglas Shulman announced today that the agency has its own smartphone app, free in both iPhone and Android iterations. With IRS2Go you can check on the status of your refund usually around 72... Read more →

I am officially old. OK, dear hubby who's a year older than I, how's this? Time is marching on at bit more rapid pace. I've become more aware of this temporal inevitability over the last couple of months as I've helped my mom relocate. Since I've been grown, we've lived apart anywhere from 135 or so miles while I was in college to almost 1,300 miles when the hubby and I were in Florida. Now, Mom and I are just 50 miles from each other. The good news is that she's just about an hour away. The bad news is... Read more →

More than three grand is a nice chunk of change. That's the average refund check -- $3,303 to be precise -- that the Internal Revenue Service issued last year. Taxpayers who opted in 2010 for direct deposit of their refund money got even more. The average refund amount electronically sent to taxpayer accounts last year was $3,191. January is prime filing month for folks expecting refunds. If this forced savings account with the U.S. Treasury as your banker is the only way you can keep from spending every last cent of your paycheck, then that's better than nothing. And with... Read more →

2010 and 2011 tax rates, income brackets

When we file our taxes, we want the bottom line: Just what do we owe? That amount depends upon into which tax bracket our taxable income falls. Thanks to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that became law on Dec. 17, 2010, the six federal income tax rates that apply to our 2010 taxes are in place for 2011 (and 2012, too). The tables below show which of the tax rates apply to what chunks of our money for the 2010 and 2011 tax years. The IRS will update the 2012 income tax bracket... Read more →

Once upon a time, the IRS let folks who filed 1040-EZ returns do so by telephone. Then came the Internet and TeleFile was axed. But, as the saying goes, if you live long enough, you'll see the old become new again. That happened last week when Intuit, maker of the popular tax preparation and e-filing software TurboTax, released SnapTax. The smartphone application, available for both iPhones and Androids, uses image-recognition technology to read salary and withholding information from a W-2. After you answer a few questions and review your return, you hit "file now" and are done. Filing your taxes... Read more →

I know you probably already saw today's tax tip there in the upper right corner of the ol' blog (or at the complete Daily Tax Tips page) on ways the IRS can deliver your tax refund. But since most folks who file early do so because they're getting a refund, I thought it worth repeating here. The fastest way to get your refund is to e-file and have your money directly deposited. No, I don't work for the IRS and no I'm not, as some have "suggested," a "tool of the government." I'm reiterating the tax agency's advice... Read more →

Legislative Rx for 1099 ailment

The health care law is safe despite the House of Representative's repeal of the measure on Wednesday. But a reporting regulation created as part of the Patient Protection and Affordable Care Act is now closer to being eliminated. I'm talking, of course, about the new Form 1099 rule, which mandates that next year every business file a separate information form for each vendor with whom it does $600 or more of business. It was included in health care to help the IRS track income it believes goes unreported. Plus, the provision is projected to raise $17 billion to help pay... Read more →

If you itemize deductions and have been wondering when the Internal Revenue Service will get to your tax return, put a big red circle around Feb. 14 on your calendar. Yep, the tax man has a Valentine's Day gift for those folks whose returns are on processing hold because of December 2010 changes to tax laws. Those late-year tax law tweaks meant the IRS had to update its computer systems. Affected returns mostly claim itemized deductions on Schedule A, as well as income adjustments (often referred to as above-the-line deductions) found directly on Form 1040 or 1040A for higher education... Read more →

The House voted yesterday evening to repeal what the the Republicans have deemed the job-killing health care reform law. Big whoop. Three Democrats -- Dan Boren of Oklahoma, Mike Ross of Arkansas and Mike McIntyre of North Carolina -- joined 242 GOP Representatives in voting to take the Patient Protection and Affordable Care Act (Public Law 111-148) and the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152) off the books. The New York Times has a cool interactive map of, as far as this vote goes, the almost totally red United States. Realistically, of course, the House... Read more →