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February 2014

January 2014

Ready. Set. File your 2013 taxes! The Internal Revenue Service finally sent that starting signal today as the 2014 federal filing season officially began, 10 days later than scheduled thanks to the government shutdown last fall. Early filers already in: Have you already hit enter on your e-filed return? Or did you do so last week when you used Free File to complete your tax return and get it in the filing queue to be sent today? Maybe you're old school and plan to drop your paper 1040 in the mail today. Regardless of which way you sent or will... Read more →

You want to e-file your tax return this year so you've gone to a paid tax professional to get the job done. You'd better double check. Not all tax preparers are EROs. ERO stands for Electronic Return Originator. Basically, these folks that the Internal Revenue Service has accepted as electronic transmitters of a filer's tax return information to the agency. An ERO generally is the first point of contact for many taxpayers who electronically file their taxes. They typically advertise their services by displaying "Authorized IRS e-file Provider" signs in their tax office windows or icons on their websites. And... Read more →

There were no big surprises, tax or otherwise, in President Obama's State of the Union circa 2014. That's understandable. He's -- sorry Obama fans, I have to say it -- a lame duck whose party is trying to hang onto the Senate in the coming midterm elections. So the president's big political assignment last night was to offer some relatively noncontroversial talking points that Democrats could take to voters this fall. Cursory tax reform talk: OK, I know the State of the Union address can't be a total tax talk . But I had hoped for a little more. Oh... Read more →

In his State of the Union address tonight, President Obama is expected to discuss income inequality and the problems facing those trying to climb up the economic ladder. He has lots of material from which to draw any remarks he makes. A recent global report by Oxfam found that almost half of the world's wealth is now owned by just one percent of the population. Worldwide, the 85 richest people on the planet own more wealth than the combined assets of the 3 billion poorest people. Closer to home, the wealthiest 1 percent in the United States captured 95 percent... Read more →

Updated Feb. 21, 2018 Taxes are all about the numbers. But when it comes to Form W-2, the alphabet also is important. The main thing you look for on your annual tax statement from your employer is, of course, the amount you earned, listed in boxes 1, 3 and 5, and the various taxes withheld in boxes 2, 4, 6 and, if you live in a state or city that collects tax on wages, in boxes 17 and 19. Click W-2 image for full Internal Revenue Service form and explanations of all box entries. But there is much more on... Read more →

Your annual tax statements are trickling in, so now it's time to make sure you have all the other info you'll need to file your 1040 when the 2014 season opens on Jan. 31. Today's Daily Tax Tip offers a checklist of what to round up, regardless of whether you will do your taxes yourself or hand them over to a tax professional. Documents for all: Along with your W-2s, 1099s and other documents, the general tax information and documents that apply to most taxpayers include: Social Security numbers for yourself, spouse and all dependents. Last year's federal return, including... Read more →

Last year was tough for lots of folks. The good news is that people were more generous than ever. In 2013, Americans donated more than $416 billion, an almost 13 percent increase over the prior year, according to the Atlas of Giving. Were you part of the reason that charitable giving increased last year? If so, thanks! Now don't miss out on a possible tax deduction for your good deeds. Increasing goodwill: Last year was the third straight year of philanthropic growth since 2009's low point of $316.5 billion, according to the Atlas of Giving's latest report. The uptick in... Read more →

I spent most of this morning at my personal computer downloading statements necessary to file our annual tax return. Most of what I was getting today was tax information from our investment accounts. I set up online access to every account, investing and basic bills, that I could when we moved back to Texas in 2005 so I wouldn't have to worry about things being forwarded by the U.S. Postal Service. It generally works out well. But now and then I do miss getting the statements in the curbside mailbox. Online access means I have to take responsibility to get... Read more →

Do you know what today is? No, annoying camel. It's definitely not hump day. It's beware of tax scam artists day. Sadly, just about every day needs to be designated as tax scam avoidance day. But con artists are most active during each year's main tax filing season. Their goal? To steal your identity so they can file a fake tax return claiming a fraudulent refund. Tax season 2014 officially begins this year on Jan. 31, but some folks are already e-filing, either with a tax professional's help or by using the already up-and-running Free File option. The Internal Revenue... Read more →

Well, that tax audit didn't go as the Internal Revenue Service had planned. William Berroyer was in the IRS' Hauppauge, Long Island, office in 2008 working out a deal on $60,000 in taxes the agency said he owed. Instead, four years later Berroyer is $862,000 richer. But it has nothing to do with what was on his 1040. The six-figure addition to Berroyer's bank account is from a physical injury that Berroyer sustained during the return examination. In a suit filed in federal court, Berroyer said during that fateful audit he tripped over a phone cord and fell against a... Read more →

The full 2014 tax filing season officially opens in 10 days. Are you ready? If this is the year that you finally hand off your tax hassles to a professional, you'd better start your search. Good tax preparers are quickly booked. And you need to make sure you hire the tax pro who's best for your filing circumstances. Sorting through tax pro options: Finding the right tax help is a lot like the whole tax system. It's not a simple process. In fact, today's Daily Tax Tip offers multiple pieces of tax preparer advice: 5 tips to picking the perfect... Read more →

Will the handouts to Boeing ever stop? Apparently not. Washington State leaders reportedly are ready to push through $4 billion in possible transportation projects that they deemed "key to Boeing's success in Washington state." The added state spending is detailed in a 164-page proposal obtained by the Associated Press under public disclosure laws. The $4 billion added tax money also is this week's By the Numbers figure. Boeing announced it would keep production of its new 777X jet in Washington after a second machinists union vote earlier this month caved to most of the company's demands. Artist's image of 777-9X... Read more →

The hubbub over the Internal Revenue Service's inept and ill-advised vetting process for groups seeking nonprofit status no longer dominates the news cycle. But make no mistake, the issue has not disappeared. TaxProf blogger Paul Caron has been keeping a daily tally of coverage. We're now up to Day 256 in the so-called IRS scandal. Fiscal costs to IRS: And there are more direct implications for the IRS other than just a public relations nightmare. The recently enacted $1.1 trillion spending bill that keeps the federal government running through Sept. 30 includes provisions directly related to the IRS 501(c)(4) nonprofit... Read more →

It's one of my most favorite times of the year. Girl Scout cookies are on sale! I'm a Thin Mints addict. I could eat a whole box in one sitting. They are great alone or crumbled over a bowl (or gallon) of vanilla ice cream. This has been a tasty temptation for as long as I can recall. So every year I buy more boxes than I should. I tell myself that the purchase is for a good cause, and it is. Thin Mints and the other varieties of cookies are a fund-raising project for the local Girl Scout troops.... Read more →

This post was updated Nov. 9, 2018 I live in Texas, a state that does not offer a health insurance exchange. Instead, we Lone Star Staters must use the federal exchange to buy their medical coverage. It has not been an easy time for my neighbors in need of health care, given's shaky roll-out. But being hardy Texans, they forged on and ended up getting policies to their liking. And now, a federal judge has determined that they will be able to claim, if eligible, the Premium Tax Credit on their 2014 federal return. Tax help in buying medical... Read more →

This post was reviewed/updated Monday, April 9, 2017 Are you filing a federal tax return for the first time? Welcome to the world inhabited by more than 150 million other Americans. It can be scary. But it doesn't have to be if you follow these six steps a novice taxpayer can take to successfully make it through their first filing season. 1. Get organized: This is something you'll need for all the future tax filing years you have before you. You'll be glad you established a good organizational habit from the get-go. 2. Talk with your parents: If you are... Read more →

Welcome to the official start of the 2014 tax filing season, part one. Although some software companies and tax professionals have been completing 2013 tax returns for the last couple of weeks, the official e-filing of these 1040s won't happen until Jan. 31. That's the day the Internal Revenue Service will start processing all tax returns. One part of IRS filing operations, however, did officially open its electronic doors today, Friday, Jan. 17. Free File is now up and running. The Free File program has been handling returns since 2003. Since then, the partnership between the IRS and tax preparation... Read more →

It's a done financial deal. This evening (Jan. 16), the Senate approved the $1.1 trillion spending bill that was OK'ed the day before by the House. Obama should sign the measure soon has signed the measure into law. Everyone in federal offices now knows just how big -- or small in the Internal Revenue Service's case -- a budget they'll have to work with for fiscal year 2014. Now for the next fiscal battle, increasing the debt ceiling. Debt And that deadline will be a bit closer than we previously thought. February, not March: Treasury Secretary Jacob (Jack) Lew says... Read more →

You'd think we'd be used to a late filing season by now. It's happened several times, including last year. But if you're getting a refund, it's hard to be patient. You want your tax cash back from the Internal Revenue Service ASAP. I understand your frustration (in theory; we usually owe Uncle Sam just a bit). But chill out for just a while longer. Some refund patience could save you money and possibly prevent even more tax hassle. Early refund options have costs: I'm talking about the tendency for some folks to seek other avenues for their tax refund money.... Read more →

Maybe the National Taxpayer Advocate's recommendations came too late in the budgeting process. Or maybe members of Congress just like whacking the most hated federal agency with a fiscal bludgeon. Whatever the reason, the Internal Revenue Service is going to have to make do with less money in fiscal year 2014 under the omnibus budget bill worked out this week on Capitol Hill. UPDATE: The House passed the spending bill Wednesday, Jan. 15, afternoon by a bipartisan 359-to-67 margin. It now awaits Senate action. And that means all of us taxpayers will probably suffer at least a little bit this... Read more →