Lawmakers in Arizona and Georgia think their residents don't have enough ways to pay their state taxes. To remedy that, they've introduced bills that would cryptocurrency payments. While fans of bitcoin and the myriad other digital assets may applaud the idea, they also need to note the downside. Paying state taxes — or for anything else — with cryptocurrency could mean more federal taxes. Grand Canyon state takes first leap: Arizona is the first state to jump at cryptocurrency tax payments. A bill by state Sen. Warren Petersen, a Republican representing Gilbert, would allow income taxes to be paid in... Read more →
February 2018
The Internal Revenue Service announced today that it has begun releasing refunds for taxpayers who claimed the Earned Income Tax Credit and the Additional Child Tax Credit. Many of these refunds should arrive in bank accounts or on debit cards this week, according to the IRS. That should make many of the ol' blog readers who've been frustrated by the delay (and shared their irritation in the comments section of my recent Where's Your Refund? post) happy. But some folks are likely to be irked about their refunds for another reason. The amount that arrived as a check, in their... Read more →
Shortly after the Tax Cuts and Jobs Act (TCJA) was signed into law on Dec. 22, 2017, the Republican lawmakers who wrote and fast-tracked it into law pointed to the measure's immediate effects. The most immediate indicator was the many companies that gave their workers year-end bonuses. Some corporate execs acknowledged that the law, which gives big businesses a dramatic 14 percentage points cut on their tax bills (from a 35 percent to 21 percent rate), played a part in the bonus decision. But as 2018, the first year that the tax cuts will be in effect, other companies are... Read more →
Warren Buffett, chairman of Berkshire Hathaway, meets with President Barack Obama in the Oval Office. Did this July 18, 2011, conversation lead to Obama's proposed Buffett Rule, a surtax on millionaires? (Official White House Photo by Pete Souza) If you were wise or lucky enough to get a piece of Berkshire Hathaway, company chairman Warren Buffett has some good news for you. Berkshire's gain in net worth last year was $65.3 billion. And while the Oracle of Omaha deserves kudos for many things, Buffett says the real thanks regarding Berkshire Hathaway's recent financial uptick should go to the Republicans. Specifically,... Read more →
Here in Central Texas, many of us have been complaining (guilty!) about the dreary patch of weather that's settled over the area. Yes, we can be whiny, especially when you look at really severe conditions elsewhere in the United States. Some Alabamans also are thinking about weather this weekend, but in a forward looking way. The Yellowhammer State's severe weather preparedness sales tax holiday kicked off yesterday, Friday, Feb. 23, and runs through Sunday, Feb. 25. During this time, Alabama's 4 percent state sales tax is waived on eligible purchases. Many cities and counties also have chosen to participate in... Read more →
Image courtesy SimpsonsWorld via Giphy.com The Tuesday after Presidents Day generally is the busiest day of the year for calls to the Internal Revenue Service's toll-free help line. That also means that callers find themselves on hold. Such waiting, compounded by being forced to listen to tunes that would never ever make your Spotify playlist, is common throughout the filing season. That then leads to taxpayer frustration, which often prompts filers to try different avenues to get answers to their questions. Don't, however, just randomly call any IRS phone number seeking tax help, cautions the IRS. And definitely don't call... Read more →
If you've been wondering when you can take advantage on your 2017 tax return of a recently renewed tax extender, your wait could be over. The IRS announced today, Feb. 22, that it's now ready to process returns claiming three recently renewed tax breaks Surprise extenders: Congress threw the tax world for a loop earlier this month when it tacked some expired tax break onto its budget bill. The tax laws, popularly known as extenders because they are temporary and must be periodically renewed or extended, included a variety of tax breaks for businesses and individuals. Immediately following the Congressional... Read more →
U.S. Navy photo by Mass Communication Specialist 1st Class Patrick Gordon With identity theft and refund fraud being so ubiquitous, folks might understandably think an unexpected tax refund notice is a scam. This time though, it's real for more than 133,000 U.S. military veterans who may qualify for their portion of federal tax refunds totaling an estimated $78 million. These former service personnel are due the money because they wrongly paid taxes on disability severance pay. Some of the erroneous tax payments go back as far as Jan. 17, 1991. The amount due eligible veterans varies based on rank and... Read more →
UPDATE, April 11, 2019 #NationalPetDay: As noted in this post from 2018, the Tax Cuts and Jobs Act (TCJA) makes changes to two of the five pet-related tax breaks noted when this post was published in 2018. For the 2019 tax season, during which tax year 2018 returns are filed, the miscellaneous expenses itemized deduction is gone and the moving expenses above-the-line deduction applies only to active military personnel. So for now, the headline is 3.5 pet-related (I'm counting the moving tax deduction as one-half since it's still partially in effect) breaks. However, these altered/expired pet tax breaks, like all... Read more →
George H.W. Bush, Barack Obama, George W. Bush, Bill Clinton and Jimmy Carter, got together in the Oval Office in 2009. The five living U.S. presidents are part of an exclusive club. They also are part of the reason for today's Presidents Day celebration. (Photo by White House photographer Eric Draper/GWB White House archives) Happy Birthday, George! George Washington's birthday actually is Feb. 22, 1731. However, we've celebrated it on the third Monday of February since 1968 thanks to a law that mandated most federal holidays occur on Mondays. We've also unofficially changed the Father of Our Country's day to... Read more →
Most taxpayers now are focusing on completing their annual tax returns. But if we have to deal with the Internal Revenue Service to finish that Form 1040, or if the agency subsequently has some questions about it, Uncle Sam's tax collector wants us to know we have some inalienable tax rights. The 10 components of Taxpayer Bill of Rights (TBOR) are this week's By the Numbers figure. Here they are: 1. The Right to Be Informed: Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of... Read more →
You open the package expecting, well you don't know what, but probably not 500 cockroaches. That, however, is what happened to a mail thief. Crooks will steal just about anything. And criminals who focus on U.S. Post Office boxes tend to increase their activity around this time every year. The reason? Tax refunds. Tax-related mail theft: Every February, people are either getting refund checks from the U.S. Treasury or they're receiving tax documents they can use to file their annual federal and state returns. Either option is a crook's dream. The checks can be cashed. The tax statements' info can... Read more →
Updated Feb. 14, 2019 Princess Bride impatience via Giphy.com Mid-February is finally here, the time when the Internal Revenue Service can finally issue refunds to taxpayers who had claimed the Additional Child Tax Credit (ACTC) and/or the Earned Income Tax Credit (EITC). Does that mean these refunds will show up today? No, that's a refund myth, even if you filed your Form 1040 on Jan. 28, the first day that the IRS began processing 2018 tax year returns. Neither is your refund likely to be directly deposited into your bank account, loaded onto a debit card or as a paper... Read more →
Beavis (sans Butt-head) offers callers, uh, help? (Image via Giphy.com) Looking for tax filing help from the Internal Revenue Service? Prepare beforehand. Tax identity theft concerns mean you'll have to prove to the IRS that you are you if you call the agency's tax hotline. And if you want face-to-face help at your local Taxpayer Assistance Center (TAC), you'll have to make an appointment. Telephone tax ID issues: I know. You're already unhappy with the IRS phone hotline. The IRS knows, too. Every filing season answering taxpayers' questions telephonically is on the agency's to-improve list. Last year, it even opened... Read more →
I hope she said yes! (Photo by Matt via Flickr) Valentine's Day has become one of the most popular days of the year to propose. If you're anticipating popping or answering the big question at an intimate romantic dinner tonight, taxes likely won't be on your mind. But perhaps they should be. Love and money: I'm a big fan of marriage. I've been in a mostly happy one with the hubby for a looong time. (Yes, I was a child bride!) But even back then, I was a tax geek. That's why our choice of wedding date — the year... Read more →
Your tax refund showed up in your bank account! Party time, right? Wrong. It's possible that the money isn't really connected to your filing. It could be part of a new tax scam that's appeared this filing season. And crooks are using even more chicanery to get the money that's in your account, from posing (once again) as Internal Revenue Service agents to pretending to be debt collectors (you knew this would eventually happen). But before this latest effort to steal your tax refund got to this point, it started with stealing your tax identity. Here's the tax tale in... Read more →
Same old, same old. That's the message the Internal Revenue Service got today when the Trump Administration released its fiscal year 2019 budget. The IRS' base budget amount is about the same as prior years and some old tax enforcement ideas are proposed again. Office of Management and Budget Director Mick Mulvaney discussing the Trump Administration budget last year. For release of the 2019 fiscal year budget, Mulvaney decided to stay off camera "because it's really boring." You can decide if he was right by listening to his remarks yourself via C-SPAN. It's no secret that the Internal Revenue Service... Read more →
Elmer Irey headed the Internal Revenue Bureau's Intelligence Unit in the 1930s. It was under Irey's direction that evidence was gathered leading to the conviction of Al Capone for failure to pay his income tax. Read more about Irey and Capone at The Mob Museum. I'm a big sports fan. But sometimes I need a break. So in my channel flipping today to find something other than the Olympics, soccer/futbol, NHL hockey and part 1 of NASCAR's 83-step Daytona 500 qualifying process, I ran across one of my favorite movies, "The Untouchables." I'm talking the 2007 version, with Kevin Costner... Read more →
While most investors have been closely following the recent gyrations of the stock market, fans of cryptocurrency also have been on their own frenzied financial journey. One bitcoin, as of this morning, was worth almost $8,433. I'd be happy with that value, but that's less than half what the cryptocurrency was worth in mid-December. On Dec. 16, 2017, the digital currency topped out at more $19,000. The cryptocurrency can be spent like real money — don't email me bitcoin et al fans; it will always be just one step above Monopoly money to me — but many tax collectors worldwide... Read more →
Since Congress decided to slip some expired tax breaks into the budget bill enacted earlier today and make them retroactive to the 2017 tax year, some folks will be amending the 1040 forms they've already filed. Ignore that smirking sound loud enough to make it onto the internet. It's the perpetually procrastinating hubby being all smug about how sometimes it does pay to put things off for a while. However, if, unlike the hubby, you don't defer tasks and were an early tax filer who now can claim, for example, the tuition and fees above-the-line tax deduction, you're probably already... Read more →