A week ago, the idea of indexing capital gains was just that, an idea. To move forward, the best bet was for the proposal to make it into Tax Reform 2.0. It didn't. So now it's looking more likely that the U.S. Treasury might act unilaterally. Treasury Secretary Steve Mnuchin had previously (all the way back in late June) said that he would prefer Congress take the lead on indexing capital gains. He did add, however, that "If we're not able to complete Tax Reform 2.0, then we'll go back to the drawing board and decide whether we want to... Read more →
July 2018
Photo by NeONBRAND on Unsplash If you thought those back-to-school tax holidays were a bit too early, think again. Classes at several Texas colleges start in a couple of weeks. So do those at our local elementary, middle and high schools. So much for summer lasting until the long Labor Day weekend. The resumption of classes means that in addition to purchasing the clothing, books and other supplies the students of all ages need, youngsters and their families also are doing some 2018 school year homework on how to pay for all the school-related costs. 529s to the educational rescue:... Read more →
It's called the dismal science, but Donald J. Trump's vision of the U.S. economy was anything but gloomy after the Commerce Department on July 27 reported gross domestic product (GDP) growth for the second quarter of the year was 4.1 percent. That's a welcome amount of growth based on the economy's broadest measure of goods and services. That's why it's this week's By the Numbers figure. But, say most of the practitioners of the dismal science, aka economists, let's not get carried away. They caution that while the latest measure of economic growth is good news for both U.S. businesses... Read more →
Your tax responsibilities as a freelancer can be a hassle, but at least they mean you're making money via your self-employment venture. But what about those clients who ignore your invoices? Here are some ways to deal with problematic payers. You've done your research — including checking into all the new entrepreneurial tax tasks you'll have to handle — and decided, yes, freelancing is the way you want to go. Welcome to my world! Overall, I highly recommend the self-employed life that involves a variety of clients. Even when you specialize like I do, you still get an interesting array... 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 →
July is almost over. The first day of school is just around the corner. And on this final July weekend (or at least part of it), some southern shoppers will be out in force as Mississippi and Tennessee hold their annual sales tax holidays. Regular readers know that these two states' events are included in my earlier overall look at this summer's back-to-school tax holidays. But since these are the final no-tax shopping appetizers before a buffet of a dozen other such events in August, they get a bit of a spotlight. Same start, different endings: Both start at 12:01... Read more →
Republicans unveiled their outline for additional tax changes on July 24 and it's just that. A bare bones framework. House Ways and Means Committee Chairman Kevin Brady (R-Texas) acknowledged the skimpy structure. That was by design, he said, with the outline to serve as a starting point for his GOP colleagues to offer feedback. Yes, he said Republican feedback. As with the original Tax Cuts and Jobs Act (TCJA) that was enacted last December, Democrats were excluded from the legislative writing process. Once things are fleshed out, Brady said he expects a Tax Reform 2.0 bill to go before the... Read more →
Rep. Bob Goodlatte opens the hearing on what Congress should do about interstate sales taxes and remote sellers in the wake of the Supreme Court decision that upended prior standards. (House Judiciary hearing video screenshot) If you thought the interstate collection of sales taxes from remote sellers was going to get easier following the recent high court ruling on the matter, think again. Now Congress is getting involved. Again. And if you thought any decision on how federal lawmakers should address the thorny issue of taxes and interstate commerce would be easy, think, yes, again. Long and winding remote sales... Read more →
Long-term investors already get a tax break. They pay lower capitals gains tax rates when they sell assets held for more than a year. That tax benefit survived the Tax Cuts and Jobs Act (TCJA). Now some Republican lawmakers want to protect even more unearned money from taxes. Tax and political considerations: Rep. Devin Nunes (R-California) has introduced a bill that would index capital gains to inflation. The Ways and Means Committee member says his Capital Gains Inflation Relief Act (H.R. 6444) "is a common-sense reform that will remove an unjust tax, contribute to economic growth, and help both large... Read more →
U.S. Navy photo by Mass Communication Specialist 1st Class Patrick Gordon Some veterans who received disability severance payments after Jan. 17, 1991, and included that money as income when they filed their tax returns now are due refunds. The former military members have known since February that they were due money. Now the process of getting it has finally begun. But Uncle Sam isn't automatically sending former troops any cash due from the erroneously taxed payments. The veterans need to file an amended tax return using Form 1040X to claim a disability severance payment-related credit or tax refund. Why now?... Read more →
Owing the Internal Revenue Service is bad. Having the IRS come after you for that money is worse. Dealing with private debt collectors who've been given your overdue tax account is worst. That's the perspective of many when it comes to the federal tax collection process. But not all. And now an online war of words has erupted between the National Taxpayer Advocate and a new group created to advocate for private collection of tax debt. Pro private tax debt collection: The Partnership for Tax Compliance (PTC) debuted on June 26. The goals of the 501(c)6 nonprofit (that's the tax... Read more →
An historic interplanetary business trip 49 years ago prompted an astronaut to submit some travel expenses to his NASA bosses. Such claims still happen every day for more Earth-bound business travelers, but a tax break for unreimbursed work-related expenses is gone. Neil Armstrong, the first man to walk on Earth's Moon, photographs the lunar module at Tranquility Base on July 20, 1969. (Photo courtesy the National Aeronautics and Space Administration/NASA) On a hot July afternoon 39 years ago today, my brother and I were ordered to come in from our play in the West Texas sun so that we could... Read more →
Today's Senate Finance Committee approval of Charles Rettig took a bit longer than originally expected. The reason was a decision this week by Rettig's future boss to ease most nonprofit donor disclosure requirements. Charles P. Rettig, nominated to be the next Internal Revenue Service commissioner, faces the Senate Finance Committee during his June 28 confirmation hearing. The Senate tax-writing committee was supposed to vote Thursday, July 19, morning on sending Rettig's nomination to the full chamber for confirmation. It was a much anticipated procedural step, since the the top IRS slot has been vacant for eight months. But the vote... Read more →
As expected, states whose residents will take a major federal tax hit under the new $10,000 limit on deductions of state and local tax (SALT) payments have headed to court. Connecticut, Maryland, New York and New Jersey on Tuesday (July 17) afternoon filed a lawsuit in federal court in New York seeking to invalidate the Tax Cuts and Jobs Act's (TCJA) changes to a long-standing federal tax deduction. In this latest semi-reform of the tax code, Congress essentially gutted the value of this itemized tax deduction for, in most cases, the millions in state income and local real property payments... Read more →
UPDATED to include the Massachusetts' sales tax holiday that was enacted Aug. 10, just in advance of that Bay State's Aug. 11-12 tax-free event. The annual sales-tax-free events generally billed as back-to-school tax holidays kick off the 2018 summer shopping season this week. There are 17 this year, three in July and 14 in August. Yes, kiddos, your summer holiday is winding down. Parents and school officials are getting ready for the resumption of classes in, for some jurisdictions, just six short weeks. That also means that it's time for back-to-school sales tax holidays. These annual events offer shoppers a... Read more →
Gym memberships could be deductible. Medical flexible spending accounts would be more appealing. Those are just part of tax changes included in a series of health care bills approved last week by the Ways and Means Committee. Now the question is, will they make it into law? Working out at Contours Express. (Photo courtesy Flickr CC) It's hot here in Austin. That's probably why most of my neighbors abandoned their usual outdoor workouts and jammed into my regular exercise class this morning. This happens every so often. Being a West Texas gal used to wide open spaces, I find the... Read more →
It's my second favorite holiday, National Ice Cream Day! Yep, it's a sorta real holiday, occurring every year on the third Sunday in July as part of National Ice Cream Month. So many ways to enjoy ice cream on National Ice Cream Day and any/every day. (Image courtesy GIFS for Humans Tumblr). National Ice Cream Day became official in 1984 when then President Ronald Reagan signed a proclamation declaring its existence. And even though the holiday was the brainchild of the dairy industry, I can't think of many more things as worthy of celebration than this beloved and iconic treat.... Read more →
It's hot. Not just here in Texas, but across the United States. In fact, around the world. That means we all need to be careful. More careful than the hubby, who decided to mow our yard yesterday. And not during the relative cooler morning when temperatures were in the 80s, but in the afternoon when the thermometer nudged 100 and it felt even hotter. It wiped him out for the rest of the day and evening. I love my man, but I guess it's true that the heat does make us do dumb things. Deadly heat: Excessive heat also tends... Read more →
If you're superstitious or suffer from paraskevidekatriaphobia, today is not a good day. In case you haven't checked your calendar, it's Friday the 13th. Even scarier is the reality that any day can be unlucky if you happen to fall for a tax scam. It's true that most tax crooks use scams to steal your identity and then file fake returns to get fraudulent refunds in your name. It's also true, though, that these scammers work year-round. That's why Friday the 13th is a good day to look at 13 scary tax scams that have appeared so far this year.... Read more →
Yes, it's just TV. But I like it. A lot. I know a lot of folks, including many of my friends, still look down their noses at television. But like any creative enterprise, it can provide much more than just entertainment. From the get-go, television has been a reflection of every country's cultural, political and social perspectives. That's why I always look forward to the annual announcement of the Emmy nominations. (More on this year's prospective winners later. You can take this a threat or promise, depending on your personal opinion about TV and its awards.) At its most elemental... Read more →