Health insurance policies with lower premiums are always popular, whether the medical coverage is offered via a workplace plan or bought separately by individuals. Those who opt for such coverage are willing to take smaller out of pocket premiums each month in exchange for larger deductibles for their overall coverage. Part of that choice is based on the opportunity to set up a companion savings account to cover those higher deductibles. These aptly and obviously named high deductible health plans, or HDHPs, work well for folks who don't have chronic medical issues, but want to make sure they have coverage... Read more →
May 2021
Reviewed and updated May 15, 2021 Tax Day 2021 for most U.S. taxpayers is just a week away. Procrastinators' focus obviously is on finishing up those 1040s. But there are some other tax tasks that, if they apply to your tax situation, you should take care of or at least consider by May 17. 1. Contribute to an IRA: Putting as much as you can into an individual retirement arrangement, or account as most of us call it, is always a smart move. The IRA will grow over the years, giving you some cash when you're ready to call the... Read more →
Washington's capital gains tax proposals have people talking. On both coasts. In Washington, D.C., President Joe Biden's call for those earning more than $1 million to pay a 43.4 percent tax on their investment earnings instead of the current 20 percent tax rate has anti-tax lawmakers and lobbyists working overtime to stop it before it gets going. That total comes from a return to the pre-George W. Bush tax cuts ordinary income tax rate of 39.6 percent plus the 3.8 percent Affordable Care Act investment income surcharge. Meanwhile, around 2,350 miles to the west, a new capital gains tax on... Read more →
Among the many numbers critical to tax filing is the deadline returns are due. That's not always the same for all taxpayers. This year we have three due dates for filers in five states. I love tax visuals. There are tons of fun tax graphics (yes, I used "fun" and "tax" in the same sentence) out there, many from the Internal Revenue Service. I just ran across another one, an infographic from WalletHub. A very long infographic that, since I'm awarding it this weekend's Saturday Shout Out, you'll find at the end of this comparatively brief post. But before you... Read more →
Crayons aren't just for kids any more. Adult coloring books abound, including one created just for accountants. With Tax Day 2017 just days away, perhaps no one is feeling the pressure more than tax professionals. Tax preparers, for the second consecutive filing season, are dealing not only with the regular rush of taxes, but also with new COVID-19 pandemic prompted laws. Multiply that by how many clients they have, add what's happening in their (and their clients') lives, and the solution equals, among other things, stress that's off the charts. Helpful timeouts: While it might seem counter intuitive to those... Read more →
Even before 2017's Tax Cuts and Jobs Act (TCJA) greatly increased the standard deduction amounts, most people chose to use the standard deduction amount. But one thing that the latest tax reform law didn't change is the ability for many to get some added deductions without itemizing. These used to be called, at least by the tax community, above-the-line deductions. They got that moniker because pre-TCJA they appeared in the last section of the old long Form 1040, just above the last line of that form's first page where your adjusted gross income (AGI) was entered. (A handful also were... Read more →
Still working through the retirement changes that were part of 2019's SECURE Act? Get ready. SECURE 2.0 is on its way. The Ways and Means Committee (W&M) today, May 5, unanimously — yes, Republicans and Democratic representatives agreed on something! — to send this latest set of retirement (and tax) law changes to the House floor. First round retirement law review: Provisions in the first SECURE, or Setting Every Community Up for Retirement Enhancement, Act took effect Jan. 1, 2020. It was the largest retirement reform bill since the Pension Protection Act back in 2006. Among the major changes in... Read more →
You need to follow your doctors' practice of keeping track of your medical records. Your documentation of your health care treatments and costs could pay off as valuable tax deductions. Most taxpayers used the standard deduction even before 2017's Tax Cuts and Jobs Act made it even more appealing by essentially doubling the amounts. Still, millions of filers every year find that claiming itemized deductions gives them a better tax result. And medical expenses tend to be a big reason why they opt to itemize, especially when they know and claim all the possible health-related expenses. Annual deduction choice: You're... Read more →
Feeling adrift as the May 17 tax filing deadline approaches? Here are some tax moves to make this month that could serve as lifelines. May Day arrived over the weekend, but millions of taxpayers today are sending out filing mayday distress signals. The delayed May 17 Tax Day is just two weeks away. Two weeks, however, is plenty of time to get your taxes done. Or postpone them — at least the form filing part — for five more months. Those are the top two tasks on the following list of seven tax moves to make this month. Since time... Read more →
The Biden Administration's proposal to up the Internal Revenue Service budget so it could go after more rich tax cheats got a lot of attention. But the White House also wants to cut down on some audits. That, according to the president's American Families Plan, can be accomplished by giving the IRS more oversight of unregulated tax preparers. The audit/tax pro regulation connection is noted in a White House fact sheet hyping the proposal: These Tax returns prepared by certain types of preparers have high error rates. These preparers charge taxpayers large fees while exposing them to costly audits. As... Read more →
Severe storms in late February produced flooding in Franklin County, Kentucky, shown here, as well as other parts of the Bluegrass State. That led to a major disaster declaration and associated tax relief. (Photo by National Weather Service) We Texans, especially here in the usually more temperate central-to-southern part of the state, learned a hard lesson in February from Mother Nature. She can be as bad as she wants, whenever and wherever she wants. We Lone Star Staters are not alone in dealing with the weather truth. Since our devastating winter storm, severe weather has raged across much of the... Read more →