Despite companies reopening as we've moved into a new phase of the COVID-19 pandemic, the number of folks filing for unemployment is raising some concerns. Yes, unemployment applications still are trending near the lowest levels of the pandemic. But first-time applicants for the benefits have edged higher the past three weeks. Today's numbers from the Department of Labor (DoL) for the week ending Sept. 25 showed seasonally adjusted initial claims of 362,000. That's an increase of 11,000 from the previous week's unrevised level of 351,000. And it's the highest since the 377,000 tally for the week ended Aug. 7. There... Read more →
September 2021
Congress currently is debating who to tax and how much to pay for the Biden Administration's Build Back Better plan. The public, however, seems to have decided. A recent Pew Research Center poll found that a majority of Americans are for raising taxes on households that make more than $400,000 a year. Overall, the survey says that 61 percent of respondents approve of raising ordinary income tax rates on their wealthier neighbors. The current top rate is 37 percent, which was lowered from 39.6 percent with the enactment in late 2017 of the GOP-written Tax Cuts and Jobs Act (TCJA).... Read more →
Looking to hide money from the Internal Revenue Service in another country? The tax agency makes finding such funds a priority, but one man accused of helping set up tax shelters has managed to slip through U.S. tax officials' hands. (Photo from Pixabay via Pexels) More than five years ago, 11.5 million leaked documents detailing information for more than 214,000 offshore companies were made public. The world was fascinated with the tale of how wealthy individuals, with the help of money managers and bankers, created tax shelters. That reveal by the International Consortium of Investigative Journalists, dubbed the Panama Papers... Read more →
The loss of tax revenue is substantial, since most states collect tax (or are supposed to) on all their meals, from eat-in to pick up to delivery. Tasty and taxable. (Photo by Adrienn via Pexels) Running a restaurant poses many challenges. Dealing with increased food costs. Hiring and training staff. Finding an accessible and affordable location. Complying with health and other regulatory rules. Paying taxes. The tax consideration is getting special attention in California, where an extended investigation reveals that around a fifth of the state's restaurants are using high-tech methods to skip out on taxes. "The California Department of... Read more →
But despite the technical problem, IRS says still use online tool to make changes, including stopping Advance Child Tax Credit payments for the rest of the year. You'd think that by the time the Internal Revenue Service issued the third Advance Child Tax Credit (AdvCTC) payment, things would be automatic. Well, you've got another think coming. The IRS did deliver in mid-September around 35 million AdvCTC payments totaling $15 billion. But unfortunately for some eligible families, their money didn't show up on time. The explanation was the usual one. It was a technical issue. Yeah, I rolled my eyes, too.... Read more →
Is the fifth time the charm? The owners of cannabis businesses legal in their states certainly hope that modified multiple maxim is true. The Secure and Fair Enforcement (SAFE) Banking Act would allow cannabis businesses in the 36 states with retail dispensaries (that are taxed) to operate the same way their non-marijuana related colleagues do. They could pay their federal taxes with a check, secure loans to expand their operations, and accept bank debit card transactions by customers. Right now, that's all problematic at best. Businesses that sell marijuana are limited in their banking options since the plant still is... Read more →
Advance Child Tax Credit (AdvCTC) payments are producing a financial benefit to more than the families receiving the money. The early tax credit amounts, which started going out in July and will continue through December, also appear to keep more workers on the job. That's a finding from a report by Humanity Forward, which partnered with researchers at the Washington University of St. Louis, Appalachian State, University of North Carolina-Greensboro, and the Urban Institute to examine the potential effects of the tax break. In addition, the tax credit also is encouraging some to follow through on entrepreneurial plans. Popular tax... Read more →
Here's some news that's not news for many taxpayers. The Internal Revenue Service is still running behind in its processing of tax filings and getting payments, including refunds, out to taxpayers. What is new, though, is that the admission comes from the top of the tax agency. IRS Commissioner Charles Rettig praised the efforts of his employees during the ongoing COVID-19 pandemic in a recent A Closer Look column. The online IRS publication offers agency executives the chance to discuss issues of interest to taxpayers and the tax community. But Rettig also acknowledged in the Sept. 14 piece that "despite... Read more →
The Internal Revenue Service has signed new contracts with three private tax debt collection agencies. (Image via Giphy) When the Internal Revenue Service four years ago reinstituted, per Congressional mandate, the latest private tax collection program, it signed four collection companies. Today, the IRS announced new deals with three collection agencies. The private collection agency (PCA) contracts take effect tomorrow, following today's expiration of the old contracts. So starting Thursday, Sept. 23, taxpayers with unpaid tax bills may be contacted by one of the following agencies: CBE Group, Inc. P.O. Box 2217 Waterloo, IA 50704 800-910-5837 Coast Professional, Inc. P.O.... Read more →
Photo by sarachicad via Flickr CC Since COVID-19 lockdowns began in March 2020, both employers and employees have been struggling to recover. There was hope when vaccines became widely available in early 2021, things would change. Coronavirus jab hesitancy and the Delta variant wrecked that. Some blamed added federal unemployment benefits on the trouble companies had finding staff when they reopened. Others said it was the businesses' fault for not offering better wages and benefits. Now, in the midst of the Great Resignation in which millions of workers have opted not to return to their prior workplaces, companies are still... Read more →
I spend way too much time on social media, specifically Twitter. I like the quick hit, hyperbolic, melodramatic tone of many of the folks I follow. One Tweet in particular caught my eye last week with its dismissal of LuLaRoe clothing. Geraldine DeRuiter, who blogs at The Everywhereist, is not a fan. "LulaRoe clothing has spread like a spandex pox over my local thrift store. Shirts and skirts and dresses, all so bizarrely ugly, and not a good sort of ugly, but a strange, sad, I-think-maybe-humanity-should-go-extinct kind of ugly."https://t.co/voUOOQRRCf — Geraldine (@everywhereist) September 19, 2021 After I quit laughing, I... Read more →
Image by Gerd Altmann from Pixabay Each year, the Treasury Department's Office of Tax Policy and the Internal Revenue Service formulate a Priority Guidance Plan that focuses resources on issues that are most important to taxpayers and tax administration. One of the main goals of the guidance plan is to increase voluntary taxpayer compliance by helping to clarify ambiguous areas of the tax law. So working off the annual guidance plan, the IRS issues regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2021-2022 Priority Guidance Plan, released on Sept. 9, contains 193 guidance projects. The list... Read more →
Technology, not heavy equipment, can close the Tax Gap, according to two former IRS commissioners. The Tax Gap has always been a concern of the Internal Revenue Service, Congress, and taxpayers who pay their taxes. Basically, it's the amount of money the IRS figures it is due from filers, but which it's been unable to collect. Two former IRS execs say they know a way the agency can collect more unpaid taxes. Even better, write former IRS Commissioner Charles Rossotti (he was head honcho from 1997 to 2001) and Fred Forman, former associate commissioner for modernization from 2000 to 2004,... Read more →
If you have it in your heart, and bank account, consider donating to your favorite charity. It could help many through a difficult year, and also might provide you an enhanced tax deduction. 2021 has been, to put it as nicely as I can, one heck of a year. We commemorated the 20th year since the Sept. 11 foreign terrorists' attacks. We've had major and deadly natural disasters. We're still dealing with the COVID-19 pandemic. And we've got 3½ months to go. All these events, and the possibility of more (hurricane season, for example, lasts until the end of November),... Read more →
Sin taxes, those government levies on products or activities generally deemed as not good for us, typically are a favorite revenue raiser for states. Now Uncle Sam, or at least Capitol Hill Democrats looking for ways to pay for their proposed $3.5 trillion economic package, are taking a page from their state tax counterparts. One of the suggested taxes is a hike of the current federal excise tax on cigarettes and cigars. Another is a new tax on vaping. The House Ways and Means Committee summary of the taxes says: This provision doubles the current rate of excise taxes on... Read more →
One of the biggest challenges for any business, whether new or established, small or larger, is hiring. It's also a challenge for the Internal Revenue Service, especially when companies don't understand or intentionally avoid employment taxes. Money lost from unpaid payroll taxes, both unreported or underreported, is huge, notes a recent Kiplinger's Tax Newsletter, accounting for a large portion of the overall federal Tax Gap. This is the amount of money the IRS is owed, but hasn't been able to collect. Kiplinger cites IRS data from 2019 that found $77 billion of payroll taxes fell through the cracks yearly from... Read more →
The IRS has decided that home COVID-19 tests are allowable medical expenses. This Tuesday was the week from hell, mainly due to dealing — again! — with medical insurance issues. I won't bore you with my personal, and continual, battles with insurance companies over paying for my health care procedures. I will say that even with the coverage, the hubby and I have been able to itemize our — and by our, I mean mostly my — medical costs over the last few years and claim them on our taxes. We're in the minority, both in itemizing and claiming medical... Read more →
The Great Resignation created by folks deciding not to return to their jobs after extended COVID-19 absences has led to a lot of new businesses. That means there a many new bosses out there, most of them dealing with a different part of the Internal Revenue Service for the first time. As business owners, they potentially face new types of taxes. Exactly which taxes depend largely on how their new company is established. That's why selection of a business entity is a major tax decision. Business entity options: As part of 2021's National Small Business Week, sponsored annually by the... Read more →
via GIPHY On a visceral financial level, we all hate paying taxes. But what we hate almost as much is that the tax laws often seem overly complicated or just plain goofy. Take estimated taxes. These are four extra payments that the Internal Revenue Service and many states require taxpayers to make to cover the taxes due on earnings that aren't subject to paycheck tax withholding. Straightforward enough, right? Until it comes to payment deadlines. Even though there are, in most cases, four of them and they're called quarterly estimated tax payments, the IRS uses a calendar that's a bit... Read more →
An overhead view of the National September 11 Memorial and Museum at the former World Trade Center site, the former location of the Twin Towers that were destroyed by the al-Qaeda attacks 20 years ago today. (Photo courtesy 9/11 Memorial and Museum via Facebook) Today is the 20th anniversary of the Sept. 11, 2001, terrorist attacks in New York City, Washington, D.C. and central Pennsylvania. The annual commemoration ceremony at the New York memorial will be much the same as in prior years. Family members of 9/11 victims will gather on the Memorial Plaza this morning to read aloud the... Read more →