Before the House Ways and Means Committee released six years of Donald J. Trump's federal filings, the last time was got an ostensible glimpse of the former president's Form 1040 was back in October 2015. That's when he shared this photo on his Twitter account of him signing what he said was his federal tax return for that year. With just a few hours left in 2022, some of us are doing some last-minute tax accounting. OK, maybe that's just me and a handful of others who've already planned our annual living room countdown to 2023. I know that one... Read more →
December 2022
Drivers faced plenty of challenges in 2022, notably the dramatic jump this year in fuel prices. That prompted the Internal Revenue Service in June to hike 2022's optional standard mileage rates for the last six months of the year. Now the IRS has bumped up the business rate again as part of its annual adjustments to a variety of tax laws. Beginning on Jan. 1, 2023, the standard optional mileage rate for a car (or van, pickup or panel truck) used for business purposes will be 65.5 cents per mile. That's up 3 cents from the midyear increase that applies... Read more →
There's still time to give for 2022 tax purposes, especially if you make an electronic donation. If you're among the minority of taxpayers who still itemize, year-end philanthropy is one of the easiest ways to boost your Schedule A deductions. And much of that giving his happening right now. Nonprofits Source, a digital marketing consultant for nonprofit groups, says an estimated 30 percent of annual giving occurs in December. Ten percent of those gifts are made in the last three days of the year. If you're part of this last-minute giving group, here are some tips on getting your potentially... Read more →
Don't miss out on any tax breaks as you put together your retirement plan. That includes claiming the Saver's Credit if you're eligible. Some retirement savers got an early Christmas present. On Dec. 23, President Joe Biden signed into law the $1.7 trillion omnibus package that keeps the federal government running and more. Among the more was a revision of retirement provisions known as the Setting Every Community Up for Retirement Enhancement (SECURE) Act. And one of those changes is the eventual conversion of the Saver's Credit into a matching contribution tied to workplace plans and IRAs. That's a good... Read more →
Photo by Karolina Grabowska The Internal Revenue Service is making progress on its documents backlog, which started in 2020 with COVID-19 pandemic office closures and snowballed. But it's not there yet. That's distressing news for taxpayers and their tax pros who've been waiting for accounts to be brought up to date. But there's a tiny silver lining for those whose refunds are among the still-stalled IRS stack. Inflation has pushed up the interest rate that the IRS will pay on refunds that take longer than 45 days to process and issue. More interest on overdue refunds: IRS interest rates are... Read more →
Merry Monday Holiday After Christmas on Sunday. Happy Boxing Day. Joyous End-of-Year Tax Tasks to Complete Week. Yep, the start of the last week of 2022 has a lot of identities. But it's that last designation that you need to pay close attention to, since the end of the tax year is critical when it comes to many tax moves. Here are eight you need to consider and, if they apply to you, complete by Dec. 31 — or actually by Friday, Dec. 30, in some cases since it's the last business day of 2022. 1. Take your required minimum... Read more →
Merry Christmas 🎅 Peace ☃️ Joy 🎄 Happy Holidays I hope you're having a wonderful Christmas. The video above offers a brief look at how the hubby and I celebrate Dec. 25. I know, I should have shot it horizontally, but that's why I'm a writer, not a cinematographer. And no, there will be no videos of me making our holiday dinner. Enjoy today and your traditions however and whatever you celebrate, or if you don't! I'll be back here with a return to taxes tomorrow. Until then, a few more of our favorite Christmas items reflecting our native Texan... Read more →
Kris Kringle, portrayed by Edmund Gwenn in the 1947 classic movie "Miracle on 34th Street." (via Giphy) I'm a Christmas traditionalist. OK, so I expand the traditional holiday season. We, at my urging, put up holiday decorations right after Halloween. We have a lot of them, so it takes time. Plus, I'm a fan and nonresident celebrant of Canada's Thanksgiving. Our neighbors to the north's celebration of the harvest and other blessings of the past year falls on the second Monday of October, following a more North American seasonal shift. Even better, it provides a welcome space between Turkey Day... Read more →
UPDATE, Tuesday, Nov. 21, 2023: The Internal Revenue Service today gave millions of people whose earnings are paid through third-party settlement orgs (think Venmo, PayPal, even TicketMaster) an early Christmas present. The new $600 transaction trigger to issue 1099-K forms is on hold for another year, with a $5,000 phase-in amount set for tax year 2024. Details in my post 1099-K $600 reporting threshold delayed again, this time to 2025. Are you worried about getting a slew of 1099-K forms next year in connection with your side gig earnings? The Internal Revenue Service has an early Christmas present for you.... Read more →
A heat pump's outdoor unit is pulling what warmth it can out of the air in freezing conditions. (Photo by Peter Eastern via Wikipedia Commons) North winds are gusting up to 30 mph right now here in suburban Austin, Texas. By sunset, we'll be at freezing, with temperatures in the area tonight expected to drop to between 10 and 15 degrees. Despite my alternately freaking out thanks to memories of 2021's snow, ice, and prolonged freezing temperatures that led to extended electric and water utility outages across most of Texas, ranting, and stuffing old hand towels into every new window... Read more →
Reviewed and updated Friday, Dec. 8, 2023 When are tax-deductible expenses like bananas? When you bunch them. (Photo by Couleur) I just got an email from my dentist, who's suddenly turned into an ad hoc tax adviser. He wanted me to know that he's got a few appointments open through the end of the year in case I need to spend my medical flexible spending account money. His alert also got me thinking about another tax tactic, bunching. Types and timing of deductible expenses: Since enactment of the Tax Reform Act of 2017, year-end bunching has taken on increased importance.... Read more →
To ensure your golden years truly shine, you need to save now. Changes in the SECURE Act 2.0, which has been added to crucial year-end legislation, could help. (Photo by 401k2012 via Flickr CC) You might have noticed that as 2022 has been winding down, there's been an unofficial theme for the ol' blog's posts. Many of them have focused on tax laws' effects, good and bad, on retirement savings. Part of that is personal. I like what I do for a living, but with each passing day, I (and the hubby) think increasingly about retirement. We're in good shape,... Read more →
Reviewed and updated Thursday, Dec. 21, 2023 Yes, you've got a lot to think about during the holidays, but add this tax task, too, if you're older and have a tax-deferred retirement plan. Don't miss the Dec. 31 RMD deadline. We're just days away from Christmas, so here's my tax tip gift to all my readers of a certain age. Take your required minimum distribution. Now. But definitely by the end of the year. If you're a septuagenarian and saved so you wouldn't have to rely solely on Social Security, you probably already know that the Internal Revenue Service wants... Read more →
via GIPHY Seven days from now, many of us will be opening Christmas presents. Hanukkah is underway. Regardless of what or how you celebrate December holidays, your purchases probably increase this month. And this year, inflation, even though it's abated a bit recently, means you have or will pay more for all those gifts, food, and other festive trimmings of the season. Every year, PNC financial services issues its Christmas Price Index, or CPI. It measures, using a methodology similar to Uncle Sam's official CPI, or consumer price index, the current costs of the gifts given in the classic holiday... Read more →
Photo by Pixabay Health and retirement are inextricably linked, and not just when we talk about staying in good shape in order to enjoy post-work years more fully. The link also is evident in the tax code, notably with the tax benefits of health savings accounts, or HSAs, that I blogged about last week. An HSA starts as a way for high deductible health plan enrollees to save tax-free for medical expenses, and then can morph into retirement funds when the account owner is older. In doing research for that HSA post, I ran across another retirement connection to the... Read more →
Back in the darkest days of the COVID-19 pandemic when companies and workers were struggling due to health-related shutdowns, they were given a bit of a tax reprieve. The Trump Administration on Aug. 8, 2020, issued executive memo that called for the deferral of the payroll tax portion of the Federal Insurance Contributions Act (FICA) tax that goes toward Social Security. The White House argued that the move would put more money into workers' hands, give employers some financial breathing room, and keep the economy moving during the initial coronavirus closures. There was a lot of political consternation about the... Read more →
Life today demands multitasking. That includes taxes. And the champion here is the health savings account, or HSA. It offers three tax advantages. First, contributions to an HSA are made before taxes are assessed on the money. This lowers your taxable income a bit. Second, HSA funds grow tax-free. Third, when you use HSA money to pay eligible medical expenses, those withdrawals are tax-free, too. A flexible, multiple, and mobile savings option: But wait. There's more. There's no use-or-lose with an HSA. The full amount in the account simply rolls over from year to year. Plus, an HSA is quite... Read more →
December 1998 was hectic. The hubby was in California, getting onboarded for his new job, which actually would be in Florida. Our cat and I were in suburban Maryland, finishing up packing for our move to the Sunshine State. Most of that packing was done from 7 p.m. into the early morning hours, as I was still commuting to my job in downtown Washington, D.C., during the day. I had planned to quit so I could focus on the move, which was scheduled for early in the new year. However, a heads-up from a buddy in my company's Human Resources... Read more →
Photo by cottonbro studio The season of giving goes beyond presents for family and friends or donations to charities. December is also when many people who work in restaurants, salons, hotels, and similar industries get their largest tips of the year. One thing that's the same, however, is the tax consequences of those gratuities. Regardless of their size or when you get them, tips are taxable income that must be reported on federal and, for most folks, state tax returns. Workers who've held long-time jobs where tips are commonplace know this. But with the economic changes wrought by the COVID-19... Read more →
Nothing ever disappears on the internet. Even, or especially, tax related posts. Take the bad legal take on taxes that tops this post. It was retweeted on Sunday (Dec. 11) by, you guessed it, Bad Legal Takes. But there's no indication of when Dave Champion originally blasted out his bad tax advice. It might have been before he was barred by a federal court in 2012 from promoting a tax fraud scheme. Or maybe he's back, since this Tweet apparently went up in October. His books also are still for sale online. Either way, that item this weekend spurred a... Read more →