Spring is the traditional time to clean out all the junk you've accumulated. Our neighborhood has a community yard sale the first weekend in May. Some of what doesn't get sold ends up going to local charities. That's a good way to dispose of clothing and household goods that are in good condition and, if you itemize, claim a tax deduction. Follow donation rules: The state of the donated goods is just one of the conditions you must take into consideration, especially if you're planning to deduct their value as an itemized charitable gift. The other key donation deduction factor... Read more →
Charity
Vice President Kamala Harris and President Joe Biden share a lighter moment. Last week, they also shared their 2022 federal and state tax returns with the American public. (Photo courtesy K. Harris/White House) The U.S. president's and vice president's tax returns were among the more than 117 million filings that the Internal Revenue Service has received through mid-April. We know this because, as is once again tradition, President Joe Biden and his wife, First Lady Jill Biden, made their 2022 tax return public. So did Vice President Kamala Harris and Second Gentleman Douglas Emhoff. The Bidens' filing showed they paid... Read more →
Scammers tend to use tried and true techniques to con people out of their identities and money. One of the most popular schemes involves crooks pretending to be real-life officials. And the Internal Revenue Service is near the top of government agencies that con artists impersonate. CloudFlare, a company which provides security for many companies' online operations, says that the IRS ranks sixth in the 50 top brands when it comes to phishing attempts that use fake sites. The example given by CloudFlare included "IRS" along with the words "contact" and "payment." A big tip-off that the URL is fake... Read more →
The IRS' tax relief for tornado-stricken Mississippians is welcome. But devastated residents could use more help. If you want to provide some support, read on for groups that are conducting a variety of recovery efforts in the storm-stricken areas and could use donations to continue their work. The devastation from the March 24-25 tornadoes that plowed through the lower Mississippi River Valley is horrific. A massive EF4 twister that cut a 59-mile path of destruction left 26 people dead. Hundreds of residents and businesses were displaced by the severe storms. The Federal Emergency Management Agency (FEMA) and the White House... Read more →
Blinders may work for horses, but they're terrible for taxpayers who might miss out on some tax savings. (Photo by Graham Ruttan on Unsplash) The Tax Cuts and Jobs Act's expansion of the standard deduction amounts means even more taxpayers are using that filing method. Most think that since they don't itemize, they don't need to worry about tax breaks. They're wrong. There are the above-the-line deductions, officially known as adjustments to income, that anyone can take (if they qualify), regardless of whether they take the standard deduction or use Schedule A. Then there are some tax credits, again available... Read more →
If you're in your seventies, it's time to start preparing for nest egg withdrawals, some of which are required by federal tax law. A couple of new retirement laws over the last few years, collectively known as the Setting Every Community Up for Retirement Enhancement (SECURE) Acts, have made a lot of changes to retirement plans and the collection of associated taxes. One revision was the bumping up the date when most older owners of tax-deferred retirement accounts must start taking some money from these savings. Starting in 2023, required minimum distributions, known by the acronym RMDs, don't kick in... Read more →
Photo by Liza Summer The Tax Cuts and Jobs Act's substantial increase in standard deduction amounts accomplished one of its supporters' major goals. More taxpayers have an easier time filing now because they claim the standard deduction. But the 2017 tax reform law had a less-welcome side effect. Charitable giving, which must be claimed as an itemized deduction, has dropped. Even for wealthier taxpayers, who are the most likely to still itemize and who under the law change can claim an even larger percentage of their charitable gifts, deductible donations have plummeted. Some federal lawmakers, however, are hoping to change... Read more →
… and yes, there is a tax connection beyond winning wagers being taxable income. Photo by Scott Webb As is usual each Super Bowl Sunday, bets are getting a lot of attention. There are the big-dollar wagers on the game. Two seven-figure bets were placed last week on the Philadelphia Eagles to defeat the Kansas City Chiefs in today's Super Bowl LVII championship game. Then there are the prop bets, many of which have nothing to do with National Football League plays on the field. For any of those bets that pay off, the winners will owe taxes to the... Read more →
We're just a couple of weeks into this new year, and I've received three 1099s and a donation thank-you letter. I am not alone. Official tax forms and statements are filtering into mail boxes, both curbside and electronic, across the country. The exact tax-related documents differ from taxpayer to taxpayer, but we all share one thing. We need them in order to accurately fill out annual tax returns. They include W-2 forms for folks with wage-paying jobs, 1099-NECs for freelancers, and 1099-MISC and DIV documents for those who have investment earnings. It is, after all, called an income tax. But... Read more →
The tax code is like a car. A big, old, clunky car that just keeps chugging along. But every now and then you need to tune it up and change the tires. Here are some tweaks to the 2023 filing season model. (Photo by Andrea Piacquadio) Tax filing rolls around every year. But every year, there also are a few changes that make the process slightly different from prior filings. We didn't have any major tax law changes in 2022. But some old rules come into play, as does the expiration of some tax breaks that many folks had enjoyed... Read more →
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 →
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 →
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. This potential tax saving technique means you... Read more →
Photo by Guneet Jassal on Unsplash It's December! Are you ready for all the decorating and shopping and cooking and parties and tax moves to make? Yep, tax actions need to be added to your already very long holiday to-do list. You only have 31 days to take advantage of some Internal Revenue Code provisions that could save you money. That's always a welcome gift from Uncle Sam, but especially at this time of year. Plus, if you take relevant tax steps sooner in the month, you'll also free up time for more traditional festivities. So let's get to it.... Read more →
The Tuesday after Thanksgiving has become a popular donation day. The charitable boosting effort, dubbed Giving Tuesday when it was initiated in 2012, is now the unofficial kick-off of the annual end-of-year charitable season. Most people don't give to good causes because they get tax breaks. Thank goodness for that, since the 2017 tax reform bill made it more difficult to claim a charitable deduction for donations. And that brings us to the first of this post's six charitable donation tax tips. 1. Itemizing required: The only way to get a tax deduction for your donations is to claim them... Read more →
These senior citizens celebrate their shared birthday month, if not the required traditional IRA withdrawals the big days may trigger. A QCD can help avoid tax on the mandated distributions. (Photo by Kay Bell) Most of us still have a real life, old-school, snail mail box. Every November, it is the target for the most mail of the year. Yep, the holidays are here. My curbside box is jammed with two types of correspondence, catalogs and charity solicitations. I get a kick out of thumbing through the catalogs. And yes, I even order a few (too many) things. The donation... Read more →
Korean War Memorial on National Mall, Washington, D.C. (Photo by Brittany Colette on Unsplash) 11 a.m. on Nov. 11, 1918. That moment marked the armistice between World War I's Allied forces and Germany, ending the fighting on the Western Front. The commemoration to honor the 4.7 million Americans who served — and the 116,500 who died — in what then was called the Great War originally was celebrated as Armistice Day. In 1954, the annual Nov. 11 commemorations were rebranded Veterans Day, and the day's focus expanded to honor veterans from all eras. But the momentousness of the event 104... Read more →
A single winning ticket for the record $2.04 billion Powerball lottery jackpot was sold in Altadena, California. The good news for the buyer, or buyers if it's a shared ticket, is that California is one of two states that don't tax lottery winnings. The other is Delaware. The bad news is that the U.S. Treasury still gets a big chuck of the huge payout when the winner(s) finally collect. Winnings are ordinary taxable income: Since lottery winnings are considered under the Internal Revenue Code as gambling proceeds, the Internal Revenue Service will get a cut. When winnings are more than... Read more →
Following these youngsters' example could pay off in more money from Uncle Sam. The IRS is notifying individuals and families who didn't have to file a 2021 tax return to take another look and consider submitting one by Nov. 17 to claim valuable tax breaks, like the enhanced Child Tax Credit, that they missed. The Internal Revenue Service is still trying to distribute tax benefits to 9 million families that have yet to claim them. The yet-to-be-collected tax breaks are COVID-19 economic impact payments available as the Recovery Rebate Credit (RRC), the Child Tax Credit (CTC), and the Earned Income... Read more →