A new tax credit for dependents offers a break for extended family members and even non-relatives. My mom is a fiercely independent octogenarian, but she still depends on me. Like today, when I'm taking her to have some dental surgery. She is not, however, a tax dependent. That means the hubby and I can't claim her on our tax returns in order to get the $500 Credit for Other Dependents. This tax break, newly-created by the Tax Cuts and Jobs Act (TJCA), also has been dubbed the Family Tax Credit or Non-Child Tax Credit. It's an add-on to the Child... Read more →
Credits
August is here, but few of us have put out the welcome mat. The eighth month of the year tends to be one of the hottest of the year. Most of the summer's fun events have come and gone. And school is about to start. OK, that last point is a positive for many parents who are running out of patience with the kids being underfoot all the time. Those moms, dads and all other shoppers in 13 states at least will get some state sales tax holidays to make this muggy month a bit more tolerable. Those tax-free events... Read more →
The Earned Income Tax Credit (EITC) was created more than 40 years ago as a way to give lower-earning workers a tax break. But from the get-go, the EITC has been problematic. Now, just weeks before the National Taxpayer Advocate retires, her office has offered Congress some suggestions on how to improve the tax credit, as well as how it can be more effectively administered. Some tax credit history: The way we got to today's EITC is almost as complicated and intricate as the tax break itself. When created in 1975, the EITC was supposed to be a temporary tax... Read more →
Much is made of the United States' voluntary compliance tax system. The IRS depends on every taxpayer to honestly and accurately report his or her earnings and figure the correct tax due on the amounts. Apparently, we agree with the self-reporting system, with most taxpayers saying cheating on taxes is wrong. Of course, part of the reason we look askance at fudging Form 1040 figures is because we're afraid the IRS will catch us. However, our fear of a tax audit might be exaggerated, according to the latest IRS Data Book. Fewer return reviews: Audits, or examinations as they're called... Read more →
These pups probably would be cooler inside under the A/C instead of atop the condenser. As a general rule, your cooling system works better when you keep the outside air conditioning unit clear of everything, including pets! Summer's been official for just a week, but folks in many areas have been dealing with hot temperatures for a while. Some, including my neighbors who've had air conditioning repair trucks parked in front of their houses for what seems like weeks, already are feeling the often costly effects of warmer weather. That's why it's a good time to think about tuning up... Read more →
When it comes to expired tax laws, Congress is in much the same situation as the builders of this unfinished bridge. The basics are there, but there's still work to be done. (Photo by Paul Mannix via Flickr CC) UPDATE, June 21, 2019: After almost more than 11 hours of discussion, the House Ways and Means Committee on Thursday, June 20, passed along a 25-to-17 party-line vote a measure to extend through 2020 a variety of tax breaks that expired in 2017 and 2018 or will expire at the end of this year, some of which are highlighted in this... Read more →
Helping with homework is just one of Dad's many jobs. Fathers' roles have changed a lot over the years. When I was a kid — yes, to many that was back in the olden days — my dad's main job was to have a job. All the day-to-day parenting duties fell to mom. Nowadays, though, fathers who live with their children are taking a more active role in caring for them and helping out around the house, according to Pew Research Center. Home-based fathers: Among the 8 facts about American dads discussed in Pew's Fact Tank feature is that more... Read more →
Killmonger and crew steal a Wakandan vibranium ax in 2018's "Black Panther." This scene was filmed in Atlanta's High Museum of Art. (Watch full museum heist scene at YouTube) If you spend part of this long Memorial Day weekend watching a movie or two, chances are good that it was made in a particular place thanks to tax breaks. Movie makers have been getting tax incentives, at both the federal and state levels, for decades. The practice, however, is controversial. Supporters see the films, traditional television shows, streaming productions, commercials and even video games made in some part within their... Read more →
New parents Harry and Meghan don't have to worry about the expense of their new bundle of joy. But for us non-royals, raising children is costly. We former colonists here across the pond can get some help covering those costs thanks to several U.S. tax breaks. An obviously elated Prince Harry announces the birth of his and wife Meghan's son. (Screen shot from the Sussex Royal Instagram) It's a boy! Watchers of the Royal Family in the United Kingdom, here across the pond and yes, worldwide, are celebrating today's announcement that the Duke and Duchess of Sussex are now parents... Read more →
Children celebrate May Day by dancing around a maypole on the Village Green in Tewin, near Welwyn Garden City, Hertfordshire, England. (Photo by Paul Barnett via Wikimedia Commons) Happy May Day! It's the annual May 1 global holiday celebrating the contributions of workers. But the other mayday often comes to mind when taxes are involved. If it's a tax distress signal you're sending out as the merry month of May begins, here are some moves that could help ease your tax trepidations. 1. File your 2018 return. If last month you didn't file your 2018 tax return, either because you... Read more →
Happy Earth Day 2019 Earth Day was created in 1969 by environmental activists in response to an oil spill in waters near Santa Barbara, California. Since then, it has expanded each year as a day to emphasize environmental issues and inspire an appreciation of our planet. With this year's celebration falling on a weekday, many folks are looking for ways to incorporate their pro-Mother Earth efforts into their daily lives. Well, nothing is as incorporated into our day-to-day existences as our taxes. So on Earth Day 2019 and every day this year, here are 4 tax-saving environmental options. 1. Electric... Read more →
Federal and most state, tax returns are due in few days. Don't panic! You still have time to finish your return (or get an extension). If you do decide to just be done with your Form 1040 — new, but not necessarily improved this year under Tax Cuts and Jobs Act (TCJA) changes — make sure you don't make any of these common filing errors in your rush to finish. For the most part, tax software has helped eliminate a lot of mistakes. Still, we're not yet at the total tax automation point yet. And that old garbage in, garbage... Read more →
Tax Day every April is the biggie for individual taxpayers. That's when our annual Form 1040 is due. And yes, I know this year there are two Tax Days, since Patriot Day celebrants in Maine and Massachusetts get until April 17 to send in their federal returns. But most of us must meet the April 15 deadline, so that's what I focus on in this post. Completing a 1040, however, is not the only mid-April tax deadline. It's just one of the 10 tax tasks listed below that many taxpayers also must make by next Monday, April 15. 1. File... Read more →
Folks in Belzoni, Mississippi, aren't thinking about taxes today. They're celebrating the 44th Annual World Catfish Festival. But in addition to being the catfish capital of the world (the closing of its museum notwithstanding), Belzoni is the county seat of the most audited county in the United States. Residents of Humphreys County, a rural county in the Mississippi Delta, is one of the country's poorer counties, with more than a third of its residents living below the poverty line. Those low incomes also probably contribute to a new study's findings that Humphreys County is the area that is most audited... Read more →
Broad City image via Giphy.com Do you have to file a return? Sorry to be the bearer of bad news, but the answer usually is yes. But there's a difference between having to file a tax return and submitting a 1040 form because you should. And by should, I mean when it's to your advantage to do so. Yes, that does happen in the tax world now and then. When filing is required: First, though, let's look at when the tax code says we must send the Internal Revenue Service a Form 1040. Although the 1040 has a new look... Read more →
Tax credits for buying a Chevrolet Bolt, left, or Volt are going down on April 1. (Photo courtesy Driving Canada) The climate change debate rages on in political circles, but on U.S. roadways, many folks are voting, as the old saying goes, with their pocketbooks. They're buying more energy efficient and less polluting cars. And Uncle Sam has been part of that sales campaign. A federal tax credit that can be as much as $7,500 has convinced some Americans to trade in their gas guzzlers for electric autos. That tax break, however, doesn't last forever. Once an electric vehicle becomes... Read more →
The Patient Protection and Affordable Care Act became law on March 23, 2010. During the almost nine years since President Barack Obama signed the health care bill, which usually is shortened to the Affordable Care Act (ACA) or Obamacare, opponents of the law have been working to repeal, maybe replace and definitely weaken it. Republicans succeeded in late 2017 in eliminating a key component of the ACA. Under the GOP's Tax Cuts and Jobs Act (TCJA), the ACA's individual health insurance mandate. This is the requirement that you obtain at least minimum essential coverage, or MEC, for yourself and dependents... Read more →
This post was updated June 21, 2019, to reflect proposed Child and Dependent Care tax credit changes. Spring has just arrived, but parents already are thinking about summer. Specifically, they're wondering who's going to take care of their kids once school is out for a few months. Now don't get me, or my friends, family and neighbors who have children wrong. We don't view schools and their teachers as babysitters. But classes do keep youngsters occupied for a big chunk of the day for most of the year. Then May and June roll around and for the next three or... Read more →
Photo by Kumar's Edit via Flickr I've been married a long time. To the same guy. Marriage is not always easy and we don't even have a boss stirring up trouble between us. But we've made it through the tough times. And now as we patch things up when we do have our differences, we joke that we're staying together because it would be a bigger hassle to divorce. Sometimes, though, couples can't work through their troubles and decide to officially end their marriages. When that happens, among all the other issues, there are tax matters to consider. Here are... Read more →
College and its ever-increasing costs certainly have gotten a lot of attention. There's the group of Democrats seeking their party's 2020 presidential nomination. Obviously spurred by the enthusiastic supporters of Independent-turned-temporary-Democrat Sen. Bernie Sanders and his promise of free college, many other White House wannabes also are talking up educational assistance. Then there's this week's Operation Varsity Blues. You might not have caught the name, but let me drop two others to spur recognition: Felicity Huffman and Lori Loughlin. Yeah, that's the name federal investigators gave to their take down of a far-reaching college admissions scheme. Wealthy parents, elite school... Read more →