Photo by Mikhail Nilov We're a week past Tax Day. Have you started working on your 2025 return? I don't mean your actual return, of course. I do mean thinking about what went well or went off the rails this past filing season. Now is the time to consider changes you can make so that the process is smoother next year. Shameless plug alert: You can find some tax planning ideas in my earlier posts Tax Day is done. Now what? Plenty! and Create a tax strategy that utilizes different tax baskets. Income tax brackets and rates: Another good place... Read more →
Deductions
Feeling flush thanks to your tax refund? If you’re looking for ways to spend it, here are some suggestions. (Photo by Karolina Grabowska) By mid-March, the Internal Revenue Service had sent out almost $163 billion in tax refunds. The average refund amount was $3,271. That's a nice chunk of change. Even if your refund isn't quite that large, or is more, when the money arrives comes the decision on how to use it. Most people already have ideas of what to do with their cash back from Uncle Sam. Some have already put those plans into action. But just in... Read more →
Photo by Philipp Deus Every taxpayer and tax circumstance is unique. However, there are some things that trigger trained Internal Revenue Service examiners. As you’re finishing up your 2024 tax return, take another look to see if any of the 10 situations items show up on your Form 1040. They don’t guarantee that your return will be pulled for further attention and possibly a full-blown audit. But they could cause the IRS to conduct a correspondence audit, which is sending you a notice asking for clarification about a questionable item on your return. 1. You have income other than basic... Read more →
Major flooding in Hazard, Kentucky, in February led to Perry County being declared a major disaster area. It’s just one of the counties in the Bluegrass State where residents are now eligible for tax relief. You can watch the video from which the screenshot above was taken at Live Storms Media's YouTube channel. We’re just more than a month away from the April 15 filing deadline, but some taxpayers will have until Nov. 3 to finish their 2024 returns. They live in areas of Kentucky and West Virginia that were pummeled in mid-February by a severe winter storm that move... Read more →
Getting to a doctor's appointment is challenging for many patients. But the travel costs could count as an itemized tax deduction. (Photo by RDNE Stock project) The Tax Cuts and Jobs Act’s increased standard deduction amounts moved me from an itemizing taxpayer to one who claims the standard deduction. Well, my improved health also helped. Even after the Republican tax reform bill took effect, for a couple of years I still had enough medical expenses — not to get too personal, but the serious medical scares included, even with insurance, some costly surgeries — to make tallying them on Schedule... Read more →
A towering city overlook is always impressive, but you don't necessarily need the telescopic help when it comes to overlooked tax breaks. Tax software, your tax adviser, and yes, the often-missed tax breaks listed below, can help you save on this year's filing. (Photo by Ricky Esquivel) The goal of every taxpayer is to pay Uncle Sam as little as legally possible. Even the Internal Revenue Service has enshrined that goal in its Taxpayer Bill of Rights. It’s number 3 on the 10-point list. A good way to ensure you pay no more tax than required is to claim all... Read more →
It’s the main tax filing season, so that means it’s also tax scam season. The Internal Revenue Service has been keeping track of the year’s most prevalent schemes for more than two decades and alerting us in its annual list of the 12 scams it has found to be the most egregious over the last year. The Dirty Dozen for 2025 includes some repeat [dis]honorees. A few are new or have been tweaked. But they share one characteristic. They target taxpayers, businesses, and the tax professional community, and all too often end in the loss by victims of personal information,... Read more →
Photo by Nataliya Vaitkevich It’s been an exciting time in your life. You got your diploma. You got a job. You even got your own apartment. OK, sort of your own, since you’re sharing it with a couple of roommates to give your budget a bit more flexibility. Now you’re about to face another financial first. Your first time filing taxes. I know, it’s not exactly a celebratory milestone. But it’s a crucial one. And it doesn’t have to be an ordeal. Here are seven steps that first-time tax filers can take to make sure their initiation into the taxpayer... Read more →
The standard tax deduction is used by most filers. The amounts are substantial, thanks to the increases of the Tax Cuts and Jobs Act (TCJA) of 2017. Plus, it’s easy to claim. The standard amount for each filing status is listed directly on Form 1040. See more tax forms and more about them at Tax Forms 2024 and Tax Forms 2025. But that doesn’t mean you should stop looking for deductions. There are two dozen that are available to qualifying taxpayers, regardless of whether you take the standard claim or itemize. Here’s a look at these 24 tax write-offs that,... Read more →
Working from home is a convenience employees don't want to surrender, according to recent poll. Conducting business from your home is still an option is you're self-employed, and you also might be able to claim the home office tax deduction. Working from home has its own unique distractions, but almost half of employees who do their job from their homes say they would quit rather than return to a full 40 hours a week in their offices. (Photo by Ketut Subiyanto) Among the slew of presidential actions taken by Donald J. Trump since his return this week to the Oval... Read more →
Photo by Pixabay The 2025 federal tax filing season officially starts Monday, Jan. 27. Millions of taxpayers already are working on their returns. Some have even completed them. Most of these folks are in a hurry to get their Form 1040 to the Internal Revenue Service because they are expecting a refund. Many also don’t have very complicated tax situations. Or they think they don’t. But something may have changed in their personal lives that could affect their filings, for better or worse. So before they — or you — hit send on their tax year 2024 filing, it’s a... Read more →
Image by Clker-Free-Vector-Images from Pixabay Even in those few years when Congress mercifully stays out of major messing with the Internal Revenue Code, we taxpayers still encounter some changes at return filing time. Here are some highlights of what you might find as you file your taxes this year. Standard deduction amount increased. Around 90 percent of taxpayers claim the standard deduction. The choice was always the favorite, in large part because it’s easy. The numbers are show directly on Form 1040. But the number of standard deduction claims increased when the Tax Cuts and Jobs Act of 2017 essentially... Read more →
The Internal Revenue Service will start processing 2024 tax year returns on Jan. 27. Millions of people will file then, or before, getting their forms into Uncle Sam’s tax queue. But to file a complete and accurate Form 1040, you need all the information that form requests. That’s generally income statements like W-2s and 1999s. But there are many other documents that have tax-filing relevance. And most of those aren’t require by law to be sent to you until the end of January. So, most of us are just going to have to be patient for a couple more weeks.... Read more →
UPDATE, Monday, Jan. 13, 2025: California officials also are offering taxpayers in Los Angeles County a postponement on filing 2024 state tax returns and making tax payments that would have been due between January 7 and October 15, 2025. The extent and ferocity of the wind-propelled Palisades fire is, in many cases, an insurmountable challenge for Los Angeles, California, firefighters. (Photo by CAL FIRE_Official - Palisades Fire, Public Domain) California firefighters, joined by their brethren from other states and Canada and Mexico, are still struggled to contain the catastrophic wildfires that have engulfed the Los Angeles metropolitan area. Since the... Read more →
If you're self-employed, use your car for work, and have taken your last business trip of 2024, go out to your vehicle and take a photo of the odometer. It could help when you file your tax return next year. (Photo by Fortune Vieyra on Unsplash) I grocery shop every Tuesday. That meant today’s weekly trip was to my local H-E-B was on the last day of 2024. It was the last time I’ll get in the car this year. So when I pulled into my garage after stocking up on necessities (milk, bread, produce) and other items (potato chips... Read more →
Saying "I do" also means saying hello to some tax changes in your new wedded life. (Photo by Jakob Owens on Unsplash) The end of each year is a good time to reflect on what happened the previous 12 months. For most of us, that includes some good events, some sad ones, and some still shaking out as we’re about to enter a brand new year. Many of these changes also could affect our taxes. So, as a bit of year-end preplanning, here are six ways that the Internal Revenue Code shows up when we encounter personal and lifestyle changes.... Read more →
Photo by Alexas Fotos 2024 is almost over, with millions making plans to celebrate the calendar changed on New Year’s Eve. But before you don your party hat and raise your glass to say goodbye to the old year and ring in 2025, you need to be aware of the tax importance of Dec. 31. Actions on the final day of a year could affect your full 2024 tax bill. Here are five that could make a difference. 1. Getting married. If you say "I do" on 12/31, then the Internal Revenue Service considers you married for the whole year.... Read more →
It’s the day after Christmas. That means we’ll find a handful of holiday cards in our snail mail box. And watch the neighbors stack boxes that held presents on the curb, even though our recycling and trash pickups are days away. Those boxes also are a reminder that in many parts of the world Dec. 26 is Boxing Day. It’s typically a day to keep the season of giving going a bit longer. There are many explanations as to how Boxing Day, and its name, came to be. One commonly accepted origin story is that it began in the United... Read more →
My phone is blowing up today, with every app suggesting that if I’m stumped for a present or two, considering giving a digital gift card from their establishment. Ditto my email. It’s not a bad idea. But the key here is to make sure that the gift card is real. So, on this Christmas Eve I’m harking back not to herald angels, but to my post earlier this month noting that gift cards are for good boys and girls, not to pay IRS tax bills. Avoid gift card scams: That post looks at how crooks tamper with actual plastic gift... Read more →
This pup is just making sure he got all his presents! (Photo by freestocks.org) In a couple of days, many families will welcome new members. No, I’m not talking about Christmas babies. I’m talking about Christmas fur babies. A puppy, kitten, or other pet of any type or age can be a wonderful addition to a home, as long as everyone is on the same page. Pros and cons of pets as presents: Many animal groups and veterinarians warn against giving a pet, especially as a surprise, during the holidays. The holiday season already is stressful for many. Suddenly having... Read more →