Texas' drought has made for a sparser than usual 2025 wildflower season. But the bees and I thank goodness this May for hardy lantana. (Photo by Kay Bell's hubby) Pardon the interruption of your May merry making, but now that the main tax season is over, you need to think about making some tax moves. I know. You thought you were done when you got your 1040 to the Internal Revenue Service on April 15. Or you thought you didn’t have to think about taxes for six more months when you instead filed for an extension. Sorry, but this brand... Read more →
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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 →
Photo by Gustavo Fring We all mess up sometimes. But when you make a mistake on your tax return, it could cost you. You could short your refund amount or end up owing more than you should. Your error could cause the Internal Revenue Service to take extra time processing your Form 1040, slowing down the issuance of your refund. Or it could be a mistake big enough that the IRS actually wants to discuss your filing in more detail. Your best defense against all these unwanted outcomes is to file a mistake-free return. And you especially don’t want to... Read more →
The Earned Income Tax Credit (EITC) turns 50 this year. The official date is March 29, in case you want to throw a party. The Internal Revenue Service isn’t waiting that long. With tax season 2025 underway, the tax agency again is celebrating this tax benefit created to help lower- and moderate-income workers with the annual Jan. 31 EITC Day. Today marks the beginning of efforts to get the word out to eligible taxpayers and encourage them to take advantage of the EITC. The EITC can be worth from hundreds to thousands of dollars for qualifying filers. While the larger... 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 →
Photo by Anna Shvets from Pexels The 2025 tax season officially starts Jan. 27, and millions of taxpayers are working on their returns. Some, however, are asking whether they must file a Form 1040 at all. I hate to dash your no-filing hopes, but the answer probably is yes. When you make money, it’s generally a safe bet that the Internal Revenue Service will want to know about it, and collect a portion. But not always. Here's a look at whether you might be among the select few legal nonfilers. Basic filing requirements: Generally, if you are a U.S. citizen... 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 →
Plus, a look at what next year’s inflation bumps mean to estate planning, gifts you give before you go, youngsters' investment earnings, and more. Leonardo DiCaprio in "The Great Gatsby," the 2018 movie version of F. Scott Fitzgerald's novel. (Warner Brothers Pictures promotional photo) “Let me tell you about the very rich. They are different from you and me.” F. Scott Fitzgerald didn’t add taxes in his elaboration of those differences in his 1925 short story “The Rich Boy,” but he could have. While most of us middle-income taxpayers get our money working for wages, wealthier individuals tend to let... Read more →
Taking advantage of these inflation-adjusted tax breaks could put more money in your hands instead of Uncle Sam's bank account. (Photo by Osarugue Igbinoba on Unsplash) Many taxpayers look forward to tax filing season because they are getting a refund. Others just want to pay the smallest possible tax bill. Some Internal Revenue Code provisions, ranging from tax deductions to tax credits to income exclusions, can help in both cases. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a relatively easy, and popular, way to reduce a tax bill. Deductions... Read more →
Photo: Investment Zen via Flickr Deductions can help reduce your taxable income. The less money subject to taxes, the small your annual bill to Uncle Sam. Some people get the most advantageous deduction amount by itemizing. Most of us, however, claim the standard deduction, especially after the Tax Cuts and Jobs Act of 2017 dramatically increased those amounts. Even better, every year the standard deductions amounts — there are several because the amounts depend on your filing status — get reviewed by the Internal Revenue Service. That usually leads to at least some hike in the standard deduction amounts. Best... Read more →
Updated, Jan. 10, 2025: In announcing the start of the 2025 tax filing season today, the Internal Revenue Service also noted that another state, Illinois, has joined Direct File. This brings to 25 the number of participating jurisdictions, more than double those during the 2024 pilot program. Four more states — Alaska, Idaho, Illinois, and Kansas — will join the Internal Revenue Service’s Direct File next tax season. They join Connecticut, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin, who earlier this year joined the IRS-created-and-operated free online tax preparation and e-filing program. These 13 new... Read more →
The Child Tax Credit (CTC) has been one of the most popular since its creation as part of the 1997 Taxpayer Relief Act. Since its $400 per child origin, the credit has increased notably. During the COVID-19 pandemic, the American Rescue Act bumped up the CTC in 2021 to a potential maximum of $3,600 per each child younger than age 6, and $3,000 per child up to age 17. The Internal Revenue Service also sent the credit amounts to qualifying amounts directly to eligible families so they didn’t have to wait until tax filing season to claim the funds. The... Read more →
Childcare is a must for working parents, but the costs keep rising. A couple of tax credits could help both businesses and parents. (Unsplash+ in collaboration with Getty Images) Youngsters are school-free for the next few months. That means working parents are searching for ways to keep their children occupied. And supervised. Many teenagers get summer jobs. Parents of pre-teens often turn to day camps to fill a few hours each workday. But when it comes to preschoolers, childcare is a year-round concern, and an increasingly expensive one. Rising childcare costs: A recent report from Child Care Aware of America... Read more →
Happy Mother’s Day! I hope all the moms out there got everything they wanted today. Of course, we should be grateful for all that our parents do for us every day of the year. In additional to the emotional support, moms (and dads) literally pay for parenthood. A recent calculation of the average cost to raise a child to age 18 came to $312,202. That figure is for a middle-class family, and doesn’t include college expenses. Yikes! Isabel V. Sawhill, a senior fellow emeritus in economic studies at the Brookings Institution, told WTOP News that the true price could be... Read more →
A scenic overlook is always worth a stop when traveling. But when it comes to taxes, you definitely don't want to overlook tax breaks that could save you money. (Photo by Gary Yost on Unsplash) There are two ways to reduce your tax bill. You can take deductions, which reduce the amount of your money that's taxable. You also can claim tax credits, which cut any tax you owe dollar-for-dollar, and in a few cases get you refund. The options are not mutually exclusive. But they don't do you any good if you don't claim the ones to which you're... Read more →
Doing your taxes can be stressful, but don't add to it by making an avoidable filing error. (Photo by Unsplash+ in collaboration with Getty Images) The tax filing, and paying if you owe, deadline is nearly here. Millions of us have yet to send our 1040 forms to the Internal Revenue Service. So next week is likely to be frantic, especially on the part of taxpayers who are doing their own taxes. This also means that these last-minute filers might make some mistakes as they hurry to get their taxes done by April 15. Don't be one of them. Tax... Read more →
Photo by Kampus Production Our neighborhood has been full of kids recently. Last week was our local school district's spring break. Monday was an added day off for the youngsters, as teachers only returned to their schools for a special work day. It also was a six days of parents juggling child care and their jobs. I got a close up of this from our new next-door neighbors. Mom and dad alternated days off from their jobs so one of them could stay home with their two children, a pre-teen and a young teenager. Child care is a major challenge... Read more →
Unsplash+ in collaboration with Getty Images Most taxpayers claim the standard deduction. Those who opt to itemize do so because they have enough tax deductible expenses to exceed their filing status' standard amount. In most cases, those expenses are medical. Generally, you can claim allowable medical costs for yourself, your spouse, and dependents as long as the treatments were prescribed by a physician as necessary to diagnose, ease, or prevent a physical or mental illness. The amount of these medical costs that exceed 7.5 percent of your adjusted gross income count on your Schedule A, the form where you detail... Read more →
Unsplash+ in collaboration with Getty Images Tax season 2024 officially starts Monday, Jan. 29. Lots of taxpayers have already filled out their 1040 forms and are just waiting for the Internal Revenue Service to start processing them next week. Most of these early filers are expecting tax refunds. They also likely have relatively simple tax lives. Lucky them. Others, however, have more complicated tax and financial circumstances. These folks have more tax documents with details that must be transferred to their return forms and schedules. They also need to consider how their situations might affect their tax returns. Below is... Read more →
IRS Commissioner Danny Werfel speaking at an EITC Awareness Day event in Baltimore sponsored by the CASH (Creating Assets, Savings and Hope) Campaign of Maryland. (Photo courtesy CASH/IRS via X/Twitter) It's the Friday before the annual tax season kick off on Monday, Jan. 29. That means today is Earned Income Tax Credit (EITC) Awareness Day. For the past 18 years, the Internal Revenue Service and community organizations, state and local government officials, schools, employers, and other groups have spent EITC Day getting the word out on this valuable, but too often overlooked, tax credit. Today, IRS Commissioner Danny Werfel headed... Read more →