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 →
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You aren't legally required to file a federal tax return, but maybe you should. Here are six reasons why it might be a good idea. (Photo by Unsplash+ in collaboration with Getty Images) Millions of taxpayers have filed their returns so far this year. Millions more are working on their taxes. But not you. You checked out my post on who has to file a tax return (thank you!) and confirmed that you're one of the lucky few who doesn't have to file a Form 1040 this year. You might want to rethink that no-filing decision. Even if you aren't... 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 →
Hello, February! Even though it's the second month of the year, it's the first full month of the annual tax-filing season and the time when most of us finally start focusing on our 1040s. So, since February also is the shortest month, and we’re already three days into it, I’ll cut to the chase and keep this month’s recommended tax moves short. 1. Keep an eye out for tax statements. Jan. 31 is the day that W-2 and various other earnings statements are supposed to be delivered to workers. Guess what? That date usually slips. Today, for example, I got... 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 →
Millions are getting ready to file federal tax returns so they can collect refunds. Crooks are among them. And things get even worse for the taxpayers whose identities were stolen and used to file false returns claiming fraudulent refunds. The average time it took the Internal Revenue Service to resolve identity theft cases and issue refunds to the affected victims in fiscal year 2024 was two years, according the National Taxpayer Advocate’s 2024 annual report to Congress, issued today. These delays impacted nearly half a million taxpayers, noted National Taxpayer Advocate (NTA) Erin M. Collins, and were even worse than... 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 →
Photo by Kaboompics.com The Internal Revenue Service is sending out holiday gifts this month to around a million people. The recipients are people who were eligible for, but did not claim, the 2021 Recovery Rebate Credit (RRC). By the end of next month, they should have the funds in hand, or directly deposited into their bank accounts. The maximum RRC amount is $1,400 per person, but the exact amount will depend on the individuals’ specific circumstances, such as income, filing status, and number of dependents. Overall, the IRS says it will be delivering about $2.4 billion to the eligible recipients.... Read more →
I love Santa Claus, but even the Jolly Old Elf isn’t magical enough to provide the tax solutions you asked for in your letter to him. You’re going to have to make some tax moves, like the 10 below, yourself. (Photo by Kaboompics.com) Ho, Ho, Holy Moly! December sure got here quickly! Thanks to the 2024 calendar, we (or at least I) haven't even had time to sufficiently recover from Thanksgiving. But time, and taxes, march on, meaning we’ll just have to deal with a compressed holiday schedule as best we can. I hate to be the Tax Grinch adding... Read more →
Unsplash+ in collaboration with Getty Images I haven’t yet seen any of those holiday car commercials with big red bows atop the gifted vehicles. But is a good time to start thinking of new transportation, particularly if you’re considering an electric vehicle (EV). That’s because under the second Trump Administration, and with the support of a Republican-led House and Senate, the $7,500 EV tax credit soon could be history. Trump's tax credit aversion: While Donald J. Trump has vacillated between loving or hating electric vehicles, he’s more consistently been opposed to them, or at least the associated tax breaks. "Tax... Read more →
UPDATE, Nov. 21, 2024: To help payroll companies and other third-party payers assist more clients with resolving incorrect Employee Retention Credit (ERC) claims, the IRS has extended the deadline for third-party payers to use the consolidated claim process. The new deadline is Dec. 31. Originally, the third-party option was set to close Nov. 22. If your company received an incorrect Employee Retention Credit (ERC) payment, you have 10 more days to set things right with the Internal Revenue Service. The deadline to report your erroneous ERC claim and repay a portion of the improperly paid funds is next week, Friday,... Read more →
The construction sector is one of the areas in which veteran-owned companies play a major role. Veterans Day is tomorrow, Nov. 11. This solemn day is one of the few federal holidays that isn't shifted to Monday. It is always commemorated on Nov. 11 because the 11th hour of the 11th day of the 11th month in 1918 was the specific moment marking the armistice between World War I's Allied forces and Germany, ending the fighting on the Western Front. The Veterans Day date has held firm, but its focus was expanded in 1954. That year, at the urging of... Read more →
Photo by Marcus Aurelius Business success, especially in the retail sector, depends a lot on prioritizing customers and their needs. Sometimes that means making physical changes to an establishment. Uncle Sam might be able to help. The federal tax code has a couple of incentives for businesses that make structural adaptations or other accommodations for employees or customers with disabilities. One tax break is the Disabled Access Credit. As a credit, it provides a dollar-for-dollar offset of tax due. The other is a tax deduction for costs to remove mobility barriers. A deduction reduces a business’ gross income so that... Read more →
Whether your dream retirement is traveling the world or enjoying your own backyard, you need to save now so you can enjoy it. One way to ensure your post-work years are golden is to take full advantage of tax-favored retirement plans. Regardless of who wins the White House, the Social Security system is going to get a lot of attention in the coming years. The aging population, combined with the much ballyhooed birth dearth, is going to put more pressure on Uncle Sam’s retirement program. Even if the new president and Congress can agree on ways to bolster Social Security,... Read more →
Photo by Brett Jordan Here’s a subject line you never want to see in your email box: There’s a problem with your tax return. But that is what’s happening to some taxpayers. No, it wasn’t from the Internal Revenue Service. Uncle Sam snail mails you a tax notice with questions about your filing. Rather, it was an email from TurboTax to its users with the subject line — CRITICAL NOTICE: Regarding your 2023 TurboTax return And here’s the message — Hi there, We’re contacting you because there might be an issue with the accuracy of your 2023 tax return. Due... 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 by Ketut Subiyanto There’s good news for businesses that filed accurate Employee Retention Credit (ERC) claims. The Internal Revenue Service says it has accelerated work on claims of COVID-19 pandemic tax break and is now processing around 400,000 claims. The eligible filings in that group are worth a total of nearly $10 billion. The tax agency was swamped by ERC claims submitted after aggressive, and some potentially predatory, promoters convinced some companies to improperly file ineligible claims well after the pandemic ended. Some promoters called the credit by another name, such as a grant, business stimulus payment, government relief,... 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 →