To ensure your golden years truly shine, you need to save now. Changes in the SECURE Act 2.0, which has been added to crucial year-end legislation, could help. (Photo by 401k2012 via Flickr CC) You might have noticed that as 2022 has been winding down, there's been an unofficial theme for the ol' blog's posts. Many of them have focused on tax laws' effects, good and bad, on retirement savings. Part of that is personal. I like what I do for a living, but with each passing day, I (and the hubby) think increasingly about retirement. We're in good shape,... Read more →
Credits
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 →
Tom and Tillie Turkey take care of their youngsters, like these three young Bourbon Red poults. But poultry and the rest of the animal world doesn't have to send their offspring to college. (Photo by Jennifer Kleffner via Flickr CC) A recurring phrase uttered at holiday season family gatherings is "you've grown so much since I last saw you!" What that usually means for many parents of those youngsters is that they will soon be heading off to college. And that move to campus means that mom and dad will have to come up with big bucks. The best way... Read more →
Updated Wednesday, Nov. 16, 2022 You still have time to electronically claim the benefits, but not much. The deadline to e-file is Thursday, Nov. 17. If you missed out on the special COVID-19 relief payments, notably the enhanced Child Tax Credit (CTC), then head to the Internal Revenue Service's Free File website. The IRS is keeping Free File operating through Nov. 17 so eligible nonfilers can e-file a Form 1040 to claim their eligible COVID benefits at, as the name says, no cost. In addition to the CTC, eligible taxpayers may be able to claim some or all of the... Read more →
Getting your tax ducks in a row takes on a different meaning in November. But whatever bird you choose for the metaphor, make some time this month to complete tasks that will prevent tax turkeys. (Photo by Mohan Nannapaneni) November, the eleventh and penultimate month of the year, is like everything else in life. As a deadline nears, the end of 2022 in this case, the number of tasks to tackle grows. A lot. During these next 30 days we have holidays, both official like Thanksgiving and Veterans Day, and unofficial like National Doughnut Appreciation Day on 11/5, and which... Read more →
Very few of us share the same tax circumstances. However, there is one thing every taxpayer can agree on. We all want to pay the least amount of federal tax as possible. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a major way of reducing our annual tax bill. But wait. There's more. There are the adjustments to income, listed on Form 1040 Schedule 1 and still known as above-the-line deductions. You can claim all of these 25 tax breaks regardless of whether you itemize or take the standard deduction.... Read more →
With some tax planning now, along with some help from tax-favored accounts, you can ensure your retirement is full of smiles, love, and flowers. (Photo by RODNAE Productions) It's always a good time to start saving for your eventual retirement. The U.S. tax code helps via a variety of tax favored retirement options. And the Internal Revenue Service helps every year by making cost-of-living (COLA) adjustments that boost the amounts you can put into your post-work accounts. The tax agency today announced how much you can stash in 2023 in tax-deferred — or tax-free — retirement accounts and pension plans.... Read more →
It's Tax Day for most procrastinators who earlier this year got six more months to file their 2021 tax returns. But not for all. Due to extraordinary circumstances, taxpayers across (and outside) the United States have more time to complete and submit their 2021 tax year forms. Some of these affected filers (and nonfilers) need to mark Nov. 15, Nov. 17, or Feb. 14, 2023, on their calendars as the absolutely final day to submit last year's tax return. Disasters, danger, and more: If you're spending today struggling to fill out your Form 1040 and associated schedules, you might be... 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 →
The Internal Revenue Service is still working out how to implement the climate tax provisions in the Inflation Reduction Act. The tax agency and its parent Treasury Department issued some preliminary guidance in August regarding the electric vehicle (EV) tax changes. The IRS also is seeking public comment on EV rules, as well as the other aspect of the other energy tax benefits in the new law. Meanwhile, states also are taking steps to deal with how the federal energy tax changes could affect their revenues. New state-level EV charges: "The increasing popularity of hybrid and electric vehicles is shrinking... Read more →
The Child Tax Credit (CTC) has always been a popular tax break for families. During the COVID-19 pandemic, millions of taxpayers with children came to depend on it even more. Now, some parents who usually don't have to file a tax return can still get this tax break, which could be as much as $3,600 per child. But they must act by Nov. 15. Pandemic pumped-up credit: The CTC was enhanced as part of 2021's American Rescue Plan Act coronavirus relief legislation. It upped the usual $2,000 per child credit for qualifying youngsters. For the 2021 tax year, the CTC... Read more →
Updated Oct. 6, 2023, to reflect added Hurricane Ian tax relief and new filing deadline. Before you and your family celebrate Halloween, check out these October tax moves. Your calendar isn't wrong. We're already into the first week of October, the beginning of the fourth quarter of the year. Once you get through repeating (like me) "Already?", it's time for the annual fall push. Between picking out your Halloween outfit and locating a secure hiding place for the holiday treats that your family can't find, it's time to make some tax moves. Here are four tax tasks that you need... Read more →
Photo by Vidal Balielo Jr. The Child Tax Credit was expanded in 2021 to help families coping with the adverse economic effects of the COVID-19. During the height of the pandemic, the American Rescue Plan Act (ARPA) temporarily bumped up the amount available via the already popular CTC. It went from $2,000 per qualifying child to $3,600 a year for children younger than age 6, and $3,000 per child for youngsters ages 6 to 17. The credit amounts were phased out once tax-filing families hit certain income levels. More of the increased CTC also was refundable, meaning that if the... Read more →
Singer-songwriter James Taylor provided the soundtrack for the White House's Sept. 13 celebration of the enactment of the Inflation Reduction Act. (White House photo via Facebook) The Biden Administration this week celebrated the enactment of the Inflation Reduction Act (IRA) with a ceremony on the White House lawn. And while a government report on inflation that came out the same day warned of continuing inflation costs, President Joe Biden and attendees didn't let the new dampen the festivities. The White House insists that the IRA will work as planned, and Biden touted the law's provisions, including the climate-change-prompted energy provisions,... Read more →
Photo by Alexander Grey on Unsplash Millions of people whose student loan debt will be wiped out now face another financial question. What to do with a bit more disposable income. Financial advisers suggest they pay off other debt, such as high-interest credit card balances. That's a smart move. So is the recommendation that folks put their newly available former debt payments into an emergency fund. I'd like to also toss out there the option of saving for retirement. As an added bonus, most retirement account options offer some sort of tax benefit. Here are some tax-favored retirement-saving possibilities that... Read more →
School is back, and that means homework. College students and their parents especially need to review some lessons on ways the Internal Revenue Code can help pay many higher education costs. The table below offers a look at two popular educational tax credits, the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC is the one most undergraduate students (or their parents) will claim. The LLC is for additional educational costs beyond the first four years, including classes you take after getting out of school. Education Benefits Comparison Tax Year 2022 Criteria AOTC LLC Maximum benefit... Read more →
The good tax news for environmentally conscious drivers is that the electric vehicle (EV) tax credit is back. The bad tax news for environmentally conscious drivers is that it's not all that easy to claim the reworked $7,500 EV credit. The Treasury Department and Internal Revenue Service, however, are trying to smooth that road a bit. They've issued some initial guidance on the new EV tax credit changes. EV tweaks in the inflation bill: With President Joe Biden's signing yesterday, Aug. 16, of the Inflation Reduction Act, it's highly touted climate protection provisions will be taking effect. One followed closely... Read more →
Coming back from an appointment today, I saw school buses roaming my neighborhood. Classes for my local school district start Wednesday, so I guess the drivers were just on reconnaissance runs. Students, their parents, and of course teachers are making preparations, too, not just here in the Austin, Texas, area, but nationwide. Much has been written (or, in my case, blogged) about state sales tax holidays (a few are still on the horizon) and the savings on school-related items. In most cases, we tend to think of students and their families taking advantage of the no-tax events. However, teachers also... Read more →
Summer's winding down, with schools opening their doors across much of the country in just a few weeks. So of course, you're thinking of one last getaway to escape the sweltering dog days. But before you head out to a beach retreat or cooler mountain cabin, take a few minutes for taxes. August is a good time to make some tax moves that could save you some dollars and future headaches. Here are four to consider. 1. Make your tax holiday shopping list: The return this fall of students to classrooms is most welcome by COVID-weary parents who saw much... Read more →
More of my Austin, Texas, neighbors could be driving (and recharging) electric vehicles if the recently agreed-upon economic bill makes it into law. (Photo by Kay Bell) As the tax world frantically thumbs through the Democrats 725-page economic plan, one thing is clear. Makers of electric vehicles and the folks who want to buy them are winners. The Inflation Reduction Act of 2022, the catchy (OK, as far as political monikers are concerned) new name for the measure that salvages some of President Joe Biden's retooled Build Back Better proposals, was worked out this week by Senate Majority Leader Chuck... Read more →