Photo by Matt Howard on Unsplash Hurricane Helene and her aftermath have, naturally, garnered most attention. But other parts of the United States also have been hit by disasters. Wildfires erupted on June 22 in parts of Washington state. Less than a month later, on July 13, parts of Illinois endured severe storms and flooding. Now the Internal Revenue Service has granted those affected taxpayers, both businesses and individuals, tax relief. Washington state wildfires: Certain taxpayers in Washington state affected by wildfires that began on June 22 now have until Feb. 3, 2025, to file various federal individual and business... Read more →
Deductions
Three more states — Alaska, Idaho, 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 12 new Direct File states will double the states where Direct File will be available. A dozen — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming — were part of the Direct File pilot for the 2024 filing season. Treasury said that... Read more →
Photo by RDNE Stock project A home of one’s own has long been part of the traditional American Dream. Nowadays, though, some say it’s a nightmare trying to join the homeownership ranks. So, of course, as we head into the last few weeks of the 2024 election, candidates at all levels also are focusing on housing. Vice President Kamala Harris, the Democratic presidential nominee, has proposed tax breaks she says will increase the housing supply, which should lead to lower prices. She’s also promoting a first-time buyer tax to help buyers get into those homes. Using the tax code to... Read more →
Next year, we go into the final year of the Republican tax reform law's SALT cap. Since the Tax Cuts and Jobs Act (TCJA) of 2017 took effect, taxpayers in high income and property tax states and their Capitol Hill reps have been fighting the law's limit on state and local taxes, or SALT, that can be claimed as an itemized federal deduction. Their main argument is that the TCJA's $10,000 cap is too low. From a fiscal perspective, supporters of the cap pointed out that it benefited wealthier taxpayers. Their big SALT claims also cost the U.S. Treasury lots... Read more →
“Oh, yeah. That’s the spot,” seems to be what this Chow Chow is thinking as he’s getting a neck rub from his owner. (Photo by Omid Armin on Unsplash) Happy National Dog Day! Or, for canine lovers, the 239th day of Dog Year 2024. Personally, I’m a cat fan. But many of my relatives are pooch parents. And let’s be honest, whatever creature you choose to welcome into your home, the animals are part of your family. So, we should be able to claim them as dependents, right? Sorry, but wrong. The Internal Revenue Service probably is full of pet... Read more →
UPDATE, Oct. 4, 2024: Parts of two more states, Illinois and Washington, are the latest to get a Feb. 3, 2025, tax deadline extension due to major disasters. Details in this post. UPDATE, Aug. 29, 2024: The U.S. collection of Caribbean islands joins its fellow territory Puerto Rico in getting tax relief due to Tropical Storm Ernesto effects. It also ups the count to 10 of disaster areas across the country that have the new extended, early 2025 tax return due date. The satellite view, courtesy National Oceanic and Atmospheric Administration's NESDIS/STAR GOES-East imagery, of Tropical Storm Ernesto as it... Read more →
If you bought your youngsters new back-to-school clothes, you’re probably looking for ways to dispose of the older outfits. Many parents take advantage of hand-me-downs, either within their own immediate family or sharing with other relatives or friends. Others donate the old, outgrown clothes. Giving them to a charity could be a win-win. The nonprofits' recycling not only helps those looking for bargain priced apparel, but in some cases it provides a tax break to filers who itemize. 2017 tax rule changes: That donation deduction, however, hasn’t been claimed as much since enactment of the Tax Cuts and Jobs Act.... Read more →
A full Cannon River rushing though Northfield, Minnesota, after rainfall from severe storms in June. (National Weather Service photo) It’s been that kind of weather year. The start of a new week brings another Internal Revenue Service announcement of disaster area tax relief. This time, the areas getting special tax consideration were hard hit by severe storms and subsequent flooding in Minnesota. The affected North Star State individual and business taxpayers now have until Feb. 3, 2025, to meet a variety of filing and payment obligations. Affected counties: The destructive weather throughout Minnesota began June 16, and produced damages in... Read more →
The Department of Justice, per a Drug Enforcement Administration request, is moving to transfer of marijuana from Schedule I of the Controlled Substances Act (CSA) to Schedule III. That decision aligns with the stance of the U.S. Health and Human Services Department, and is supported by the Biden Administration. The change would not make cannabis legal nationally. It still will be a controlled substance under federal law. But the recategorization would provide state-legal cannabis businesses some banking access, and the ability to claim some tax breaks they currently are denied. Less of a stigma: Going from Schedule I to Schedule... Read more →
The Nov. 5 election results will help put the fate of the Republican tax reform law into sharper focus. Provisions that affect individual taxpayers will end on Dec. 31, 2025. The next Congress and president will decide which ones will stay or go. Regardless of who wins the U.S. presidency this November, the next occupant's first year in (or return to) the Oval Office will be during a potentially tumultuous year for taxes. That’s because 2025 is when the Tax Cuts and Jobs Act’s (TCJA) individual provisions expire. So, Congress will be working to save or ax, depending on party... Read more →
Update, Wednesday, Sept. 18, 2024 — Hurricane Debby's effects continue to be felt, both physically and when it comes to taxes. The Internal Revenue Service today added Lycoming, Potter, Tioga, and Union counties in Pennsylvania to the storm's tax relief list. The Keystone State taxpayers join those in in Florida, Georgia, North Carolina, South Carolina, and Vermont. Update, Tuesday, Aug. 13, 2024 — Hurricane Debby has finally moved out of the United States, but her trek from Florida’s Gulf Coast, back into the Atlantic, then up the Eastern Seaboard was incredibly destructive. Remnants of Debby were still causing problems when... Read more →
Photo by Yan Krukau Some classes have already started. Others, like those in my local suburban Austin school district, begin next week. And most will be underway by the end of August. So, families are hitting the stores, especially in places with back-to-school tax holidays, picking up the supplies that will help their youngsters succeed this semester. But parents and guardians aren’t alone. Teachers also regularly spend their own money to make sure that their students have a positive educational experience. If you’re one of those educators who’s shelling out your own money for classroom supplies, save those receipts. You... Read more →
We had the second U.S. landfall of the 2024 hurricane season today, and federal disaster (and tax) relief is likely to be announced soon. Meanwhile, those who earlier were in the paths of an angry Mother Nature outburst already are facing new tax deadlines, starting with the one this week for those who endured the fires on Maui and Hawai'i's Big Island. The horrific aftermath of the wildfire that destroyed the historic Hawaiian town of Lahaina on Maui last August. (Photo by U.S. Civil Air Patrol via Wikimedia Commons) Hurricane Debby made landfall as a category 1 early Monday, Aug.... Read more →
UPDATE, Aug. 2, 2024: The The Internal Revenue Service also has granted the delayed Feb. 3, 2025, deadline to taxpayers in separate disaster areas in Kentucky and Missouri. Tax relief for Kentucky applies to those in 58 Blue Grass State counties who were affected by severe storms, straight-line winds, tornadoes, landslides, and mudslides that began on May 21. Similar tax relief is provided Missouri residents in 15 Show Me State counties that sustained damages from severe storms, straight-line winds, tornadoes, and flooding that began on May 19. The bold-faced links earlier in this update will take you to the official... Read more →
Next Monday, July 15, is Tax Day for residents of disaster areas in three states. This tax deadline applies to taxpayers affected by Federal Emergency Management Agency (FEMA) major disaster declarations in parts of Alaska, Maine, and Rhode Island. The disaster areas are listed below. The bold-type state names are links to the Internal Revenue Service's tax relief announcements for each area. The Wrangell Cooperative Association of Alaska Tribal Nation off coastal Alaska. That area was hit by severe storms, landslides, and mudslides that began on Nov. 20, 2023. Eight counties in Maine that sustained damages from severe storms and... Read more →
Unsplash+ in collaboration with Olivie Strauss Hello, July! We are soooo ready for this first full month of official summer. This first week of July will be a short one for many of us. We’ll be taking advantage of July 4 falling on Thursday, making it an extra-long Independence Day holiday weekend. But once the fireworks are over, it’s back to the regular grind where we never are independent of taxes. That’s why we also need to also make some time in July for tax moves. Here are five to consider. 1. Get ready for disastrous weather. Even though I’m... Read more →
June is here! Summer officially arrives in a few weeks. And many of us already are making vacation plans. Great! Have fun. But also make some time this month to deal with tax tasks. Really. Taxes definitely aren’t a day at the beach, but some summer tax moves can help make next year’s filing easier, and potentially less costly. Here are five tax moves to make, or at least consider, this June. 1. Pay your estimated taxes. Millions of us must make these extra tax payments each year. The payments cover income we get that’s not subject to withholding, such... Read more →
The 2024 hurricane season has just begun, but some people are still dealing with disasters from last and earlier this year. Some of them now are facing a June 17 tax filing and payment deadline. Mother Nature has been Mommy Dearest across much of the United States so far this year. Way too many federal announcements and media reports have included the phrase “A historic severe weather outbreak occurred” in 2024, meaning that millions of Americans have found themselves in major disaster areas. And the current hurricane season has just begun! Unfortunately, the disastrous start to this year was a... Read more →
Photo by Chris on Unsplash The tax code is complicated. Even for the most basic situations, there are income levels that determine whether you must file, and if so, what your tax rate is. As your life and finances get more complicated, so do your taxes. That’s why most of us depend on tax software to meet our annual filing needs. Even the tax professionals we turn to for added support go electronic, mostly at the Internal Revenue Service’s insistence. But it never hurts to have a least a rudimentary understanding of our tax system. It is our money that’s... Read more →
The tornado that struck Afton, Iowa, in Union County on April 26, 2024. That county is one of eight that have been declared major disaster areas, meaning residents are eligible for a variety of federal assistance, including tax relief. (Photo by Dean Baron via National Weather Service) Iowans in eight Hawkeye State counties that were struck by severe storms and tornadoes last month now have until Oct. 15 to file various federal individual and business tax returns and make tax payments. This latest Internal Revenue Service disaster relief applies to individuals and households that live or have a business in... Read more →