Grandparents attending graduation ceremonies are a wonderful family tradition. Now a coming tax law change will create another meeting of education and retirement, this time affecting two tax-free savings plans. (Photo by RDNE Stock project) Many of us face a dilemma when it comes to two of the biggest reasons for saving, retirement and education. Do we split our extra income between the two? If so, evenly or with one account getting a boost? Or do we defer one for the sake of the other? The answers will depend on your personal financial and family situations, as well as your... Read more →
Politics
Photo by Anastasiia Chepinska on Unsplash Among the many lessons we've learned, or not, from the COVID-19 pandemic is that we'll likely never be rid of it. And as the transition to endemic status progresses, we'll continue to deal with flare-ups like, irony alert, the one that erupted following the Centers for Disease Control (CDC) and Prevention's recent first in-person Epidemic Intelligence Service conference in four years. The same persistence seems to apply to taxes, too. As the severity of COVID-19 became clearer, most of the United States went into lockdown to help slow its spread. While that saved lives,... Read more →
Photo by Durmuş Kavcıoğlu on Unsplash Some folks are already en route to their long Memorial Day weekend destination. Millions will be flying, with AAA projecting that this holiday's nearly 3.4 million air travelers will surpass pre-pandemic numbers. But the number of holiday travelers hitting U.S. roads will dwarf all other modes of Memorial Day travel. AAA expects more than 37 million will drive 50 miles or more starting today, Thursday, May 25, through Monday, May 29. Gas prices are lower this holiday compared to last year, notes AAA, when the national average was more than $4 a gallon. When... Read more →
Photo by Liza Summer After a couple of years of COVID-19 pandemic disruptions, the 2023 tax filing season was, for the most part, pretty smooth. But that apparently didn't do the federal tax system much good, at least from a reputational standpoint. The annual Gallup poll on the U.S. economy and personal finance found that the federal income tax now is considered the worst of all taxes. It bumped local property tax from the top spot. Of course, that view might have been influenced by Gallup's timing. It asked its tax questions from April 3 to 25, right as millions... Read more →
The upcoming Memorial Day weekend is the unofficial start of summer. It's also the start of a couple of sales tax holidays in Texas and Florida. Texas energy & water tax savings: Let's start here in Texas. Beginning Saturday, May 27, and running through Monday, May 29, Lone Star State shoppers won't have to pay state and local sales taxes that usually apply to purchases of energy- and water-saving products. The tax-free qualifying appliance purchases and related items include — Energy Star-qualified air conditioners priced at $6,000 or less; refrigerators priced at $2,000 or less; ceiling fans; incandescent and fluorescent... Read more →
Two enterprising women packing up items they sold for shipping. (Photo by Kampus Production) A major contributor to the Tax Gap is unreported taxable income. The Internal Revenue Service thought it was going to be able to collect more when Congress new reporting rules were included in American Rescue Plan Act (ARPA) of 2021. ARPA dramatically reduced the income level at which third-party, e-commerce payment platforms — such as eBay, PayPal, Etsy, CashApp, and Venmo, — must issue 1099-K forms to sellers who got money through them. It was set to drop from $20,000 to $600 beginning in 2023. That... Read more →
The Internal Revenue Service announced last week that during filing season 2024 it will run a pilot program in which some taxpayers will be able to file their returns directly with the tax agency for free. Such no-cost, direct filing has been the tax holy grail. There would be no private software middleman, as is now the case for Free File. All of us could just go to the IRS website and file our taxes. There would be no cost, regardless of our income or filing situation complexity. And unlike the IRS' current Free Fillable Forms, there would be computer... Read more →
Owners of electric vehicles in Texas, like this one charging in a suburban Austin office garage, will face a new registration fee starting Sept. 1, 2023. (Photo by Kay Bell) More than 10 million electric cars were sold worldwide in 2022. Sales are expected to grow by another 35 percent this year, meaning 14 million electric vehicles (EVs) will be on global roads last year, according to the International Energy Agency's (IEA) latest annual analysis. That puts electric autos' share of the overall car market at 14 percent in 2022, a 10 percent increase from just two years ago. IEA... Read more →
It's going to take more charging stations, and in more rural areas, to get more U.S. drivers to even consider buying an electric vehicle. (Photo courtesy ChargeX Consortium) I live in Austin, Texas, where traffic congestion increases daily (only partially kidding). But I grew up in West Texas, where driving an hour or longer one way to get from one small town to another was and still is not unusual. Often without any kind of way station along the long, flat roads. It's those distances that give me and those who still live in more rural areas pause when it... Read more →
Photo by Gustavo Fring Millions of Americans are worrying about the damage to their retirement accounts if the United States (aka Congress) defaults on the country's debt. But there's another retirement fear that could put federal and state governments on the hook for trillions more dollars. Many Americans aren't saving enough for retirement, and new research says that if the trend continues unabated, the country could by 2040 face a retirement savings gap and resulting economic burden of almost $1.3 trillion. The federal government would bear the bulk of the saving shortfall, $964 billion. The remaining $334 billion burden would... Read more →
The outlook remains a bit cloudy for reaching an agreement to prevent the United States from defaulting on its debt. (Photo by Harold Mendoza on Unsplash) Many think the debt ceiling debate is just political posturing in Washington, D.C. However, the head of the nation's top consumer watchdog agency says we all should be worried. "It's a big worry. Every family should be concerned,” Rohit Chopra, director of the Consumer Financial Protection Bureau, told CNN in an interview last week. So, as we await Congressional action to keep the United States and its residents out of financial freefall, this weekend's... Read more →
U.S. crypto fans are not happy with the White House proposal to institute a 30 percent crypto mining tax. They are not alone. European Union (EU) members have agreed to crack down on crypto tax evasion by having member states share digital holdings data. The Directive on Administrative Cooperation (DAC8) introduced last December is a crypto-tax framework that would increase surveillance of crypto exchanges, marketplaces, and other crypto-related services. This latest EU crypto effort aims to increase tax transparency in crypto assets and to combat tax evasion and avoidance. Approval of DAC8 which could generate additional tax revenue of around... Read more →
A view from the left field upper deck of the Milwaukee Brewers' ballpark, back when what is now American Family (AmFam) Field was known as Miller Park. (Photo by Brewersfan1061 via Wikipedia Commons) We're six weeks into the Major League Baseball season and my two favorite teams are giving me plenty of reasons to cheer and rant. But ain't that the way with all sports? At least my teams, the Orioles and Astros, are settled in Baltimore and Houston. I feel for the Oakland fans, where the few still going to Oakland-Alameda County Coliseum are watching their underperforming A's run... Read more →
Meanwhile, even crypto-mining-friendly Texas is exploring ways to limit such operations' heavy use of the Lone Star State's power grid. Austin Technology Council Texas is known for many things. Now, two of them, cryptocurrency mining and hot summers, are colliding. The Lone Star State has become a major hub for bitcoin miners. Many operations set up shop here because of the state has vast spaces needed for the operations. Then there's Texas' mostly independent power grid, which has few connections to the rest of the country. This has allowed Texas to avoid federal oversight. And don't forget Texas' demand response... Read more →
Vice President Kamala Harris and President Joe Biden share a lighter moment. Last week, they also shared their 2022 federal and state tax returns with the American public. (Photo courtesy K. Harris/White House) The U.S. president's and vice president's tax returns were among the more than 117 million filings that the Internal Revenue Service has received through mid-April. We know this because, as is once again tradition, President Joe Biden and his wife, First Lady Jill Biden, made their 2022 tax return public. So did Vice President Kamala Harris and Second Gentleman Douglas Emhoff. The Bidens' filing showed they paid... Read more →
Earth Day is tomorrow, April 22. This annual celebration of Mother Earth's beauty and its focus on ways to make a positive impact on our planet has lots of folks thinking about how they can reduce their carbon footprints In keeping with the 2023 theme "Invest in Our Planet," a lot of folks are considering investing in an electric or other alternative energy vehicle to lower their dependence on fossil fuels. Of course, tax breaks also could nudge them down that road. The good news is that the Biden Administration pushed through a new $7,500 electric vehicle (EV) tax credit.... Read more →
Alaska gets a chunk of its operating revenue from the federal government, which owns more than half the real estate in America's largest state. But budget concerns have Last Frontier lawmakers again discussing creation of a statewide sales tax. (Photo of Denali peak reflected in Wonder Lake courtesy U.S. National Park Service) Alaskans face fewer taxes than most other United States taxpayers. It's one of eight states* with no income tax. And while some local jurisdictions collect sales tax, there is no statewide levy on purchases. But that could change if the Last Frontier's Republican governor gets his way. Gov.... Read more →
Happy Tax Day! Except in 2023, April 15 isn't the practical filing deadline. As tax procrastinators know, the convergence of this being a Saturday and Monday being the Emancipation Day holiday in Washington, D.C., Tax Day 2023 doesn't arrive until Tuesday, April 18. Today is, however, a good day to look at how the middle of April came to be one of America's most feared and hated days. Changing tax deadlines: I provided an answer, briefly, in my post Why is April 15 Tax Day? on this day in 2012. April 15 wasn't always Tax Day. As the Internal Revenue... Read more →
The Treasury Department and Internal Revenue Service today released an extensive plan on how the tax agency will spend the nearly $80 billion in added funds it received in the Inflation Reduction Act (IRAct). New IRS Commissioner Daniel Werfel, in the introduction to the 150-page Strategic Operating Plan, said the plan is structured to achieve the following five objectives — Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible. Quickly resolve taxpayer issues when they arise. Focus expanded enforcement on taxpayers with complex tax filings and high-dollar noncompliance to address... Read more →
Click image to read full indictment. April 4, 2023, is one of those "where were you when…" days. Many of us were in front of our televisions or computer screens watching the formal criminal arraignment of a former U.S. president. Donald J. Trump pleaded not guilty today to 34 felony counts of falsifying business records. "True and accurate business records are important everywhere, to be sure. They are all the more important in Manhattan, the financial center of the world," said Manhattan District Attorney Alvin Bragg at an afternoon press conference in which he discussed why his office brought the... Read more →