How Texans see the United States. Each new year brings hope. A flip of the calendar pages, and the suddenly clean slate, at least metaphorically, means better things ahead are possible for us personally, professionally, financially and, of course, on the tax front (taxically, which spellcheck wants to change to toxically…). When it comes to taxes, the goal every year is to pay less. While we're still working under the Tax Cuts and Jobs Act (TCJA) changes at the federal level, we still see some changes in 2020. Notably, especially when it comes to our always hoped for lower tax... Read more →
Politics
One of the hallmarks of the Trump Administration is tariffs, either put in place or threatened, on a variety of imported goods. If you have money in the stock market, you're probably pretty happy with 2019. Despite some blips, the market this year maintained its continued upward march. The positive news for investors, however, goes against conventional wisdom that tariffs are bad for the economy. Wall Street bulls say that tariffs eventually will take their toll. And others, including a pair of Federal Reserve economists, cite evidence that tariffs already are costing jobs and hiking prices. No tariff trouble for... Read more →
Paying property tax bills by Dec. 31 used to be a surefire way for many filers to bump up their Schedule A deductions enough to make itemizing more advantageous than using the standard deduction. That's no longer the case thanks to the Tax Cuts and Jobs Act (TCJA). In addition to capping state and local real estate tax deductions at $10,000, the tax reform bill also nearly doubled prior tax law's standard amounts. So fewer folks are worrying about paying tax bills that may be due later, like the end of next January here in the Austin area, by year's... Read more →
Some of the Christmas cookies the hubby and I make and decorate. Yes, we over-bake. And yes, we slather on the sugary icing and decorations because the mainly sugar and butter cookies themselves are not fattening enough. Gotta keep Santa (and friends, family and ourselves) happy! Was Santa apparently full by the time he got to your house, leaving you with some extra Christmas cookies? No worries, even if you're low on milk … or are lactose intolerant. All the adults in your household can loosen their belts and finish off those goodies with a brew or two. Sugar and... Read more →
"Do nothing" has long been the derisive descriptor attached to the U.S. Congress. Actually, though, the House and Senate could more accurately be described as a legislative body that does things that don't have any chance of becoming law. That's the case most recently with a bill that would eliminate, at least temporarily, the $10,000 cap on tax deductible state and local taxes, referred to by the acronym SALT. Cutting SALT in the tax diet: The House last week narrowly passed, by a 218 to 206 margin, H.R. 5377, dubbed the Restoring Tax Fairness for States and Localities Act. The... Read more →
Congress played Santa this week, averting a government shutdown and approving a wide variety of anticipated tax breaks. Merry Christmas U.S. taxpayers. H.R. 1865, the Further Consolidated Appropriations Act, 2020, is now law. In a surprise move earlier this month, House and Senate negotiators cobbled together a massive bill that not only, as the name indicates, assures that the federal government stays open, but which also included some long-awaited (at least by those who will benefit) expired tax provisions. In addition, lawmakers corrected — and by corrected, I mean repealed — some obvious — and by obvious, I mean universally... Read more →
Congress just came up with more tax breaks to wind down 2019 than the number of ornaments we have on our upstairs' mini Christmas tree! (Photo by Kay Bell) Congress finally decorated its Christmas tree early this morning. The ornaments were myriad tax breaks. Or, in some cases, elimination of taxes. With Dec. 25 bearing down and special interest groups sending more requests to Capitol Hill than kiddos' letters to Santa, the House and Senate negotiators finally agreed on, among other things, what to do about those expired tax provisions popularly known as extenders. They OK'ed a handful of them... Read more →
Greek street market vendors offer just about everything. (Photo: Travels with Gerri-Travellerspoint) Every day, more Americans go digital, at least partially, when comes to their finances. We pay via our smartphone features and apps. Our paychecks or gig earnings are directly deposited. Even the Internal Revenue Service is nudging (and sometimes shoving) us to handle our tax tasks electronically. But we are nowhere near where Greece is going. That Mediterranean country, the one that's been on the financial edge or over it for years, now is forcing its residents to use electronic transactions equal to around a third of their... Read more →
The Tax Cuts and Jobs Act (TCJA) is the first major tax reform enacted since 1986. And while it cuts tax rates for most, one of its provisions has caused some military heroes' families to face higher tax bills. That's about to change. The fiscal year 2020 National Defense Authorization Act (NDAA), approved today by the House, repeals what is known as the widow's tax. The Senate is expected to soon OK the bill. Once that happens, the new NDAA should in turn should resolve the kiddie tax issues that the TCJA caused for children of service members who died... Read more →
The Tax Cuts and Jobs Act (TCJA) this month will mark its 2nd birthday. After two full years of dealing with its provisions, the most tax code changes in 30-plus years, there's still debate over how much it's helped both taxpayers and the economy. One thing is clear, however. The TCJA's focus on lowering tax rates for big business has transformed the United States' global tax ranking. Since the TCJA took effect, the U.S. of A. has gone from a high-tax nation to one of the lowest-taxed countries in the world, according to the latest global tax report from the... Read more →
These carolers, dressed in Dickensian attire, are no doubt singing traditional Christmas tunes, not my reworked and tax-themed "O Tannenbaum." (Photo by Chris Waits via Flickr CC) O Tax Year-End (O Tax Year Moves) O Tax Year-End, O Tax Year-End, How are thy days so nearing! O Tax Year Moves, O Tax Year Moves, How are thy days so wearing! Not only in the wintertime, But even in young spring is thy prime. O Tax Year-End, O Tax Year Moves, How are thy days so nearing! Yes, that's my attempt at tax lyrics to the tune "O Tannenbaum," known here... Read more →
Current state and local taxes deduction limit on federal Form 1040 Schedule A. We're wrapping up the second full year of living with the Tax Cuts and Jobs Act (TCJA) but some things still feel unfinished. Treasury and the Internal Revenue Service continue to issue guidance on various provisions, tax forms still are being tweaked, economists can't agree on the tax bill's economic effects and a key legal battle is still raging. The courtroom drama is about, you guessed it, TCJA's $10,000 limit on state and local taxes itemized federal deductions. Fighting a low-SALT tax diet: In July 2018, New... Read more →
Happy Thanksgiving. This annual gathering of family and friends is supposed to be a happy time of reconnecting. Nowadays, though, that takes some work. So to help you enjoy this Turkey Day instead of dread it or worse, here are some tips. Some are even tax-related. Acknowledge your differences: Clashes between family members have been going on since humans appeared on this planet. Unfortunately, over-sized expectations during holidays tend to make them worse. Old arguments — be they political, emotional or otherwise — often resurface. Recognize this and be ready. You aren't going to change your relatives or the issues... Read more →
The men and women hoping to win the Democratic presidential nomination have gotten a lot of attention for their proposals to tax the wealthy. That's obviously an area to watch, as the money could help pay for some other tax and public policy pitches. But most of us aren't wealthy. So what is really important to us is how much of a tax bite the Internal Revenue Service would take out of our average Jane and Joe Taxpayer income under Democratic plans. The Tax Foundation has looked at the tax proposals from the four Democratic White House wannabes who, at... Read more →
Today I'd rather be in the Midwest, say northern Ohio or Michigan, at least as far as the weather. Yeah, it's chillier than I like, but at least it's not so dang windy. As the screen shot above of the live wind map wind shows, the rest of the country is dealing with some strong gusts. Locally, we're at around 13 mile per hour sustained wind, with gusts up to 30 mph. Where wind pays: You'd think I'd be used to the wind. I did, after all, grow up in West Texas, where the wide-open spaces are perfect to spin... Read more →
Photo by Chris/spike55151 via Flickr There's a saying that any tax law bill should be subtitled the Perpetual Employment for Accountants Act. The thinking, in both the financial and political worlds, is that no matter what Congress does to the Internal Revenue Code, we'll need tax professionals to decipher at least some of it. Or to help guide you, if you can afford it, through the legislative and legal maze that will allow you to avoid or at least reduce the effects of some of the tax laws. That's the point of Paul Sullivan's analysis of proposed wealth taxes. "Name... Read more →
Whether I'm at home or traveling, I enjoy craft beers, like this one from a Maryland micro brewer. (Photo by Kay Bell) It's been one of those days. One of those weeks. One of those months. You get the idea. So I treated myself to a beer at lunch. And I'm having another one this afternoon. As the saying and song go, it's 5 o'clock somewhere. I really don't partake of adult beverages that much, despite the many booze-related items I've posted over the years. And although the posts are, obviously, about taxes, I don't tend to think about the... Read more →
Welcome to Part 4 of the ol' blog's 2020 series on tax inflation adjustments. We started on Nov. 6 with a look at next year's income tax brackets and rates. Today we look at changes to tax credit, deduction and income exclusion amounts. Note: The 2020 figures in this post apply to 2020 returns to be filed in 2021. For comparison purposes, you'll also find 2019 amounts to be used in filing 2019 returns due April 15, 2020. The hubby has a chant he breaks into every year when I start working on our annual tax return: "Deduct! Deduct! Deduct!"... Read more →
Today, Nov. 5, 2019, voters in seven states — Colorado, Kansas, Maine, New Jersey, Pennsylvania, Texas and Washington — will decide, among other things, 32 statewide ballot measures. It's a variety of state constitutional amendments, initiatives, referendums, propositions and non-binding advisory recommendations. Tallying Texans' takes on taxes: Here in Texas, we're voting on four tax-related items. All are legislatively referred constitutional amendments. As the name indicates, the Texas legislature voted to put the questions to voters instead of taking up the matters themselves during the legislative session. It is a form of direct democracy. But it's also, as I see... Read more →
The National Debt Clock is a billboard-sized running total display installed on the western side of One Bryant Park, west of Sixth Avenue between 42nd and 43rd Streets in Manhattan, New York City. On Oct. 31, 2019, its numbers topped $23 trillion for the first time. The national debt is the total of all the money the U.S. government has borrowed and owes to its creditors, as well as the interest on that debt. Going from the macro to micro level, it's analogous to the total you might owe on a mortgage, a car loan and credit cards. And the... Read more →