The Rev. Dr. Martin Luther King in Washington, D.C., in 1963 where he delivered his "I Have A Dream" speech. (Photo via Wikimedia) On this Martin Luther King, Jr. Day federal holiday, the focus once again is on public service. It's a way to honor The Rev. Dr. King's commitment to helping those who need it the most. It's also a time when we rightfully recall the civil rights leader's most famous speech, his delivery of his "I have a dream" vision of equality in Washington, D.C., on Aug. 28, 1963. But King also knew that hard, practical work was... Read more →
Politics
We're just a couple of weeks into this new year, and I've received three 1099s and a donation thank-you letter. I am not alone. Official tax forms and statements are filtering into mail boxes, both curbside and electronic, across the country. The exact tax-related documents differ from taxpayer to taxpayer, but we all share one thing. We need them in order to accurately fill out annual tax returns. They include W-2 forms for folks with wage-paying jobs, 1099-NECs for freelancers, and 1099-MISC and DIV documents for those who have investment earnings. It is, after all, called an income tax. But... Read more →
Lyriq photo courtesy Cadillac Sometimes the obvious is, well, obvious. Until it isn't. Back in 1964, Supreme Court Justice Potter Stewart's famous intuitive declaration about knowing pornographic material when he saw it made things clear. Then on Jan. 11, 2015, we Dallas Cowboys fans, then belatedly the NFL, knew that Dez Bryant's touchdown catch was definitely a catch. Now General Motors (GM) and Uncle Sam are fighting over what, for most of us, is pretty clear, specifically what counts as an SUV. The government's final answer will affect the new Inflation Reduction Act tax credit for electric versions of sports... Read more →
Image by Gerd Altmann from Pixabay Most states operate on a fiscal year that runs from July 1 to June 30. That's why we see some new laws take effect each summer across the United States. However, those states also make the effective date for other changes the first of the year. It's easier for us residents, who operate on a January to December calendar, to accept that timetable. That's especially true of tax laws, since most states also tend to follow the Internal Revenue Service calendar. New tax laws effective New Year's Day: This Jan. 1, notes the Tax... Read more →
The tax year is over. Long live the tax year. Taxes are, if nothing else, persistent. Sure, there are a few (or more) changes every year, even if it's only inflation adjustments. But even in years when the changes are negligible, they are back, starting to add up on the first of every January. That's why 2023 is the first By the Numbers honoree of this new year. The transition from an old to a new tax year is also the focus of this post. It's a look at six tax matters that affected or at least fascinated us in... Read more →
Before the House Ways and Means Committee released six years of Donald J. Trump's federal filings, the last time was got an ostensible glimpse of the former president's Form 1040 was back in October 2015. That's when he shared this photo on his Twitter account of him signing what he said was his federal tax return for that year. With just a few hours left in 2022, some of us are doing some last-minute tax accounting. OK, maybe that's just me and a handful of others who've already planned our annual living room countdown to 2023. I know that one... Read more →
Don't miss out on any tax breaks as you put together your retirement plan. That includes claiming the Saver's Credit if you're eligible. Some retirement savers got an early Christmas present. On Dec. 23, President Joe Biden signed into law the $1.7 trillion omnibus package that keeps the federal government running and more. Among the more was a revision of retirement provisions known as the Setting Every Community Up for Retirement Enhancement (SECURE) Act. And one of those changes is the eventual conversion of the Saver's Credit into a matching contribution tied to workplace plans and IRAs. That's a good... Read more →
Kris Kringle, portrayed by Edmund Gwenn in the 1947 classic movie "Miracle on 34th Street." (via Giphy) I'm a Christmas traditionalist. OK, so I expand the traditional holiday season. We, at my urging, put up holiday decorations right after Halloween. We have a lot of them, so it takes time. Plus, I'm a fan and nonresident celebrant of Canada's Thanksgiving. Our neighbors to the north's celebration of the harvest and other blessings of the past year falls on the second Monday of October, following a more North American seasonal shift. Even better, it provides a welcome space between Turkey Day... Read more →
A heat pump's outdoor unit is pulling what warmth it can out of the air in freezing conditions. (Photo by Peter Eastern via Wikipedia Commons) North winds are gusting up to 30 mph right now here in suburban Austin, Texas. By sunset, we'll be at freezing, with temperatures in the area tonight expected to drop to between 10 and 15 degrees. Despite my alternately freaking out thanks to memories of 2021's snow, ice, and prolonged freezing temperatures that led to extended electric and water utility outages across most of Texas, ranting, and stuffing old hand towels into every new window... Read more →
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 →
Photo by cottonbro studio Italian retailers prefer cash transactions. That helps explain why the country ranks near the bottom in Europe in digital payment adoption, and is among the 30 most "cash dependent" major economies in the world, according to the latest Cash Intensity Index (ICC). This ranking, measures the effect of cash usage on the Gross Domestic Product in 95 countries around the world. The currency preference also is why Italian business owners are cheering the 2023 draft budget proposed by new far-right Prime Minister Giorgia Meloni. The new government's fiscal plan includes a measure to permit stores, taxis... Read more →
Photo by Pixabay The Internal Revenue Service is slowly but slowly becoming more electronic. The pace should pick up once the agency starts spending some of the new money it got this year to upgrade its operating systems. It's also looking for volunteers to offer suggestions on how the IRS can be a better e-agency. Specifically, the IRS is looking for applicants for the Electronic Tax Administration Advisory Committee (ETAAC). Ongoing electronic efforts: The ETAAC was established by Congress as part of 1998's IRS Restructuring and Reform Act. Its primary goal is to help the IRS meet that law's targets... Read more →
Among the things Treasury Secretary Janet Yellen discussed with late-night television host Stephen Colbert during her Nov. 30 appearance on his "Late Night" show was her signature that will be on currency starting next year. (Screenshot from Late Night YouTube video) I tend to go cashless as much as possible, but I'm also a currency collector. Yeah, one of my many dichotomies. I have a 1976 version of the $2 bill, Yes, the greenback with Thomas Jefferson's mug is real and still in circulation. I also stashed a crisp new $10 bill a few years ago when it looked like... Read more →
The sports arena in Miami bore the FTX name until the cryptocurrency exchange filed for bankruptcy. (Photo by 350z33 via Wikipedia Commons) Even before the FTX meltdown, cryptocurrency operations were in regulators' and legislators' sights. Now more, worldwide, are calling for added government attention to the sector. European Central Bank (ECB) President Christine Lagarde has called regulation and supervision of crypto an "absolute necessity." Gary Gensler, chair of the U.S. Securities and Exchange Commission (SEC), in a Yahoo Finance interview today said his agency already has the authority it needs to oversee the crypto industry. But he also noted that... Read more →
Photo by Eric Prouzet on Unsplash The U.S. jobs report today was way better than expected. Employers added 263,000 jobs. That meant that the country's unemployment rate held at 3.7 percent. That's just a couple of minuscule notches higher than the half-century low of 3.5 percent. Wages are up, too. The October-to-November average hourly earnings crept up 0.6 percent, making it the strongest month-to-month gain since January. The latest hiring data has left economists, the Federal Reserve, and stock managers at a loss. One of the persistent questions as unemployment remains low is why so many businesses are still scrambling... Read more →
My polling place only had Spanish "¡Yo Voté! / I voted" stickers. But the language doesn't matter. The act of voting, this year and in the future, does. (Photo by Kay Bell) The 2022 midterm elections have come and gone. As the old saying goes, it's all over but the shouting or crying or both. In addition to selecting individuals to lead our local, state, and federal governments, many of us were asked to decide on ballot issues. Overall, according to Ballotpedia, voters in 37 states and the District of Columbia decided Nov. 8 on 132 statewide ballot measures. Since... Read more →
Regardless of what prompts an IRS examination, aka an audit, take advantage of the Taxpayer Bill of Rights guarantee that you can get professional help to get you through the process. Photo by SHVETS Production In an expected follow-up to reports that Donald J. Trump, while in the Oval Office, wanted the Internal Revenue Service to audit his perceived foes, a House tax writing committee member is asking for an investigation into the former president. Rep. Bill Pascrell (D-New Jersey), who chairs the Ways and Means Oversight Subcommittee until the next GOP-controlled House is sworn in, wrote the Attorney General... Read more →
David Boeke via Flickr The Internal Revenue Service got billions in added funding thanks to the Inflation Reduction Act, but money is still key. Specifically, Uncle Sam's tax agency needs "consistent and multi-year funding … to achieve its goals of providing efficient, effective, modern service to the nation's taxpayers," according to the Internal Revenue Service Advisory Council's (IRSAC) 2022 annual report. The IRSAC report lauds the Inflation Reduction Act's fiscal boost as a "once-in-a-generation opportunity to upgrade the IRS's service, enforcement, and IT capabilities." However, IRSAC members point out that the measure "was largely partisan legislation and may not foreshadow... Read more →
Daniel Werfel, then IRS Acting Commissioner, and Treasury Inspector General for Tax Administration J. Russell George testified before Congress in June 2013 about the IRS' questionable nonprofit status approval practices. (C-SPAN hearing screenshot) The Internal Revenue Service apparently will be led by a blast from its past, notably its troubled past. Daniel Werfel is President Joe Biden's choice for commissioner of the Internal Revenue Service. Werfel is most familiar to the tax and wider world as the man who filled the IRS' top role in 2013 in an interim capacity during the agency's nonprofit authorization scandal. In charge during troubling... Read more →
The Tax Gap is the amount the Internal Revenue Service says it is owed, but which it's been unable to collect. That amount now is $496 billion. The figure, which was reached after the IRS analyzed tax activity from 2014 through 2016, is an increase of $58 billion from the agency's last estimate. The IRS also did some Tax Gap forecasting. The agency's projections for tax years 2017 through 2019 show an estimated $540 billion per year. Both those Tax Gap amounts are huge, and disturbing. That's why they earn this weekend's dual By the Numbers recognition. Tax Gap components:... Read more →