Unsplash+ in collaboration with Getty Images Congressional proposals to exempt gratuities from income pop up periodically, usually in election years. It’s happening again in 2024. Republican presidential nominee Donald J. Trump suggested tax-free tips during a June campaign stop in Nevada, where workers in tourist meccas like Las Vegas depend on the added income. Vice President Kamala Harris, the Democratic counterpart hoping to hold the White House for the party, endorsed easing taxes on tips in August. So, of course, lawmakers on Capitol Hill got in on the tax-free pledge. So far, bills to exempt tip income have been introduced... Read more →
Politics
It’s not unusual, especially here in Texas, for undocumented workers to be employed in industries that depend on manual labor, such as agriculture or construction. (Photo by Zohair Mirza on Unsplash) “They’re eating the dogs” is now forever part of U.S. presidential campaign lore, for worse or worst since there’s no better take. Following Donald J. Trump’s exclamation of a false social media rumor of pet deaths in Springfield, Ohio, during his Sept. 10 debate last week with Kamala Harris, the municipality about half an hour northeast of Dayton has encountered much unwanted attention. It has included bomb threats to... Read more →
Photo by Pavel Danilyuk The Texas Comptroller Glenn Hegar today announced cities, counties, transit systems, and special purpose districts soon will be getting their share of $1.1 billion in local sales tax allocations for September. That's 6.3 percent more than last September. Sales taxes are one of the three major ways states and the assorted jurisdictions within their borders get revenue. The other two are property taxes, mostly on real estate value, and income earned by individuals and businesses. Since the Lone Star State has no personal income tax, most of us residents are resigned to generally high sales and... Read more →
Any kind of saving is good, but for your retirement, a better option is a workplace retirement plan or IRA. A new Saver’s Match will help some when it takes effect in a couple of years. (Photo by Diane Helentjaris on Unsplash) The Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted at the end of 2022, includes a notable change in how eligible individuals can collect the Saver’s Credit. This tax credit turns contributions to popular retirement plans, which already are tax-favored, into addition funds. Qualifying lower- and middle-income savers who put $2,000 into an Internal Revenue Service-authorized... Read more →
Treasury Secretary Janet L. Yellen speaking at the Austin, Texas, Internal Revenue Service campus Friday, Sept. 6. The Secretary's remarks included news of progress collecting unpaid taxes from rich nonfilers. (Screen capture from Treasury YouTube video) The U.S. Treasury’s balance has grown recently, thanks to Internal Revenue Service’s success in collecting from high-wealth individuals who neglected to file tax returns. Treasury Secretary Janet L. Yellen and IRS Commissioner Danny Werfel this morning announced that to date $1.3 billion has been recovered from wealthy nonfilers. The new collection effort, kicked off in 2023 and led by dozens of senior employees, focused... Read more →
Photo by Antoni Shkraba Capital gains, the money made when you sell an asset that’s increased in value, have been in the tax code since the modern income tax was ratified in 1913. Back then, these earnings were taxed at a top 7 percent rate. In 1921, an alternative top capital gains tax rate of 12.5 percent was allowed. The 5.5 percentage point hike was not that bad, though, when you compared it to the top ordinary tax rate more than a century ago of 73 pct. Then the investment tax followed the adage that what goes up must come... Read more →
Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Maryland, where the hubby and I spent our first married years, is our adopted second home. It's also home of wildlife areas like the Jug Bay tidal wetlands pictured above that we frequently visited to watch birds and wildlife. Now, the Old Line State also will be part of the IRS Direct File program. (Photo of Jug Bay Wetlands Sanctuary by Kevans27 via Wikipedia Commons) The Internal Revenue Service continues to make progress in getting states to sign up for Direct File, the agency’s... Read more →
However, opponents of the Internal Revenue Service's option that cuts out private tax software companies still aren't convinced of the program's value or security. UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states will be a part of the Internal Revenue Service’s Direct File program next year. When the 2025 filing season starts, more than 120,000 Maine and 600,000 Wisconsin taxpayers and will be eligible to file via the IRS created and managed free, online tax preparation and e-filing option. The potential Pine Tree State and... Read more →
Photo by Alesia Kozik The 2024 election features a lot of firsts. We’ve seen the first sitting president to withdraw from the race after securing enough delegates to win his party’s nomination. The first woman of color seeking the presidency. The first person convicted of (and facing more) felony charges running against her. It’s also the first presidential race in which crypto currency could play a major role. Blockchain companies have supplied 48 percent of the $248 million of corporate money donated to influence federal elections this cycle, according to research by the nonprofit watchdog group Public Citizen. To be... Read more →
When making retirement plans, be sure to include how taxes might affect your ability to spend your golden years the way you want. Taxation of Social Security is getting a closer look this year, mainly because the Republican presidential nominee has suggested ending the current federal tax paid by some retirees on up to 85 percent of their benefits. A handful of states also tax the federal retirement benefits that their residents receive. This is the case in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Those nine Social Security taxing states are this weekend’s... Read more →
A few years ago, when housing prices here in Austin kept climbing, the hubby and I hired a company to protest our annual real estate appraisal. That assessment is used to calculate just how big our property tax bill will be. Other factors, such as local tax rates and certain exemptions, also come into play. But if your house is deemed to be worth a whole lot of money, and you’re not planning on selling it for or near that amount, then a generous appraisal will cost you property tax dollars. So, we hired a firm with time and experience... Read more →
The Child Tax Credit (CTC) has been one of the most popular since its creation as part of the 1997 Taxpayer Relief Act. Since its $400 per child origin, the credit has increased notably. During the COVID-19 pandemic, the American Rescue Act bumped up the CTC in 2021 to a potential maximum of $3,600 per each child younger than age 6, and $3,000 per child up to age 17. The Internal Revenue Service also sent the credit amounts to qualifying amounts directly to eligible families so they didn’t have to wait until tax filing season to claim the funds. The... Read more →
Election results, however, could change that. Here's how to claim the alternative fuel vehicle tax credit now, just in case things change after the Nov. 5 results. Republican presidential nominee Donald J. Trump has softened his stance on electric vehicles, likely because of his burgeoning personal relationship with Tesla CEO Elon Musk. But even though Trump says he’s now “totally for” EVs, he also says he would consider eliminating a $7,500 tax credit for some of the vehicles. “Tax credits and tax incentives are not generally a very good thing,” Trump told Reuters after a campaign event Monday, Aug. 19,... 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 →
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. State participation in the Internal Revenue Service’s Direct File slowly keeps growing. Connecticut and North Carolina are the latest states that will allow some of their taxpayers to use the IRS’ direct tax preparation and e-filing online program next year. They join New Mexico, New Jersey, Oregon, and Pennsylvania as new participants during the 2025 tax filing season. Twelve states — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. — were part... Read more →
Vice President Kamala Harris, Democratic presidential nominee, revealed some of her economic plans in a speech Friday, Aug. 16, in Raleigh, North Carolina. (Screenshot of X-Twitter video) Vice President Kamala Harris rolled out her presidential campaign’s economic proposals Friday in a roughly half-hour speech in Raleigh, North Carolina. They included a federal ban on alleged corporate price gouging on food products, ways to help people buy their first home, and financial help for families. Much of Harris’ assistance would come from tax breaks, some of them familiar fiscal tools, both enacted or previously proposed by the Biden Administration. New tax... Read more →
Keeping track of your finances when you're older can alert you to the possibility that you might owe tax on some of your Social Security benefits. Most of us look forward to retirement. Some of us also get a tax shock once we start collecting Social Security. Some of our federal retirement benefits, in some cases as much as 85 percent of our annual payout, could be subject to federal taxation. Not only is that tax an unwelcome surprise to older taxpayers, it also has become part of the current presidential campaign “Seniors should not pay tax on Social Security,”... 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 →
In addition to moving more valid Employee Retention Credit (ERC) payments through the system, the Internal Revenue Service says it has stopped $5 billion invalid claims of the business tax credit. The Employee Retention Credit (ERC) saga continues, this time with some good news for businesses awaiting the benefits of the tax credit. The ERC was created in 2020 to help businesses and their staff stay afloat during the COVID-19 pandemic. But a rash of recent claims, many of them questionable filings encouraged by aggressive ERC promoters, created problems for the Internal Revenue Service and legitimate claimants. The IRS instituted... Read more →