Are you enjoying Thanksgiving? I hope so. And if your Turkey Day celebration extends, like it does for most of us, into Friday and the weekend, Happy Beyond Thanksgiving! But when you're ready (or forced) to get back to your regular routine, you might want to make time to consider the items in the box below: five tax turkeys and how to avoid them. A few relatively easy tax moves in these areas could help make your tax life easier. 2023's Tax Turkeys 🦃 🍗 🦃 to Avoid Not adjusting your incorrect withholding Not collecting your employer's maximum 401(k) match... Read more →
Education
Taking advantage of these inflation-adjusted tax breaks could put more money in your pocket instead of Uncle Sam's bank account. (Photo by Sasun Bughdaryan on Unsplash) Each of our tax situations is unique. But every taxpayer can agree on one thing. We all want to pay the least amount of tax as possible. That universal goal can be reached by taking advantage of tax deductions, tax credits, and income exclusions. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a relatively easy, and popular, way to reduce a tax bill. Deductions... Read more →
Property taxes are the prime source of funding for school districts across the United States. But the homeowners who pay those taxes generally think those taxes are too high. That tax concern was addressed yesterday, Nov. 7, in two states where voters made the ultimate decisions by their choices on ballot questions. And the election results were not a surprise, even where they decided against property tax relief. Coloradoans' complicated tax "no" vote: Colorado voters overwhelming rejected Proposition HH, a proposal by Democratic lawmakers to provide them property tax relief and boost school funding. But Proposition HH was not nearly... Read more →
Unsplash+ in collaboration with Getty Images Tuesday, Nov. 7, is election day. The hubby and I already voted. But, as expected in an election year that doesn't include national races, we are in the vast minority. With almost 18 million registered voters, an early count of early voters showed that statewide turnout was only 5.53 percent. I'm a bit surprised. I thought the property tax cut ballot initiative would have energized more of my neighbors. Texas property tax cut: The proposition was put on the ballot by the legislature in response to homeowner complaints about Texas' real estate taxes, which... Read more →
A rare annular, or ring of fire, solar eclipse is tomorrow, Oct. 14. NASA has more on the event. And if it's cloudy where you live or you're not in a prime viewing region, you can livestream the eclipse. October already is the spookiest month of the year, but things ramp up this weekend. Today, in case you haven't looked at a calendar, is Friday the 13th. Tomorrow, Saturday, Oct. 14, millions in the Americas will experience, at least in part, a rare annular solar eclipse. In the United States, the event will begin in Oregon around 9:13 a.m. Pacific... Read more →
If you're just now getting to work on your extended 2022 tax return, which is due to the Internal Revenue Service by Monday, Oct. 16, don't panic. These tips will help you make the most of the little tax time left. (Image courtesy Taxpayer Advocate Service, which also has some tips for Oct. 16 filers.) It's almost Tax Day for extreme procrastinators. The extension you got for your 2022 return ends on Monday, Oct. 16. Since the tax clock is ticking, let's get right to these eight tips that can help you complete your Form 1040 by the fast approaching,... Read more →
You made it through college. Congratulations! Now you've just got to repay that student loan. Photo by Muhammad Rizwan on Unsplash More than 40 million former college students who have federal student loans must soon start repaying that debt. The financial obligation has been on hold since March 2020 as a way to help borrowers who encountered financial difficulties during the COVID-19 pandemic. During these three and half years, the borrowers didn't have to pay their student loans. But that changes next month. The first post-pause payment is due in October, which starts in just a few days. If you... Read more →
Students settling in at the top of Kyle Field stadium in College Station in advance of a Texas A&M vs. University of Texas-Austin game. The Lone Star State rivalry looks to resume, since Texas will join A&M in the Southeastern Conference (SEC) next year. (Photo by Zabdiel Gonzalez on Unsplash) Yes, college football technically kicked off last weekend, but today was when most fans got the games they've been waiting months to see. Like the TCU-Colorado match-up in the yet again rejiggered Big 12 conference. That game was wild! You know Big 12 football is back when there’s no defense... Read more →
Teachers and other eligible educators, stop before filing your tax returns and make sure you claim the tax break for your out-of-pocket classroom expenses. (Photo Unsplash+ in collaboration with Getty Images) Our neighborhood schools this week welcomed students back from summer break. Teachers and other school staff already had been in the classrooms, getting ready for the youngsters' return. Those educators also likely spent some of their own money on the 2023-24 school year preparations. There's a bit of good tax news for those school employees. They can claim a tax break for their out-of-pocket educational expenses. $300 is still... Read more →
A student checks his notes before the next class. (Photo by Brice Cooper on Unsplash) The 2023 school year has started, or will soon, for kindergarten through college students. Learning can be expensive, even for public school attendees. But it is higher education that poses the highest costs. Uncle Sam can help cover some educational expenses, but the school-related tax benefits noted in my post last week are limited. That means that students and/or their families must come up with the bulk of the school payments. That's usually done through traditional financial assistance, such as scholarships, loans, or other forms... Read more →
The bridge connecting El Paso, Texas, and Juárez, Mexico, is one of several international exchange points expecting increased traffic this weekend as Mexican shoppers visit to take advantage of Lone Star State tax holiday savings. (Photo by Nils Huenerfuerst on Unsplash) The final five summer sales tax holidays are upon us, with Texas kicking things off this weekend. And it's going to be an international affair. U.S. Customs and Border Protection (CBP) officials expect a higher volume of crossings into the Lone Star State starting tomorrow, Friday, Aug. 11. That's the first day of Texas' three-day back-to-school tax holiday. If... Read more →
Photo by Shubham Sharan on Unsplash Public schools in my part of Austin will welcome students on Aug. 16. Yeah, that's next week. Many universities also will begin classes this month. That leaves a small window now for some school-related tax lessons. So here's a crash course on eight educational tax breaks. Some help cover kindergarten through high school graduation costs. Others apply only to higher education expenses. There's even some federal tax help for post-graduation folks looking to improve their work skills. Let's start with two popular tax credits, since they offer dollar-for-dollar tax savings. American Opportunity Tax Credit:... Read more →
Get ready Arkansas, Connecticut, Iowa, Maryland, Massachusetts, Missouri, New Jersey, New Mexico, Ohio, Oklahoma, South Carolina, Texas, and West Virginia shoppers. Your back-to-school tax holidays are coming up in August. And yes, Floridians, your event wraps up this week. Many school supplies, like these at my local grocery store, will be sales-tax-free in Texas later this summer. (Photo by Kay Bell) With August just one day away, it's definitely time for parents and youngsters alike to get ready for the reopening of classrooms. Yes, those two groups likely will celebrate (or not) differently. But there's one thing they can share,... Read more →
Get ready Alabama, Florida, Mississippi, and Tennessee shoppers. Your back-to-school tax holidays are this month. The rest of this year's no-tax shopping events are scheduled for August. Many school supplies, like these at my local grocery store, will be sales-tax-free in Texas later this summer. (Photo by Kay Bell) Wow! We're into the third week of July already. You know what that means. School is just around the proverbial corner. And you know what that means. States are holding their annual sales tax holidays. There are four this month in Alabama, Florida, Mississippi, and Tennessee. A baker's dozen are scheduled... Read more →
Harvard University, pictured here in Richard Rummell's 1906 watercolor landscape, would pay the most if a Massachusetts tax bill tied to students who get in based on family connections is enacted. (Image Courtesy of Arader Galleries via Wikipedia Commons) Following the Supreme Court's ruling that effectively ends affirmative action in college admissions, a proposal by two Massachusetts state lawmakers is getting a lot of attention. Their bill would tax rich colleges in the Bay State, including Harvard, whose policies were the basis of the high court decision, and put the money into a trust to fund community colleges is getting... Read more →
World's youngest CPA Jimmy Chilimigras, left, with his mentor Bryan Kesler. (Screen capture from Kesler CPA Review video) When I was 15, summer was a fun time. No school. The public pool was open. And I was getting driving lessons in anticipation of my 16th birthday when I could get my license. Yes, I am that old. James Chilimigras has other plans this summer. Sure, Jimmy, as he's known, is doing some fishing around his Bay Saint Louis, Mississippi, home. But the 15-year-old is also getting ready to attend New Orleans' Loyola University law school in neighboring Louisiana this fall.... Read more →
The U.S. Supreme Court yesterday struck down college admission affirmative action policies. Some legal experts say the high court's decision could also lead to more, and similar, challenges in how corporations make hiring and promotion decisions. That got me thinking, of course, about taxes. IRS audit unfairness: Most people who are audited by the Internal Revenue Service think they are being unfairly targeted. It seems that might actually be true in some cases. IRS Commissioner Danny Werfel recently acknowledged that the way the tax agency applies the federal tax laws is discriminatory. In a letter to the chair of the... Read more →
After legislative and court fights, Washington State's capital gains tax took effect on Jan. 1, 2022. The Evergreen State's 7 percent tax applies to the sale of stocks, bonds, and other financial assets exceeding $250,000. And its collection, with the tax's first payments due this past April, has been a boon for the state's treasury. Initial estimates predicted the capital gains tax might provide Washington State around $248 million in this fiscal year, which ends on July 1. The actual amount the state has collected as of May 9 was more than three times that: $849 million. Education boost: Washington... Read more →
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 →
Photo by Juan Ramos on Unsplash May is graduation month. It's also graduate gift giving time. Money is always tight for the new diploma recipients (and their families), regardless of whether they've completed high school or college. That's why financial gifts are always welcome. One of those graduate gifts for students looking to continue their school days is a contribution to their 529 plans. And one source of those contributions could be, for older savers, their required minimum distributions. Quick 529 overview: These savings plans, named from the Internal Revenue Code that created them, originally only covered higher education expenses.... Read more →