Many Social Security recipients are celebrating the announcement that their benefits will increase in 2022. But if you get other income to help you enjoy your retirement, you could owe tax on your government benefits. There's some good news for the around 72 million people who receive Social Security benefits, either as retirees or Supplemental Security Income (SSI) recipients (or both). The Social Security Administration announced* on Wednesday, Oct. 13, that they will see a 5.9 percent increase in their benefit checks in 2022. It's the largest increase to the government benefits, which primarily go to retirees, in nearly four... Read more →
Estimated taxes
The Great Resignation created by folks deciding not to return to their jobs after extended COVID-19 absences has led to a lot of new businesses. That means there a many new bosses out there, most of them dealing with a different part of the Internal Revenue Service for the first time. As business owners, they potentially face new types of taxes. Exactly which taxes depend largely on how their new company is established. That's why selection of a business entity is a major tax decision. Business entity options: As part of 2021's National Small Business Week, sponsored annually by the... Read more →
via GIPHY On a visceral financial level, we all hate paying taxes. But what we hate almost as much is that the tax laws often seem overly complicated or just plain goofy. Take estimated taxes. These are four extra payments that the Internal Revenue Service and many states require taxpayers to make to cover the taxes due on earnings that aren't subject to paycheck tax withholding. Straightforward enough, right? Until it comes to payment deadlines. Even though there are, in most cases, four of them and they're called quarterly estimated tax payments, the IRS uses a calendar that's a bit... Read more →
So how was your summer? Yep, it's over, or will be officially a bit later in this brand new month of September. In addition to bringing some cooler temperatures (eventually, or so promise my local weathermen and women), the ninth month of the year also marks the opening of schools (at least in part, depending on COVID-19 Delta outbreaks), and football seasons (American, not Ted Lasso's version). Tax tasks also are on this month's agenda. Yeah, taxes aren't as fun as football (either U.S. or global leagues) or as welcome as a break from the heat or the kiddos going... Read more →
Ah, August. In normal times (remember those?), we'd be complaining about the late-summer heat, parents would be counting down days until school started, and tax geeks would be looking at things they should do this month. Well, things are decidedly not normal. It's been abnormally hot in much of the country already. Some schools are reopening, but with more COVID-19 precautions than they had planned since the virus has re-emerged with a vengeance due to the Delta variant. Those August tax moves, though, they're still around, of course with some coronavirus twists. And today, Aug. 2, the first Monday of... Read more →
Are you ready for Tax Day take two? It's June 15 and it's almost here. That mid-June day is the annual deadline for millions of U.S. taxpayers who are living outside the country. That includes members of the armed forces stationed abroad. It's also the due date for the current year's second estimated tax payment. And this year, even more taxpayers will participate. June 15, 2021, is the first Tax Day for millions who literally endured disastrous situations earlier this year. Here's the scoop for all these folks now facing impending June tax obligations. U.S. taxpayers living abroad: Every year,... Read more →
June's arrival, especially now that many coronavirus limits are being lifted, means the start of summertime fun. But it's also a good month to make some key tax moves before heading off to your favorite recreational pursuits. We did it! Survived Tax Day 2021 … unless you're among the millions who got an extension to file or live in a state where the deadline to submit 2020 tax returns was even further delayed. In that case, one of the things you need to take care of this month is filing your taxes. Here more on that and four other tax... Read more →
For the second consecutive year, millions of individual taxpayers aren't freaking out about their taxes as April 15 nears. That's because for the second consecutive year, the annual Tax Day has been postponed. But still, some folks are crashing right about now to get their 2020 filings done. That's because the Internal Revenue Service decision to move Tax Day 2021 from mid-April to May 17 applies only to individuals who must file income tax returns, aka the IRS' 1040 forms series. And some of these still have an April 15 deadline if they must pay estimated taxes for the 2021... Read more →
It's likely to be déjà vu all over again for IRS Commissioner Charles Rettig, testifying here in March before a House tax panel, when he goes before the Senate Finance Committee on Tuesday, April 13. Not to get your tax deadline hopes up too much, but Internal Revenue Service Commissioner Chuck Rettig is testifying tomorrow, April 13, before the Senate Finance Committee (SFC). The The last time he talked to lawmakers, it was in March to Representatives on the Ways and Means (W&M) Oversight Subcommittee. It was then that Rettig put the kibosh on the possibility that the IRS would... Read more →
UPDATE, Friday, April 9, 2021: Rep. Lloyd Smucker (R-Pennsylvania) has introduced H.R. 2437, a bill that would postpone the due date for first-quarter 2021 estimated tax payments to May 17, 2021. Thanks to the San Diego CPA firm GPW for the tip via Twitter, along with the observation that if Smucker's bill does pass, it likely will be very close to the filing wire. The Internal Revenue Service has dashed hopes that it would true-up 2021's annual tax filing deadline and the year's first estimated tax payment. Many in the tax community had been hoping (and lobbying and complaining and... Read more →
It's April. You know what that means. Major League Baseball is back! Yep, the return of The Boys of Summer takes top billing this month since the Internal Revenue Service pushed the usual April 15 Tax Day to May 17. I'll be spending this Opening Day doing what I do every year when the professional baseball season starts: watching games. All 30 MLB teams are in action today, so that's a lot of innings to occupy my time. Update: Today's meeting of my East Coast team, the Baltimore Orioles, at the Red Sox's Fenway Park is postponed until Friday due... Read more →
IRS Washington, D.C., headquarters (Photo by Davide Boeke via Flickr CC) Taxpayers are not the only ones ticked off because they got failure to file notices from the Internal Revenue Service. "Enough is enough," two leaders of the House Ways and Means Committee has told IRS Commissioner Charles Rettig in a recent letter. W&M Chairman Rep. Richard Neal (D-Massachusetts) and Rep. Bill Pascrell Jr. (D-New Jersey), chair of the tax-writing panel's Subcommittee on Oversight, took the agency to task not only for the 260,000 incorrect non-filing notices it recently sent, but also for a series of other missteps. "[W]e are... Read more →
Millions of taxpayers are facing a deadline at the end of this week. No, unfortunately I am not talking about the Jan. 15 mark that the Internal Revenue Service is required by law to meet in distributing the second round of COVID-19 economic relief payments. I'm talking about paying Uncle Sam instead of getting money from him. The final estimated tax payment for tax year 2020 is due on Friday, Jan. 15. Taking care of taxes yourself: Around 22 million individuals file these extra tax payments, which total four if you make them for the full tax year. They are... Read more →
Photo by Olya Kobruseva via Pexels Happy New Year! Oh, sorry. Was I typing too loud? I'm glad you were able to festively, and I hope safely, ring in 2021. Now that it's here, it also brings a new tax filing season. The Internal Revenue Service's delivery of the second round of COVID-19 relief money shouldn't hamper its handling of 2020 returns, which should officially start later this month. So if the IRS can be ready, so can we. So here are a few tax things to think about and take care of, after, of course, you're fully recovered from... Read more →
Most of us are cheering the rapidly approaching end of tumultuous 2020. I definitely am right there with you with some pre-New Year's Eve joyfulness. But take a little time off from your anticipatory year-end celebrations to check out these tax moves. These final three tax tasks for the final three days of the year could pay off at filing time in 2021. 1. Know the value of donating items instead of cash. You have until Dec. 31 to donate to an IRS-qualified charity so you can claim the gift as a deduction on your 2020 tax return. If you... Read more →
It's been a tough year for millions. In addition to worrying about keeping themselves and their families safe during the coronavirus pandemic, millions have lost their jobs. But there may be a little bit of help for those relying on government payments as 2020 winds down. The House and Senate are working on a compromise COVID-19 relief bill. It's huge and there still are congressional hurdles to overcome, but right now the proposal calls for a federal unemployment benefit of $300 a week for 16 weeks. That's welcome news for the nearly 13 million Americans who, without Congressional help, are... Read more →
We need to follow Santa Claus' example this month. Just as he checks his naughty or nice list, we need to check on tax moves to make by Dec. 31. It's December. 2020 and its craziness is almost over! Are you ready? Specifically, are you ready for the holidays? For those of us still committed to pandemic precautions, it's going to be a different, and yes, a bit less jolly, season. But one thing is the same as in previous Decembers. We still need to make some tax moves before Jan. 1. Some December tax moves will demand a little... Read more →
A quick Social Security note about for folks not yet at or near the benefits age about taxes on that pre-retirement income. More of it, known as the wage base, will be subject to the Social Security payroll tax. Details are in this post. Retirees checking on their investments. The income could make their Social Security benefits taxable. Today's a good day for millions of Social Security recipients. The Social Security Administration (SSA) has announced that benefits will increase a bit next year. Older folks who get regular monthly Social Security payments, along with those who receive Supplemental Security Income... Read more →
If you get money that's not subject to income tax withholding, then this weekend's Saturday Shout Out posts are for you. Tuesday, Sept. 15* is the due date for the third quarter payment of estimated taxes. Our tax system is pay-as-you-earn. That's typically done by withholding from wages. But when there's no per-paycheck tax collection mechanism in place, the payment responsibility falls on the person getting the money. And the way it's done is through estimate tax payments. The type of earnings that typically trigger are full-time self-employment or occasional gig work income, investment earnings, rental income, certain alimony payments,... Read more →
Updated, Labor Day Monday, Sept. 6, 2021: It's 2021 and we're still dealing with COVID-19. That means many people also still are dealing with losing their jobs. The updated taxes and unemployment insurance questions and answers — yes, the $10,200 exemption situation is noted — in this post from this time last year still apply. It's Labor Day weekend. This holiday usually is time for end-of-summer revelry, with a little leftover celebration of the workers whose efforts are recognized on the first Monday of each September. This year's a bit different. Social distancing during the coronavirus pandemic have, for the... Read more →