School is back, and that means homework. College students and their parents especially need to review some lessons on ways the Internal Revenue Code can help pay many higher education costs. The table below offers a look at two popular educational tax credits, the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC is the one most undergraduate students (or their parents) will claim. The LLC is for additional educational costs beyond the first four years, including classes you take after getting out of school. Education Benefits Comparison Tax Year 2022 Criteria AOTC LLC Maximum benefit... Read more →
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CT and NJ shoppers get sales tax relief on classroom clothing and, in the Garden State, more at the end of this month. And then there were five. That's how many states remain in the August back-to-school tax holiday list. Three of them — in Illinois, Maryland, and Massachusetts — are this weekend. The other two, in Connecticut and New Jersey, will close out this month. Since most of the 19 states offering tax holidays this year have by now held their no-tax shopping events, all y'all know the drill. The table below has specific dates and links with tax-free... Read more →
Photo by Daniel X. O'Neil via Flickr CC With things more or less back to whatever now counts as normal, kids (and parents) are counting down the days until school restarts. They're also looking, especially with inflation bumping up prices, for ways to save on necessary school supplies, which a recent National Retail Federation (NRF) survey found are expected to be around $864 this year. Sixteen states are offering ways to help their back-to-school shoppers. They're offering state (and in some cases local) sales tax holidays in August. Florida's two-week back-to-school tax holiday began July 25 and continues through midnight... Read more →
Photo by Vlada Karpovich Immediately after the U.S. Supreme Court overturn the constitutional right to abortion, talk turned to the longer-term ramifications of the Dobbs v. Jackson Women's Health Organization ruling. The ending of the 49-year-old federal right to an abortion means states now can determine under what circumstances the medical procedure is allowed. Most that have enacted anti-abortion laws or reinstated pre-Roe statutes do not allow or severely limit the time frame in which it can be performed. Some even have granted an unborn fetus personhood, or have introduced legislation to ban abortion by establishing fetal personhood, according to... Read more →
Summer's winding down, with schools opening their doors across much of the country in just a few weeks. So of course, you're thinking of one last getaway to escape the sweltering dog days. But before you head out to a beach retreat or cooler mountain cabin, take a few minutes for taxes. August is a good time to make some tax moves that could save you some dollars and future headaches. Here are four to consider. 1. Make your tax holiday shopping list: The return this fall of students to classrooms is most welcome by COVID-weary parents who saw much... Read more →
Photo by William Fortunato Being a parent is a challenge, even with the best of children. It's also expensive, especially for parents of infants. And the costs have increased thanks to the recent inflation spike. "Most parents are the poorest they'll ever be in their kid's life on the day their kid is born," Kathryn Edwards, an economist with the RAND Corporation, recently told Boston's NPR news station WBUR. "That's what makes something like the cost of diapers hit really hard, is that you're hitting people who in 10 years probably have absolutely no problem affording diapers. It’s just really... Read more →
Families in Puerto Rico who haven't filed to claim the enhanced 2021 tax year Child Tax Credit should do so, preferably by using the tax break's special online simplified filing tool. (Image from IRS Publication 5649) The Internal Revenue Service is still trying to deliver 2021 tax year Child Tax Credit money, this time focusing on families in Puerto Rico. The tax break amount was increased last tax year to a potential maximum of $3,600 for each child ages 5 and younger, and up to $3,000 for youngsters ages 6 through 17. It's also a fully refundable tax credit for... Read more →
Photo by Andrea Piacquadio I'm later than usual posting today because the hubby and I finally cleaned a room that we've ignored for way too long. That meant it took longer than if we'd just dusted a bit more regularly. That's why I'm thinking of hiring a cleaning person. OK, I probably won't. I do think about it every time we do some major cleaning job, since I find housekeeping a total drag. Just ask the hubby. But I'm not really one for people I don't really know being in my house. Plus, if we do hire cleaning help, we... Read more →
If you're a young person with a summer job, be aware of the tax implications. (Photo by Andrea Piacquadio) Your teenager has a summer job lined up, and you're thrilled. So is your youngster. But before the young worker heads off for the first day of gainful employment, it's a good idea to consider the tax implications. Here are five common tax issues that young workers, and their parents, face. 1. The teen likely will have to file some sort of tax return. The U.S. tax code is wonderfully egalitarian when it comes to filing. Anyone who makes a certain... Read more →
If you live in one of them, the state tax break is a nice add-on to the federal Child Tax Credit, which this year reverted to its lower, pre-COVID amounts. Child tax credits, at the federal level and in 10 states, can have the parents of these youngsters jumping for joy, too. (Photo by Guduru Ajay bhargav) The expanded federal Child Tax Credit (CTC) helped millions of households cope with finances stretched thin due to COVID-19 layoffs and even total business closures. During the height of the pandemic, the already popular CTC of $2,000 per qualifying child was increased. The... Read more →
Photo by Jill Wellington Summer doesn't officially start until the solstice a bit later this month, but that doesn't stop us from celebrating the unofficial arrival of lazy, hazy days today, June 1. But before heading out to the beach, a cool mountain retreat, your favorite amusement park, or distant family members you haven't seen in ages, it's tax time. Yes, Tax Day was six weeks ago for most of us. But even if you got an extension to file your 2021 return, there still are some tax moves you should make or at least consider this month. I know... Read more →
One of our neighbors made sure we all knew they had a new, cool graduate. (Photo by Kay Bell) I swear, my nieces and nephews were just in kindergarten. And wasn't that neighbor kid trick-or-treating as a dinosaur a couple of years ago? So how am I getting high school and college graduation announcements for these young people? Most of them will get a nice, actual paper congratulations card. A few will find a gift card tucked inside. However, a couple of these newly minted young adults will get actual gifts. But they won't be items that have to wrapped.... Read more →
Here are this weekend's full Flower Moon eclipse stages. The moon moves right to left, passing through the penumbra and umbra, leaving in its wake an eclipse diagram with the times (Eastern time zone) at various stages of the eclipse. Visualizations by Ernie Wright, NASA Scientific Visualization Studio. Click here for the video version. And if it's cloudy where you live, you can livestream the eclipse. It's Friday the 13th, the only one in 2022. A total lunar eclipse will turn the full Flower Moon red Sunday night. The only thing that could amp up our combined superstitions and natural... Read more →
The Child Tax Credit (CTC), already a popular tax break, was enhanced for the 2021 tax year. In addition to being larger — up to $3,600 for each child younger 6 and up to $3,000 for each youngster age 6 through 17 instead up the usual $2,000 per qualifying child — it was available to more families. Most eligible households got half of their qualifying CTC amount last year as monthly advance payments. They were sent automatically to taxpayers who had filed returns in prior years. Families who didn't have to file, usually because they earned less than the amount... Read more →
Taxes don't typically prompt celebrations like that of these school children welcoming May with a traditional Maypole dance. But thinking about tax moves this month can help you avoid costly faux pas. (Photo by Paul Barnett via Wikimedia Commons) May is supposed to be the month full of flowers from the previous month's showers. Unfortunately, this year the month is starting off on a decidedly unmerry note. In the wake of the devastating Kansas tornadoes, forecasters are warning of multiple rounds this week of severe thunderstorms, including tornadoes, across the Plains, Midwest, and South. That's why heeding weather warnings and... Read more →
via GIPHY So, you missed Tax Day. It happens. Don't panic. But don't dawdle. The Internal Revenue Service is serious about wanting your tax forms and, of course, any taxes you owe. If you miss the annual deadline, regardless of exactly when it falls, then you'll likely end up facing filing-related penalties, the harshest of which is for not filing at all. Below are four things you need to do now to get out of that penalty jam with as little damage as possible. Plus, there's a fifth tax move that could pay off for folks who aren't legally required... Read more →
Photo by Vidal Balielo Jr. via Pexels Filing status is one of those tax matters that seems so simple, but which often trips up taxpayers in real life. As noted (shameless plug warning) in my 5 filing status choices item for the April Tax Tips page, most folks' status stays the same from tax year to tax year. But a change (or two, or more) in your personal situation could mean you need to revisit how you file your return. The head of household (HoH) status is a frequent source of confusion. Here, an unmarried person takes care of the... Read more →
Do check out these following related — and legitimate — tax write-offs Sometimes your home is indeed located at the intersection of favorable tax breaks. Sometimes it's not. Below is a look at the difference between some questionable and acceptable residential (and more!) write-offs. Every tax-filing season, the great quest by filers is to find the most tax breaks. But there are some deductions and credits you should steer clear of. These expenses that don't meet Internal Revenue Service guidelines mean the agency will stop processing your tax return to give it second (or third, or …) look. At best,... Read more →
President Joe Biden's fiscal year 2023 budget proposal of a minimum tax on the wealthiest Americans, as well as a levy on unrealized gains on assets (including stock holdings), is getting the most attention. Biden's plan to collect at least a 20 percent tax on U.S. households worth more than $100 million would apply to about 20,000 households, but more than half the revenue would come from households worth more than $1 billion, according to White House estimates. It also would, says the administration, help reduce the nation's budget deficit by $1 trillion over the next decade. Wish list only:... Read more →
It's not a literally blank computer screen, but the IRS and White House Child Tax Credit portals aren't accepting input until after Tax Day on April 18. (Photo by cottonbro from Pexels) The increased Child Tax Credit (CTC) has been a boon for many U.S. families. The American Rescue Plan Act (ARPA) bumped up the tax break for the 2021 tax year from $2,000 per each eligible child to $3,600 for children age 5 or younger, and $3,000 for youngsters ages 6 to 17. Now, however, an online tool that the IRS created to make sure all who were due... Read more →