UPDATE, March 12, 2023: Congratulations to all those who won Academy Awards tonight, especially the big winner, "Everything Everywhere All at Once." The movie, known on social media as #EEAAO (or #EEAO if you don't want to include the preposition) proved that this year's major Hollywood event definitely wasn't your grandparents' Oscars. The wildly imaginative film, which featured a tax audit, won best picture. Three EEAO stars, Michelle Yeoh, Ke Huy Quan, and Jamie Lee Curtis, won acting Academy Awards. And original screenplay and directing Oscars went to The Daniels, Daniel Kwan and Daniel Scheinert. Jamie Lee Curtis, far left,... Read more →
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White House Budget video screenshot. Full video is available at Facebook and Twitter. The Biden Administration released its fiscal year 2024 budget today (March 9, 2023). Thanks to previews from President Joe Biden, there are no surprises as far as taxes. "I want to make it clear I'm going raise some taxes," Biden to told a group in Virginia Beach, Virginia, who gathered Feb. 28 to hear about healthcare. "Many of you are billionaires out there. You're going to stop paying at 3 percent. Not a joke." The president's promise was put in writing today with the issuance by the... Read more →
Photo by Kris Gonzalez via Flickr CC Parenting presents many challenges. One of them is finding quality child care. The tax code can help a bit here if you, and your spouse if you're married, both work. The Child and Dependent Care Credit offsets some child care expenses. Since it's a tax credit, it does that by reducing your tax liability dollar-for-dollar. But if you're a working mom or dad who enjoyed the pandemic-prompted enhancements to the child care credit last year, get ready to be disappointed when you file your 2022 return. The tax break afforded by the Child... Read more →
The Earned Income Tax Credit, or EITC, is one of the most beneficial tax breaks for lower- and moderate-income workers. It's also one of the most under-claimed. The reasons are many, starting with its complexity. You have to work to be able to claim the EITC. But if you make too much money, you're ineligible. Your marital status comes in the calculation of the final credit, as does the size of your family. And many single people ignore the EITC because they think it's only available to filers with dependent children. "This is an extremely important tax credit that helps... Read more →
Photo by Polina Zimmerman While millions are debating when to file their tax return, others are asking a more elemental question. Do I have to file a 1040 at all? It's a good question. The short answer is probably. But there are some situations where the Internal Revenue Service doesn't demand individuals file. Here's a look at just who is off the tax filing hook. Filing requirements for most of us: Generally, if you are a U.S. citizen or resident you must consider three things when determining whether you have to file a tax return: your age, your filing status,... Read more →
Every filing season, eager taxpayers, most of them expecting a refund, send their returns to the Internal Revenue Service as soon as they can. For most it works out OK. Others, however, discover on their own, or learn from the IRS, something just not quite right, and costly, on their Form 1040. It works the other way, too. In some instances, folks submit a return without claiming a tax break that would have saved them dollars. The IRS isn't going to tell you about that! The best way to make sure you enter all the data that the IRS wants,... Read more →
The tax code is like a car. A big, old, clunky car that just keeps chugging along. But every now and then you need to tune it up and change the tires. Here are some tweaks to the 2023 filing season model. (Photo by Andrea Piacquadio) Tax filing rolls around every year. But every year, there also are a few changes that make the process slightly different from prior filings. We didn't have any major tax law changes in 2022. But some old rules come into play, as does the expiration of some tax breaks that many folks had enjoyed... Read more →
Reviewed and updated Thursday, Dec. 21, 2023 Yes, you've got a lot to think about during the holidays, but add this tax task, too, if you're older and have a tax-deferred retirement plan. Don't miss the Dec. 31 RMD deadline. We're just days away from Christmas, so here's my tax tip gift to all my readers of a certain age. Take your required minimum distribution. Now. But definitely by the end of the year. If you're a septuagenarian and saved so you wouldn't have to rely solely on Social Security, you probably already know that the Internal Revenue Service wants... Read more →
Women are making some advances in workplaces, but still face challenges when it comes to saving for a secure retirement. (Photo by Christina @ wocintechchat.com on Unsplash) I've spent most of my professional life writing and, for the most part, I've enjoyed it. But I've also, for the most part, looked forward to tapping away at a keyboard because I want to, not because I have to. That's part of the reason I shifted to freelancing. The freedom of being an independent contractor is, (one more time) for the most part, the best thing about the arrangement. So that I... Read more →
Reviewed and updated Nov. 23, 2023 Tom and Tillie Turkey take care of their youngsters, like these three young Bourbon Red poults. But poultry and the rest of the animal world doesn't have to send their offspring to college. (Photo by Jennifer Kleffner via Flickr CC) A recurring phrase uttered at holiday season family gatherings is "you've grown so much since I last saw you!" What that usually means for many parents of those youngsters is that they will soon be heading off to college. And that move to campus means that mom and dad will have to come up... Read more →
Updated Wednesday, Nov. 16, 2022 You still have time to electronically claim the benefits, but not much. The deadline to e-file is Thursday, Nov. 17. If you missed out on the special COVID-19 relief payments, notably the enhanced Child Tax Credit (CTC), then head to the Internal Revenue Service's Free File website. The IRS is keeping Free File operating through Nov. 17 so eligible nonfilers can e-file a Form 1040 to claim their eligible COVID benefits at, as the name says, no cost. In addition to the CTC, eligible taxpayers may be able to claim some or all of the... Read more →
Sifting through all the options during workplace benefits enrollment season can be confusing and frustrating. Here are some things to think about, including taxes, as you evaluate your company's offerings. (Photo by MART PRODUCTION) We're in the heart of the annual benefits enrollment season. Not only is the Affordable Care Act healthcare marketplace open for business, but older Americans are signing up for Medicare. But a big segment of American workers rely on workplace-provided benefits to cover then health care and other needs. If you're checking out your company's benefits, either to enroll for the first time or continue the... Read more →
Plus a look at how higher costs of living affect capital gains, youngsters' investment earnings, gifts, and more. Image via Giphy Them that got, are them that get. Not only is that a lyric (and theme) from a fabulous Ray Charles song, it's a good synopsis of the current estate tax law, especially with 2023 inflation adjustments. Many of the current wealth-related tax provisions help the richest among us stay that way. But some of them can help all of us, regardless of our income level, increase our relative wealth. And, as reviewed in this Part 6 of the ol'... Read more →
If you've been to a doctor recently, refilled a subscription, had to go to an emergency room, or just bought over-the-counter medications, you know that all these cost a lot more than in previous years. It's enough to make you sick, or at least nudge up your blood pressure a bit. However, the tax code might have an Rx that can help. There are a variety of medical tax breaks that can help lower your federal tax bill. Several of them are adjusted each year to account for inflation. Here, in today's Part 5 post of the ol' blog's annual... Read more →
Very few of us share the same tax circumstances. However, there is one thing every taxpayer can agree on. We all want to pay the least amount of federal tax as possible. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a major way of reducing our annual tax bill. But wait. There's more. There are the adjustments to income, listed on Form 1040 Schedule 1 and still known as above-the-line deductions. You can claim all of these 25 tax breaks regardless of whether you itemize or take the standard deduction.... Read more →
Tax year-in and tax year-out, most filers claim the standard deduction instead of itemizing. The standard option has always been appealing because it's easy. There are no receipts to save, no added calculations. Even better, the Internal Revenue Service provides the standard amount you can claim, based on your filing status, right there at the bottom of the first page of Form 1040. The standard deduction train picked up even more passengers after the Tax Cuts and Jobs Act (TCJA) of 2017 essentially doubled the standard amounts. And those now more valuable deduction amounts are getting even better, thanks to... Read more →
Following these youngsters' example could pay off in more money from Uncle Sam. The IRS is notifying individuals and families who didn't have to file a 2021 tax return to take another look and consider submitting one by Nov. 17 to claim valuable tax breaks, like the enhanced Child Tax Credit, that they missed. The Internal Revenue Service is still trying to distribute tax benefits to 9 million families that have yet to claim them. The yet-to-be-collected tax breaks are COVID-19 economic impact payments available as the Recovery Rebate Credit (RRC), the Child Tax Credit (CTC), and the Earned Income... Read more →
The Child Tax Credit (CTC) has always been a popular tax break for families. During the COVID-19 pandemic, millions of taxpayers with children came to depend on it even more. Now, some parents who usually don't have to file a tax return can still get this tax break, which could be as much as $3,600 per child. But they must act by Nov. 15. Pandemic pumped-up credit: The CTC was enhanced as part of 2021's American Rescue Plan Act coronavirus relief legislation. It upped the usual $2,000 per child credit for qualifying youngsters. For the 2021 tax year, the CTC... Read more →
Photo by Vidal Balielo Jr. The Child Tax Credit was expanded in 2021 to help families coping with the adverse economic effects of the COVID-19. During the height of the pandemic, the American Rescue Plan Act (ARPA) temporarily bumped up the amount available via the already popular CTC. It went from $2,000 per qualifying child to $3,600 a year for children younger than age 6, and $3,000 per child for youngsters ages 6 to 17. The credit amounts were phased out once tax-filing families hit certain income levels. More of the increased CTC also was refundable, meaning that if the... Read more →
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 →