Many people who are having cash flow issues opt for advances on their expected tax refunds. (Photo via Unsplash+ in collaboration with Getty Images) The 2024 tax filing season will officially start, if prior year tax calendars hold, in about six weeks. That's when the Internal Revenue Service will start processing 2023 tax year returns. But millions of people will file as soon as they can in January, even if the IRS isn't ready. They'll use tax software or a tax preparer to get their 1040 form out of the way and to the head of the processing line. These... Read more →
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Unsplash+ in collaboration with Getty Images The Internal Revenue Service and its Security Summit partners today wrapped up the eighth annual National Tax Security Awareness Week with a warning for everyone, individual taxpayers and tax pros, to stay alert to emerging tax scams. It's a message the group issues regularly throughout the year because con artists work year-round to steal our money and, in many cases, our identities. Once they get that personal data, they can file fake tax returns to try to collect fraudulent refunds. By now, most of us are well aware of the warning signs of scams... Read more →
Photo by Anne Nygård on Unsplash Most taxpayers get federal tax refunds. Internal Revenue Service data complete through Oct. 27 shows that the agency received 160.5 million returns and issued nearly 105 million refunds that totaled more than $319 billion. Not surprisingly, taxpayers who are getting cash back from Uncle Sam are among the first to file every tax season. That's also a good security move. By getting their 1040 forms to the IRS early, they beat the criminals who might try to file fake returns under their names to claim their or even bigger fraudulent refunds. But some folks... Read more →
Individuals who didn't automatically receive an Economic Impact Payment or claim a Recovery Rebate Credit during the COVID-19 pandemic get a second chance at the money. Economic Impact Payments helped many U.S. families financially during the COVID-19 pandemic. But some eligible filers didn't get the stimulus money directly, and didn't claim it later as a Recovery Rebate Credit when they filed. Now they get another shot at the tax relief. Remember Economic Impact Payments? These funds, also referred to as stimulus payments, were issued during the height of the COVID-19 pandemic. The Internal Revenue Service sent most of the payments... Read more →
Tax mistakes, unintentional or otherwise, mean penalties when discovered by the IRS. And the amounts could add up. (Photo by Polina Tankilevitch) The United States' tax system depends on voluntary compliance by taxpayers. But Uncle Sam is no fool. He and his tax collectors are believers of the adage "trust, but verify." The Internal Revenue Service also follows up on that verification with penalties when it finds taxpayers — and the professionals we pay to take care of our taxes — aren't fulfilling our tax responsibilities on our own. The most severe punishments come via criminal tax prosecutions. The IRS... Read more →
IRS also ups payment threshold trigger to $5,000 for the 2024 tax year. Thanksgiving is this week, but the Internal Revenue Service today skipped all the way to Christmas, giving an estimated 44 million taxpayers an early gift. Most of these individuals won't have to deal with 1099-K forms in 2024. They now have another year before they'll get this tax statement detailing their self-employment income. They also can make much more next year — up to $5,000 instead of $600 — before this third-party reporting document must be issued in January 2025. This latest delay decision, detailed in IRS... Read more →
Taxes are all about numbers, but generally speaking, we taxpayers are not big math fans. That's why we hire tax professionals or use tax software. That aversion to doing more calculations is why most of us have chosen, year-in and year-out, to claim the standard deduction. Sure, I know, we should use the tax deduction method, either standard or itemizing, that gives up the better tax due result. Still, I know some folks who use the standard deduction method without even comparing because, as noted, it's easier. There are no receipts to save, no additional adding, subtracting, and figuring percentages.... Read more →
UPDATE, Thursday, Nov. 16, 2023: My initial post's pessimism was unwarranted! Uncle Sam is going to make it through the holidays with all his offices open. The two-pronged continuing resolution (CR) measure approved by the House and Senate and signed into law late today by President Joe Biden provides funding for Veterans Affairs, Agriculture, Transportation, Housing and Urban Development, and energy and water programs through Jan. 19, 2024. All other federal departments will have money to operate through Feb. 2, 2024. Even better for the federal agencies, including the Internal Revenue Service, the current spending levels in the CR remain... Read more →
Unsplash+ in collaboration with Getty Images Every year, families gather at Thanksgiving. In many cases, it's a chance for relatives and friends who haven't seen each other for a while to reconnect. Some families, however, are much closer proximity-wise. They see each other all the time. And in some of those cases, family members are caregivers. That's why November is a good choice as National Family Caregivers Month. It is formal recognition, as noted in President Joe Biden's proclamation, that millions of Americans provide crucial care and assistance to parents, children, siblings, and other loved ones. Many of these caregivers... Read more →
Photo by DocuSign on Unsplash Many of the accommodations we made for the COVID-19 pandemic were burdensome. Just ask parents who were forced into dual work-from-home and school teacher duties. But two tax-related changes were more well-received, so much so that the Internal Revenue Service is extending them. The agency extended indefinitely the option to use electronic or digital signatures on tax documents. The IRS says digital/e-signatures will be acceptable "until more robust technical solutions are deployed." In addition, encrypted emails still can be used until Oct. 31, 2025, to communicate directly with IRS personnel with whom the taxpayers or... Read more →
Getting your tax ducks in a row takes on a different meaning, and bird, in November. But whatever fowl you choose for the metaphor, make some time this month to complete tasks that will prevent tax turkeys. (Photo by Mohan Nannapaneni) Hello, November! We welcome cooler (but not cold!) temperatures, holiday feasts (yes, I love pumpkin pie), and seeing family and friends for the first time in, well, months. This penultimate month of the year is also a good time to tackle some tax tasks. I know, you already have a lot on your November to-do list. But check out... Read more →
Photo by Anya Batalova on Unsplash We don't get many — OK, not any — kids dressed as ghosts on Halloween night. Our neighborhood's youngsters seem to prefer dressing as comic book icons turned movie characters. Heck, last week I even saw an adult, or a very tall teen, dressed as Spiderman, full-face mask included, during my last grocery store visit. But that's for another blog post. Or a call to the local authorities. Getting back to ghosts, notably those with tax connections. As I mentioned in an earlier post, ghost employees and ghost employers can wreak havoc when it... Read more →
Unsplash+ in collaboration with Allison Saeng Ghost sightings are common this time of year. Some companies, however, find that ghost employees haunt their businesses year-round. Ghoulish tax tricks are also played on workers by some ghost employers. In both cases, the actions are not just criminal, but also are costly to all, including Uncle Sam, who are victims of these scary tax evasion tactics. Haunted by ghost workers: A ghost employee is a fictitious employee set up in a company's human resource and/or payroll system that receives paychecks. Basically, ghost workers are a form of embezzlement, as the nonexistent employees... Read more →
Photo by Nathan Lemon on Unsplash In these hectic times, you might think you don't have any more minutes to offer, especially in an unpaid capacity. But volunteering can pay off in unexpected ways. You can meet new people, and make new friends, who share your passion. Many times, you learn new skills, some of which could help advance your paying career. The satisfaction of helping others also just might make you happier. That's something that all of us could use. And if your inclination to assist involves taxes, then you are exactly who the Internal Revenue Service is seeking.... Read more →
Small businesses' many challenges were multiplied during the COVID-19 pandemic. The Employee Retention Credit (ERC) helped many companies and their workers make it through that lean time. But recently, unscrupulous promoters have pushed some owners to improperly claim the ERC, creating new problems. Now the IRS is offering a way to correct those bad filings. (Image via Unsplash+ in collaboration with Getty Images) The Employee Retention Credit (ERC) helped lots of small businesses and their staff make it through the COVID-19 pandemic. When properly claimed, the ERC is a refundable tax credit designed for businesses that continued paying employees while... Read more →
The rich and famous frequent Monaco's glamorous casinos. The European principality also was the base for a U.S. taxpayer who didn't report all his taxable income to the IRS. The lesson, for him and an unconnected counterpart in the prime U.S. gambling destination of Nevada, is that the house — in this case, Uncle Sam's tax agency — usually wins. (Photo by Kaja Sariwating on Unsplash) Many people liken dealing with the U.S. tax code to wagering. You try to follow the casino rules and common sense, but the temptation to push your luck is often too enticing. Sometimes those... Read more →
Super helpful is how millions of taxpayers describe VITA and TCE volunteers each tax-filing season. The IRS has awarded new grants to keep the nationwide free tax preparation and filing programs going. (Photo by Jonas Jacobsson on Unsplash) More than 62 million of us did our own taxes and e-filed them this tax season, at least through May 12, the date of the Internal Revenue Service's latest count. That represented almost 44 percent of all 2022 tax year filings so far. Some of those taxpayers, however, got some no-cost help from IRS-trained volunteers in filling out and electronically filing their... Read more →
The 2023 filing season officially ended for most U.S. taxpayers on Monday, the Oct. 16 extension deadline. Now the Internal Revenue Service is looking forward to next year. The agency today announced that its finalizing a Direct File program that will involve at least four states. Arizona, California, Massachusetts, and New York officials have decided be a part of the 2024 filing program, which will be under total IRS purview rather than in conjunction with the tax software industry as is the current Free File system. State tax help key: Getting the buy-in of California and New York, home to... Read more →
Updated Tuesday, October 17, 2023 The Internal Revenue Service's surprise announcement came on what was Tax Day for millions of Golden State taxpayers who earlier got additional federal filing time due to major disasters. State officials have followed suit, extending California's due date, too. In addition, the IRS last week gave U.S. taxpayers living in Israel almost a year to take care of a variety of current tax obligations. Storms across California earlier this year produced widespread flooding and other disastrous conditions. That prompted federal relief, including extended tax deadlines. Today, the IRS gave Golden State taxpayers another month to... Read more →
Tax time is almost up if you got a filing extension. (Unsplash+ in collaboration with Getty Images) It is Tax Day if you got an extension to file your 2022 tax return. Leading up to this Oct. 16 filing deadline, the ol' blog has been offering tips on how to finish up that Form 1040. They include — 8 tax tips for filers facing Oct. 16 extension deadline 10 often overlooked tax breaks 10 common tax filing mistakes Self-employment retirement plans with Oct. 16 contribution deadlines Free File 2023 still open, with 7 companies offering 9 no-cost tax prep/e-file options... Read more →