If you have a big heart like the Tin Man in The Wizard of Oz classic movie, consider helping out fellow taxpayers as a volunteer during the coming tax-filing season. Volunteering is getting a lot of attention right now, as people are doing what they can to help each other in areas ravaged by Hurricane Helene. These good deed doers are as critical as the official government and organized philanthropic organization workers. The Internal Revenue Service also depends on volunteers every filing season. They are the IRS-trained people who staff Volunteer Income Tax Assistance (VITA) and Tax Counseling for the... Read more →
Filing
Getting mail delivered to your home is convenient. But even individually locked boxes, like these in this community collection area, are not safe from mail thieves. The Internal Revenue Service last week reaffirmed its commitment to modernization, specifically giving taxpayers more digital options, when it announced 24 states will be part of its Direct File program. Direct File is the IRS’ own tax preparation software that eligible taxpayers can use to prepare and electronically file their annual federal tax returns for free. The key for users is free. From the IRS' perspective, a more important part is electronic filing. More... Read more →
Three more states — Alaska, Idaho, and Kansas — will join the Internal Revenue Service’s Direct File next tax season. They join Connecticut, Maine, Maryland, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, and Wisconsin, who earlier this year joined the IRS-created-and-operated free online tax preparation and e-filing program. These 12 new Direct File states will double the states where Direct File will be available. A dozen — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming — were part of the Direct File pilot for the 2024 filing season. Treasury said that... Read more →
National Oceanic and Atmospheric Administration/National Weather Service The people whose lives have been devastated by Hurricane Helene obviously are not thinking about taxes. But the Internal Revenue Service has acted to officially ensure that they don’t have to worry about this for a while. The IRS has announced disaster tax relief for all individuals and businesses in seven states that were affected by the deadly hurricane, which made landfall in Florida’s Big Bend as a category 4 and then proceeded to wreak havoc across the south. Major disaster declarations have been issued by Federal Emergency Management Agency (FEMA) for the... Read more →
Photo by Vlad Chețan October is a scary month. Of course, there’s Halloween. As an adult, I’ve learned one of the most frightening things is a bad Oct. 31 costume party! It’s also the time of year when weather turns colder, sending a chill along the spines of those (me!) who prefer warmer weather. And scariest of all, it’s the start of the final quarter of the annual tax year. If you got a filing extension, you’ve got to face your fears and submit that extended Form 1040 by Oct. 15 or potentially pay the price in late-filing penalties. Beyond... Read more →
Even the Internal Revenue Service has acknowledged the Employee Retention Credit (ERC) claim process has been beleaguered by fraud and abuse. That’s why the tax agency stopped accepting new ERC filings last year, and has focused on working through existing claims. While some ERC claimants have received tax credit money for keeping staff on payroll during the height of the coronavirus pandemic, others are getting bad news from the IRS. Their ERC claims have been denied. The unwelcome word is arriving as IRS Letter 105-C. The mailed correspondence means the IRS has found the claim ineligible, and has disallowed, or... Read more →
Regular readers already know this, but since the college and professional football seasons are underway, and we’re about to head into Major League Baseball’s playoffs, it’s time for a reminder. Any winning sports bets are taxable income at the federal and most state levels. Sports betting’s growth: More of us are pocketing a few extra dollars after the games since the U.S. Supreme Court in 2018 ruled that states can decide whether to allow gambling within their borders. That includes online betting. Currently, 38 states and the District of Columbia allow some form of sports betting. Twenty-seven of those states... Read more →
If only online privacy was as easy as posting a sign. (Photo by Connor Danylenko) Do you look at your overflowing email box (OK, maybe that’s just me) and wonder why in the heck am I getting all this unsolicited crap? It’s probably because you checked, or didn’t check, a box when you went to some website. You either directly or implicitly consented to let that site pass along your email to “partners” who are now inundating you with unwanted email. That’s a tax issue, too, according to the Treasury Inspector General for Tax Administration (TIGTA). In a just released... Read more →
Will the federal government be open or closed on Oct. 1? We should get an idea this week as Congress considers yet another short-term funding bill for Uncle Sam's operations. (Open and Closed sign photos by Tim Mossholder) Here we go again. I wish I was talking about the great Ray Charles’ version of that classic song, but alas this post’s focus is, again, on a possible federal government shutdown. That could happen, at least partially, if Congress and the White House don’t agree on a funding measure beyond this fiscal year, which ends Sept. 30. Without money, Uncle Sam... Read more →
Photo by Mikael Blomkvist The third estimated tax payment deadline was Monday, Sept. 16, but today the Internal Revenue Service eased the minds of some Pennsylvanians who missed it. The IRS announced that taxpayers in areas of the Keystone State that were deluged by Tropical Storm Debby as it moved up the country’s east coast are eligible for a variety of tax relief. They’ve been given until Feb. 3, 2025, to meet a variety of tax filing and payment deadlines, including this week’s estimated tax due date. You can read more about the tax relief for storm-affected Pennsylvania individual and... Read more →
It’s not unusual, especially here in Texas, for undocumented workers to be employed in industries that depend on manual labor, such as agriculture or construction. (Photo by Zohair Mirza on Unsplash) “They’re eating the dogs” is now forever part of U.S. presidential campaign lore, for worse or worst since there’s no better take. Following Donald J. Trump’s exclamation of a false social media rumor of pet deaths in Springfield, Ohio, during his Sept. 10 debate last week with Kamala Harris, the municipality about half an hour northeast of Dayton has encountered much unwanted attention. It has included bomb threats to... Read more →
Boo! No, it’s not Halloween yet, but today is just as scary for some. They suffer from paraskevidekatriaphobia, the fear of Friday the 13th. Fear also is often associated with taxes. With another tax deadline on Monday — the Sept. 16 due date for the third estimated tax payment of the 2024 tax year — today is a good time to acknowledge, and start to overcome the associated fears of, some scary tax misinformation that just won't go away. Here are 13 tax misperceptions that once you know them and the right tax moves to make, you can become a... Read more →
Updated Wednesday, Sept. 18, 2024 UPDATE, Wednesday, Sept. 18, 2024: The IRS today announced tax relief, including a Feb. 3, 2025, deadline for estimated tax and other filings and payments for taxpayers in four Pennsylvania counties in the aftermath of Hurricane Debby, which made landfall in Florida on Aug. 5 and then moved up the Eastern Seaboard. Details in this post about all the areas affected by Debby. UPDATE, Friday, Sept. 13, 2024: The IRS today announced tax relief, including a Feb. 3, 2025, deadline for estimated tax and other filings and payments for all Louisiana residents after Hurricane Francine... Read more →
NOTE, Sept. 18, 2024: This estimated tax deadline is extended for taxpayers in officially designated major disaster areas. To date, such extensions apply to today's tax due date (and more) in 20 states and two U.S. territories. Millions of taxpayers will be sending Uncle Sam some more money next week. Monday, Sept. 16, is the due date for their third 2024 tax year estimated tax payment. At least we — yes, I’m a long-time payer of estimated taxes — have an extra day to fulfill this tax obligation, since the regular Sept. 15 deadline is on Sunday. But we all... Read more →
Any kind of saving is good, but for your retirement, a better option is a workplace retirement plan or IRA. A new Saver’s Match will help some when it takes effect in a couple of years. (Photo by Diane Helentjaris on Unsplash) The Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted at the end of 2022, includes a notable change in how eligible individuals can collect the Saver’s Credit. This tax credit turns contributions to popular retirement plans, which already are tax-favored, into addition funds. Qualifying lower- and middle-income savers who put $2,000 into an Internal Revenue Service-authorized... Read more →
Treasury Secretary Janet L. Yellen speaking at the Austin, Texas, Internal Revenue Service campus Friday, Sept. 6. The Secretary's remarks included news of progress collecting unpaid taxes from rich nonfilers. (Screen capture from Treasury YouTube video) The U.S. Treasury’s balance has grown recently, thanks to Internal Revenue Service’s success in collecting from high-wealth individuals who neglected to file tax returns. Treasury Secretary Janet L. Yellen and IRS Commissioner Danny Werfel this morning announced that to date $1.3 billion has been recovered from wealthy nonfilers. The new collection effort, kicked off in 2023 and led by dozens of senior employees, focused... Read more →
Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Maryland, where the hubby and I spent our first married years, is our adopted second home. It's also home of wildlife areas like the Jug Bay tidal wetlands pictured above that we frequently visited to watch birds and wildlife. Now, the Old Line State also will be part of the IRS Direct File program. (Photo of Jug Bay Wetlands Sanctuary by Kevans27 via Wikipedia Commons) The Internal Revenue Service continues to make progress in getting states to sign up for Direct File, the agency’s... Read more →
So how was your summer? That’s right, it’s that time of year again. The summer break officially ended on Sept. 1 with the arrival of meteorological fall, which runs through Nov. 30. I know, it’s kind of an arcane tidbit, but we have other more recognizable autumnal indicators. Youngsters across the country are back in classrooms. Their parents are back to the 9-to-5 grind after the long Labor Day holiday, with the next extended break not until the holidays. And temperatures here in Central Texas have dropped into the upper 80s! Yes, that’s early fall weather for us. I hope... Read more →
However, opponents of the Internal Revenue Service's option that cuts out private tax software companies still aren't convinced of the program's value or security. UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states will be a part of the Internal Revenue Service’s Direct File program next year. When the 2025 filing season starts, more than 120,000 Maine and 600,000 Wisconsin taxpayers and will be eligible to file via the IRS created and managed free, online tax preparation and e-filing option. The potential Pine Tree State and... Read more →
Photo by Katt Yukawa on Unsplash Crowdfunding, a personal way of raising money that’s been supercharged by social media’s reach, has tax implications. Most of us are familiar with charitable crowdfunding. Expect to see a lot more of that in the wake of natural disasters, with solicitations by individuals and groups looking for help for themselves or others. In addition to charitable fundraising, there also are lots of online financial solicitations by and for businesses. Regardless of the crowdfunding reason, the Internal Revenue Service notes that distribution of the funds may be includible in the gross income of the person... Read more →