UPDATE, Jan. 13, 2021: There was no big winner in the Jan. 12 Mega Millions drawing, although some lucky ticket holders matched enough numbers to have a nice pocketful of spending (and taxable) cash. This nationwide lottery jackpot is now $750 million. Picking lucky numbers from a lottery game dispenser. More than $1 billion is up for grabs in the two nationwide lotteries. The Powerball jackpot is at $550 million. A solo Mega Millions winner will walk away with $600 million. Since I know you've got your lotteries tickets in hand, here are six tax and financial tips in case... Read more →
Finances
When the Internal Revenue Service issued the first round of COVID-19 economic relief payments as debit cards last year, a lot of them ended up in trash cans. Many folks thought the mailing was just another slick marketing attempt to get them to apply for an added credit card. They tossed those envelopes and the valuable relief cards they contained in the trash. So that this next batch of approximately 8 million COVID relief debit cards now hitting (or at least heading to) mail boxes isn't mistaken for junk mail, the IRS has made changes to the envelope. Clear envelope... Read more →
Photo: Pixabay via Pexels The good news, at least from the reports I'm getting from my family, friends, folks in the tax community and social media, is that people are getting their second COVID-19 economic impact payments (EIPs). This latest round of payments officially is a tax credit known as the Recovery Rebate. It was part of the end-of-year federal funding bill, aka the Consolidated Appropriations Act, 2021 (CAA). The Internal Revenue Service started directly depositing the money, based on information it has in its system, on Dec. 29, two days after the legislation was signed into law. Now the... Read more →
Have you received your $600 COVID-19 economic impact payment (EIP)? If not, then you're probably doing the same thing as Purcival Fairweather. You're checking, double checking and rechecking yet again your bank account to see if the coronavirus cash is finally there. $600 check? More like check my account 600 times. — Purcival Fairweather 🍾 (@purcival) January 2, 2021 But your obsessive bank badgering won't have to go on very much longer. If your EIP doesn't arrive by Jan. 15 or shortly thereafter it's sent out as a debit card or paper U.S. Treasury check, then you're not getting it.... 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 →
UPDATE, Dec. 29, 2020, 4:20 p.m. CST: Good news for those who saw their unemployment benefits lapse by the delayed signing of the second COVID relief bill. The Department of Labor say they will get the full 11 weeks of benefits, although most will have to wait a few weeks for state agencies to reprogram the package's provisions into their computers. To reflect this decision, the original headline "Millions out of luck and money as federal unemployment assistance ends" was changed. UPDATE, Dec. 27, 2020, 7:34 p.m. CST: The presidential COVID bill holdout is over. Donald J. Trump tonight signed... Read more →
The Internal Revenue Service has a bit of good, although very belated, news for taxpayers still waiting for their 2019 tax return refunds. The agency says it plans to issue most of those delayed refunds by the end of the year. Coronavirus pandemic mail pile-up: The problem stems, of course, from COVID-19. In the spring, most of the federal government and many private companies instituted pandemic protocols. Among those put in place by the IRS were closures at most of its campuses nationwide. That meant tax work that had to be handled in-office went undone. The closures also produced a... Read more →
Add "The 12 Days of Christmas" to the list of things that were affected by the coronavirus pandemic this year. No, not the iconic holiday song. That's still around. But some of the lyrics took a hit when they were evaluated in 2020 for the annual PNC Christmas Price Index (PNC CPI). For this 37th look at the Bureau of Labor Statistics' (BLS) Consumer Price Index and how it applies to procuring the song's 12 gifts from a True Love, The PNC Financial Services Group had to make some hard choices. Notably, the 2020 PNC CPI had to adjust for... Read more →
Update, December 30, 2020: When the Consolidated Appropriations Act, 2021, finally was signed into law on Dec. 27, the new law OK'ed the $600 COVID-19 economic relief payments now going out and meant the federal government would stay open through Sept. 30, 2021. But it also included the No Surprises Act, a measure that should help end the unexpected medical bills many patients receive even though they have insurance. The new health care law will take effect in 2022. The only thing nearly as bad as dealing with a medical situation is getting a surprise bill after the treatment. (Photo... Read more →
One of the many U.S. Capitol ornaments that adorn our Christmas tree each year. (Photo by Kay Bell) We all have our holiday traditions. That includes Congress. Almost every year, Representatives and Senators return to Washington, D.C. in December to take care of must-pass legislation. This year, there are two big items on the legislative to-do list. One is to approve federal government funding for the remainder of the 2021 fiscal year. Without that money, Uncle Sam's offices nationwide will shut down (again). That's definitely the Congressional equivalent of Santa putting coal in stockings! The other issue is another COVID-19... Read more →
Photo by Emanuel Kluge via Flickr CC Could the COVID-19 pandemic produce changes in tax systems worldwide? That's what one global economic group thinks could and should happen. There's no argument about the revenue problems caused by the coronavirus in 2020. They are being felt acutely as we head into the heart of the year's holiday season. In addition to the coronavirus' disruption of traditional get-togethers due to health concerns, there's the pandemic's financial component. COVID-19 business cutbacks and closures have left too many with reduced, or no, paychecks. Businesses that are open are seeing fewer customers because of those... 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 →
As we head into December, holiday shopping begins in earnest. Today's Cyber Monday is expected to be the busiest ever, as millions have shifted to online purchasing of just about everything during the COVID-19 pandemic. This increasing burst of internet transactions also means more chances for crooks to steal your payment and personal information. Much of the data that criminals are trying to snag this holiday shopping season also can be used during the rapidly approaching 2021 tax season to steal you tax identity and use it to file a fake return claiming a fraudulent tax refund. That's why on... Read more →
UPDATE Sunday, Dec. 27, 2020: Donald Trump, despite objecting to the amount of COVID-19 relief individual payments and some spending provisions, signed the federal appropriations measure into law. However, he did so a day after unemployment benefits from a July extension expired, costing millions of recipients at least a week of these federal benefits. UPDATE Monday, Dec. 21, 2020: Congress and the White House over the weekend extended the shutdown deadline to midnight today. But another continuing resolution is in the works to keep money flowing for seven more days, through Dec. 28. That would ensure lawmakers and the Administration... Read more →
Have coronavirus money troubles forced you to break into some of your next eggs? COVID-19 legislation made getting to retirement money easier, but you probably will still owe tax on the early withdrawals and must deal with a new form to report your distributions (or paybacks) to the IRS at filing time. With the holidays here and no additional immediate COVID-19 economic relief payment in sight, some folks likely have or are considering tapping their retirement accounts. That option was made easier as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27. It provides... Read more →
A VITA volunteer talks with a taxpayer. Check out the IRS' video on VITA and TCE programs for more on them and how you can participate. Every November, millions of Americans take time around Thanksgiving to acknowledge all the things in their lives for which they are grateful. This year, the coronavirus pandemic is affecting not only how we celebrate Turkey Day, but our assessments of our blessings. It's also reshaped how many of us look at ways we can share our good fortunes. One option is donating to charitable groups that can help out those who have fewer thanks... Read more →
Of course 2020 has multiple Fridays that fall on the 13th of the month. The year's first was on March 13, right when as a nation we were realizing that COVID-19 would define everything about this year, and beyond. Back then, I offered 13 good luck tax breaks. Today, Friday, November 13, 2020, arrives as we're dealing with a resurgence of the coronavirus. So it seem appropriate to revisit that first list of 13 tax opportunities that could ease some of your tax fears on this traditional day of superstitions, while we're in the midst of a pandemic and beyond.... Read more →
Welcome to Part 7 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. Today's post looks at next year's changes to Alternative Minimum Tax (AMT) calculations, as well as Social Security and nanny tax changes. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this... Read more →
Students at all levels are facing COVID-19 classroom challenges. Older students (and their parents) also are facing college costs, which can be covered in part with financial aid. (Photo by Julia M Cameron via Pexels.com) 2020 has been challenging year for all students and their parents. Moms and Dads with K-12 kiddos have been doing double (or more) duty as teachers where schools have shifted to full or hybrid remote classes as a coronavirus pandemic precaution. It's not much easier when the youngsters are older. Many young adults who've been away at college or were looking forward to going are... Read more →