The Internal Revenue Service has delivered two rounds of COVID-19 economic impact payments (EIPs). The first was the $1,200 per person approved in late March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The second EIP for $600 per person was authorized at the end of last December as part of the Consolidated Appropriations Act (CAA), with payments distributed through the first two weeks of January 2021. By now, folks know that if they didn't get the full amounts, which included additional payments for eligible dependents, they need to claim the Recovery Rebate Credit (RRC). You'll do... Read more →
Finances
You made it through college. Congratulations! Now you've just got to repay that student loan. Photo by Muhammad Rizwan on Unsplash More than 40 million former college students who have federal student loans must soon start repaying that debt. The financial obligation has been on hold since March 2020 as a way to help borrowers who encountered financial difficulties during the COVID-19 pandemic. During these three and half years, the borrowers didn't have to pay their student loans. But that changes next month. The first post-pause payment is due in October, which starts in just a few days. If you... Read more →
Photo by Max Burchill on Unsplash To paraphrase a gazillion social media posts, exploitative people are why we can't have needed tax breaks. OK, Congress plays a big part. And the Internal Revenue Service too often steps on its own tax toes. But in many cases, unscrupulous people mess things up for the rest of us who are just trying to comply with tax laws and get a little bit of legitimate tax relief along the way. That's what happened with the Employee Retention Credit (ERC). This refundable tax credit was created by lawmakers to help businesses that were struggling... Read more →
Unsplash+ in collaboration with Getty Images Congress apparently is still trying to hash out a tax bill. Republican leaders have created a measure, but it's facing not only Democratic opposition, but also pushback from some of its own members. The hangup within the GOP is the $10,000 limit on tax deductible state and local taxes. Democrats want any tax legislation to include an expansion of the Child Tax Credit, or CTC, that follows the increases allowed during the COVID-19 pandemic. The CTC is one of the most popular federal tax breaks around. The family-friendly tax break has been in the... Read more →
Unsplash+ in collaboration with Martin Sanchez I hope you enjoyed your Labor Day break. Now that summer is effectively and officially coming to an end this month, it's also a good time to look at some tax tasks. Taking care of tax business in September can help you avoid a costly tax fall as autumn arrives. OK, bad seasonal quasi-pun. Sorry. Accept my apology and these four September 2023 tax moves. 1. Pay your third quarter 2023 estimated tax. Many who've already filed their annual tax return still have other taxes to take care of this month. Yes, I'm talking... Read more →
Labor Day isn't a holiday for all workers. (Photo by frank mckenna on Unsplash) Labor Day is a day off for many workers. But entrepreneurs probably put in regular shifts this first Monday in September. When your small business depends primarily on you, you tend to work even on holidays. Since you're busy being the boss, I won't take up too much of your time. But whether you're a new business owner or have been the boss for years, it's always good to stay on top of your tax responsibilities. Here are some tax basics for all of us self-employed... Read more →
Relax! An IRS change should help those 50 and older who make catch-up contributions to their workplace retirement savings plans. (Photo: Unsplash+ in collaboration with Getty Images) The second version of the Setting Every Community Up for Retirement Enhancement, or SECURE 2.0, Act was lauded for its many retirement-saving positive provisions. But as often happens with tax-related legislation, especially when it becomes law at the very end of a year, there were some not so good changes. That was the case with SECURE 2.0, which was enacted on Dec. 29, 2022, as part of the much larger Consolidated Appropriations Act.... Read more →
America's elite billionaires club last week welcomed a new member. The person who has the sole winning ticket, purchased at a Publix grocery store in Neptune Beach, Florida, can claim the $1.58 billion Mega Millions jackpot. The Aug. 8 jackpot was the largest Mega Millions jackpot awarded, according to the national lottery. The winner, who has yet to come forward, has the option of taking the nearly $1.6 billion spread out over 30 years. Or the winner can slide into the millionaires' club by getting a single cash payment of $783.3 million. One vs. 30 payouts: Most people opt for... Read more →
A student checks his notes before the next class. (Photo by Brice Cooper on Unsplash) The 2023 school year has started, or will soon, for kindergarten through college students. Learning can be expensive, even for public school attendees. But it is higher education that poses the highest costs. Uncle Sam can help cover some educational expenses, but the school-related tax benefits noted in my post last week are limited. That means that students and/or their families must come up with the bulk of the school payments. That's usually done through traditional financial assistance, such as scholarships, loans, or other forms... Read more →
The bridge connecting El Paso, Texas, and Juárez, Mexico, is one of several international exchange points expecting increased traffic this weekend as Mexican shoppers visit to take advantage of Lone Star State tax holiday savings. (Photo by Nils Huenerfuerst on Unsplash) The final five summer sales tax holidays are upon us, with Texas kicking things off this weekend. And it's going to be an international affair. U.S. Customs and Border Protection (CBP) officials expect a higher volume of crossings into the Lone Star State starting tomorrow, Friday, Aug. 11. That's the first day of Texas' three-day back-to-school tax holiday. If... Read more →
Photo by Shubham Sharan on Unsplash Public schools in my part of Austin will welcome students on Aug. 16. Yeah, that's next week. Many universities also will begin classes this month. That leaves a small window now for some school-related tax lessons. So here's a crash course on eight educational tax breaks. Some help cover kindergarten through high school graduation costs. Others apply only to higher education expenses. There's even some federal tax help for post-graduation folks looking to improve their work skills. Let's start with two popular tax credits, since they offer dollar-for-dollar tax savings. American Opportunity Tax Credit:... Read more →
If you're the parent of this rambunctious duo, you definitely have a challenging job. However, this roughhousing duo also might help you claim a valuable federal tax credit. The Child Tax Credit (CTC) is one of the most popular federal tax breaks around. This family-friendly tax break has been in the Internal Revenue Code in some form since 1997. Parents like it because it's relatively easy to claim. It's also a tax credit, which means it will reduce your tax liability dollar-for-dollar. During the height of the COVID-19 pandemic, the CTC benefits were expanded. To counter the economic problems created... Read more →
Senate side of the U.S. Capitol. (Photo by Scrumshus - Own work, Public Domain) The Internal Revenue Service's to-do list is pretty packed right now. It just announced that it is implementing paperless tax protocols next year. But a group of U.S. senators say it needs to make fighting crypto tax evasion a priority. They are concerned about the Treasury Department's and IRS' apparent procrastination in complying with the Infrastructure Investment and Jobs Act's (IIJA) mandate of new tax regulations for crypto asset traders. The IIJA-ordered rules would require third parties, such as Coinbase, to report information about individuals' crypto... Read more →
Unsplash+ in collaboration with Getty Images Shoppers in 14 states are taking advantage of sales tax holidays in August. Tennessee's back-to-school tax-free event was in late July. But Volunteer State shoppers have another way to escape sales taxes this month. And in September. And in October, too. Tennessee's new Grocery Tax Holiday began at 12:01 a.m. on Aug. 1. Food and food ingredients are exempt from sales tax until 11:59 p.m. Oct. 31. During the three-month grocery tax holiday, shoppers won't have to pay the state's 6.75 percent state and local option sales tax on food and food ingredients. The... Read more →
Get ready Arkansas, Connecticut, Iowa, Maryland, Massachusetts, Missouri, New Jersey, New Mexico, Ohio, Oklahoma, South Carolina, Texas, and West Virginia shoppers. Your back-to-school tax holidays are coming up in August. And yes, Floridians, your event wraps up this week. Many school supplies, like these at my local grocery store, will be sales-tax-free in Texas later this summer. (Photo by Kay Bell) With August just one day away, it's definitely time for parents and youngsters alike to get ready for the reopening of classrooms. Yes, those two groups likely will celebrate (or not) differently. But there's one thing they can share,... Read more →
Four U.S. senators with usually divergent policy points of view have agreed that there needs to be stricter control of digital asset trading. When Sen. Elizabeth Warren (D-Massachusetts) introduced her Digital Asset Anti-Money Laundering Act last year (S. 5267), the lone cosponsor was Kansas Republican Sen. Roger Marshall. The latest version of the bill (S. 2669) has added cosponsors Sen. Joe Manchin, the West Virginia Democrat who's often bucks his party's leaders, and Sen. Lindsey Graham (R-South Carolina), now a Donald J. Trump supporter. Four lawmakers isn't many, but the group's agreement shows that Congress is starting to consider tighter... Read more →
Get ready Alabama, Florida, Mississippi, and Tennessee shoppers. Your back-to-school tax holidays are this month. The rest of this year's no-tax shopping events are scheduled for August. Many school supplies, like these at my local grocery store, will be sales-tax-free in Texas later this summer. (Photo by Kay Bell) Wow! We're into the third week of July already. You know what that means. School is just around the proverbial corner. And you know what that means. States are holding their annual sales tax holidays. There are four this month in Alabama, Florida, Mississippi, and Tennessee. A baker's dozen are scheduled... Read more →
When the Powerball numbers pop up on Monday, July 10, 2023, the jackpot will be at least $650 million since no one won the Saturday, July 8, drawing. Lottery officials say the cash option for a winner will be an estimated $328.2 million, before taxes. That payout would be the ninth largest Powerball jackpot on record, and the second largest Powerball jackpot of 2023. The other national lottery, Mega Millions, isn't too shabby either. A winner of that drawing for $480 million on Tuesday, July 11, could pocket a lump sum payout of $240.7 million. Picking lucky numbers from a... Read more →
Photo by Alesia Kozik Cryptocurrencies have changed not only individuals' views of assets and wealth development, but also countries' tax systems. Those are among the issues explored in a just-released International Monetary Fund (IMF) paper. As for the tax challenges, the IMF paper notes that the capital gains tax revenue at stake worldwide, either because it's not imposed or not collected, may reach well into the tens of billions of dollars. But the more profound risks, say the paper's authors, may ultimately be for value added tax (VAT) and sales taxes. The paper also cites research monitoring crypto transactions. These... Read more →
FanDuel On July 1, Tennessee will become the first state to tax sports betting handle. That means the Volunteer State's tax take will be based on based on the total amount of money wagered, instead of revenue collected. For a few more days, Tennessee will impose a 20 percent tax on adjusted gross gambling revenue (AGR). Next month, it will tax sports betting handle at 2 percent. The reason is, of course, money. Millions more to collect: A Tennessee General Assembly Fiscal Review Committee financial summary of the bill making the taxing methodology change notes that more than $3.77 billion... Read more →
If you were rich, what would you buy with all your money? (Photo by Leon Kohle on Unsplash) During the 1992 presidential election, then-candidate Bill Clinton's mantra was "It's the economy, stupid." It worked. Clinton was elected and served two terms. Now a group of wealthy individuals worldwide are hoping a tweaking of Clinton strategist James Carville's iconic phrase will help them convince governments to increase taxes on the rich and simultaneously raise the minimum wage. "It's the inequality, stupid," say those who are part of the nonprofit Patriotic Millionaires. The group points to the astounding escalation of economic inequality... Read more →