Welcome to Part 7 of the ol' blog's 2019 series on tax inflation adjustments. Today we look at changes to the Alternative Minimum Tax (AMT) and next year's Social Security wage base. You can find links to all 2019 inflation posts in the series' first item: income tax brackets and rates. Note: The 2019 figures apply to 2019 returns that are due in April 2020. For comparison purposes, you'll also find 2018 amounts to be used in filing this year's 2018 tax return due April 15, 2019. Taxpayers who face the alternative minimum tax, or AMT, see it as the... Read more →
Finances
Don't let tax turkeys gobble up your money. Make these tax moves, a couple of which are related to recent tax reform, this November and for sure by the end of 2018. South Park turkeys via Giphy It's November! The start of the holiday season. Time to get into the festive spirit with some year-end tax moves. "Whoa! Wait! What the what are you thinking?" you say. "I'm still adjusting to Standard Time and already have a huge to-do list to make sure my family has the perfect Thanksgiving. Then as soon as that's over, I've got to start with... Read more →
This dog might not feel as guilty as he looks, but shame can be useful in some tax collection situations. (Photo by Ansel Edwards/Flickr) When I was a kid and did something I wasn't supposed to, all it took was one quick glance from my mom to make me feel so ashamed. I'm not sure even my mother's steely look would work nowadays on kids who've grown up on reality TV and who make their every move, good or bad, public on social media. But when it comes to taxes, shame seems to work. Many U.S. jurisdictions post the names... Read more →
Since it's unofficial retirement week here at the ol' blog, let's close it out with a look at how to move money from one retirement account to another and not upset the Internal Revenue Service or your nest egg. Life changes. That means sometimes you want or need to change your retirement plan. Say, for example, you have a 401(k) at one workplace, get a new job and open a 401(k) with that employer. What happens to the 401(k) you had at your prior job? In many cases, the company where you worked will let you keep it, although obviously... Read more →
You don't need a golden goose to have a great nest egg for retirement. You just need to contribute to one or more tax-favored retirement accounts. (Photo by 401(k) 2012 via Flickr) Congratulations to America's newest billionaire, the owner of the ticket bought in South Carolina that matched all the Mega Millions lottery numbers. That person is $1.537 billion richer, or more probably an $878 millionaire, since that's the cash payout amount. That lucky lottery player won't have to work another day or worry about retirement as long as he or she isn't a total spendthrift. Most of the rest... Read more →
Some of my retirement money is in stock funds. They've been going gangbusters. Until this week. I'm fighting the urge to look at what's happened with these plans' value. Did they tank along with the broader market a few days ago? Or are they edging back up with today's sort-of recovery? I'm curious, but I don't need that money right now. And I believe my investment choices are sound. So I'm going to ignore the current market gyrations and just let things ride. That's the advice most financial gurus are offering now. This week's downward trend is just an overdue... Read more →
Today is a great day for my mother. The Social Security Administration announced that she and her fellow Social Security recipients will get a get a 2.8 percent cost-of-living adjustment (COLA) in 2019. The 2019 COLA — the largest since the 3.6 percent bump in 2011 — means the average single retiree's federal retirement benefit will be $1,461 or $39 more a month than this year. My mom is thrilled. Those 30+ bucks will cover her monthly phone bill. Still stretching each month: Unfortunately, the upcoming benefits adjustment won't be enough to make up for more than a decade of... Read more →
Old-school passbook savings accounts are safe, but have been paying minuscule interest over the last few years. The White House might be unhappy, but all of us with money in safer assets like certificates of deposit (CDs) or plain-old savings accounts are sending the Federal Reserve Board of Governors, aka the Fed, a big fat thank you. The Fed's decision yesterday (Wednesday, Sept. 26) to raise rates to a range between 2 percent and 2.25 percent means we'll be seeing few more pennies of earnings in our accounts. And it is just pennies. Those of us old enough to remember... Read more →
One thing almost everyone agrees on, both politically and financially, is that we all need to do a better job of saving for retirement. But some young savers are undercutting their own efforts by regularly tapping their workplace retirement accounts early. As part of Labor Day celebrations, Donald J. Trump signed an executive order that, in part, instructed the Treasury and Labor departments to look into ways to make it easier and cheaper for smaller employers to band together to offer 401(k)-type plans for their workers. Expanding these tax-deferred workplace retirement plans is a good idea. With the demise of... Read more →
A few election years ago, Republicans were aghast at the level of takers compared to makers. In case you've forgotten, they were complaining that an increasing number of folks, the so-called takers, were escaping their rightful tax payments and getting government help at the expense of the makers, higher earners who tend to put more tax money into the economy. That's still happening. Now, however, in a wonderful bit of political irony, it's the GOP that's responsible for more U.S. households avoiding tax bills next filing season. Big tax cuts for millions: The latest analysis by the Tax Policy Center... Read more →
This time of year, my social media streams are full of photos of my friends' children as they head back to class. And it's not just the youngest students being celebrated. Yes, I'm old enough to have peers with kids in college. While all these students' parents are proud of their progeny's new educational milestone, there's also a bittersweet tinge to all those Facebook postings of surprisingly grown up kids. And, of course, there's the realization that this next phase of their youngsters' lives is going to cost them. In some cases, the costs will be a whoooooole lot. Ever... Read more →
Click screenshot to watch Boston CBS affiliate WBZ's report on this weekend's just-enacted Massachusetts Sales Tax Holiday. Massachusetts has had a difficult relationship with the sales tax holiday concept. Over the years the Bay State's lawmakers have struggled with the need to retain as much tax revenue as possible versus giving residents (and possible voters) a brief break from taxes on some of their purchases. The even has been regularly approved one year, only to be dropped the next, with lawmakers often deciding to hold a tax holiday at the very last minute. That's the case this year. For the... Read more →
Photo by Chris Potter via ccPixs.com School is about to start, so all the students who contributed to the just-released July jobs report are wrapping up those seasonal gigs. Many of these young workers plan to use the money they earned to pay some of their college costs. Kudos for them for contributing to their educations. But it's also a great idea for young people to start thinking about the day when they can quit working for good. The problem is that too many young people, like a lot of us, don't think that far ahead. Plus, a young person's... Read more →
We're on the downside of 2018 and that has some folks in the tax world, and on Capitol Hill, concerned. They're worried that unless folks act soon, they're going to get an unwelcome surprise next federal tax filing season. When they fill out their new Form 1040s, they'll discover they owe. The reason is the new Tax Cuts and Jobs Act (TCJA). OK, technically it's because a lot of folks haven't adjusted their payroll withholding to account for the new lower income tax rates and other changes, like no more exemptions and revised of eliminated itemized expenses. It's not for... Read more →
It's called the dismal science, but Donald J. Trump's vision of the U.S. economy was anything but gloomy after the Commerce Department on July 27 reported gross domestic product (GDP) growth for the second quarter of the year was 4.1 percent. That's a welcome amount of growth based on the economy's broadest measure of goods and services. That's why it's this week's By the Numbers figure. But, say most of the practitioners of the dismal science, aka economists, let's not get carried away. They caution that while the latest measure of economic growth is good news for both U.S. businesses... Read more →
Owing the Internal Revenue Service is bad. Having the IRS come after you for that money is worse. Dealing with private debt collectors who've been given your overdue tax account is worst. That's the perspective of many when it comes to the federal tax collection process. But not all. And now an online war of words has erupted between the National Taxpayer Advocate and a new group created to advocate for private collection of tax debt. Pro private tax debt collection: The Partnership for Tax Compliance (PTC) debuted on June 26. The goals of the 501(c)6 nonprofit (that's the tax... Read more →
UPDATED to include the Massachusetts' sales tax holiday that was enacted Aug. 10, just in advance of that Bay State's Aug. 11-12 tax-free event. The annual sales-tax-free events generally billed as back-to-school tax holidays kick off the 2018 summer shopping season this week. There are 17 this year, three in July and 14 in August. Yes, kiddos, your summer holiday is winding down. Parents and school officials are getting ready for the resumption of classes in, for some jurisdictions, just six short weeks. That also means that it's time for back-to-school sales tax holidays. These annual events offer shoppers a... Read more →
It's hot. Not just here in Texas, but across the United States. In fact, around the world. That means we all need to be careful. More careful than the hubby, who decided to mow our yard yesterday. And not during the relative cooler morning when temperatures were in the 80s, but in the afternoon when the thermometer nudged 100 and it felt even hotter. It wiped him out for the rest of the day and evening. I love my man, but I guess it's true that the heat does make us do dumb things. Deadly heat: Excessive heat also tends... Read more →
It's a cliché because it's true. All politics is local. That applies to taxes, too. Whether you love or hate a tax law depends on how much it helps or hurts you personally. That's why this weekend's Saturday Shout Out goes to the Tax Foundation's interactive map that lets you see average 2018 tax cuts in your congressional district. If you want to go beyond your locality, you can check out the dollar differences on average make to taxpayers across the country. As you can see on the Washington, D.C.-based tax policy nonprofit's map reproduced below, you simply enter your... Read more →
The fresh pepper section is always my first stop at my local H-E-B grocery store. Most of these delectable edibles come from Mexico. Donald J. Trump's forays last week into international issues got lots of attention. There was, of course, the on-off-on-again (and potentially taxpayer costly) Singapore Summit with North Korea. While I'm all for working to keep Kim Jong Un from reverting to his nuclear missile happy persona, my Texas neighbors and I were focused on another global matter. Yep, I'm talking about Trump's statement that he'd like to scrap the North American Free Trade Arrangement, or NAFTA, followed... Read more →