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
Everybody needs some help now and then. On Friday, July 23, and Saturday, July 24, the Internal Revenue Service is providing assistance to those in 16 metropolitan areas who need to file a 2020 tax return so they can get various COVID-19 relief payments. The first of six scheduled Advance Child Tax Credit (AdvCTC) payments hit bank accounts and U.S. Postal Service boxes last week. The bulk of these initial payments — the Internal Revenue Service says it sent out $15 billion to about 35 million families — were dispersed automatically. The recipients, who had previously filed returns or used... Read more →
It's mid-July, a particularly important date this year for parents. No, I'm not talking about the Advance Child Tax Credit payments that started going out today. I'm talking about the imminent arrival of the 2021-22 school year. With the COVID-19 pandemic somewhat under control — Be gone, Delta variant and everyone please get vaccinated! — schools across the country will be opening this year. Yes, that sound you hear over the internet is millions of parents celebrating. Tax holidays, too: That other sound you hear is taxpayers, both parents and child-free, celebrating, too, because the annual back-to-school tax holidays also... Read more →
Some of the world's billionaires are looking to escape earth, but for those who like terra firma, New York City is home to most of the world's richest people. (Photo of lower Manhattan skyline by MusikAnimal via Wikimedia Commons) Richard Branson today proved yet again how different the rich are from you and me. The British billionaire owner of Virgin Galactic and three spaceplane crewmates reached suborbital heights on Sunday, July 11, before gliding back to earth. I was once a child with a dream looking up to the stars. Now I'm an adult in a spaceship looking down to... Read more →
Cleaning up after customers. (Photo by RODNAE Productions from Pexels) Some businesses reopening after the lifting of COVID-19 pandemic restrictions have struggled to hire workers. The big debate is whether coronavirus relief, primarily Uncle Sam's added unemployment benefits, or low wages is why so many jobs are going unfilled. That argument is likely to continue, along with the Congressional battle to raise the federal minimum wage. Earlier this year, the effort to increase it from $7.25 per hour to $15 an hour failed. Some state, city minimum wages hiked: Wage increase advocates, however, have had more success at other governmental... Read more →
Enjoying a comfortable retirement later means planning for and contributing to nest eggs now. For some, the Saver's Credit offers an added tax incentive. Some lawmakers want to make the credit even better. I'm a big believer in saving for retirement because, well, I'm a big believer in retiring. Specifically, in retiring when and how I want. And that takes money. Uncle Sam apparently shares my pro-nest-egg point of view. In addition to the tax breaks available for those who take advantage of myriad retirement saving options, the Internal Revenue Code also offers a double reward for some with the... Read more →
Spring has come and gone here in Central Texas. We're heading into a stretch when afternoon high temperatures are going to push 90 degrees. But it's still a good time for some spring cleaning, especially since it's going to too hot to be outdoors. And especially if you decided to get your taxes done well ahead of the May 17 Tax Day 2021 deadline. Over the years, I've posted my post-filing record retention recommendations. My tax document record keeping suggestions following last year's also-delayed Tax Day still are good, even if I say so myself. True, if you need but... Read more →
Sometimes it's worth the extra time and effort to file an amended tax return. In its regular email to tax professionals last week, the Internal Revenue Service remined them that their clients who filed 2020 returns before the American Rescue Plan Act (ARPA) excluded a portion of unemployment from tax don't need to file amended returns. The IRS says it will recalculate the tax liability of these filers, taking into account the tax they paid on $10,200 per person in unemployment benefits before ARPA's March 11 enactment date. If the early-filing taxpayers are due a refund, the IRS will automatically... Read more →
If it feels like you just filed required federal forms about your overseas financial holdings, you're probably right. Last year, as we all were working to adjust to the myriad tax (and life) changes precipitated by the COVID-19 pandemic, lots of tax deadlines got pushed back. Some way back. One of those was the filing extension for Form 114, Report of Foreign Bank and Financial Accounts, usually referred to as FBAR. Some individuals didn't have to submit this document until Dec. 31, 2020. Now FBAR filers are facing a new deadline. Next week. On Thursday, April 15. That's right. The... Read more →
Archer Daniels Midland is one of the major corporations cited in a new report of companies that paid no taxes in 2020. The Biden Administration's infrastructure plan has ramped up the perennial tax debate between Democrats and Republicans. The White House wants to increase tax collections on companies to pay for the proposal, dubbed The American Jobs Plan. And that approach is getting some support from a recent Institute on Taxation and Economic Policy (ITEP) report. The Washington, D.C. nonprofit found that 55 of the largest U.S. companies paid nothing in federal income taxes last year. The $0 tax payments... Read more →
You lost your job last year and collected unemployment. You knew that the benefits are taxable income, so when you filed your 2020 tax return earlier this year, your calculations made sure that Uncle Sam got his piece of your unemployment money. Then along came the American Rescue Plan Act (ARPA), signed into law on March 11, and its provision excluding a portion of jobless benefits from tax. How do you get your overpaid unemployment taxes back? This week, the Internal Revenue Service followed up on its earlier announcement that filers shouldn't amend their 2020 returns because of the new... Read more →
It's April. You know what that means. Major League Baseball is back! Yep, the return of The Boys of Summer takes top billing this month since the Internal Revenue Service pushed the usual April 15 Tax Day to May 17. I'll be spending this Opening Day doing what I do every year when the professional baseball season starts: watching games. All 30 MLB teams are in action today, so that's a lot of innings to occupy my time. Update: Today's meeting of my East Coast team, the Baltimore Orioles, at the Red Sox's Fenway Park is postponed until Friday due... Read more →
Are you a retiree constantly checking your bank account for your third COVID-19 economic impact payment? The IRS says you should get it next week. The Internal Revenue Service has some good news for the around 30 million Social Security recipients anxiously awaiting the latest COVID relief money You should get your $1,400 economic impact payment, dubbed EIP3, next week. The IRS' precise projection is that most of the third relief amounts, dubbed EIP3, will be sent electronically and show up in the recipients' accounts on April 7. Perpetual payment challenge: Getting coronavirus relief amounts to older individuals has been... Read more →
Photo: Ketut Subiyanto from Pexels The Paycheck Protection Program (PPP) was created to help small businesses continue to operate in the face of COVID-19 complications. Its execution, however, has been a mixed bag for many businesses and their tax pros, not always working as smoothly as its creators had hoped. Still, the forgivable loan program has its fans. And those worried about its impeding March 31 expiration can rest easier. The Senate last week agreed to the House bill extending the PPP. President Joe Biden is expected to sign it. When that's done, borrowers will be able to apply for... Read more →
Princess Bride impatience via Giphy.com You're due a tax refund. Plus, your 2020 tax situation means you can claim the rest of the COVID-19 related Recovery Rebate Credit that you didn't automatically get last year. So, of course, you filed on Feb. 12, as soon as the Internal Revenue Service started accepted returns. Now you're wondering, why the heck you haven't yet received your refund. Unusual overload: The bad news is that the IRS is still dealing with backlogs, primarily of mailed correspondence, created when it had to shut down its offices last year as part of coronavirus precautions. The... Read more →
You don't have to literally settle in next to your mail box, but do be on the lookout for your coronavirus economic relief payment. The IRS is sending out the next batch of this third round and many of them will be checks or debit cards delivered by the U.S. Postal Service. Attention taxpayers: More economic impact payments are on the way. That's the promise in an announcement today from the Internal Revenue Service. But the news is not all good. Many of this next batch of payments will be as paper checks or prepaid debit cards that eventually will... Read more →
Some people got less COVID-19 relief money because the IRS took some to pay other debts. Every year, some taxpayers find the tax refunds the Internal Revenue Service sends them are less than they expected. The usual reason for the shortfall is that the federal refund amounts were offset by other debts, such as unpaid taxes, student loans or delinquent child support. That situation cropped up last year when the Recovery Rebate Credit was created as part of COVID-19 relief legislation. The rebates were paid in advance to millions of taxpayers. And in some, but not all, instances, economic impact... Read more →
The tax world is full of instances that are different from the real world. There are quarterly estimated tax payments that don't align with our standard calendar quarters. There are birthdays that are considered having been celebrated earlier when we get older. And now there are financial transactions that aren't financial transactions, at least when it comes to cryptocurrency. IRS has crypto questions: Cryptocurrency, often referred to generally as bitcoin (the Kleenex tissue of virtual money), has been a target of the Internal Revenue Service for years. Most recently, the agency has focused on getting taxes due on crypto transactions.... Read more →
Updated on March 21, 2021, to reflect that the IRS plans to automatically calculate any tax refunds due unemployment recipients who already filed their 2020 returns and paid taxes on their full benefits amount before the $10,200 tax exclusion was included in the American Rescue Plan Act (ARPA) enacted on March 11. Updated on March 23, 2021, to reflect revised IRS changes to filing instructions in connection with ARPA's partial unemployment tax exclusion. The good news here is that the IRS now says those says jobless benefits you collected don't count toward the $150,000 income threshold that determines eligibility for... Read more →
The third round of coronavirus economic impact payments are on their way. So are con artists trying to convince financially strapped folks that there are easier ways to get the government payments of up to $1,400 per person. Don't fall for the lies. Some of the just-approved $1,400 COVID-19 relief payments will be delivered by local postal carriers. Others will get their coronavirus cash by direct deposit or Treasury-authorized debit cards. Be on the lookout for the payments, as well as crooks trying to steal them and your identity. The latest COVID-19 economic relief plan, officially known as the American... Read more →
The Internal Revenue Service is still working its way through millions of pieces of correspondence delivered last year, so the last thing it needs is more. But it's getting it. Federal lawmakers and organizations representing members of the tax community have mailed letters over the last week to the U.S. Treasury and IRS urging the delay this year of April's usual Tax Day. April 15 is still THE day: Tax returns so far are still due on April 15, the traditional filing deadline. And the IRS Commissioner Charles Rettig is holding to that date. For now. During a March 3... Read more →