The Internal Revenue Service will start processing 2024 tax year returns on Jan. 27. Millions of people will file then, or before, getting their forms into Uncle Sam’s tax queue. But to file a complete and accurate Form 1040, you need all the information that form requests. That’s generally income statements like W-2s and 1999s. But there are many other documents that have tax-filing relevance. And most of those aren’t require by law to be sent to you until the end of January. So, most of us are just going to have to be patient for a couple more weeks.... Read more →
Investing Capital Gains
Saying "I do" also means saying hello to some tax changes in your new wedded life. (Photo by Jakob Owens on Unsplash) The end of each year is a good time to reflect on what happened the previous 12 months. For most of us, that includes some good events, some sad ones, and some still shaking out as we’re about to enter a brand new year. Many of these changes also could affect our taxes. So, as a bit of year-end preplanning, here are six ways that the Internal Revenue Code shows up when we encounter personal and lifestyle changes.... Read more →
It’s the day after Christmas. That means we’ll find a handful of holiday cards in our snail mail box. And watch the neighbors stack boxes that held presents on the curb, even though our recycling and trash pickups are days away. Those boxes also are a reminder that in many parts of the world Dec. 26 is Boxing Day. It’s typically a day to keep the season of giving going a bit longer. There are many explanations as to how Boxing Day, and its name, came to be. One commonly accepted origin story is that it began in the United... Read more →
You’re 73. You have a traditional IRA or other tax-deferred retirement account. You’ve yet to take your required minimum distribution (RMD). You better get to it. The deadline for most who are subject to this tax rule is Dec. 31. Here’s a quick RMD to-do list to help ensure you complete the task. As a bonus, there also are some suggestions on how to use the retirement money. Take out the mandated amount. Your traditional IRA or affected retirement account trustee should have been bugging you about this. It’s time to take the nagging seriously and withdraw your RMD. The... Read more →
In addition to donating cash to your favorite charity, there are other ways to give. Here are three alternative charitable giving options. (Photo by Mark John Hilario) 🦃 Happy 🍗 Thanksgiving! 🦃 Millions of Americans gather today with family and friends to give thanks for all the good things in their lives. This November holiday also is a major fundraising time for charities. Donations to nonprofits that help those in need — shelters, food banks and other meal programs, support services for those needing special services — increase this time of year. Technically, these donations could provide donors a tax... Read more →
Photo by Mick Haupt on Unsplash The 2024 general election is over. Finally. Now we sort through the results to try to determine how what we did on Nov. 5 will affect us. The election of Donald J. Trump to a second term, along with Republican control of the Senate and likely the House, will likely simplify a lot of federal tax questions in 2025, the final year of many individual Internal Revenue Code provisions in the Tax Cuts and Jobs Act of 2017. But as noted back on Oct. 26, tax questions, not just candidates, also were on ballots.... Read more →
Photo by Julentto Photography on Unsplash International travel is a dream for many Americans. Some enjoy their jaunts so much, they decide to move instead of just vacation abroad. A foreign relocation means many changes. But one thing doesn’t change. U.S. citizens who live and work abroad still owe U.S. taxes on their income. Thanks to Uncle Sam's reliance on a worldwide tax system at the individual level, the U.S. Treasury gets a piece of your earnings regardless of where in the world you make it. There are, however, some tax provisions that can help U.S. workers in other countries.... Read more →
Plus, a look at what next year’s inflation bumps mean to estate planning, gifts you give before you go, youngsters' investment earnings, and more. Leonardo DiCaprio in "The Great Gatsby," the 2018 movie version of F. Scott Fitzgerald's novel. (Warner Brothers Pictures promotional photo) “Let me tell you about the very rich. They are different from you and me.” F. Scott Fitzgerald didn’t add taxes in his elaboration of those differences in his 1925 short story “The Rich Boy,” but he could have. While most of us middle-income taxpayers get our money working for wages, wealthier individuals tend to let... Read more →
Photo by Element5 Digital on Unsplash Tuesday, Nov. 5, is election day. The hubby and I already voted, and if you’re like us, you can’t wait for all the politicking to be over. The incessant calls, emails and snail mail material extends beyond the candidates. In several states, and at local levels, too, voters will decide ballot initiatives. So, this weekend’s Saturday Shout Outs go to recent coverage of the referenda, with, of course, a focus on taxes. The first shout goes to Ballotpedia, which reports that 159 statewide ballot measures were certified as of Oct. 24 to appear on... Read more →
Photo by RDNE Stock project A home of one’s own has long been part of the traditional American Dream. Nowadays, though, some say it’s a nightmare trying to join the homeownership ranks. So, of course, as we head into the last few weeks of the 2024 election, candidates at all levels also are focusing on housing. Vice President Kamala Harris, the Democratic presidential nominee, has proposed tax breaks she says will increase the housing supply, which should lead to lower prices. She’s also promoting a first-time buyer tax to help buyers get into those homes. Using the tax code to... Read more →
Photo by Haley Owens on Unsplash The hubby is a patient and tolerant man. I'm glad those traits apply to some of my annoying tendencies. But one thing I do that drives him crazy is picking up coins on the street. Or, in the case of the penny I found yesterday as I got out of my car at the grocery store, in parking lots. Lucky for me, he doesn’t see me do this very often. I stick the pennies and other found change in my pocket and dump them in the coin jar when I get home. And yes,... Read more →
Photo by Antoni Shkraba Capital gains, the money made when you sell an asset that’s increased in value, have been in the tax code since the modern income tax was ratified in 1913. Back then, these earnings were taxed at a top 7 percent rate. In 1921, an alternative top capital gains tax rate of 12.5 percent was allowed. The 5.5 percentage point hike was not that bad, though, when you compared it to the top ordinary tax rate more than a century ago of 73 pct. Then the investment tax followed the adage that what goes up must come... Read more →
Photo by Alesia Kozik The 2024 election features a lot of firsts. We’ve seen the first sitting president to withdraw from the race after securing enough delegates to win his party’s nomination. The first woman of color seeking the presidency. The first person convicted of (and facing more) felony charges running against her. It’s also the first presidential race in which crypto currency could play a major role. Blockchain companies have supplied 48 percent of the $248 million of corporate money donated to influence federal elections this cycle, according to research by the nonprofit watchdog group Public Citizen. To be... Read more →
Photo by Alesia Kozik In the last 15 years, virtual currency has grown into a trillion-dollar industry. It’s exponential growth is reflected in the number of types of virtual currency. Since April 2020, the crypto options have jumped from 5,000 to more than 26,000 by July 2023. The Internal Revenue Service has faced digital currency tax compliance complications from the get-go. The challenges have increased as the sector and its advocates have grown. Evasive crypto transactions and how effectively the IRS deals with the taxpayers who employ them is the subject of a recent Treasury Inspector General for Tax Administration... Read more →
Photo by Keith Luke on Unsplash Congratulations to this year’s high school and college graduates. Walking across that stage and getting that diploma is a ceremony they and their families have long waited to experience. So what, besides sincere well wishes, do you give the graduates in your life for reaching this milestone? There are lots of gifts that can help young adults as they head off to college or into the work world. My personal favorite when I was that age was cash. (Truth be told, it still is my preferred present!) If your favorite graduate is like me,... Read more →
Almost a year ago, the man dubbed Bitcoin Jesus because he made a fortune as an early advocate of the digital currency, was indicted on mail fraud, tax evasion, and filing false tax return charges. We found out about the $48 million tax evasion and other charges this week when the Department of Justice (DoJ) unsealed the June 2023 indictment naming Roger Keith Ver. He was arrested in Spain based on the criminal charges, and U.S. law enforcement officials are seeking Ver’s extradition. The indictment, announced by DoJ on April 30, alleges that Ver formerly of Santa Clara, California, owned... Read more →
UPDATE, June 28, 2024: Today, the Internal Revenue Service and Treasury Department issued final regulations and other guidance related to reporting digital assets. Beginning with the 2025 calendar year, brokers may be required to report certain information regarding digital asset transactions as outlined in the new regulations set forth by the IRS. This includes filing information returns, providing statements to payees, and withholding on certain digital asset transactions. You can find more in the IRS announcement, and this Marcum analysis. Just days after tax season 2024 wrapped on April 16 for most filers, the Internal Revenue Service already alerted some... Read more →
Getting a tax refund can feel like it's raining money. (Photo by Eugene Lisyuk) You filed your taxes, and now are awaiting a refund. The Internal Revenue Service's data shows the average it had issued as of April 5 was $3,011. That three grand average is a nice chunk of change. Even a smaller amount is welcome. So, what are you going to do with that money? Everyone's personal, financial, and yes, tax, needs are different. But here are some suggestions for all y'all getting a refund. 1. Open or add to a savings account or emergency fund. I know,... Read more →
Federal tax returns get most of the attention during the annual tax season. That's because Uncle Sam's individual income tax laws apply across the country. But state taxes also are demanded of most Americans. And in most of the 43 states and District of Columbia that tax some type of individual earnings, April 15 also is the due date. No individual income tax states: The only states with no personal income tax at all are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Tax savvy readers probably noticed that the Evergreen State is not on that list. That's because... Read more →
President Joe Biden has targeted capital gains tax laws in his fiscal year 2025 budget. But don't freak out if you have some money in the markets. For the most part, Biden's looking to get more from really wealthy market mavens who typically pay lower capital gains tax rates on the long-term assets they sell. Collecting billionaires' unrealized capital gains: When you sell an asset for more than your paid for it, that profit is a capital gain. The tax rate for these gains typically is less than ordinary tax rates that apply to earnings like wages. In most cases,... Read more →