Unsplash+ in collaboration with Getty Images The Internal Revenue Service and its Security Summit partners today wrapped up the eighth annual National Tax Security Awareness Week with a warning for everyone, individual taxpayers and tax pros, to stay alert to emerging tax scams. It's a message the group issues regularly throughout the year because con artists work year-round to steal our money and, in many cases, our identities. Once they get that personal data, they can file fake tax returns to try to collect fraudulent refunds. By now, most of us are well aware of the warning signs of scams... Read more →
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Photo by Anne Nygård on Unsplash Most taxpayers get federal tax refunds. Internal Revenue Service data complete through Oct. 27 shows that the agency received 160.5 million returns and issued nearly 105 million refunds that totaled more than $319 billion. Not surprisingly, taxpayers who are getting cash back from Uncle Sam are among the first to file every tax season. That's also a good security move. By getting their 1040 forms to the IRS early, they beat the criminals who might try to file fake returns under their names to claim their or even bigger fraudulent refunds. But some folks... Read more →
Unsplash+ in collaboration with Getty Images As we have become more globally interconnected, worldwide tragedies affect more of us. We have family and friends scattered across the globe. We want to support and help them, especially in troubled times. But those connections can have a dark side. Crooks take advantage of our goodwill. Fraudsters tout fake charities to worldwide victims, seeking to divert much needed help into their own malicious pockets. After disasters, the Internal Revenue Service regularly reminds taxpayers to be alert for such cons. Fake charity scams also are, sadly, a perennial on the IRS' annual Dirty Dozen... Read more →
Individuals who didn't automatically receive an Economic Impact Payment or claim a Recovery Rebate Credit during the COVID-19 pandemic get a second chance at the money. Economic Impact Payments helped many U.S. families financially during the COVID-19 pandemic. But some eligible filers didn't get the stimulus money directly, and didn't claim it later as a Recovery Rebate Credit when they filed. Now they get another shot at the tax relief. Remember Economic Impact Payments? These funds, also referred to as stimulus payments, were issued during the height of the COVID-19 pandemic. The Internal Revenue Service sent most of the payments... Read more →
Photo via Unsplash+ in collaboration with Andrej Lišakov The official holiday shopping season is officially underway. So is the identity theft season, which could cause lots of problems for shoppers at tax time. I know about the shopping season because my email box is overflowing with "Buy Now!" and "Bargains, Bargains, Bargains" and "Get 40% Off!" messages, mostly for stuff I have no intention of buying at any price. I know about the tax threat because next week, Nov. 27 through Dec. 1, is the eighth annual National Tax Security Awareness week. During these coming five days, just as online... Read more →
Tax mistakes, unintentional or otherwise, mean penalties when discovered by the IRS. And the amounts could add up. (Photo by Polina Tankilevitch) The United States' tax system depends on voluntary compliance by taxpayers. But Uncle Sam is no fool. He and his tax collectors are believers of the adage "trust, but verify." The Internal Revenue Service also follows up on that verification with penalties when it finds taxpayers — and the professionals we pay to take care of our taxes — aren't fulfilling our tax responsibilities on our own. The most severe punishments come via criminal tax prosecutions. The IRS... Read more →
IRS also ups payment threshold trigger to $5,000 for the 2024 tax year. Thanksgiving is this week, but the Internal Revenue Service today skipped all the way to Christmas, giving an estimated 44 million taxpayers an early gift. Most of these individuals won't have to deal with 1099-K forms in 2024. They now have another year before they'll get this tax statement detailing their self-employment income. They also can make much more next year — up to $5,000 instead of $600 — before this third-party reporting document must be issued in January 2025. This latest delay decision, detailed in IRS... Read more →
Photo by Kyle Glenn on Unsplash This Thanksgiving week is a big travel week for millions of Americans. Most people are heading to friends' and/or relatives' where they'll share a Turkey Day spread. Others are using the time for other, non-holiday recreational pursuits. By this time next week, they'll be back home. In most cases, they'll return to homes are in the United States. However, thousands of U.S. citizens have relocated internationally. Despite the location distances, those Americans abroad share something with domestic residents other than celebrating a traditional U.S. holiday. They still owe U.S. taxes on their income, regardless... Read more →
Photo by Jon Tyson on Unsplash Taxes are all about the numbers, and this past week I've been posting inflation-adjusted figures that apply to a variety of tax provisions. Long-time readers know I parcel the numbers out in a 10-part series. But one of those posts, Part 3 on cost-of-living boosts in 2024 for tax-favored retirement savings plans, was published first because the Internal Revenue Service typically issues those adjustments first. Since that earlier Part 3 post hasn't gotten a sequential mention during this recent run of inflation series posts, I'm boosting it today. And I'm pulling out an item... Read more →
People are increasingly falling for a new scam known as pig butchering. The scheme involves cryptocurrency purchases, and the promised outcome is as reliable as flying pigs. (Photo by Daniel Novykov on Unsplash) The Internal Revenue Service Criminal Investigation (CI) unit has some advice as the holiday season nears. Don't be a pig. No, the warning has nothing to do with over-eating, starting with next week's Thanksgiving spreads. Rather, IRS CI says crooks are reaching out on social media, typically seeking those looking for romantic partners, to get the targeted victims' help in cryptocurrency schemes. These targets, whom the fraudsters... Read more →
Plus, a look at how a higher cost of living affects gifts before you go, youngsters' investment earnings, and more. Photo by Lance Reis on Unsplash What we would do with our wealth may differ, but most of us want to be rich. And even if the Internal Revenue Service is successful in its recently announced effort to crack down on higher income tax evaders, having money is always preferable. In fact, if you've got beaucoup cash, you don't really have to try to slip one past Uncle Sam. Many of the current wealth-related provisions in the Internal Revenue Code... Read more →
Unsplash+ in collaboration with Getty Images If you've been to a doctor recently, refilled a subscription, had to go to an emergency room, or just bought over-the-counter medications, you know that all these treatments cost a lot more than in previous years. It's enough to make you sick, or at least nudge up your blood pressure a bit. However, the tax code might have an Rx that can help. There are a variety of medical tax breaks that can help lower your federal tax bill. Several of them are adjusted each year to account for inflation. Here, in Part 5... Read more →
Taking advantage of these inflation-adjusted tax breaks could put more money in your pocket instead of Uncle Sam's bank account. (Photo by Sasun Bughdaryan on Unsplash) Each of our tax situations is unique. But every taxpayer can agree on one thing. We all want to pay the least amount of tax as possible. That universal goal can be reached by taking advantage of tax deductions, tax credits, and income exclusions. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a relatively easy, and popular, way to reduce a tax bill. Deductions... Read more →
Taxes are all about numbers, but generally speaking, we taxpayers are not big math fans. That's why we hire tax professionals or use tax software. That aversion to doing more calculations is why most of us have chosen, year-in and year-out, to claim the standard deduction. Sure, I know, we should use the tax deduction method, either standard or itemizing, that gives up the better tax due result. Still, I know some folks who use the standard deduction method without even comparing because, as noted, it's easier. There are no receipts to save, no additional adding, subtracting, and figuring percentages.... Read more →
UPDATE, Thursday, Nov. 16, 2023: My initial post's pessimism was unwarranted! Uncle Sam is going to make it through the holidays with all his offices open. The two-pronged continuing resolution (CR) measure approved by the House and Senate and signed into law late today by President Joe Biden provides funding for Veterans Affairs, Agriculture, Transportation, Housing and Urban Development, and energy and water programs through Jan. 19, 2024. All other federal departments will have money to operate through Feb. 2, 2024. Even better for the federal agencies, including the Internal Revenue Service, the current spending levels in the CR remain... Read more →
Tax crimes that happen in Vegas, don't stay in Vegas. They end up with the convicted felon heading to federal prison. That's what happened to Scott H. Lawrence. The Las Vegas man pleaded guilty in July to more than $1.9 million in federal tax evasion. On Nov. 3, he was sentenced to one year and one day in jail. Growing tax evasion scheme: The tax troubles that finally landed Lawrence in jail grew out of an attempt to keep the Internal Revenue Service from collecting an earlier tax bill. And the criminal effort was years in the making, according to... Read more →
Wide open spaces have a lot of appeal to many of us. Also appealing are the wider income tax brackets in 2024 just announced by the IRS. (Photo by Austin Pacheco on Unsplash) Inflation has dropped from its post-pandemic historic high in 2022, but it's still enough to cause financial pain. That, along with producers hanging on to their higher prices to recoup some of their COVID-19 losses, eats into our buying power, as every consumer is painfully aware. But there are a few instances when inflation can work to our advantage. One is when it prompts the Internal Revenue... Read more →
The Internal Revenue Service isn't playing games with tax refunds. Next tax-filing season, it's popular Where's My Refund? online tracking tool will get some needed improvements. The main questions millions of taxpayers ask every filing season are related to refunds. How big is it? When will I get it? Where the heck is my refund? That last question led to the Internal Revenue Service's creation of its popular online tracking tool, Where's My Refund? Next filing season, which is just three months away, taxpayers will find several improvements to the refund tracker. Popular, but often frustrating, query tool: Where's My... Read more →
Photo by DocuSign on Unsplash Many of the accommodations we made for the COVID-19 pandemic were burdensome. Just ask parents who were forced into dual work-from-home and school teacher duties. But two tax-related changes were more well-received, so much so that the Internal Revenue Service is extending them. The agency extended indefinitely the option to use electronic or digital signatures on tax documents. The IRS says digital/e-signatures will be acceptable "until more robust technical solutions are deployed." In addition, encrypted emails still can be used until Oct. 31, 2025, to communicate directly with IRS personnel with whom the taxpayers or... Read more →
I get alerts every day from search engines, the U.S. Department of Justice, and emails from my unpaid tax researcher, also known as the hubby, on tax crimes. Many of the tales of tax offenders end up in the weekly Tax Felon Friday feature. Today, however, I'm focusing on official efforts to facilitate such felonious tax actions. Taking from the IRS: The U.S. House this week approved financial aid for Israel. The GOP bill to provide Israel $14.3 billion calls for that amount to be offset by taking funds, once again, from the Internal Revenue Service. The vote is latest... Read more →