Millions of Americans rely on their workplace benefits to cover then health care and other needs. Most of them also are paying even more attention to those job-based benefits this year in light of the persistent COVID-19 pandemic. Medical insurance is a top priority. But other benefits also are getting added attention during this annual fall period, during which many U.S. companies allow workers to enroll in or change their benefits for the coming coverage year. Many of the office-based benefits also offer some tax advantages. Here are five questions with an Internal Revenue Service-inspired perspective to ask yourself as... Read more →
Healthcare Medical
The Social Security Administration (SSA) gave retirees and other recipients of the program's payments good news this week. Next year, they'll bet the biggest benefits bump in decades. Some higher earners, however, aren't so happy. That government benefits announcement also noted that the amount of income subject to payroll taxes also is going up in 2022. This amount, known as the Social Security wage base, is the maximum earnings, by both salaried workers and the self-employed, that are subject to that retirement portion of the Federal Insurance Contributions Act (FICA) tax. In 2021, the wage base is $142,800. On Jan.... Read more →
Saving is a key component to reaching financial independence. However, for individuals facing added challenges, putting aside money for the future can be difficult. Achieving a Better Life Experience, or ABLE, accounts were created in 2014 to help in these cases. They are tax-advantaged savings accounts for individuals with disabilities (and their families) to help them maintain their health, independence, and quality of life. While money put into ABLE accounts isn't tax-deductible, the distributions are tax-free when they are used to pay qualified disability-related expenses. Here are some key questions and answers about ABLE accounts. Who is eligible for an... Read more →
Sin taxes, those government levies on products or activities generally deemed as not good for us, typically are a favorite revenue raiser for states. Now Uncle Sam, or at least Capitol Hill Democrats looking for ways to pay for their proposed $3.5 trillion economic package, are taking a page from their state tax counterparts. One of the suggested taxes is a hike of the current federal excise tax on cigarettes and cigars. Another is a new tax on vaping. The House Ways and Means Committee summary of the taxes says: This provision doubles the current rate of excise taxes on... Read more →
The IRS has decided that home COVID-19 tests are allowable medical expenses. This Tuesday was the week from hell, mainly due to dealing — again! — with medical insurance issues. I won't bore you with my personal, and continual, battles with insurance companies over paying for my health care procedures. I will say that even with the coverage, the hubby and I have been able to itemize our — and by our, I mean mostly my — medical costs over the last few years and claim them on our taxes. We're in the minority, both in itemizing and claiming medical... Read more →
Photo by FRANK MERIÑO from Pexels With the Delta variant fueling a resurgence of COVID-19 cases, focus has fallen on folks who are choosing not to get jabbed. Vaccine resistors offer many reasons for not getting the shot (J&J) or shots (Pfizer and Moderna). One of them is that they can't afford to take time off work. Uncle Sam is encouraging employers to cut their job-focused unvaccinated workers some slack. Eligible businesses who let their employees have paid time off to get the vaccine will get a tax break. And he just expanded the situations to which the business tax... Read more →
Kickback apparently has discontinued its bottled cold coffee with CBD, but still offers the cannabis chemical in ready-to-drink teas and ground coffee. (Photo by Deceptitom via Wikipedia) It's been one of those weeks. That's why when I woke up late this morning – OK, early afternoon — I thought (was hoping) it was Saturday. Once the caffeine kicked in, I discovered that maybe I should be using another energy booster. Cannabidiol, or CBD as it's commonly called. CBD is the second most prevalent of the active ingredients in the Cannabis sativa plant, also known as marijuana or hemp. As recreational... Read more →
No diet drinks in our pantry! (Photo by Kay Bell) Today we celebrate the sweet, iced or glazed, and often decorated treat we know as doughnuts. The first Friday of June each year is National Doughnut Day. On the other 364 days, though, many of us try to avoid calorie-heavy foods and beverages. And many lawmakers want to help us resist our collective sweet tooth by making such items more expensive. Specifically, they want to tack on new or additional taxes to the belt-busting products. In some cases, the so-called sin tax is on high-fat foods. But the main target... Read more →
The 2020 tax return filing deadline for most U.S. taxpayers literally is just days away. If you're scrambling to meet the May 17 due date, don't be in such a hurry that you cheat yourself out of some tax savings. You can claim deductions, either by itemizing if that gives you more than your standard deduction amount or by claiming some income adjustments, most of which are still referred to (by me, at least!) as above-the-line deductions, that reduce the amount of income that's taxed. There also are tax credits, which are even better because they directly reduce what you... Read more →
Health insurance policies with lower premiums are always popular, whether the medical coverage is offered via a workplace plan or bought separately by individuals. Those who opt for such coverage are willing to take smaller out of pocket premiums each month in exchange for larger deductibles for their overall coverage. Part of that choice is based on the opportunity to set up a companion savings account to cover those higher deductibles. These aptly and obviously named high deductible health plans, or HDHPs, work well for folks who don't have chronic medical issues, but want to make sure they have coverage... Read more →
Reviewed and updated May 15, 2021 Tax Day 2021 for most U.S. taxpayers is just a week away. Procrastinators' focus obviously is on finishing up those 1040s. But there are some other tax tasks that, if they apply to your tax situation, you should take care of or at least consider by May 17. 1. Contribute to an IRA: Putting as much as you can into an individual retirement arrangement, or account as most of us call it, is always a smart move. The IRA will grow over the years, giving you some cash when you're ready to call the... Read more →
You need to follow your doctors' practice of keeping track of your medical records. Your documentation of your health care treatments and costs could pay off as valuable tax deductions. Most taxpayers used the standard deduction even before 2017's Tax Cuts and Jobs Act made it even more appealing by essentially doubling the amounts. Still, millions of filers every year find that claiming itemized deductions gives them a better tax result. And medical expenses tend to be a big reason why they opt to itemize, especially when they know and claim all the possible health-related expenses. Annual deduction choice: You're... Read more →
Feeling adrift as the May 17 tax filing deadline approaches? Here are some tax moves to make this month that could serve as lifelines. May Day arrived over the weekend, but millions of taxpayers today are sending out filing mayday distress signals. The delayed May 17 Tax Day is just two weeks away. Two weeks, however, is plenty of time to get your taxes done. Or postpone them — at least the form filing part — for five more months. Those are the top two tasks on the following list of seven tax moves to make this month. Since time... Read more →
One of the many reasons that people hate taxes is that after the hassle of filing, then comes the fear that a Form 1040 mistake will mean an audit. The sort-of good news for taxpayers is that the Internal Revenue Service hasn't been auditing as many people in recent years. The agency has had other things to worry about, like doing its myriad jobs with fewer staff and less money. Then there's COVID-19, with added pandemic payments that the IRS is tasked with distributing. Things could be changing, though. More people are getting vaccinated, meaning the end of the coronavirus... Read more →
Shawn Campbell via Flickr Creative Commons Last year was difficult for lots of people. Millions lost their jobs due to coronavirus pandemic protocols. For many, that also meant losing their workplace provided healthcare coverage. Finally, though, there is a bit of good news for folks in this situation. The American Rescue Plan Act (ARPA), which was enacted in March, contains provisions to help individuals deal with COVID created health insurance issues. Plus, the Internal Revenue Service recently announced that taxpayers who received more federal advance subsidy than needed to help buy health coverage through the Affordable Care Act (ACA) exchange... Read more →
As COVID-19 continues to control to at least some degree our lives, federal and state tax officials are offering tax benefits to those who take steps to control and lessen the effects of the persistent pandemic. Photo: Anna Tarazevich from Pexels If you still itemize deductions, the Internal Revenue Service today announced that you can count a few more purchases toward your Schedule A medical claims. Of course, the additions are because of COVID-19. Specifically, the IRS says in Announcement 2021-7 that the costs of personal protective equipment, aka PPE, purchased for the primary purpose of preventing the spread of... Read more →
Image by Maxime Duprez via Twitter Happy National Pi Day 2021. Or as usurping marketers in the United States also call it Pie Day, even though there is a day designated for the food. Go ahead, get your bargain-priced sweet or savory pies today. But March 14 actually celebrates the mathematical constant pi, or π in the Greek alphabet. In case it's been a long time since math class, that's the ratio of a circle's circumference to its diameter. The trillion-digit ratio is rounded to 3.14. You can find more about pi in one of my earlier March 14 blog... 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 →
Millions of taxpayers have already followed this calendar note's insistent instruction. Reading tax statistics can be a lot like checking out COVID-19 vaccination options. You can't just look at one number. You have to take into account the circumstances that produced the percentage that caught your attention. That's the deal with the 2021 filing season figures. Percentages skewed by season lengths: As of Feb. 26, the latest complete information collected by the Internal Revenue Service, almost 45.3 million 2020 tax returns have been filed. That's a 23.7 percent drop from the amount of submitted returns through the end of February... Read more →
Even during a pandemic, more routine illnesses occur. Don't put off seeing a doctor. Your medical spending account money can help cover office visit copays and much more. And if you're facing a March 15 deadline to spending the money, don't miss it! Medical concerns are top of mind for most of us right now because COVID-19. But as doctors are quick to point out, you shouldn't let pandemic fears keep you from seeking medical help, either for less-severe ailments or regular treatments of a chronic illness. In addition to paying attention to your and your family's health, you also... Read more →