But DOGE and Congressional cuts could threaten further enhancements The Internal Revenue Service is working to expand digital interaction with taxpayers. Will the effort survive Republican budget cutters and the new administration's federal government downsizing moves? (Photo by GotCredit via Flickr CC) I finally opened a taxpayer account with the Internal Revenue Service last year. My motivation was that for the first time in ages I filed the hubby’s and my joint 1040 before April 15, but didn’t send the tax due at the same time. Instead, I electronically paid Uncle Sam on Tax Day. So, I wanted to make... Read more →
Credit: Panoramio via Wikimedia Hello March! Good to see that you're following the traditional script and, at least here in the greater Austin area, roared in like a lion. But the weather bluster also is a good reminder that some feline-style aggressiveness could pay off on your taxes. Some of the four March tax moves below could cut your 2024 tax bill that you'll compute on the return due by April 15. Others are good tax moves for the current 2025, and future, tax years. A couple do both. If any of the suggested tax moves work for you, implement... Read more →
When we file our tax returns, we’re assured that the information is private. Access to our filing data is limited, and the Internal Revenue Service employees who do get to see our personal information are prevented by law from sharing it. It is a felony for IRS personnel to gain unauthorized access to taxpayer data. That same legal restrictions apply to IRS contractors. Just ask Charles Littlejohn, a former IRS consultant who last year was sentenced to five years in prison for stealing and sharing Donald Trump’s (and others’) tax data. The billionaire Elon Musk was one of those others... Read more →
Some of the taxable goodies in this year's Academy Awards swag bag. (Photo: Distinctive Assets) An Oscar statuette, which is made of gold-plated bronze, costs around $400 to produce. Of course, the value to the winners is decidedly more, both emotionally and when it comes to negotiating their next film contract. But some 2025 nominees for the movie industry’s biggest prize, which will be handed out tomorrow night, already have received much more expensive tokens. Yes, we’re talking about the annual Academy Awards swag bag goodies. This year, Distinctive Assets prepared gift bags for the 25 nominees in the Academy... Read more →
Photo by Алексей Васильев While we wait for a new Internal Revenue Service commissioner to be confirmed, the personnel carousel keeps spinning at the tax agency. The first major change was Danny Werfel, who had served as the 50th head of the tax agency since March 2023. Werfel resigned his post in January after Donald J. Trump announced he wanted his own person in charge. IRS Deputy Commissioner Douglas O’Donnell, a senior career IRS official, stepped into the opening as acting commissioner. It was O’Donnell’s second stint as the IRS’ an interim leader, also serving from November 2022 to March... Read more →
It’s the main tax filing season, so that means it’s also tax scam season. The Internal Revenue Service has been keeping track of the year’s most prevalent schemes for more than two decades and alerting us in its annual list of the 12 scams it has found to be the most egregious over the last year. The Dirty Dozen for 2025 includes some repeat [dis]honorees. A few are new or have been tweaked. But they share one characteristic. They target taxpayers, businesses, and the tax professional community, and all too often end in the loss by victims of personal information,... Read more →
You aren't legally required to file a federal tax return, but maybe you should. Here are six reasons why it might be a good idea. (Photo by Unsplash+ in collaboration with Getty Images) Millions of taxpayers have filed their returns so far this year. Millions more are working on their taxes. But not you. You checked out my post on who has to file a tax return (thank you!) and confirmed that you're one of the lucky few who doesn't have to file a Form 1040 this year. You might want to rethink that no-filing decision. Even if you aren't... Read more →
Here’s hoping your tax procrastinating doesn’t go this far! (Photo by Tara Winstead) More than 33 million taxpayers already have filed their 2024 tax returns this year. Chances are a lot of them live in the Midwest. Taxpayers in Wisconsin, Ohio, Michigan, and Indiana tend to procrastinate the least when it comes to filling out their federal returns, according to IPX1031’s latest Tax Procrastinators report. Midwest-adjacent Pennsylvania rounds out the five states, coming in between Ohio and Michigan, where filers don’t dally So where do taxpayers tend to put off filing? Waiting to file: The sixth annual study from the... Read more →
We’re through a full month of the 2025 tax filing season. Many of the taxpayers who filed when the season started at the end of January have already received their refunds. The official count, last updated by the Internal Revenue Service on Feb. 14, shows nearly 13.7 million refunds have been issued. The average refund check so far is $2,169. You, however, are still waiting for the IRS to send you your money. The best way to find where it is in the IRS system is to use the agency’s online tracking tool Where’s My Refund? Here are some questions... Read more →
Photo by RDNE Stock project The Republican party has long opposed the federal estate tax, or as its members call it, the Death Tax. Bills are regularly introduced to kill the tax. Eliminating it even made it into the GOP-led House Budget Committee working paper on extending the tax cuts enacted the last time Donald J. Trump was president. Now, however, that committee’s chairman has decided that a, dare we say, more conservative approach would be better. Rather than eliminate the tax, he’s introduced a bill that would cut the current 40 percent estate tax rate in half. Short-lived tax... Read more →
U.S. Capitol, Wikipedia Commons photo The Republican-led Congress is struggling to find a way to enact Donald J. Trump’s agenda. Even Trump seems to be waffling. After originally saying he supported the House’s plan for "one big, beautiful bill," Trump said during a radio interview Friday the GOP’s tax, border security, and energy legislative efforts may need to be broken up into smaller bills. So, where do we go from here? That’s what GOP Congressional leaders wany to know. Senates acts first: In the meantime, the Senate last week went with its two-part approach, and passed a $340 billion budget... Read more →
Secretary of Defense Pete Hegseth recently shared on social media a document he said was a $33,558.16 bill from the Internal Revenue Service. Hegseth also claimed the tax due notice — the image of which didn’t show any letterhead, address of the sender, or date — was the result of a “rushed” audit. He then accused the Biden administration of pushing the audit forward, implying political payback, not tax errors, was the reason for the IRS inquiry and subsequent mailing. Finally, Hegseth told the followers of his personal social media account that as far as the tax audit, he and... Read more →
Retirement can be more enjoyable when you don't have to worry about money or, if some lawmakers get their way, taxes on Social Security benefits. (Photo by RDNE Stock project) Lots of folks are paying more than usual attention to Social Security of late. We’re wondering just what Elon Musk’s Department of Government Efficiency (DOGE) minions are doing as they poke around the federal system that provides financial support to millions of older and medically disabled people. We’re also curious as to when Donald Trump might follow through on his campaign promise to end taxation of Social Security benefits. The... 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 as noted in yesterday's post, states also demand taxes from their residents, and most of them require annual income tax filings, too. 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, New... Read more →
Pixabay Every season, most U.S. residents do double duty. In addition to filing a federal tax return with the Internal Revenue Service, they also must file a state tax return. We lucky, federal-only filers live in one of the eight states that don't tax any individual income. They are Alaska, Florida, Nevada, New Hampshire (which just joined the group on Jan. 1, 2025), South Dakota, Tennessee, Texas, and Wyoming. Residents of Washington state don't have to pay tax on wages, but some face a tax on capital gains. In the rest of the country, individual income taxes are a major... Read more →
Today technically is George Washington's Birthday, but it's popularly referred to as Presidents Day in honor of all our commanders in chief, like these four greats on Mount Rushmore National Memorial. (Image courtesy Mount Rushmore Facebook page) Happy birthday, George! That’s the officially correct take on this Monday federal holiday. Although it’s now popularly known as Presidents (or Presidents' or President's; the apostrophe apparently is optional and mobile) Day, the correct designation for today is Washington’s Birthday. America's first president was born on Feb. 22, 1732, and Washington’s actual birthdate was the holiday until 1968. That’s when the Uniform Monday... Read more →
UPDATE, Monday, Feb. 24, 2025: The Internal Revenue Service layoffs did happen, but fewer than what might have been. Still, say seven former IRS Commissioners who served during both Democratic and Republican administrations say that the firing of 6,700 agency employees in the middle of tax season is a huge mistake. We’re in the heart of tax filing season. So far, things seem to be going smoothly. But that could change. Internal Revenue Service workers processing the millions of already filed returns also are dealing with some additional, but not tax-related, work concerns. Plus, the tax agency could lose as... Read more →
Some taxpayers got a new earnings statement this year, a 1099-K form. The tax statement arrived because they sold more than $5,000 in products or services through apps and marketplaces. The 1099-K, officially titled Payment Card and Third Party Network Transactions, finally was issued this year on a widespread basis. It was supposed to go out years earlier to sellers who made $600 or more. That was a change made in the American Rescue Plan Act (ARPA) of 2021 from the $20,000 in sales and 200 transactions trigger to issue the form. All income you make, even if you don’t... Read more →
Photo by Polina Tankilevitch This weekend is bookended by holidays. Today’s Valentine’s Day gift and card exchanges and Presidents Day sales on Monday, Feb. 17. It also marks the peak phone traffic at the Internal Revenue Service, with taxpayers taking advantage of a day off, and finally having their tax statements in hand, to work on their returns. For many callers, however, it also means time on telephone hold. Avoid bad tax-hold tunes: Instead of listening to music that’s not really your taste, the IRS suggests taxpayers with questions this weekend — and beyond — look online for the answers.... Read more →
Photo by RDNE Stock project Valentine's Day is tomorrow. The annual Feb. 14 celebration of love immediately conjures thoughts of hearts, flowers, chocolate, love songs, rom-coms, and taxes. Yes, taxes. I don’t want to interrupt, at least not too much, your efforts if you’re still nailing down events and gifts for tomorrow. But the following tax considerations might have an impact on your choices for Valentine’s Day. In most cases, it will be state taxes that come into play. And since states don’t impose sales taxes on all goods and services in a uniform manner or at a uniform rate,... Read more →