UPDATED, Sunday, Nov. 19, 2023, to add a couple of new links as I found as I caught up on my own weekend tax reading. Source: Monopoly Wiki An inheritance from a friend or relative can be a nice surprise and a way to fondly remember that person. Such gifts typically do not have any tax implications for either the estate or heirs, at least not immediately, at the federal level. As noted in Part 6 of the ol' blog's annual tax inflation series, the value of an estate that is exempt from Uncle Sam's clutches goes from $12.92 million... 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 →
Before law changes, the now inflation-indexed Alternative Minimum Tax, known as the AMT, seemed to work like an ATM for the U.S. Treasury. The AMT was created 54 years ago to ensure the rich paid at least some tax, but since it originally wasn't indexed for inflation, it increasingly affected a lot of less-wealthy taxpayers. (Photo by Unsplash+ in collaboration with Getty Images) What's worse than figuring your tax bill? Having to figure a second, parallel amount you might owe. That's a situation that taxpayers who owe the Alternative Minimum Tax, or AMT, end up facing at filing time. The... 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 →
Property taxes are the prime source of funding for school districts across the United States. But the homeowners who pay those taxes generally think those taxes are too high. That tax concern was addressed yesterday, Nov. 7, in two states where voters made the ultimate decisions by their choices on ballot questions. And the election results were not a surprise, even where they decided against property tax relief. Coloradoans' complicated tax "no" vote: Colorado voters overwhelming rejected Proposition HH, a proposal by Democratic lawmakers to provide them property tax relief and boost school funding. But Proposition HH was not nearly... 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 →
Unsplash+ in collaboration with Getty Images Every year, families gather at Thanksgiving. In many cases, it's a chance for relatives and friends who haven't seen each other for a while to reconnect. Some families, however, are much closer proximity-wise. They see each other all the time. And in some of those cases, family members are caregivers. That's why November is a good choice as National Family Caregivers Month. It is formal recognition, as noted in President Joe Biden's proclamation, that millions of Americans provide crucial care and assistance to parents, children, siblings, and other loved ones. Many of these caregivers... 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 →
Unsplash+ in collaboration with Getty Images Tuesday, Nov. 7, is election day. The hubby and I already voted. But, as expected in an election year that doesn't include national races, we are in the vast minority. With almost 18 million registered voters, an early count of early voters showed that statewide turnout was only 5.53 percent. I'm a bit surprised. I thought the property tax cut ballot initiative would have energized more of my neighbors. Texas property tax cut: The proposition was put on the ballot by the legislature in response to homeowner complaints about Texas' real estate taxes, which... 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 →
Substitute a cat for the dog, and that's pretty much how the hubby and I envision retirement! (Photo: Unsplash+ in collaboration with Getty Images) OK, boomer. When that catchphrase meme went viral a few years ago, it marked the end of friendly generational relations. It also could be seen as a wake-up call to retirement savers. With Social Security already facing financial challenges, many point to the added challenges that Uncle Sam's retirement program faces as even more of the Baby Boom generation retires. Congress has yet to address Social Security's future. Of course, the House and Senate seem to... Read more →
Getting your tax ducks in a row takes on a different meaning, and bird, in November. But whatever fowl you choose for the metaphor, make some time this month to complete tasks that will prevent tax turkeys. (Photo by Mohan Nannapaneni) Hello, November! We welcome cooler (but not cold!) temperatures, holiday feasts (yes, I love pumpkin pie), and seeing family and friends for the first time in, well, months. This penultimate month of the year is also a good time to tackle some tax tasks. I know, you already have a lot on your November to-do list. But check out... Read more →
…and possibly get a sweet tax break for your gift. Unsplash+ in collaboration with Getty Images There are two kinds of Halloween candy people. There are those who low-ball their trick-or-treater count and end up running out of goodies to give out early in the night's festivities. They turn off the porch and interior lights, and ignore the doorbell ringing by costume clad candy seekers who refuse to bypass any house. Then there are those who buy waaaaay too much candy. Even when they start doubling the handouts to the later goodie-seeking groups, they end up with a lot, a... Read more →
Photo by Anya Batalova on Unsplash We don't get many — OK, not any — kids dressed as ghosts on Halloween night. Our neighborhood's youngsters seem to prefer dressing as comic book icons turned movie characters. Heck, last week I even saw an adult, or a very tall teen, dressed as Spiderman, full-face mask included, during my last grocery store visit. But that's for another blog post. Or a call to the local authorities. Getting back to ghosts, notably those with tax connections. As I mentioned in an earlier post, ghost employees and ghost employers can wreak havoc when it... Read more →