It's finally here! Tax Day 2021! Yeah, I know most of y'all aren't that excited. Either you're done with your 2020 return (good for you) or you're struggling to finish it (you can do it!) or, for a variety of reasons (including disaster declarations; so sorry you had to deal with that), you have more time to file. Today, though, is still a critical deadline for millions of taxpayers, especially those who taxes. Facing the prospect of having to write the U.S. Treasury a check (or send Uncle Sam an electronic payment) is one of the main reasons folks procrastinate... Read more →
Paying taxes
The Internal Revenue Service has signed new contracts with three private tax debt collection agencies. (Image via Giphy) When the Internal Revenue Service four years ago reinstituted, per Congressional mandate, the latest private tax collection program, it signed four collection companies. Today, the IRS announced new deals with three collection agencies. The private collection agency (PCA) contracts take effect tomorrow, following today's expiration of the old contracts. So starting Thursday, Sept. 23, taxpayers with unpaid tax bills may be contacted by one of the following agencies: CBE Group, Inc. P.O. Box 2217 Waterloo, IA 50704 800-910-5837 Coast Professional, Inc. P.O.... Read more →
via GIPHY On a visceral financial level, we all hate paying taxes. But what we hate almost as much is that the tax laws often seem overly complicated or just plain goofy. Take estimated taxes. These are four extra payments that the Internal Revenue Service and many states require taxpayers to make to cover the taxes due on earnings that aren't subject to paycheck tax withholding. Straightforward enough, right? Until it comes to payment deadlines. Even though there are, in most cases, four of them and they're called quarterly estimated tax payments, the IRS uses a calendar that's a bit... Read more →
IRS image Last fall, the Internal Revenue Service announced that it was adding QR, or Quick Response, codes to some of the notices it sends taxpayers. Specifically, the codes are going on tax due notices. The goal, says the IRS, is to make it easier for taxpayers to deal with the notices. Recipients of the QR coded correspondence can use their smartphones to scan it and go directly to IRS website. From there, they can access their taxpayer account, set up a payment plan, or contact the Taxpayer Advocate Service. Basically, the digital option eliminates the tax middleman or woman.... Read more →
Thoreau's Cove, circa 1908, on Walden Pond near Concord, Massachusetts. (Photo from the U.S. Library of Congress via Wikimedia Commons) Nature is a healing touchstone for many. That was especially evident when we reduced our socializing due to COVID-19. A walk in a park was a way to get out of our self-imposed lockdowns and stay safely distant from others while embracing the environment. Many people went further as the coronavirus pandemic continued, moving from crowded cities to suburban or urban retreats where they could work from home. They found, in a fashion, their own modern day Walden Ponds. At... Read more →
July 15 is a big day for the Internal Revenue Service and taxpayers. Millions of families will start getting Advance Child Tax Credit payments this Thursday. It's also the day the IRS resumes additional collection and enforcement actions that, due to the COVID-19 pandemic, had been suspended. "The majority of compliance operations are already running normally after being suspended to provide pandemic-related relief during the People First Initiative April 1, 2020, through July 15, 2020," notes the IRS on a recent update to its mission critical functions web page. However, says the agency, it kept its systemic and automated lien... Read more →
What's the result when the worst things happen? Too often, it's terrible people taking advantage of good people. This occurs with alarming regularity in the tax world following tragedies and disasters. Con artists use horrible events to convince compassionate individuals to donate to groups that will help out the victims. What really happens all too often is the caring donors become victims, too. Fake charities are just one type of scam in today's third installment of the IRS' Dirty Dozen for 2021. This category of tax ruses in which dishonest people trick others into doing something illegal often includes fraudulent... Read more →
Are you ready for Tax Day take two? It's June 15 and it's almost here. That mid-June day is the annual deadline for millions of U.S. taxpayers who are living outside the country. That includes members of the armed forces stationed abroad. It's also the due date for the current year's second estimated tax payment. And this year, even more taxpayers will participate. June 15, 2021, is the first Tax Day for millions who literally endured disastrous situations earlier this year. Here's the scoop for all these folks now facing impending June tax obligations. U.S. taxpayers living abroad: Every year,... Read more →
Including some amended filing considerations that are affected this year by COVID-19 law changes. Photo by Ann H from Pexels It's been a week since Tax Day 2021. Those of us who submitted our tax returns have just been enjoying being done with the Internal Revenue Service for another year. But maybe we should give Uncle Sam's tax collector a little more thought before we finally wrap up this tax season. Here are 5 tax matters you need to consider so that you can completely clear your 2020 tax year decks. 1. Check your refund status: This is the biggie... Read more →
You just finished filing your taxes last week. That included, for most Americans, state tax returns, too. And for some, the news was not good, especially on the state tax front. Residents of 42 states and Washington, D.C., face state and local taxes on at least some of the income, either earned (usually from jobs) or unearned (usually investment income). For some, the dollars handed over to their state and local tax collectors are more troubling than their federal tax amounts. High state taxes, both corporate and individual, usually is cited as a key reason lower-tax states like my native... Read more →
P.S. — The IRS commish says thanks to those who did file on May 17. Wow. Those extra 32 days to get your taxes done sure went fast. So quickly, in fact, that you flat-out missed the May 17 tax filing deadline. Don't panic, but don't procrastinate any longer. The Internal Revenue Service is serious about wanting your tax forms and, of course, any taxes you owe. If you miss the annual deadline, regardless of exactly when it falls, then you'll likely end up facing three main filing-related penalties, the harshest of which is for not filing at all. Below... Read more →
The time left until tomorrow's Tax Day is tick, tick, ticking away. If you're feeling like silent movie legend Harold Lloyd, hanging on by your fingernails as you try to finish your Form 1040, take a break by filing for an extension instead. In a survey earlier this tax filing season by Credello, more than three-quarters of respondents said they know what they're doing when it comes to filing their taxes. Oh, really? Not that I'm questioning the poll participants' honesty, but taxes are not really the area where you want to fake it 'til you make it. If you... 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 →
Rather than heavy equipment, the IRS needs legislative and fiscal help to close its $1 trillion Tax Gap. If you've thought the $441 million figure that the Internal Revenue Service has for years cited as the Tax Gap is too low, you are not alone. None other than the IRS commissioner agrees that there is more tax money that's owed than the agency has been able to collect. A whole lot more. At an April 13 hearing before the Senate Finance Committee, IRS Commissioner Charles Rettig estimated that the actual Tax Gap could be as much as $1 trillion. That's... Read more →
UPDATE, Friday, April 9, 2021: Rep. Lloyd Smucker (R-Pennsylvania) has introduced H.R. 2437, a bill that would postpone the due date for first-quarter 2021 estimated tax payments to May 17, 2021. Thanks to the San Diego CPA firm GPW for the tip via Twitter, along with the observation that if Smucker's bill does pass, it likely will be very close to the filing wire. The Internal Revenue Service has dashed hopes that it would true-up 2021's annual tax filing deadline and the year's first estimated tax payment. Many in the tax community had been hoping (and lobbying and complaining and... Read more →
Updated Wednesday, April 7, 2021 Just days after the Internal Revenue Service's March 17 announcement that it was moving the 2021 tax filing deadline from April 15 to May 17, most states that collect some type of personal income tax followed the federal tax agency's lead. The IRS decided that filers could use more time to file and pay their 2020 taxes since we're all still dealing to some degree with the lingering effects of the COVID-19 pandemic. That "we" includes the IRS, which faces a backlog of 2019 returns (and 2020 filings, too, since the tax season opened in... Read more →
Photo by Kay Bell The 2021 filing season won't start until Feb. 12 this year. That's frustrating for the millions of taxpayers who traditionally are early return filers. It's more frustrating for those taxpayers who, because of COVID-19 complications (which also created this year's filing delay), are really counting on their tax refunds to cover expenses. This year's later than usual filing start means it is even more important to get those 1040 forms into the Internal Revenue Service as soon as the agency will take them. If you're still debating about when to file your taxes, here are seven... Read more →
Four years ago, Congress forced the Internal Revenue Service to again use private collection agents (PCAs). This third deal with debt collectors came after the IRS ended two previous arrangements when they proved to be, shall we say, problematic. Now it looks like the current IRS PCA collaboration also has some issues. Low collection rate: A recent Treasury Inspector General for Tax Administration (TIGTA) report says that the private tax debt collectors currently under IRS contract have brought in just a fraction — 1.79 percent of the total value of accounts — of the $30 billion in unpaid tax they've... Read more →
Millions of taxpayers are facing a deadline at the end of this week. No, unfortunately I am not talking about the Jan. 15 mark that the Internal Revenue Service is required by law to meet in distributing the second round of COVID-19 economic relief payments. I'm talking about paying Uncle Sam instead of getting money from him. The final estimated tax payment for tax year 2020 is due on Friday, Jan. 15. Taking care of taxes yourself: Around 22 million individuals file these extra tax payments, which total four if you make them for the full tax year. They are... Read more →
Photo by Olya Kobruseva via Pexels Happy New Year! Oh, sorry. Was I typing too loud? I'm glad you were able to festively, and I hope safely, ring in 2021. Now that it's here, it also brings a new tax filing season. The Internal Revenue Service's delivery of the second round of COVID-19 relief money shouldn't hamper its handling of 2020 returns, which should officially start later this month. So if the IRS can be ready, so can we. So here are a few tax things to think about and take care of, after, of course, you're fully recovered from... Read more →
Most of us are cheering the rapidly approaching end of tumultuous 2020. I definitely am right there with you with some pre-New Year's Eve joyfulness. But take a little time off from your anticipatory year-end celebrations to check out these tax moves. These final three tax tasks for the final three days of the year could pay off at filing time in 2021. 1. Know the value of donating items instead of cash. You have until Dec. 31 to donate to an IRS-qualified charity so you can claim the gift as a deduction on your 2020 tax return. If you... Read more →