We're less than two months from Tax Day 2020, which was pushed to July 15 due to the coronavirus pandemic. Or are we? There's been some talk and a few actual reports in the media that the White House is contemplating pushing the tax deadline back again, possibly to Sept. 15 or even mid-December. Just talk, so far: An NBC News report noted that talks of an even later Tax Day are preliminary. In that same article, Trump Administration officials stressed that no tax date change decision has been made. But some in the tax community are still a little... Read more →
Paying taxes
The first two estimated tax payments for 2020 aren't due this week because of COVID-19 changes, but it's still time to look at how much you owe via 1040-ES and how best to figure those amounts. I've paid estimated taxes for almost as long as I've filed taxes. These payments, in case this tax is new to you, are the equivalent of withholding. With estimated taxes, however, we taxpayers must cover the income (and usually other) tax on things like freelance earnings or investment payouts since we get the money without anything being taken out beforehand for Uncle Sam. There... Read more →
We're in what during normal times would be the annual tax season's big push to the end (or an extension). But these are not normal times. Instead, it feels more and more like we're living in a tax version of Bill Murray's classic "Groundhog Day." That's because for the second time in three days the Treasury Department and Internal Revenue Service have moved the deadlines for filing and paying taxes. Friday, March 20, morning Treasury Secretary Steve Mnuchin decided that an earlier decision that split the usual April 15 deadline for tax filing and paying should be changed. So he... Read more →
States also are coping with COVID-19 and tax return timing, with a handful already delaying some returns. UPDATE, March 21, 2020: Tax Day 2020 has changed again. Now taxpayers have until July 15 to file their 2019 returns and pay any due tax. This latest change was announced March 20 and the IRS issued some guidance on the changes on March 21. This window's timely admonition usually is good advice as April 15 nears. This year, however, Tax Day may be pushed back due to the spreading coronavirus. (Painted window in Harlingen, Texas, 1939, by Lee Russell; New York Public... Read more →
You finished your tax return and the news is not good. You owe Uncle Sam money. Don't freak out, at least not yet. Your payment isn't due until April 15. That gives you time to figure out how to come up with the cash and/or get it to the U.S. Treasury. The Internal Revenue Service, naturally, has some suggestions. Let's start with the agency's new favorite tax payment method. Yep, I'm talking electronic. You have several digital options. 1. Credit, Debit or Digital Wallet: Paying by plastic is one of the oldest and most popular tax e-pay methods. As the... Read more →
Law schools and their students, like these at Georgia State University College of Law, are major contributors to the success of Low-Income Taxpayer Clinics nationwide. (Photo courtesy Philip C. Cook LITC) Sometimes, taxpayers encounter issues more serious that just filing their returns. They discover that the Internal Revenue Service has some questions about a prior return or an appeal of an agency decision isn't going as expected or that the federal tax collector is taking his name to heart and initiating collection procedures. What to do? Specifically, what to do if you don't have much money? Find your nearest Low-Income... Read more →
The shortest month of the year is a little longer in 2020. It's a Leap Year. What will we do with that extra day, Feb. 29? Of course, we're going to devote those additional 24 hours to our taxes. OK, maybe not. For many, this first full week of February is getting off to a slow part, thanks to the annual Super Bowl Sunday hangover. Others simply aren't ready to think taxes yet. It's not their fault. They, and that includes me, are still waiting for necessary tax-filing statements. And some eager and on-the-ball taxpayers don't want to think about... Read more →
Image via GotCredit.com The year's first obvious and, for some, painful acknowledgement of taxes is next week. Jan. 15 is the due date for the final estimated tax payment for the 2019 tax year. That upcoming deadline day is this weekend's By the Numbers figure. Generally, if you expect you'll owe more than $1,000 in taxes, then you must pay estimated taxes throughout the year. If you've been paying estimated taxes for a while, you already know that these payments cover earnings that aren't subject to withholding. This includes things like investment earnings that pay out periodically during the year... Read more →
Paying property tax bills by Dec. 31 used to be a surefire way for many filers to bump up their Schedule A deductions enough to make itemizing more advantageous than using the standard deduction. That's no longer the case thanks to the Tax Cuts and Jobs Act (TCJA). In addition to capping state and local real estate tax deductions at $10,000, the tax reform bill also nearly doubled prior tax law's standard amounts. So fewer folks are worrying about paying tax bills that may be due later, like the end of next January here in the Austin area, by year's... Read more →
Halloween is almost here. Are you still looking for a costume? Here's a suggestion. Go as the Internal Revenue Service. On this annual night of frights, Uncle Sam's tax collector offers plenty of scares. Here are four terrifying tax situations to get you in a Halloween mood. Be afraid, but also be prepared, on this Oct. 31 as well as year-round. 1. Audit: There's no need to build up to this scare, which can occur any time of the year. Fear of an IRS audit is one of the biggest tax terrors for most people, even (or maybe especially) those... Read more →
I've dealt with bill collectors over the years. Fortunately for me, it's been on behalf of a couple of relatives who found themselves in over their heads financially. Fortunately for my family members, after much — way too much — and often contentious back and forth, we were able to come to a satisfactory resolution. That's why I tend to share former Taxpayer Advocate Nina Olson's skepticism about the way that private collection agencies, or PCAs in tax-acronymese, interact with folks who owe taxes. But despite my, Olson's and many others' lingering distrust of these operations, private debt collect is... Read more →
The tax gap is holding as steady as this gap on the old Florida Keys bridge. (Photo by Ewen Roberts via Flickr) We might want to revise Benjamin Franklin's famous tax saying. The new version could read, "In in this world nothing can be said to be certain, except death, taxes and the tax gap." The tax gap is the difference between the amount of tax that filers should pay and the amount that they actually hand over voluntarily and on time to the Internal Revenue Service. And IRS data continues to show that while tax years come and tax... Read more →
If you read last week's September tax moves post (thanks), you might remember that one of the four suggested actions was to pay your estimated taxes. Not to be a nag, or a reminder as I insist to the hubby, but I'm putting that tax task out there again today. The third installment for the 2019 tax year is due Sept. 16. Yes, that's a day later than normal, but the usual 9/15 due date falls on Sunday. So you get an extra day, next Monday, to either snail mail your 1040-ES voucher and check or money order to the... Read more →
Arizona home to be auctioned to pay federal tax debt. I've seen a lot of estate sale signs lately. Either it's an indication of the changing demographics of my part of Austin or folks are trying to fancy up their garage sales. An estate (or renamed garage) sale basically is a way to dispose of most of an owner's property either because family doesn't want their deceased relative's items or the goods need to be sold to make a move easier. Uncle Sam regularly holds his own versions, but in many instances these government sales are to settle tax debts.... Read more →
National Taxpayer Advocate Nina E. Olson, shown here in a screen shot from an earlier C-SPAN appearance, takes parting shot at 'woefully inadequate' IRS customer service in her final report to Congress before she retires in July. Nina E. Olson is nothing if not consistent. The problem for taxpayers with this trait is that it means much of the change to and improvement of the Internal Revenue Service that Olson has championed for almost two decades remains unfinished. Olson is the National Taxpayer Advocate (NTA), at least for another few weeks. She was appointed to the IRS oversight post in... Read more →
June 17 is the deadline this year for the second installment of 2019's estimated taxes. It's just one mid-June deadline that millions of U.S. taxpayers face. June 15 is a major tax deadline. Except for this year. For 2019, June 17 is the next red-letter Tax Day. That's because the 15th falls on Saturday, meaning that the usual due date moves to the next business day. A couple of extra days are nice, especially for folks who like to wait until the last minute. But don't get too comfortable. Here are three tax situations which require millions of taxpayers to... Read more →
Why yes, that is a bill you just got from the Internal Revenue Service. And like all past-due notifications, the sooner you take care of it, the better for you and your bottom line. The IRS is mailing letters or notices, including CP14s and CP501s, to taxpayers who filed their returns on time, but did not pay the tax that was due at that time. The notifications, most of which are going out in June and July, let the recipients know that they have a tax balance due. To minimize the associated non- or underpayment penalties, the IRS recommends that... Read more →
Michael Cohen (left) and Tom Arnold run into each other in New York City in June 2018. (Photo via Tom Arnold on Twitter) Michael Cohen, Donald J. Trump's former attorney and previously self-described fixer, is heading to federal prison in a couple weeks. But in a recent conversation with actor Tom Arnold, Cohen said he didn't commit all of the crimes for which he will do time. Specifically, according to the story on the telephone discussion that the Wall Street Journal broke, Cohen says he's not guilty of tax evasion, one of the charges for which he's going to jail.... Read more →
The time left until Tax Day is tick, tick, ticking away. If you're feeling like silent movie legend Harold Lloyd (pictured above), hanging on by your fingernails as you try to get your tax filing act together, I have some good news and some bad news. The bad news is that there's no way to stop the tax deadline clock. The good news is you can get an extension to file your 1040. By filing for an extension, the Internal Revenue Service will give you six more months, up to Oct. 15, to submit your return. You still have to... Read more →
Tax Day every April is the biggie for individual taxpayers. That's when our annual Form 1040 is due. And yes, I know this year there are two Tax Days, since Patriot Day celebrants in Maine and Massachusetts get until April 17 to send in their federal returns. But most of us must meet the April 15 deadline, so that's what I focus on in this post. Completing a 1040, however, is not the only mid-April tax deadline. It's just one of the 10 tax tasks listed below that many taxpayers also must make by next Monday, April 15. 1. File... Read more →