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 →
Paying taxes
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 →
Nobody likes to owe taxes at filing time. And if you owe too much, you could face added penalties for not having enough money withheld or underpaying estimated taxes throughout the year. But every year, lots of folks find they have to write a check to the U.S. Treasury or set up a payment plan with the Internal Revenue Service. The financial technology company SmartAsset.com recently took a look at where the U.S. taxpayers have the biggest tax bills. High plains tax bills: Sorry, Dakotans. You are the unlucky winners. Yep, residents of both South and North and South Dakota... Read more →
There's better news for taxpayers this week. Internal Revenue Service data for the second week of the 2019 tax filing season shows a slightly larger refund amount. When the IRS released its first-week data, which covered 2018 tax returns filed by Feb. 1, the number of 1040s submitted and processed, as well as the number of refunds and average amount of those fewer checks, were dramatically lower than at the same time last year. That led to much grumbling by filers and arguments among supporters and opponents of the Tax Cuts and Jobs Act (TCJA) about how the major tax... Read more →
By now, everyone knows that a lot of taxpayers are getting the worst news ever at filing time. They owe the U.S. Treasury money. We can debate the reasons for the unexpected tax bills ad infinitum. Withholding tables were rejiggered in 2018 following the changes in the Tax Cuts and Jobs Act (TCJA). Itemized deductions and exemptions were reduced or eliminated by that tax legislation. Taxpayers didn't adjust their withholding to get their paycheck amounts more in line with the new law. The bottom line is that more than the usual number of filers this year are going to have... Read more →
Hello, February! If we ever were in need of your hearts and flowers, it is now. January was tough tax-wise. We had to worry about whether the Internal Revenue Service actually would get filing season open as the longest federal government shutdown in U.S. history dragged on. It opened as promised on Jan. 28, but be patient. Plus, we're dealing with our first filing season under the many, many changes brought about by the Tax Cuts and Jobs Act (TCJA). Yep, we definitely need some tax love. And some tax guidance, whether we're earlier filers awaiting refunds or procrastinators taking... Read more →
The 2019 tax filing season starts on Monday, Jan. 28. That's when the Internal Revenue Service will start accepting and, more importantly, processing tax returns. While there's still some concern as to whether the IRS is up to the job this year since will be operating on half-staff (or fewer, according to reports that many recalled agency employees are skipping [unpaid] work) one thing is certain. We taxpayers have to meet tax deadlines, government shutdown or no government shutdown. So mark your calendars for this year's key filing dates. Jan. 28, 2019: Filing season 2019 begins. If you filed early,... Read more →
Internal Revenue Service offices nationwide, like this one in New York City, are closed due to the ongoing federal government shutdown. (Photo by Matthew Bisanz via Wikipedia Commons) Most of us don't have personal interactions with the Internal Revenue Service. We simply do our taxes every year, send them to the federal tax collector and move on with our lives. It's a different story in many places across the country. Those places have physical IRS offices where friends and family usually go each weekday to do their jobs. They want the government shutdown shut down so they can get back... Read more →
George Herbert Walker Bush, the 41st president of the United States, lying in state at the U.S. Capitol on Monday, Dec. 3. (Screenshot from C-SPAN video.) President George H.W. Bush, who passed away Nov. 30 at age 94 at his Houston home, will be honored today, Wednesday, Dec. 5, at a state funeral at Washington National Cathedral. The current President and First Lady, along with four others commanders-in-chief — the late 43rd president's son George W. Bush, Barack Obama, Bill Clinton and Jimmy Carter, along with their wives — are among the dignitaries from around the world who will be... Read more →
Each year, the Internal Revenue Service assesses estimated tax penalties against millions of taxpayers. This added money typically is due the IRS when a taxpayer pays too little total tax during the year. The last time the IRS released complete estimated tax penalty data was three years ago. The federal tax agency said back then that the average estimated tax penalty, which is based on the interest rate charged by the IRS on unpaid tax, was about $130. Back in September 2015, the IRS said it was seeing more taxpayers run into the estimated tax penalty. The number jumped about... Read more →
A few election years ago, Republicans were aghast at the level of takers compared to makers. In case you've forgotten, they were complaining that an increasing number of folks, the so-called takers, were escaping their rightful tax payments and getting government help at the expense of the makers, higher earners who tend to put more tax money into the economy. That's still happening. Now, however, in a wonderful bit of political irony, it's the GOP that's responsible for more U.S. households avoiding tax bills next filing season. Big tax cuts for millions: The latest analysis by the Tax Policy Center... Read more →
We're on the downside of 2018 and that has some folks in the tax world, and on Capitol Hill, concerned. They're worried that unless folks act soon, they're going to get an unwelcome surprise next federal tax filing season. When they fill out their new Form 1040s, they'll discover they owe. The reason is the new Tax Cuts and Jobs Act (TCJA). OK, technically it's because a lot of folks haven't adjusted their payroll withholding to account for the new lower income tax rates and other changes, like no more exemptions and revised of eliminated itemized expenses. It's not for... Read more →
If you filed a return on April 17 (or the 18th thanks to the Internal Revenue Service's Tax Day systems glitch), but didn't pay your full tax bill, Uncle Sam is coming for you. OK, not in person (yet). So you can still answer when someone rings your doorbell. But the IRS says in the coming weeks it will be sending out billing notices to 2017 tax return filers who still owe money. These tax bills actually will be in the form of IRS notices, specially notices CP14 and CP501, which are frequently mailed in the months of June and... Read more →
Click image to watch the Mos Eisley cantina scene, in which these musicians provide the catchy background tune, from the 1977 Star Wars movie that launched the sci-fi film franchise. Merry May 4th. Yes, this is another goofy, made-up holiday, but one that's dear to sci-fi fans (and punsters), particularly those devoted to Star Wars. The film franchise's iconic "May the force be with you" greeting is celebrated each year on the similar sounding "May the Fourth be with you." As a long-time sci-fi fan and a college student who waited in a long line to see the 1977 debut... Read more →
May 4. That's the day the Ways and Means Oversight Subcommittee wants the Internal Revenue Service to explain exactly what happened on this year's Tax Day. If you were a last-minute filer, especially one trying to pay your 2017 tax bill, you remember the hassle on April 17 when the IRS experienced a spectacularly ill-timed systems crash. That day, one of the busiest of the year for the IRS, one of the agency's core systems in West Virginia failed. Unfortunately for the IRS and millions of tax-owing filers, it was the system that powered the IRS' Direct Pay and Payment... Read more →
The Internal Revenue Service had issues with some of its online systems on Tuesday, April 17, the day that was supposed to be the filing deadline for our 2017 tax returns. Those problems notwithstanding, e-fling and electronically paying any tax that's due today, Wednesday, April 18 — yes, today, the new filing deadline provided by the IRS to make up for its online inconveniences yesterday — is still the best move for many filers. The agency for years has been encouraging, and in some cases forcing, electronic filing and paying of taxes. The reasons are that it's easier (definitely for... Read more →
Rep. Lynn Jenkins (R-Kansas) and fellow Ways and Means member Rep. John Lewis (D-Georgia) have offered a bill to revamp the IRS. Remember the kinder, gentler Internal Revenue Service? That was the goal of the IRS Restructuring and Reform Act of 1998, which sought to ease up on the tax agency's aggressive collection actions back then. Now two Ways and Means Committee members are looking to remake the IRS into a modern, more efficient agency that provides taxpayers a better experience. I'm pretty sure that modernizing and refining processes for better efficiency can eventually be accomplished. As for the improved... Read more →
"Dear IRS, …" — If you have a question about how a tax law or regulation affects your particular set of circumstances, you can ask, in writing, for the Internal Revenue Service to weigh in. But be prepared to pay for the advice and, effective Aug. 15, pay electronically. Taxes are complex. That’s why it’s often wise to get professional help. In some cases, however, even tax pros need some guidance. This is particularly true when taxpayer circumstances are such that the individuals and their advisers feel the need for further interpretation as to how tax laws or administrative rules... Read more →
Undefeated boxing champ Floyd Mayweather Jr. is trying to avoid a knockout from the Internal Revenue Service. Mayweather still owes the federal tax collector a reported $22.s million for his 2015 taxes. That year, Mayweather reportedly earned as much as $230 million for besting Manny Pacquiao in the heavily promoted Fight of the Century. Floyd Mayweather's official weigh-in before his 2015 fight with Manny Pacquiao in Las Vegas. Money earned on that match is at the center of an unpaid tax bill battle Mayweather's waging with the IRS. (Photo courtesy Pixabay via Wikimedia Commons) Rich, but tax cash poor: Mayweather... Read more →
Happy Mother's Day! What a perfect day to talk about tax audits. You don't see the connection? Then you missed the season finale last week of the CBS show "Mom." I'm not really a fan, but it was on in the background as we were fixing dinner. Scene from the May 11 season finale of CBS sitcom "Mom," where the characters portrayed by Anna Faris and Allison Janney consult an attorney, played by Leonard Roberts, about some tax trouble. (Photo courtesy CBS) But as I was chopping veggies I heard "the IRS put a lien on my account." So naturally... Read more →