Back in the darkest days of the COVID-19 pandemic when companies and workers were struggling due to health-related shutdowns, they were given a bit of a tax reprieve. The Trump Administration on Aug. 8, 2020, issued executive memo that called for the deferral of the payroll tax portion of the Federal Insurance Contributions Act (FICA) tax that goes toward Social Security. The White House argued that the move would put more money into workers' hands, give employers some financial breathing room, and keep the economy moving during the initial coronavirus closures. There was a lot of political consternation about the... Read more →
Paying taxes
What better topic for Thanksgiving than tax turkeys and how to avoid them. Our first tax turkey, represented by this solo strutting showy bird, is incorrect withholding. (Photo by Chris Henry on Unsplash) Thanksgiving, a time of gathering with family you haven't seen for a while. But sometimes, even when we get along with our relatives, we need a break from all that familial reconnecting. You could take a walk. Or check out a calming app. Or take care of a tax task. To help with that third suggestion, the rest of this Thanksgiving week (and weekend) the ol' blog... Read more →
UPDATE, Nov. 5, 2022, 10:25 p.m. CDT: The Houston Astros win game 6 by a 4-1 score and are 2022 World Series Champions! Houston Astros mascot Orbit hopes to trade in his extra-large regular season cap tonight for a 2022 World Series Champion one. (Photo by Kay Bell) The Houston Astros will play what fans, including me, hope is their last game of the 2022 Major League Baseball season tonight in Minute Maid Park. If they beat the Philadelphia Phillies, they get to hoist the World Series trophy in front of their hometown fans. Some H-Town businesses, however, might be... Read more →
If you've put off your tax filing until this last weekend before the absolutely final extended tax deadline of Oct. 17, don't panic. You've still got a little bit of time to do the tax job right. Image courtesy National Taxpayer Advocate Tax Day for ultra-procrastinators is just days away. Monday, Oct. 17, to be precise. There's no way to make up for lost tax time on this final filing weekend. But these 8 last-minute extended filing tips plus one for next filing season can help you finally get the job done on time. 1. Get your tax documents in... Read more →
If you've yet to file a 2019 or 2020 tax year return, you should get to work on that oversight soon. Like get them done by Sept. 30 soon. By meeting that end-of-this-month date, you may be able to avoid the usual late-filing penalty. It's typically assessed at a rate of 5 percent per month, up to 25 percent of the unpaid tax. And since the 2019 and 2020 due dates are long gone, that could be a substantial abated amount, depending on how much tax you owe. Helping both taxpayers and tax agency: The Internal Revenue Service's penalty relief... Read more →
The COVID-19 pandemic ignited an explosion of side hustles, with many folks cobbling together multiple independent operations to replace traditional jobs lost to the virus. The U.S. economy has picked up, and many businesses are forcing bringing their former and work-from-home staff back into the office. But side hustles remain popular. Most side hustle for more than money: Even where they have wage-paying work, many Americans also have side jobs, according to a survey by Insuranks, a small business insurance marketplace. Ninety-three percent of the adults surveyed by Insuranks said they have an added job alongside their main employment positions.... Read more →
Photo by Mikhail Nilov Just when you thought it was safe to go to your mailbox, the tax bogeyman is back. The Internal Revenue Service says it has — again — sent out some confusing, and potentially incorrect tax notices. This time it's balance due notices. This is getting to be a bad habit. Earlier this year, taxpayers who had filed and paid taxes while the IRS was operating under COVID-19 pandemic constraints received automatically issued notices that the IRS couldn't find their 1040 forms. The problem then was due to the millions of backlogged paper returns that stacked up... Read more →
Houston Astros' mascot Orbit generally stays in no-income-tax Texas in doing his job, so he doesn't have to worry about jock taxes. (Photo by Kay Bell) What are you doing this Fourth of July weekend? In addition to the traditional cookouts and fireworks, many folks across the United States head out to ballparks. I love the Independence Day break because it means more day baseball. I'm not going to any Major League Baseball (MLB) games in person this year, but you can be sure that I'll be watching them on television, starting this afternoon. MLB got a late start this... Read more →
With inflation at historic levels, U.S. families are re-examining their budgets. Uncle Sam recently did the same with his money, or rather the Congressional Budget Office (CBO) did. What this federal agency within the government's legislative branch found was surprising. The word that the CBO actually used was unexplained in connection with the robust growth of tax collections. Unexplained income tax revenue: "Tax collections in both 2020 and 2021 were larger than the currently available data on economic activity would suggest," according to the CBO report "The Budget and Economic Outlook: 2022 to 2032" issued on May 24. "That unexplained... Read more →
June 14, 2022, at 6:45 a.m. That's the precise point from which the Internal Revenue Service will never be the same. Darren Guillot, IRS Deputy Commissioner of Small Business/Self Employed Collection & Operations Support, offered that assessment today in announcing the agency's expansion of artificial intelligence voice bots. That date and time was when the agency flipped the switch on so-called authenticated voice bots. This new artificial intelligence system can complete more elaborate tax paying tasks for taxpayers. More importantly, it allows taxpayers using the bots to avoid the hold times they would have faced if they called an IRS... Read more →
Was this you on Tax Day, struggling with your return? If you just decided to chuck it and you owe, you need to file by June 14 or face an added tax penalty. (Photo by Mikhail Nilov) Did you totally miss Tax Day? If so, and you owe the Internal Revenue Service a now overdue payment, the agency says it's not too late. In fact, if you pay up soon, specifically by next Tuesday, June 14, you'll avoid a larger noncompliance charge. Normal tax penalties: Under normal non-filing and non-payment calculations, the IRS assess two penalties. The late-filing penalty is... Read more →
If you're a young person with a summer job, be aware of the tax implications. (Photo by Andrea Piacquadio) Your teenager has a summer job lined up, and you're thrilled. So is your youngster. But before the young worker heads off for the first day of gainful employment, it's a good idea to consider the tax implications. Here are five common tax issues that young workers, and their parents, face. 1. The teen likely will have to file some sort of tax return. The U.S. tax code is wonderfully egalitarian when it comes to filing. Anyone who makes a certain... Read more →
A group of Kentucky homeowners switched to a different, higher-rate tax district so their increased taxes would pay for things like street cleaning. A transcription error meant they got it and other services for free for eight years. (Photo by Kay Bell) Property tax bills are a major expense for homeowners. They also can be confusing. Here in Texas, most property tax money goes to the homeowners' local school districts. But there's usually more. Our real estate bill, for example, has collections for our independent school district, as well as five other taxing jurisdictions. That's why every tax bill recipient... Read more →
Photo by Jess Bailey Designs The only thing worse than getting a surprising high property tax appraisal — which, as one of April's tax tips advises, you definitely should protest for venting, as well as potential lower tax, purposes — is having your local tax collector tell you that your tax payment is overdue. That happened to 2,400 homeowners in upstate New York, according to LocalSYR.com. Tax rebate endangered: Technically, the property owners in Onondaga County didn't get a past due bill. Instead, they incorrectly received notice from the Empire State's Department of Taxation and Finance that they could lose... Read more →
Photo by cottonbro from Pexels It's been a week since Tax Day 2022. Those who submitted tax returns have been enjoying being done with the Internal Revenue Service for another year. But maybe it's time to give Uncle Sam's tax collector a little more thought. Here are 5 tax matters to consider so that you can completely clear your 2021 tax year decks. 1. Review your payroll withholding: The IRS reminds us every year that most taxpayers get refunds. That's because a lot of filers plan it that way. They overwithhold taxes from their paychecks as a forced savings account.... Read more →
Every Tax Day, millions of Americans complain about how much money they hand over to the U.S. government and how Uncle Sam spends it. OK, that's every day. But seeing the actual personal numbers on Form 1040 tends get people to focus. That's why the National Priorities Project (NPP), a Northampton, Massachusetts-based nonprofit that for almost 40 years has analyzed federal revenue and spending data, issues an annual receipt of where our tax dollars, primarily from individual income taxes, go. Source: NPP and White House Office of Management and Budget (OMB) Coronavirus shift: The military usually commands a major portion... Read more →
via GIPHY So, you missed Tax Day. It happens. Don't panic. But don't dawdle. 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 filing-related penalties, the harshest of which is for not filing at all. Below are four things you need to do now to get out of that penalty jam with as little damage as possible. Plus, there's a fifth tax move that could pay off for folks who aren't legally required... Read more →
Tax things are sort of back to normal. It's April, the traditional month in which our returns are due. And while today's Tax Day is a few a few days late thanks to the Emancipation Day holiday, it's here. So now what? Here are some things to do to take care of your 2021 tax return, and more, on Tax Day 2022. Ultimate tax procrastinators: It's not unusual for millions to wait to file. Last year, more than 21 percent of people who ultimately filed a return did so in the last week before Tax Day, which was delayed until... Read more →
Yeah, this image is (sadly) amusing, but a quick, real tax payment note. Make your check or money order, as long as it's not for an astronomical amount, payable to U.S. Treasury, not the Internal Revenue Service. Are you going to have to pay Uncle Sam tomorrow? Is your due tax a lot? A whole lot? If your tax bill is very — and I mean VERY — big, you won't be able to send the U.S. Treasury a check. Specifically, the Internal Revenue Service warns those who are extraordinarily deep in tax debt that it can't take a single... Read more →
The time left until Tax Day 2022 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 by Monday, April 18, rescue yourself by filing instead for a six-month extension. Most of us are procrastinators at some point in our lives. This tendency to hold back tends to show up when we're facing particularly difficult decisions or tasks. Tax filing time is one of those times. But waiting until the last minute can be costly. If we get in a hurry to meet... Read more →