Don’t forget to pay your final 2024 tax year estimated tax amount by tomorrow, Jan. 15. I know. I’m cutting it close with my reminder. But if your life is as hectic as mine is right now and this tax task has crept up on you, then better late than never. Electronic options: Since time is of the essence, the fastest and easiest way to pay is electronically. Those options include — Debit or credit card or digital wallet. This is fast, easy, and familiar to most of us. The two Internal Revenue Service-approved vendors Pay1040 and ACI Payments, Inc.... Read more →
Paying taxes
Gift cards make great presents for family and friends. The cards, however, cannot be used to pay taxes during the holiday season or any time. (Gift card wreath via Pinterest) Gift cards are a great last-minute gift or a present for that hard-to-shop-for person in your life. That’s why they are so popular, particularly during the holiday season. The plastic presents also are popular with crooks. They tamper with easily accessible gift cards in store displays, obtain card barcodes and other information, then put them back on the rack. When a card is purchased and activated, the criminals use it... Read more →
Five turkeys might not technically be enough to be classified a rafter or gang or death row of turkeys — and yes, all are among the many collective nouns for a gathering of this particular fowl — but these birds represent today's fifth and final Tax Turkey to Avoid. (Photo by Chris Henry on Unsplash) Are you enjoying your Thanksgiving break? Maybe time off from work this week has you thinking about when you can leave the 9-to-5 completely. Whenever that happens, you’ll want to have enough of a nest egg to enjoy your retirement. That will be possible if... Read more →
This showy Texas turkey, not to be confused with music icon Bob Wills' Turkey, Texas, hometown, is a spectacular representation of the ol’ blog’s first tax turkey to avoid this holiday season, or any time of year. It’s Thanksgiving week. Most Americans are looking forward to the upcoming fourth Thursday in November, when they’ll gather to share food and fun with family and friends. A turkey will be the featured food on most tables, a tradition dating from the turn of the 19th century. But turkey also is disparaging slang for loser. Tax turkeys, in addition to being unwanted, can... Read more →
Missing a deadline can be frustrating. Missing a tax deadline also can be costly, thanks to penalty and interest charges. (Photo by Anton Malanin on Unsplash) In most cases, if you missed the Oct. 15 tax extension deadline and didn’t owe any tax, then you don’t have to worry about penalty and interest charges. Those are calculated based on the amount of tax due. The late payment penalty is 0.5 percent of your unpaid balance per month or partial month, capped at 25 percent. The failure-to-file penalty is even steeper. It’s 5 percent of unpaid taxes per month or partial... Read more →
Photo by Francisco De Legarreta C. on Unsplash Owing a big tax bill is a terrible feeling. The only thing worse is not being able to come up with the money to pay Uncle Sam. The Internal Revenue Service offers some solutions. You can pay over time by setting up an installment plan with the tax agency. Sometimes, even spreading out payments isn’t enough. Dealing with a huge tax bill: If your tax debt is so large that you know you’ll never be able to pay it all, you can turn to an Offer in Compromise, or OIC. By submitting... Read more →
Unsplash+ in collaboration with Getty Images Congressional proposals to exempt gratuities from income pop up periodically, usually in election years. It’s happening again in 2024. Republican presidential nominee Donald J. Trump suggested tax-free tips during a June campaign stop in Nevada, where workers in tourist meccas like Las Vegas depend on the added income. Vice President Kamala Harris, the Democratic counterpart hoping to hold the White House for the party, endorsed easing taxes on tips in August. So, of course, lawmakers on Capitol Hill got in on the tax-free pledge. So far, bills to exempt tip income have been introduced... Read more →
So how was your summer? That’s right, it’s that time of year again. The summer break officially ended on Sept. 1 with the arrival of meteorological fall, which runs through Nov. 30. I know, it’s kind of an arcane tidbit, but we have other more recognizable autumnal indicators. Youngsters across the country are back in classrooms. Their parents are back to the 9-to-5 grind after the long Labor Day holiday, with the next extended break not until the holidays. And temperatures here in Central Texas have dropped into the upper 80s! Yes, that’s early fall weather for us. I hope... Read more →
If you’ve glanced at the filing extension countdown in the ol’ tax blog’s right column, you know time is running out to file your extended tax return. The incessantly ticking clock isn’t a reason to panic. It is, however, a reminder that you don’t want to push that Oct. 15 deadline. The Internal Revenue Service doesn’t give you any more time to file your Form 1040. So, you should be thinking about finishing up that paperwork now. Here are some tips to help. Gather your filing documents. This shouldn’t be too much of a problem. You probably used the material... Read more →
The Internal Revenue Service continues its efforts to get more taxpayers interacting with the agency electronically. The latest move is enhancing business taxpayer accounts. Upgrades for business filers: The business tax account, or BTA, was launched last fall as a way for certain business taxpayers to view and make balance-due payments online. With the latest expansion, an eligible business taxpayer can use a BTA to pay Federal Tax Deposits (FTDs), and see and make a payment on their full balance due. The account is also now accessible in Spanish with more translations planned. Entities that can open a BTA: You... Read more →
The Internal Revenue Service has been making use of additional federal funds to crack down on tax scofflaws. Notably, it has collected more than $1 billion from wealthy Americans who had, shall we say, neglected to file returns. However, a recent federal oversight office review indicates that the IRS also needs to take a look within its own ranks. Overall, IRS and contractor employees were 95 percent tax compliant, meaning they filed returns and paid (or were paying) due taxes, according to a recent Treasury Inspector General for Tax Administration (TIGTA) investigation. While just 5 percent not filing or paying... Read more →
Unsplash+ in collaboration with Getty Images Tipping for services apparently is misunderstood, which helps explain why it sparks resentment in some customers, including some of my own family members, I’m sad to say. So I thought I give unemotional artificial intelligence a shot at explaining it. Here’s what ChatGPT says about tipping. Tipping for services typically refers to giving an additional amount of money to service providers, such as waitstaff in restaurants, hairdressers, taxi drivers, or hotel staff, as a token of appreciation for their service. Tipping customs vary widely by country and culture, but it's generally seen as a... Read more →
The only thing worse than getting a notice from the Internal Revenue Service, is getting a wrong one. And the absolutely worst IRS communication scenario is getting a mailing that says you owe Uncle Sam when you are sure you paid your tax bill on time. That happened recently to some taxpayers. Now the IRS is trying to ease these individuals’ concerns. Wrong automatically issued notices: “The IRS is aware that some taxpayers are receiving CP14 (Balance Due, No Math Error) notices indicating a balance due even though payments were made with their 2023 tax return,” said the agency in... Read more →
Unsplash+ in collaboration with Getty Images School’s out for the summer. That means many young people are working summer jobs. If it’s your first time in the workplace, congratulations on your earnings effort. And good luck with the tax lessons you’re about to learn. Here’s a quick CliffsNotes on paychecks and taxes. Income Tax Withholding: Getting your first paycheck is reason for celebration. That joy, however, tends to be offset a bit when you realize that Uncle Sam, and probably your state tax collector, too, took some off the top. That’s the income tax withholding that all wage-earning workers face.... Read more →
To paraphrase the oft-covered pop song, you fought the Internal Revenue Service law, and the IRS won. But that’s not necessarily the end of the process. You have the right to appeal the IRS’ decision. The agency itself says so in its Taxpayer Bill of Rights. And the IRS has a separate appeals office created to deal with these taxpayer-auditor disputes. There are around 1,500 appeals office employees, most of whom were auditors themselves, and generally have legal or accounting experience. I know. You saw that phrase “were auditors themselves,” and are having second thoughts about appealing your tax finding.... Read more →
Photo by Karolina Grabowska Tax Day 2024 is over for most of us. But Tax Day 2021 looms for some this month. No, we are not in some tax time warp. And no, I did not have an adult beverage with my morning cuppa. The tax reality is that this coming May 17, 2024, is the last chance for almost a million people to get federal refund money they were due back in 2021. These individuals didn’t file a 2020 tax year return three years ago. And those three years are, according to tax law, the time limit they have... Read more →
Photo by Leeloo The First You didn’t file a tax return on April 15 and you’re still avoiding the task because you owe more than you can pay. That’s a terrible reason. You actually are making things worse. Penalty and interest charges automatically started running as soon as your tax filing and nonpayment became delinquent on April 16. So you need to act now, first by filing a return, and then by exploring ways to eventually pay Uncle Sam what you owe. Failure to file and/or pay penalty costs: Even if you can't afford to immediately pay the full amount... Read more →
Photo by Ketut Subiyanto The Internal Revenue Service's big tax party was yesterday and you didn't RSVP. Not even by filing Form 4868 to get an extension to show up as much as six months later. In fact, you didn't attend the Tax Day soiree at all. Maybe you had a good reason for not filing a Form 1040 on April 15. Maybe you simply forgot. Or maybe you started your return and got discouraged. While the IRS won't take your failure to file your return and pay any tax you owe personally, the agency isn't going to overlook your... Read more →
Running out of time to finish (or start) your 2023 tax return? Then get more by filing for an extension. (Photo by Jon Tyson on Unsplash) Put down that tax return. You know you aren't going to get it done by Monday, April 15. Instead, file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This Internal Revenue Service form is the tax procrastinator's best friend, whether you've put off filing because, well, taxes or you're still waiting for some tax statements that arrive annoyingly late every year. Yes, I'm looking at you Schedule... Read more →
Tax Day 2024 is Monday, April 15. Have you filed your 1040 yet? By the end of March, the Internal Revenue Service had received more than 90 million tax returns. Sounds like a lot, right? But that's just 70 percent of the almost 129 million returns the tax agency is expecting to get this tax season. So a lot of taxpayers (or their tax preparers) are busy this weekend. Of course, not all those 39 million yet-to-be-filed returns will be finished by April 15. A good portion will be extended, giving the taxpayers (and their tax preparers) until Oct. 15... Read more →