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 →
Paying taxes
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 →
Millions of people will be celebrating on Monday, April 15. The arrival of Tax Day means they are done with dealing with the Internal Revenue Service for another year. For many others, however, it's just the beginning of another round of collections. The annual federal filing (and paying) deadline also is the start of the current year's estimated tax payment cycle. Extra payments for certain income: The U.S. tax system is pay as earn. That's taken care via paycheck withholding if you're an employee. But even if you have a job where income (federal and state, if applicable) tax is... Read more →
Daisies enjoying the result of an April shower. (Photo by Kay Bell) Tax Day is almost here, no fooling! We've readjusted, after the COVID-19 pandemic delays, to having Tax Day fall in the middle of this fourth month. This year, it's officially April 15 again for most of us. So filing our return or extension request by then obviously is a prime focus. But there are some other tax matters to consider or complete this April 2024. Here are six. 1. Finish (or start) your 2023 return. Tax Day is just 14 days away, and the Internal Revenue Service is... Read more →
Last week, I finally got all the documents I need to file my 2023 tax return. As an independent contractor, the bulk of my income tax statements were 1099-NEC forms. But some folks are getting 1099-Ks. And these tax statements still are causing confusion. Form 1099-K has become more common with the growth of the gig workforce, and the delivery of products and services through online apps and marketplaces, such as PayPal, Venmo, CashApp, eBay, Etsy, Uber, Lyft, and Airbnb. Old form, new amounts: The forms are not new, but the amount of earnings that trigger their issuance has changed.... Read more →
Fortune cookie tax filing wisdom (Photo by Kay Bell) If the 2024 tax-filing season is anything like previous ones, millions of taxpayers sent their 2023 taxes to the Internal Revenue Service today, the official start of federal return processing. The most obvious and common motive for first-day filing is to get expected refunds. But there are some other reasons you might want to file your taxes early. Here are eight. 1. To beat tax ID thieves to the punch. The IRS and its Security Summit partners have made good progress in recent years in reducing tax identity theft and associated... Read more →
Most taxpayers will never be as chill as this tabby, especially now that the annual tax filing season is here. But these tips could make the tax task a little easier. (Photo by Jacalyn Beales on Unsplash) If you've already got your 2023 tax return ready to send to the Internal Revenue Service tomorrow, Jan. 29, when the agency starts processing filings, you can peruse other items on the ol' blog. (Thank you!) If, however, you're not quite ready yet to tackle Form 1040, I got you. Even when your taxes aren't complicated, many of us dread filling out tax... Read more →
You probably are getting ready for the three-day weekend coming up with the Rev. Dr. Martin Luther King, Jr. federal holiday on Monday, Jan. 15. But if you pay estimated taxes, you also know that date usually is the deadline for the prior tax year's fourth payment. Since it's MLK Day this year, this due date is pushed to the next business day, Tuesday, Jan. 16. You need to meet that final deadline to avoid a possible tax bill or penalty (or both) when your file your 2023 tax return later this year. Why estimated tax? Most of us pay... Read more →
If you're just now getting to work on your extended 2022 tax return, which is due to the Internal Revenue Service by Monday, Oct. 16, don't panic. These tips will help you make the most of the little tax time left. (Image courtesy Taxpayer Advocate Service, which also has some tips for Oct. 16 filers.) It's almost Tax Day for extreme procrastinators. The extension you got for your 2022 return ends on Monday, Oct. 16. Since the tax clock is ticking, let's get right to these eight tips that can help you complete your Form 1040 by the fast approaching,... Read more →