Photo by Matheus Bertelli Happy New Year! I know, we’re well past the Jan. 1 hangover phase, but it is the first full work week of 2025, so I stand by my greeting. And I up it with Happy New Tax Year! On Jan. 20, Republicans who crafted that major tax reform bill will be in control of all three branches of federal government. They plan to keep and, if reports are true, expand the TCJA. As for paying for all those tax breaks, well that's another matter. Like I said, exciting tax times ahead. But while lawmakers on Capitol... Read more →
Politics
Saying "I do" also means saying hello to some tax changes in your new wedded life. (Photo by Jakob Owens on Unsplash) The end of each year is a good time to reflect on what happened the previous 12 months. For most of us, that includes some good events, some sad ones, and some still shaking out as we’re about to enter a brand new year. Many of these changes also could affect our taxes. So, as a bit of year-end preplanning, here are six ways that the Internal Revenue Code shows up when we encounter personal and lifestyle changes.... Read more →
Photo by Kaboompics.com The Internal Revenue Service is sending out holiday gifts this month to around a million people. The recipients are people who were eligible for, but did not claim, the 2021 Recovery Rebate Credit (RRC). By the end of next month, they should have the funds in hand, or directly deposited into their bank accounts. The maximum RRC amount is $1,400 per person, but the exact amount will depend on the individuals’ specific circumstances, such as income, filing status, and number of dependents. Overall, the IRS says it will be delivering about $2.4 billion to the eligible recipients.... Read more →
UPDATE, Saturday, Dec. 21, 2024: This afternoon, President Joe Biden signed the last-minute funding bill to keep the federal government operational through March 14, 2025. The U.S. Senate approved the slimmed-down bill in the very early morning hours today, following House passage Friday evening. Although the final passage and presidential signature came after Uncle Sam technically ran out of money to keep all his offices open, since the fiscal fail was on a Saturday there will be no practical effects. The continuing resolution was the final vote of the 118th Congress of the United States. And with that, Merry Christmas,... Read more →
Photo by Pixabay We’re heading into the home stretch, and playoff push, of the National Football League (NFL) season. It’s the most popular sport in the United States. Since the U.S. Supreme Court in 2018 okayed state-authorized sports betting, the NFL has gained new fans who are more interested in how the games can make them a few, or more, bucks. Currently, 38 states, along with the District of Columbia and Puerto Rico, have legalized some form of sports betting, though not all have implemented it. Now the National Council of Legislators from Gaming States (NCLGS) wants to help states... Read more →
Donald J. Trump signed 220 executive orders (EOs) the last time he was president. Some GOP lawmakers want him to end the IRS Direct File program by signing another EO to that effect on the first day he's back in the Oval Office next year. (Photo by Sean Spicer, White House Press Secretary via Twitter/Wikimedia Commons) Republicans who oppose the Internal Revenue Service’s online tax return preparation and e-filing program are hoping that it will end next month before the 2025 filing season starts. Direct File, the free online program expected to be available to qualifying taxpayers in 24 states... Read more →
You’re 73. You have a traditional IRA or other tax-deferred retirement account. You’ve yet to take your required minimum distribution (RMD). You better get to it. The deadline for most who are subject to this tax rule is Dec. 31. Here’s a quick RMD to-do list to help ensure you complete the task. As a bonus, there also are some suggestions on how to use the retirement money. Take out the mandated amount. Your traditional IRA or affected retirement account trustee should have been bugging you about this. It’s time to take the nagging seriously and withdraw your RMD. The... Read more →
Osarugue Igbinoba via Unsplash+ We're just weeks from New Year's Resolutions. Most of them involve ending bad habits, like smoking. Taxes already have helped here. Studies have shown people tend to give up this form of tobacco as the price of a pack of cigarettes increased due to states’ added excise taxes. That’s particularly true of young smokers who have less disposable income. Other nicotine addicts, however, find workarounds. While this tactic may satisfy their cravings, it damages the smokers’ health, stresses our medical systems due to increased smoking-related illnesses, and costs states needed revenue. Tobacco taxes tie smuggling: One... Read more →
What am I bid for the Internal Revenue Service top job? The IRS Commissioner seat isn’t actually on the auction block, but incoming president Donald J. Trump wants to oust the tax agency’s current leader and install an auctioneer. Billy Long, who also served from 2011 to 2023 as a Republican U.S. Representative for Missouri’s 7th district, never served on the tax-writing House Ways and Means Committee during his years in Congress. Long’s only apparent private sector tax background, per his X (formerly Twitter) @auctnr1 account biography, is as Certified Tax & Business Advisor in connection with the troubled COVID-era... Read more →
UPDATE, Thursday, Dec. 12, 2024: President Joe Biden today signed into law H.R. 5863, the Federal Disaster Tax Relief Act of 2023, which provides tax relief with respect to certain federal major disasters. Wildfires to the west, hurricanes to the east. An array of major disasters now are covered under a tax relief bill that, after more than a year, finally will be law. (Photo by Caleb Cook on Unsplash) A long-awaited disaster relief finally is headed to the White House, where President Joe Biden is expected to sign it into law and was signed into law by President Joe... Read more →
Photo by Pixabay I know it’s early December and you're already frazzled. Oh, wait. Maybe that’s just me. Even if you are a bit swamped like me, but still think you can make room for one more thing (I'm jealous!), the Internal Revenue Service wants to hear from you. Specifically, the tax agency is seeking new members for the Electronic Tax Administration Advisory Committee (ETAAC). And actually, you don’t have to decide right now. (Whew!) The IRS is accepting applications through Jan. 31, 2025. Even better for those who need to clear some items from their current to-do lists and/or... Read more →
DOGE's X (formerly Twitter) account banner Donald J. Trump has fulfilled one presidential campaign promise. He has named billionaires Elon Musk and Vivek Ramaswamy to head the Department of Government Efficiency, or DOGE. Now we’ll see if they can actually streamline the federal government and dramatically cut its costs. DOGE details: First, a quick look at DOGE. Despite its name, DOGE is not an official federal department or government agency, but rather a presidential advisory board. Trump noted that status in naming Musk and Ramaswamy as co-leaders, adding that they will “provide advice and guidance from outside of Government” in... Read more →
Stop me if you’ve heard this before, but for the Internal Revenue Service to do its best job collecting money for federal government programs, the agency needs adequate money. The perennial funding issue was once again the lead topic in the Internal Revenue Service Advisory Council's (IRSAC) 2024 annual report. The IRS collects 96 percent of all federal revenue, with around 85 percent of taxes owed paid voluntarily and on time, notes the IRSAC report. But while 85 percent is not a bad compliance rate, it’s been stuck at that level for two decades. That means the IRS needs to... Read more →
The anniversary comes as the Internal Revenue Service watchdog is awaiting confirmation of a new leader. The Internal Revenue Service is a perpetual target. Some want to eliminate it. Others want to add to its operations. Both of these groups often rely on data provided by the Treasury Inspector General for Tax Administration, or TIGTA, in making their divergent arguments. TIGTA was created as part of the Internal Revenue Service Restructuring and Reform Act or 1998 (RRA 98). The following year, TIGTA began carrying out its mandate to provide independent oversight of IRS activities. Now, the IRS watchdog is commemorating... Read more →
Will this higher cost across the country be enough to convince lawmakers to revise the $10,000 state and local tax (SALT) federal tax deduction cap? Before the Tax Cuts and Jobs Act (TCJA) of 2017 was enacted, I’d spend this time of year deciding whether to pay our home’s annual property tax bill by Dec. 31 or wait until its due date of Jan. 31 the following year got closer. It wasn’t just a cashflow decision. It also affected our tax filing. Or did, as I noted, before the Republican tax reform bill limited the amount of state and local... Read more →
Last month, the Internal Revenue Service issued its annual inflation adjustments for myriad tax provisions. The new numbers were released before the Nov. 5, so there was a bit of concern that these figures could dramatically change after 2025. The trepidation was based on the expiration at the end of next year of mostly individual tax breaks in the Tax Cuts and Jobs Act (TCJA) of 2017, the signature tax law in Donald J. Trump’s first term. Now, with Trump returning to the Oval Office in January, along with Republican majorities in the House and Senate, there’s a bit more... Read more →
Streaming fans in Louisiana soon could be paying more to watch their favorite shows and movies. This time, though, they can’t blame the services providing the programming. Their ire over more costly entertainment is due to Pelican State lawmakers who now are meeting in a special session to focus on Gov. Jeff Landry has proposed a reworking of Louisiana’s tax structure. More subject to sales tax: Part of the tax overhaul is an expansion of s part of targets subject to Louisiana’s 4.45 percent state sales tax. It would be levied on several digital products and services, including online news... Read more →
Unsplash+ in collaboration with Getty Images I haven’t yet seen any of those holiday car commercials with big red bows atop the gifted vehicles. But is a good time to start thinking of new transportation, particularly if you’re considering an electric vehicle (EV). That’s because under the second Trump Administration, and with the support of a Republican-led House and Senate, the $7,500 EV tax credit soon could be history. Trump's tax credit aversion: While Donald J. Trump has vacillated between loving or hating electric vehicles, he’s more consistently been opposed to them, or at least the associated tax breaks. "Tax... Read more →
Whether your dream retirement is traveling the world or enjoying your own backyard, you need to save now so you can enjoy it. One way to ensure your post-work years are golden is to take full advantage of tax-favored retirement plans. Regardless of who wins the White House, the Social Security system is going to get a lot of attention in the coming years. The aging population, combined with the much ballyhooed birth dearth, is going to put more pressure on Uncle Sam’s retirement program. Even if the new president and Congress can agree on ways to bolster Social Security,... Read more →
Before law changes, the now inflation-indexed Alternative Minimum Tax, known as the AMT, seemed to work like an ATM for the U.S. Treasury. When the AMT was created in 1969 to ensure wealthy individuals paid at least some tax, it wasn't indexed for inflation. Until that changed with the 2017 tax reform law, the AMT adversely affected a lot of less-wealthy taxpayers. (Photo by Ali Mkumbwa on Unsplash) What's worse than figuring your tax bill? Having to figure a second, higher, parallel amount you might owe. That's a situation that taxpayers who owe the Alternative Minimum Tax, or AMT, end... Read more →