Any kind of saving is good, but for your retirement, a better option is a workplace retirement plan or IRA. A new Saver’s Match will help some when it takes effect in a couple of years. (Photo by Diane Helentjaris on Unsplash) The Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted at the end of 2022, includes a notable change in how eligible individuals can collect the Saver’s Credit. This tax credit turns contributions to popular retirement plans, which already are tax-favored, into addition funds. Qualifying lower- and middle-income savers who put $2,000 into an Internal Revenue Service-authorized... Read more →
Retirement
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 →
When making retirement plans, be sure to include how taxes might affect your ability to spend your golden years the way you want. Taxation of Social Security is getting a closer look this year, mainly because the Republican presidential nominee has suggested ending the current federal tax paid by some retirees on up to 85 percent of their benefits. A handful of states also tax the federal retirement benefits that their residents receive. This is the case in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Those nine Social Security taxing states are this weekend’s... Read more →
Keeping track of your finances when you're older can alert you to the possibility that you might owe tax on some of your Social Security benefits. Most of us look forward to retirement. Some of us also get a tax shock once we start collecting Social Security. Some of our federal retirement benefits, in some cases as much as 85 percent of our annual payout, could be subject to federal taxation. Not only is that tax an unwelcome surprise to older taxpayers, it also has become part of the current presidential campaign “Seniors should not pay tax on Social Security,”... Read more →
Photo by Keith Luke on Unsplash Congratulations to this year’s high school and college graduates. Walking across that stage and getting that diploma is a ceremony they and their families have long waited to experience. So what, besides sincere well wishes, do you give the graduates in your life for reaching this milestone? There are lots of gifts that can help young adults as they head off to college or into the work world. My personal favorite when I was that age was cash. (Truth be told, it still is my preferred present!) If your favorite graduate is like me,... 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 →
You don’t like the taxes being withheld from your paychecks, but at least you know your tax money is going to fund government services. Most of the time. In some cases, those responsible for getting income and other payroll taxes to Uncle Sam don’t comply with their legal responsibility to collect and deliver the funds to the Internal Revenue Service. Nearly $2.7M unremitted tax: It’s that delivery portion that’s usually the bigger issue. And that’s what a Maryland woman pleaded guilty to today. The woman, whose name is in the official Department of Justice complaint filed back in January, but... Read more →
Getting a tax refund can feel like it's raining money. (Photo by Eugene Lisyuk) You filed your taxes, and now are awaiting a refund. The Internal Revenue Service's data shows the average it had issued as of April 5 was $3,011. That three grand average is a nice chunk of change. Even a smaller amount is welcome. So, what are you going to do with that money? Everyone's personal, financial, and yes, tax, needs are different. But here are some suggestions for all y'all getting a refund. 1. Open or add to a savings account or emergency fund. I know,... Read more →
Photo by Zachary Keimig on Unsplash The Internal Revenue Service is processing millions of returns that are coming in as Tax Day for the main 2024 tax season nears. But thanks to added Inflation Reduction Act money, the tax agency also is looking more closely at some returns. It recently resumed sending automated notices that had been on hold since February 2022 due to COVID-19 pandemic problems. And it got even more attention when IRS Commissioner Danny Werfel announced that his agents were going to crack down on individuals who use corporate jets for personal travel jets. While most of... Read more →
A scenic overlook is always worth a stop when traveling. But when it comes to taxes, you definitely don't want to overlook tax breaks that could save you money. (Photo by Gary Yost on Unsplash) There are two ways to reduce your tax bill. You can take deductions, which reduce the amount of your money that's taxable. You also can claim tax credits, which cut any tax you owe dollar-for-dollar, and in a few cases get you refund. The options are not mutually exclusive. But they don't do you any good if you don't claim the ones to which you're... Read more →
Did you turn 73 last year? Belated happy birthday wishes. Now here's an important tax question about that septuagenarian celebration. Did you take your first required minimum distribution (RMD) from your tax-deferred retirement funds by the end of 2023? If the answer is no, then you've got to withdraw that mandated amount by next Monday, April 1. No fooling. Miss that RMD deadline date, and you'll owe Uncle Sam more money than just the tax due on your withdrawal amount. Ending tax deferral days: The Internal Revenue Code offers myriad tax benefits for retirement savers. Several of them provide tax-deferred... Read more →
March's arrival means it's time to start stalking some tax savings. (Photo via Unsplash+ in collaboration with Getty Images) While the saying that March comes in like and goes out like a lamb usually is a reference to this month's weather transition from winter to spring (or, here in Central Texas, to summer already), feline aggressiveness could come in handy at tax filing time. There are plenty of tax moves you can make during this final full month before Tax Day, which is this year is the normal April 15 due date. Here are five tax matters to consider in... Read more →
Consistent contributions to tax-advantaged retirement accounts can help them grow from seedlings to a solid and sizeable amount of money for your post-work years. (Photo by micheile henderson on Unsplash) The stock market has been on a roll, rather than a roller coaster, of late. On Friday, March 1, The Nasdaq recorded its first record close in more than two years. The Dow and S&P 500 are off to their best start to a year since 2019. That's more good news for investors, particularly those whose holdings are in retirement accounts. These savers already saw their retirement vehicles achieve their... Read more →
You're ready to file your tax return, but there's one problem. You don't have all the statements you need to complete your Form 1040 and associated schedules. Many of us, however, are just going to have to be patient for a couple more weeks. While some issuers have sent taxpayers the required statements, many don't get them out until close to, in most cases, the mandated Jan. 31 delivery date. The documents typically are snail mailed, but technology is gaining ground. Issuers of most of my annual tax statements now let me know by email the documents are ready. Then... Read more →
Now that we know the Internal Revenue Service will start processing our 2023 tax returns on Jan. 29, taxpayers are thinking about how they'll deal with this annual filing task. Many taxpayers are concerned about tax law complexity. Some are looking for the most tax breaks that will get them a big refund. Others worry about the cost of filing. And all of us just want the process completed as painlessly as possible. Regardless of your tax concerns, you have lots of filing options. Here's a quick overview. Go pro: You can hire a tax professional, either an independent tax... Read more →
Photo via Unsplash+ in collaboration with Monika Grabkowska Happy New Year! I know, it's already two days old, so I'm a bit late. But I'm cutting myself some slack since it's the first work day of the year after a three-day holiday. I'm also cutting myself some slack when it comes to annual resolutions. I'm not making any. It's not that I'm opposed to setting goals. But I hate that annual judgy list. I'm still working on some prior year intentions, so I don't see a need to add to my tasks. If you, however, like to start off each... Read more →
Even if you're not a cat, you can appreciate Boxing Day as a way to help others by making charitable donations. Happy Boxing Day! This holiday isn't formally celebrated in the United States, but many people around the world embrace the day after Christmas as a way to keep the season of giving going a bit longer. There are many explanations as to how Boxing Day, and its name, came to be. One commonly accepted origin story is that when it began in the United Kingdom during the Victorian period, household servants were given the day after Christmas off as... Read more →
To ensure you have the type of retirement you want, you must do some calculations, including figuring how your required minimum distributions fit in, financially and tax-wise. (Photo via Unsplash+ in collaboration with Getty Images) Retirement savings can make a big difference in how enjoyable your post-work years will be. If you have tax-deferred retirement accounts, those savings also present new tax responsibilities once you reach a certain age. Some money in a traditional IRA that's been out of the Internal Revenue Service's reach for years must be taken out as a required minimum distribution, or RMD. Uncle Sam also... Read more →
You have a lot to do, and which you'd rather be doing, this month. But also take some time to check out a few December tax moves. (Photo via Unsplash+ in collaboration with Getty Images) It's December! Are you ready for all the decorating and shopping and cooking and parties and tax moves to make? Me neither. Although I love the holidays and Christmas decorating, my time and patience get shorter this time of year as my seasonal to-do list gets longer. So I understand if you are rolling your eyes right now as I suggest adding some tax moves... Read more →
Are you enjoying Thanksgiving? I hope so. And if your Turkey Day celebration extends, like it does for most of us, into Friday and the weekend, Happy Beyond Thanksgiving! But when you're ready (or forced) to get back to your regular routine, you might want to make time to consider the items in the box below: five tax turkeys and how to avoid them. A few relatively easy tax moves in these areas could help make your tax life easier. 2023's Tax Turkeys 🦃 🍗 🦃 to Avoid Not adjusting your incorrect withholding Not collecting your employer's maximum 401(k) match... Read more →