Very few of us share the same tax circumstances. However, there is one thing every taxpayer can agree on. We all want to pay the least amount of federal tax as possible. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a major way of reducing our annual tax bill. But wait. There's more. There are the adjustments to income, listed on Form 1040 Schedule 1 and still known as above-the-line deductions. You can claim all of these 25 tax breaks regardless of whether you itemize or take the standard deduction.... Read more →
Retirement
With some tax planning now, along with some help from tax-favored accounts, you can ensure your retirement is full of smiles, love, and flowers. (Photo by RODNAE Productions) It's always a good time to start saving for your eventual retirement. The U.S. tax code helps via a variety of tax favored retirement options. And the Internal Revenue Service helps every year by making cost-of-living (COLA) adjustments that boost the amounts you can put into your post-work accounts. The tax agency today announced how much you can stash in 2023 in tax-deferred — or tax-free — retirement accounts and pension plans.... Read more →
No person, place, or animal is left untouched after a natural disaster. Florida's cattle ranchers and other agribusinesses were slammed by Hurricane Ian. (Photo by Jo-Anne McArthur on Unsplash) Hurricane Ian hit southwest Florida around three weeks ago. The deadly storm moved across that state, and then, after entering the Atlantic, curved into the Carolinas for a second U.S. landfall. People are still in shock. Some are dealing with property still underwater. All are worrying about how they'll recover. The federal government, through the Federal Emergency Management Agency and Small Business Administration, is offering relief programs. Some folks are looking... Read more →
The Social Security Administration (SSA) gave retirees and other recipients of the program's payments good news this week. Next year, they'll get an 8.7 percent cost-of-living increase. That's the highest in more than 40 years, and comes on the heels of this year's bump that, at the time, was the largest retirement benefits bump in decades. Some higher earners, however, aren't so happy. Today's SSA announcement also noted that the amount of income subject to payroll taxes also is going up in 2023. This amount, known as the Social Security wage base, is the maximum earnings, by both salaried workers... Read more →
Photo by Alexander Grey on Unsplash Millions of people whose student loan debt will be wiped out now face another financial question. What to do with a bit more disposable income. Financial advisers suggest they pay off other debt, such as high-interest credit card balances. That's a smart move. So is the recommendation that folks put their newly available former debt payments into an emergency fund. I'd like to also toss out there the option of saving for retirement. As an added bonus, most retirement account options offer some sort of tax benefit. Here are some tax-favored retirement-saving possibilities that... Read more →
Financial advice for older people also should include planning for taxes on Social Security benefits, unless a House bill to end that process passes. If you're of a certain age (confession: I am), you're likely getting lots of notices about the possible hike in 2023 of Social Security benefits. At one point, prognosticators were saying it could be as much nearly 11 percent. However, the recent easing of inflation lessens the likelihood of a double-digit percentage bump. The latest prediction is a 9.6 percent bump. Still not bad. Most folks who get Social Security benefits will welcome any increase in... Read more →
The Internal Revenue Service is under scrutiny again, this time for conducting unusual and intensive audits of two top FBI officials who were critical of Donald J. Trump. The IRS has asked the Treasury Inspector General for Tax Administration (TIGTA) to investigate how former FBI director James B. Comey and his deputy, Andrew G. McCabe, both were subjected to a rare, compliance research audit that is supposed to random. Congress also will get involved. Rep. Bill Pascrell (D-New Jersey) already, and repeatedly, has taken IRS Commissioner Charles Rettig to task for IRS shortfalls and missteps. In May, during a hearing... Read more →
Image by Wokandapix from Pixabay The 2022 calendar aligned this year so that July 4th provided many of us with an extra-long holiday weekend. But the fireworks are over and, sadly, we'll never be independent of taxes. So it's back to work this first week of July, and back to making tax moves that can at least keep a few more dollars out of Uncle Sam's clutches. Here are five to consider this July. 1. Note the taxable driving change. If you use your vehicle for business or medical travel, that tax benefit got a bit better on July 1.... Read more →
If you added cryptocurrency to your investment mix, things have not been as fun as they were when the digital asset first burst upon the scene. Sure, markets go up and down all the time. But crypto has, for the most part, crashed, if not totally burned. Crypto's volatility and unproven long-term track record is why many advisers have warned against putting it, or putting just a little, into portfolios. Some crypto fans, however, are willing and eager to own it. In fact, they want to go all in and add it to their retirement savings. That retirement plan possibility,... Read more →
Plus, a look at when Uncle Sam gets to tax some of the federal retirement payouts he distributes. The U.S. economy might be slowing down a bit, but people still are finding jobs. May's unemployment figures, released by the Bureau of Labor Statistics on June 3, showed a slight increase in jobs. That kept last month's unemployment rate at 3.6 percent, just above the lowest level since December 1969. Work data for last month also showed that the jobless rate, the federal government's employment count that includes those not looking for work and those holding part-time positions for economic reasons,... Read more →
I have a stock app on my phone. Yeah, that's it above, with all those ugly, jagged red lines. I'm smart enough not to get alerts, but now and then when I check other news, I see it. Like today, which got me thinking it's time to delete this piece of electronic info, at least for a while. But while I'm not enjoying the prospect of delaying the start of my golden years, the declining stock market is good news for some retirement account owners. If they have traditional IRAs, the current down market could be a good time for... Read more →
One of our neighbors made sure we all knew they had a new, cool graduate. (Photo by Kay Bell) I swear, my nieces and nephews were just in kindergarten. And wasn't that neighbor kid trick-or-treating as a dinosaur a couple of years ago? So how am I getting high school and college graduation announcements for these young people? Most of them will get a nice, actual paper congratulations card. A few will find a gift card tucked inside. However, a couple of these newly minted young adults will get actual gifts. But they won't be items that have to wrapped.... 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 →
Photo by 401k2012 via Flickr CC April 18 isn't just the day you must file your 2021 tax return and pay any tax due. This fast-approaching Tax Day also the deadline to make a 2021 tax year contribution to your individual retirement arrangement (IRA), either a traditional or Roth account. For 2021, you can contribute up to $6,000 to your traditional or Roth IRA. If you're age 50 or older, you can add another $1,000 as a catch-up contribution. If you have the cash, or expect to get a refund that could replace the money you use for your IRA,... Read more →
Did you turn 72 in the last half of 2021? Happy belated birthday, from me and the Internal Revenue Service. My late wishes are because I'm a nice person. The IRS' greetings, which also might be as sincere, also are because your septuagenarian milestone could mean money for the U.S. Treasury. That birthday is the deadline for taking a required minimum distribution, or RMD, from certain tax-deferred retirement savings accounts. And if you celebrated that momentous day in the last half of last year, but didn't take an RMD in 2021, then you have just a few more days to... Read more →
Since the Tax Cuts and Jobs Act (TCJA) of 2017 nearly doubled the standard deduction amounts, even more people have chosen to use that filing method. IRS data indicate that close to 90 percent of us have opted not to mess with itemizing. But dumping the Schedule A doesn't mean you give up all deductions. On tax year 2021 returns, you can claim some of your cash charitable deductions directly on Form 1040. And if you take a look at Schedule 1, one of the documents that the Internal Revenue Service created to accompany Form 1040 when the TCJA took... Read more →
Scenic overlooks, like this view of the Austin skyline from my suburban neighborhood, can be lovely. But when it comes to taxes, you don't want to overlook tax breaks. (Photo by Kay Bell) If you're like most taxpayers, when you finally decide to do your taxes, you want to get it over with as soon as possible. But don't pay a price for you haste. If you rush through filling out your Form 1040, you could cheat yourself out of some tax savings. It happens every year. Folks overlook deductions, whether they itemize on Schedule A or claim above-the-line breaks... Read more →
Photo by Bich Tran from Pexels Sure, taxes are due on April 18 (this year), but March is big tax month. Today is the start of the final full month before your 2021 return — and, if you owe, any tax — is due. That means there's still time to take some steps to help shave some off that possible tax bill. Here are five March tax moves, mostly retirement related, to consider. 1. Open or add to your traditional IRA. You can put money into any IRA, traditional or Roth, by Tax Day and designate it as applying to... Read more →
I got my first tax statement today, a 1099 for some freelance work I did last year. That's just one of the documents that millions of taxpayers are awaiting so they can file their tax year 2021 returns. In addition to income statements, such as the 1099-NEC I got, 1099s with details on investment earnings, and W-2 forms for folks with wage-paying jobs, there are beau coup documents reporting tax-related transactions. Among the most common are forms detailing home related mortgage interest and taxes paid from escrow accounts, retirement account distributions, prize and gambling winnings, and in some cases, health... Read more →
You made it through the hectic December holidays. Congratulations. But don't slow down now. You still have to accomplish a few final year-end tax tasks. I know, not how you want to spend the last few days of the year. But these 6 year-end tax moves could save you some money, either when you file your 2021 return next year or down the tax road. 1. Don't miss the RMD deadline. You're enjoying your well-deserved retirement thanks to all those years of savings. Don't mess things up now by missing your required minimum distribution (RMD). This withdrawal from tax-deferred retirement... Read more →