Don't Mess With Taxes

Washington's capital gains tax proposals have people talking. On both coasts. In Washington, D.C., President Joe Biden's call for those earning more than $1 million to pay a 43.4 percent tax on their investment earnings instead of the current 20 percent tax rate has anti-tax lawmakers and lobbyists working overtime to stop it before it gets going. That total comes from a return to the pre-George W. Bush tax cuts ordinary income tax rate of 39.6 percent plus the 3.8 percent Affordable Care Act investment income surcharge. Meanwhile, around 2,350 miles to the west, a new capital gains tax on... Read more →

One of the many reasons that people hate taxes is that after the hassle of filing, then comes the fear that a Form 1040 mistake will mean an audit. The sort-of good news for taxpayers is that the Internal Revenue Service hasn't been auditing as many people in recent years. The agency has had other things to worry about, like doing its myriad jobs with fewer staff and less money. Then there's COVID-19, with added pandemic payments that the IRS is tasked with distributing. Things could be changing, though. More people are getting vaccinated, meaning the end of the coronavirus... Read more →

The tax world is full of instances that are different from the real world. There are quarterly estimated tax payments that don't align with our standard calendar quarters. There are birthdays that are considered having been celebrated earlier when we get older. And now there are financial transactions that aren't financial transactions, at least when it comes to cryptocurrency. IRS has crypto questions: Cryptocurrency, often referred to generally as bitcoin (the Kleenex tissue of virtual money), has been a target of the Internal Revenue Service for years. Most recently, the agency has focused on getting taxes due on crypto transactions.... Read more →

While GameStop's valuations captured a lot of attention because so-called ordinary investors were taking down the Wall Street pros, another investing sector also has been exploding. Cryptocurrency is riding a new wave of popularity, with a not-so-ordinary guy helping here, too. Elon Musk, who threw his social media support behind the video game retailer with his Gamestonk!! Tweet last month, now has helped push bitcoin's price sharply higher with pro-crypto tweets. That his electric car company Tesla adding $1.5 billion worth of bitcoin to its balance sheet also didn't hurt its value. Bitcoin's price rose last week to almost $60,000.... Read more →

A GameStop store in an Alaska mall, circa 2013. (Photo by Bentley Mall via Wikipedia Commons) GameStop is a struggling brick-and-mortar enterprise that sells video games, gaming merchandise and consumer electronics through its, for now, more than 5,000 retail stores across the United States. The Grapevine, Texas-based company has been the focus recently of stock market moves that have intertwined day traders, stock buying apps, novice and naïve investors, Wall Street hedge funds and lots of rich guys with social media accounts who can afford to fan the overheated investing flames. I'm a Boglehead buy-and-hold type of investor, so I'll... Read more →

UPDATE, Jan. 21, 2021: Congratulations to the owner of the $730.1 million winning Powerball ticket purchased in Western, Maryland. But there's still a chance for all us dreamers. The next Mega Millions jackpot on Friday, Jan. 22, will be at least $970 million — which would be the United States' third-largest lottery jackpot ever. Picking lucky numbers from a lottery game dispenser. More than $1 billion is up for grabs in the two nationwide lotteries. The Powerball jackpot is at $550 million. A solo Mega Millions winner will walk away with $600 million. Since I know you've got your lotteries... Read more →

We need to follow Santa Claus' example this month. Just as he checks his naughty or nice list, we need to check on tax moves to make by Dec. 31. It's December. 2020 and its craziness is almost over! Are you ready? Specifically, are you ready for the holidays? For those of us still committed to pandemic precautions, it's going to be a different, and yes, a bit less jolly, season. But one thing is the same as in previous Decembers. We still need to make some tax moves before Jan. 1. Some December tax moves will demand a little... Read more →

Welcome to Part 7 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. Today's post looks at next year's changes to Alternative Minimum Tax (AMT) calculations, as well as Social Security and nanny tax changes. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this... Read more →

Welcome to Part 6 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at how the annual changes help investors, high-earners and, eventually, estate heirs. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15,... Read more →

Whether you'll be on the road this holiday season or staying home, you still need to map out some year-end tax moves. (Photo by Mohan Reddy Atalu via Pexels.com) It's November, a month most of us welcome because of its cooler temperatures and annual holiday festivities. However, there's even more to think about in November 2020. The presidential election is just a few days away. Then there's the coronavirus pandemic, which means Thanksgiving plans for most of us are modified if not scrapped. If you find you're staying home this year as a health precaution, don't despair. Remember that it's... Read more →

Photo by Antonio Quagliata via Pexels.com The presidential election countdown clock it quietly ticking. In most national election years, the tax plans of the candidates get a lot of attention. Obviously, 2020 is not most years. Other things — OK, one thing, COVID-19 — have been the focus on the campaign trail. But it's still worth looking at the tax implications of a possible change in the Oval Office. GOP vs. Democratic plans: The Trump Administration will look to make permanent at least some of the Republicans' 2017 tax reform measure. The White House also has hinted at expanding some... Read more →

John McAfee's banner image on his Twitter account. If you've waiting until the upcoming October extension deadline to file, chances are you wanted the extra time to ensure that you got your filing right. That's smart. Making mistakes or overlooking tax breaks could cost you, not only money but also time if you end up having to answer Internal Revenue Service questions about your filing. And when an audit — or examination as the IRS likes to call the process — definitely doesn't go your way, you could end up in more trouble. That's what happened to John David McAfee.... Read more →

Donald J. Trump posted this photo in 2016 on Twitter, saying it represented the size of his tax return filing. When we got a glimpse of Donald J. Trump's federal 2005 tax year filing back in 2017, one thing was very clear. Trump's personal tax situation is why during his initial presidential campaign he called for the elimination of the federal Alternative Minimum Tax (AMT). The New York Times' recent exposé of more than two decades of Trump tax information, underscores his adversarial relationship with this parallel tax system. In the few years that Trump did pay federal income tax,... Read more →

Meanwhile, the rest of us regular taxpayers say thanks for the offer and, as Tax Day 2020 looms, continue to look for ways to keep from paying so much on our nowhere-near-a-million earnings. If you're still working on your tax return instead of jetting off in your private plane to a luxury destination, then you might agree with the latest tax-the-rich plea. You also might need some of the tax-saving tips listed later in this post. With July 15, aka coronavirus Tax Day 2020, looming, millions of taxpayers are scouring their records and the tax laws looking for ways to... Read more →

Former Vice President Joe Biden meeting supporters in Iowa last year in the early days of his campaign. Now he's the Democratic presidential nominee. His and opponent Donald Trump's tax plans will be a part of the election discussions. (Photo by Gage Skidmore via Flickr) It's a done deal. Former Vice President Joe Biden will be the Democrat challenging Donald J. Trump this November for the White House. Biden secured enough delegates last week to formally become the Democratic nominee on the first ballot at the party's convention. That official imprimatur will come in August at the Democrats' combined in-person... Read more →

GivingTuesday.org Hello Giving Tuesday. No, the world has not gone so thoroughly whack that we've jumped to the Tuesday after Thanksgiving. Rather, because of the unprecedented, and unexpected, need caused by the coronavirus pandemic, the creators of Giving Tuesday are encouraging those who can afford to give to participate in Giving Tuesday Now. As in today. This new global day of giving is in addition to the fall event, which has been around since 2012 and is scheduled this year for Dec 1. Potential charities, philanthropic activities:"We believe that generosity has the power to unite and heal communities in good... Read more →

Reviewed and updated May 1, 2021 Image via Fotolia You're doing your part to help flatten the coronavirus transmission curve. You've been sitting at in your house for weeks. (Thanks, streaming services!) You're washing your hands so much, they're raw. (Moisturize, too. It's an added coronavirus prophylactic.) You're providing lessons and activities for your now home-schooled kiddos. (Take into account your child's needs and personality and take advantage of the many online resources.) But you want to do more. Specifically, you want to help others who aren't in such relatively good situations as you and yours. Thank you! There are... Read more →

Friday the 13th scares a lot of folks, but there are some tax breaks that are almost as cuddly as this ebony kitten. It's another Friday the 13th, but the last thing we need in March 2020 is more stuff to worry about. So what's better help take our minds off the very scary COVID-19 pandemic and all its ramifications — like no sports to divert our attention! — than taxes? Yes, taxes. Really. There's no word yet as to whether the April 15 filing deadline and any due tax payments will be extended. But there still are a lot... Read more →

For folks with money in the stock market, the coronavirus' effect on their holdings is more terrifying than Michael Myers, the persistent slasher of "Halloween" horror movie fame. I confess. I've been glued to cable TV financial channels this week. They're showing, for owners of stocks, a real-life horror movie. The evil and infectious COVID-19 monster is maniacally slashing investment gains. Who or what can show up (soon, please!) to stop this crazed killer of our planned comfortable retirement? OK, I might be taking this sequel — and that's what it is; market corrections and recessions have happened before —... Read more →

Having plenty of money apparently also has some drawbacks. Really. One is that you could soon get more attention from the Internal Revenue Service, especially if you've been, shall we say, a bit lax in letting Uncle Sam know about your how well you're doing. The IRS announced today that it will be sending agents to visit taxpayers who haven't filed returns or didn't do so in a timely manner in 2018 or previous years. These particular in-person tax inquiries, according to the IRS, will be on those whose income is $100,000 or more. Audit income disparities: These in-person audits... Read more →