Don't Mess With Taxes

View from the Astros' dugout in Minute Maid Park. (Photo by Kay Bell) The National Basketball Association's (NBA) championship series is on and, at least to this casual fan, surprisingly competitive. Major League Baseball (MLB) has started its second-half, with my two favorite teams at polar opposite ends of the playoff picture. National Football League (NFL) players will report to training camps this month. But aside from summer crossover, there's one other thing professional sports teams have in common. The billionaire owners of major league sports franchise owners are always the winners, even when their teams lose. How? By utilizing... Read more →

Some of the world's billionaires are looking to escape earth, but for those who like terra firma, New York City is home to most of the world's richest people. (Photo of lower Manhattan skyline by MusikAnimal via Wikimedia Commons) Richard Branson today proved yet again how different the rich are from you and me. The British billionaire owner of Virgin Galactic and three spaceplane crewmates reached suborbital heights on Sunday, July 11, before gliding back to earth. I was once a child with a dream looking up to the stars. Now I'm an adult in a spaceship looking down to... Read more →

We regular folks tend to have a complicated relationship with the wealthy. And by complicated, I mean one-sided, unrealistic, and too often reverential. Being aspirational, we love to gawk at what they can get away with because of their money, and dream of one day being in their Manolos and mansions. That's fueled way too many not-really reality shows. Such hopes also are a big reason scammers can convince wealthy wannabes to fall for schemes that peddle false hopes of large tax deductions. In real-life tax reality, these dodges simply are a way to push hopeful taxpayers further away from... Read more →

Photo of John McAfee shared by his wife earlier this year as part of a Twitter post arguing for his release from a Spanish prison. Last week, millionaire software developer John McAfee was in a Spanish court arguing that he shouldn't be extradited to the United States to face tax evasion charges. Today, MacAfee was found dead in his cell at a Barcelona-area jail. There's no official word on the cause of death. News reports, however, say a preliminary investigation found no signs of foul play. Early indications are that McAfee hanged himself. Hours before the discovery, Spain's National Court... Read more →

While one accused wealthy tax cheat awaits a Spanish court's decision on whether he'll be returned to the United States to face charges, U.S. lawmakers look for ways to snare more rich tax evaders. Or at least get more from them up front. Rather than letting the wealthy have more money to burn, efforts are underway in Washington, D.C., to make it easier to catch rich tax scofflaws, as well as to simply tax them even more. Billionaires who've managed to use tax laws to avoid paying any tax have been getting even more attention lately. Some wealthy people, however,... Read more →

ProPublica's recent article on how little — sometimes nothing — that rich people pay in taxes was not a revelation. It's long been known that the tax code is full of loopholes, which aren't necessarily illegal. Equally acknowledged is that the super wealthy can afford high-dollar tax professionals to find and put these tax breaks to work. Still, the trove of Internal Revenue Service information from, per the investigative journalism nonprofit, "the tax returns of thousands of the nation's wealthiest people, covering more than 15 years" has captured the fancy of all us fellow and much less well-off taxpayers. It's... Read more →

Joe Biden's campaign slogan "Build Back Better" now is part of his presidency's agenda. Many promises he made in 2020 now are part of the Biden Administration's first federal budget proposal. President Joe Biden's first federal budget proposal, which is for the 2022 fiscal year that starts Oct. 1, comes in at $6 trillion, detailed in more than 1,700 pages. The White House projects its changes will bring $3.6 trillion to the Treasury over the next decade. It also projects a $1.84 trillion deficit. That's a substantial number, up from 2019's $984 billion deficit, but a sharp decrease from the... Read more →

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 →