Photo by Karolina Grabowska Interest payments are a part of almost every person's life. If you carry a credit card balance, you pay interest on it. If you have a mortgage, interest is probably the largest (but, for now, still tax-deductible) part of your monthly payment. And if you don't pay all the federal tax you owe on time, interest adds to you total U.S. Treasury bill. But with taxes, the reverse also is true. When the Internal Revenue Service is slow in getting your overpayment processed, your refund will include interest payments to you. And right now, due to... Read more →
Shout Out
For more than 50 years, the U.S. Small Business Administration (SBA) has celebrated National Small Business Week, which recognizes the contributions of America’s entrepreneurs and small business owners. The theme for this year's week, which wraps up today, May 7, is Building a Better America Through Entrepreneurship. As part of the May 1 through 7 recognition of small businesses, SBA Administrator Guzman visited nine cities across the United States to participate in, along with SBA local office personnel and local elected officials, celebrations of the country's 32.5 million small businesses. Since taxes are a critical component of small businesses, the... Read more →
Photo by Kampus Production via Pexels. Here in Austin, we're in the midst of doing our civic duties. In between the March primaries and late May runoffs from inconclusive races in that voting session, residents of the Lone Star State's capital are deciding on a trio of ballot questions. Two deal with property taxes. The third asks, in part, if we Austinites would like to eliminate enforcement of low-level marijuana offenses. There's a statue of Willie Nelson in downtown Austin. What do you expect the result to be? Toking in Tejas: Joking aside, Austin is just one Texas city that's... Read more →
Most U.S. taxpayers made it through Tax Day 2022. They either filed their 1040 forms, or they got an extension to submit their returns by Oct. 17. The Internal Revenue Service reported that by April 15, which usually is the annual filing deadline, but was pushed to the next business day by Washington, D.C.'s Emancipation Day holiday, it had received more than 122.5 million returns. That's around 73 percent of the people who filed in 2020 and 2021, when filings exceeded historical averages. The count was higher those years because people who normally weren't required to send in a return... Read more →
Photo by Vidal Balielo Jr. via Pexels Filing status is one of those tax matters that seems so simple, but which often trips up taxpayers in real life. As noted (shameless plug warning) in my 5 filing status choices item for the April Tax Tips page, most folks' status stays the same from tax year to tax year. But a change (or two, or more) in your personal situation could mean you need to revisit how you file your return. The head of household (HoH) status is a frequent source of confusion. Here, an unmarried person takes care of the... Read more →
Photo by RODNAE Productions from Pexels Tax Day 2022 is just more than a week away, and based on Internal Revenue Service filing statistics, millions of us need to get to work. Uncle Sam's tax collector says the nearly 92.3 million filings it received through April 1 are running about 2 percent behind last year's numbers. Using 2021 numbers for comparison, that's more than 77.8 million unfiled returns so far this year. Of course, last year's filing figure is larger than previous years since millions who weren't required to submit returns did so that they could get COVID-9 economic impact... Read more →
TAP members grace the cover of the federal advisory panel's 2021 Annual Report. As the annual tax filing (and payment) deadline nears, complaints about the process increase. It's a natural reaction to the frustration of dealing with our complex tax code, especially these last three years that have been complicated by COVID-created deadline changes, delays, and new laws. Some folks, however, want to do more than grumble. They want to be a part of making the tax system better. They are the volunteer members of the Taxpayer Advocacy Panel, or TAP. And that group now has some new members. 2022... Read more →
No-cost help fulfilling our annual tax-filing obligations has always been a better slogan than a reality. We are just about three weeks away from Tax Day 2022. This is our third consecutive coronavirus-tinge tax filing season, but things seem (fingers crossed!) to be going relatively well. As of March 18, the Internal Revenue Service had received more than 72 million returns. Almost 70 million of those 1040s arrived electronically. The IRS doesn't break out in its regular filing season statistics how many of the e-filings were submitted by users of its Free File option. That number, however, is likely to... Read more →
Photo by Anna Shvets from Pexels Inflation is the biggest domestic, and political, concern right now. And after months of waiting, the Federal Reserve's expected reaction to rising prices came last week. The board members of the United States' central bank raised interest rates on Wednesday, March 16, for the first time since 2018. The bump of a quarter percentage point to its benchmark rate is the first of expected increases to combat the country's highest inflation in four decades. When all is said and done, most financial observers say the previously near-zero interest rates to be near 2 percent... Read more →
Ready to take a break from your 2021 taxes? I have just the diversion. You can read all about the tax legislation that was enacted during the 116th Congress. Wait! Come back. It's a good timeline look at recent tax breaks and changes, some of which still affect our 2021 tax returns. During that session of Congress, which began on Jan. 3, 2019, and ended on Jan. 3, 2021, the House and Senate sent 344 bills to the White House that were signed into law. Since this is a tax blog, our attention is on those bills/laws that had an... Read more →
Abandoned Russian tank in Ukraine (Rob Lee via Twitter) The Russian invasion of Ukraine is the latest reminder that wars have been around as long as humans. Taxes also have been part of the clashes, either fighting against them as in the American Revolution, or countries' creating or increasing them to pay for the battles. So it's no surprise that taxes have captured public attention — OK, the social media tax community's attention — as Ukrainians fight to keep their nation out of Vladimir Putin's hands. Specifically, it's the announcement by Ukraine authorities that citizens who have seized Russian tanks... Read more →
Even before Russia invaded Ukraine, gasoline prices in the United States were going up due to that Econ 101 basic supply and demand. During the COVID-19 pandemic, more U.S. workers starting doing their jobs remotely. Working from home meant no commuting, so fewer vehicle fill-ups. Oil producers, notably the OPEC (Organization of the Petroleum Exporting Countries) cartel, responded by cutting production sharply in 2020. Since then, things have returned to, for lack of better words, more normal. Demand for oil and products like gasoline has surged since pandemic lows. But production has not kept up. More people wanting a scarce... Read more →
via GIPHY Getting fired is never fun. Most of us have been there or have a family member or close friend who's lost a job. Sometimes people get let go when they're paying for services. It happens every year at accounting and tax preparation offices across the United States. The reasons tax professionals cut some taxpayers loose are many and varied, as I blogged about years ago in my posts Are you a good or bad tax client? and Bad tax clients, revisited. All types of troublesome taxpayers: Sometimes, famous customers get dumped, too. Recent case in point, Donald J.... Read more →
The winter Olympics are still going on, and I'm particularly thrilled about the "old" man of 40, Nick Baumgartner, finally winning his first medal after tries in four of the global games. And a gold at that! It was the second gold for his mixed snowboard cross teammate Lindsey Jacobellis, who until Baumgartner's win, was the oldest winter games winner at age 36. Congrats, but sorry, Olympics athletes. Here in the United States, we'll be taking a break this weekend. The Super Bowl is Sunday. And you know what that means. Betting on the National Football League championship game. Prop... Read more →
Photo by Andrea Piacquadio from Pexels The continuing Joe Rogan Spotify podcast controversy also has refocused attention on the streamer's relationship with musicians. Supporters of Spotify and other mainly music subscription services — Apple Music, Tidal, and Amazon, to name a few — say streaming rescued the music industry by providing it with regular monthly revenue. Opponents of the services say industry is the key word. The big winners, they point out, are the streamers and large record companies, while the artists who make the music aren't benefiting unless they are at the superstar level. Think Taylor Swift, Beyoncé, Ed... Read more →
Photo by RODNAE Productions from Pexels Cryptocurrency's popularity skyrocketed during the height of the COVID pandemic. Celebrities endorsed it. Athletes and government officials embraced it. So, of course, more of the less famous added the virtual money to their portfolios. Then 2022 arrived. The value of most cryptocurrencies has plummeted in recent weeks, wiping out billions of dollars of wealth. But the bad news doesn't stop there. Now it's tax time. IRS' increasing interest in crypto: The digital money's growing acceptance naturally attracted the tax man's attention. The Internal Revenue Service says that for tax purposes, crypto is treated property.... Read more →
The Internal Revenue Service will go beyond its current multifactor authentication online access protocol when it comes to signing in to taxpayer accounts. The Internal Revenue Service continues its efforts to get more of us to interact with it electronically. It also wants to make sure those transactions are secure. So later this year, the IRS is implementing a new security protocol for folks who want to set up or manage an online taxpayer account. But it appears, at least based on anecdotal online and social media reactions, that the move might backfire. More steps to get info: Last week,... Read more →
Photo by Andea Piacquadio from Pexels Back in olden times, taxpayers put their literal signatures on the 1040 forms they filed with the Internal Revenue Service. Now, most of us electronically sign our tax returns. Regardless of which method you use, the end result is the same. If you don't sign your tax return, it's not a valid submission. That oversight cost one expatriate couple $12,697 in tax refunds. The loss recently was affirmed the Federal Circuit Court of Appeals. The ruling gets this weekend's Sunday Shout Out. I'll let you read it yourself. It's not that long (just nine... Read more →
Photo: United Van Lines Our house is at that age where it needs a lot of care to continue to be comfortable. That's led to more frequent discussions about whether to stay or go. I'm the nester in our family, and was the one who pushed for buying our place almost 17 years ago. But a couple of times recently, like when our main HVAC unit needed to be replaced, I've argued for just selling and letting the new owners deal with it. The hubby has been able to talk me down so far. He also knows that as much... Read more →
I know I said this last year, but once again, I have never been so ready for a fresh start! The last two years were full of chaos, COVID-19 and otherwise, that affected every part of our lives, taxes included. So, recoveries from a New Year's Eve of hearty partying notwithstanding, let's get right to 2022 taxes! April Tax Day, but not the 15th: This year, the Internal Revenue Service is aiming to get back on a more normal cycle. Tax Day 2022 is in April. OK, it's on Monday the 18th instead of the 15th, but still. The three-day... Read more →