Remember back in January when I listed 6 reasons why you should wait to file your federal tax return? The Internal Revenue Service has come up with a new one for taxpayers in several states. Specifically, the IRS is telling individuals who last year received special state-issued payments to help offset higher inflation costs to wait before submitting their 2022 federal 1040s. The reason for the delay? The IRS must decide how much, if any, tax it's going to collect on the state relief amounts. Residents in 17 states awaiting IRS word: Officials in 17 states last year issued inflation-prompted... Read more →
State/Local
Photo by RODNAE Productions Last year, as the country started emerging from COVID-19 closures, the Internal Revenue Service joined the resocialization. It opened some of its Taxpayer Assistance Centers (TACs) across the country so individuals could get some face-to-face tax help, no appointments needed. That resumption of more-normal taxpayer interaction was such a success, the agency is doing it again this 2023 filing season. For one Saturday a month, beginning in February and continuing through May, TACs in 46 states, the District of Columbia, and Puerto Rico will be open on four upcoming Saturdays, from 9 a.m. to 4 p.m.... Read more →
The Internal Revenue Service has its own Groundhog Day, but it's not limited to just one specific 24-hour period. Most often, this re-do of a tax return is when you find you made a mistake on your original Form 1040. The do-over is accomplished by filing Form 1040-X, an excerpt of which is shown below. See more tax forms and more about them at 2022's Talking Tax Forms and Tax Forms 2023. Fix errors: Nobody's perfect, and the annual filing season underscores that for many of us. When we do make a mistake on our taxes, filing an amended return... Read more →
The first week of the 2023 tax filing season is in the books. But there are lots of other tax dates to look forward to, or at least be aware of, this year. As happens every year, there are the normal conflicts that delay some of them a bit. They are the traditional deadline shift the Internal Revenue Service institutes when tax due dates fall on weekends or federal holidays. The original date gets bumped to the next business day. The legal holidays in 2023 that could affect tax deadlines are — January 2, New Year's Day (observed) January 16,... Read more →
Photo by Dewang Gupta on Unsplash In 2019, the Internal Revenue Service received nearly 156 million tax returns. Then came the COVID-19 pandemic. In 2022, the number of 1040s filed hit 169.7 million. The increase continued in 2021 with the IRS receiving 169.1 million returns, and into 2022, when 164.3 returns were sent to the tax agency. The main reason for the 2020-2022 filing spikes was the coronavirus-related financial help — economic impact payments and increased advance Child Tax Credit amounts — that the IRS was tasked with delivering. Many, OK most, of those millions who hadn't filed before 2020... Read more →
National Weather Service radar of a quasi-linear convective system (QLCS) and supercells, along with severe warnings in the southeastern United States during the afternoon of Jan. 12, 2023. The Autauga County, Alabama, EF3 tornado was on the ground at the time. (Image via Wikipedia; click here to see radar loop) Tax season 2023 starts today, but some more filers won't have to worry about meeting the April Tax Day deadline because Mother Nature continues to wreak havoc across the United States. Her Mommy Dearest outbursts earlier this month resulted in major natural disaster declarations in Alabama and Georgia. That, in... Read more →
Being a bit pokey can sometimes pay off at tax filing time. (Photo by Kay Bell) My husband and I have a lot in common. We also are a lot different. I tend to obsessiveness, wanting to take care of things as soon as I can. The hubby, on the other hand, is more deliberative. Unless it absolutely has to be done immediately, he's OK with waiting. And waiting and waiting. We've managed to make out differing approaches work. And I must admit that sometimes, he's right to put off projects. Not always, but sometimes. Situations change, making moot what... Read more →
Photo by Kay Bell The Internal Revenue Service won't start processing 2022 tax year returns until Jan. 23, but you can file before then. A lot of folks are doing just that. The most common and obvious motive for filing early is to get the refund you're expecting. But there are some other reasons you might want to get your return to the IRS as soon as possible. 1. To beat tax ID thieves to the punch. The IRS and its Security Summit partners have made good progress in recent years in reducing tax identity theft and refund fraud. One... Read more →
Every filing season, eager taxpayers, most of them expecting a refund, send their returns to the Internal Revenue Service as soon as they can. For most it works out OK. Others, however, discover on their own, or learn from the IRS, something just not quite right, and costly, on their Form 1040. It works the other way, too. In some instances, folks submit a return without claiming a tax break that would have saved them dollars. The IRS isn't going to tell you about that! The best way to make sure you enter all the data that the IRS wants,... Read more →
The Rev. Dr. Martin Luther King in Washington, D.C., in 1963 where he delivered his "I Have A Dream" speech. (Photo via Wikimedia) On this Martin Luther King, Jr. Day federal holiday, the focus once again is on public service. It's a way to honor The Rev. Dr. King's commitment to helping those who need it the most. It's also a time when we rightfully recall the civil rights leader's most famous speech, his delivery of his "I have a dream" vision of equality in Washington, D.C., on Aug. 28, 1963. But King also knew that hard, practical work was... Read more →
The Internal Revenue Service won't start processing 2022 tax returns until Jan. 23, but you still can file before then. And if your adjusted gross income last year was $73,000 or less you can file for free at Free File. If you use a search engine to find free tax filing, you'll likely discover other options. You'll also probably get such offers in your email box. But the only official, IRS-sanctioned Free File option is the one on its website. To get there, type Free File in the search box at the upper right of IRS.gov. That search result will... Read more →
It's official. The Internal Revenue Service today announced that it will begin accepting and processing 2022 tax year individual returns on Monday, Jan. 23. The IRS also has a date for taxpayers eligible to use its Free File service. It opens for no-cost business tomorrow, Friday, Jan. 13. Seven companies are participating this year. With the announcement of these tax season 2023 dates, the official filing kickoff calendar is complete. Today, Jan. 12, is the start of the agency's business e-filing season. On hold for just a little longer: Word on the official processing date also is good news for... Read more →
The California Governor's Office of Emergency Services (Cal OES) coordinates emergency responses, such as this one in early January before the latest disastrous rains and flooding engulfed the state. (Photo courtesy Cal OES Facebook) California covers a huge area, so there's room for plenty of extremes. That includes weather. Over the last few days, the Golden State has gone from devastating drought to equally devasting flooding. This week began with around 90 percent of California's population under a flood watch. Today, the Internal Revenue Service announced that it is giving taxpayers who are dealing with the disastrous conditions in 31... Read more →
Image by Gerd Altmann from Pixabay Most states operate on a fiscal year that runs from July 1 to June 30. That's why we see some new laws take effect each summer across the United States. However, those states also make the effective date for other changes the first of the year. It's easier for us residents, who operate on a January to December calendar, to accept that timetable. That's especially true of tax laws, since most states also tend to follow the Internal Revenue Service calendar. New tax laws effective New Year's Day: This Jan. 1, notes the Tax... Read more →
Massive waves on Lake Erie splashed homes in Hamburg, New York, during the historic blizzard that moved across the Empire State just before last Christmas. While the result was a collection of real-life ice sculptures, the storm's ultimate effects were far less lovely. (Screen capture from WXChasing YouTube video) I admit it. I whined about the unusual cold front that moved into the Austin area Christmas week 2022. One of the reasons we moved here was for the area's generally moderate winters. But I was properly shamed. A few freezing nights was nothing like the deadly storm that gripped parts... Read more →
The tax code is like a car. A big, old, clunky car that just keeps chugging along. But every now and then you need to tune it up and change the tires. Here are some tweaks to the 2023 filing season model. (Photo by Andrea Piacquadio) Tax filing rolls around every year. But every year, there also are a few changes that make the process slightly different from prior filings. We didn't have any major tax law changes in 2022. But some old rules come into play, as does the expiration of some tax breaks that many folks had enjoyed... Read more →
The tax year is over. Long live the tax year. Taxes are, if nothing else, persistent. Sure, there are a few (or more) changes every year, even if it's only inflation adjustments. But even in years when the changes are negligible, they are back, starting to add up on the first of every January. That's why 2023 is the first By the Numbers honoree of this new year. The transition from an old to a new tax year is also the focus of this post. It's a look at six tax matters that affected or at least fascinated us in... Read more →
Merry Monday Holiday After Christmas on Sunday. Happy Boxing Day. Joyous End-of-Year Tax Tasks to Complete Week. Yep, the start of the last week of 2022 has a lot of identities. But it's that last designation that you need to pay close attention to, since the end of the tax year is critical when it comes to many tax moves. Here are eight you need to consider and, if they apply to you, complete by Dec. 31 — or actually by Friday, Dec. 30, in some cases since it's the last business day of 2022. 1. Take your required minimum... Read more →
When are tax-deductible expenses like bananas? When you bunch them. (Photo by Couleur) I just got an email from my dentist, who's suddenly turned into an ad hoc tax adviser. He wanted me to know that he's got a few appointments open through the end of the year in case I need to spend my medical flexible spending account money. His alert also got me thinking about another tax tactic, bunching. Types and timing of deductible expenses: Since enactment of the Tax Reform Act of 2017, year-end bunching has taken on increased importance. This potential tax saving technique means you... Read more →
Photo by cottonbro studio The season of giving goes beyond presents for family and friends or donations to charities. December is also when many people who work in restaurants, salons, hotels, and similar industries get their largest tips of the year. One thing that's the same, however, is the tax consequences of those gratuities. Regardless of their size or when you get them, tips are taxable income that must be reported on federal and, for most folks, state tax returns. Workers who've held long-time jobs where tips are commonplace know this. But with the economic changes wrought by the COVID-19... Read more →