Don't Mess With Taxes

Photo by Scrumshus via Citypeek-Wikipedia The Senate this week released its plan for another round of coronavirus relief. As expected, there are substantial differences between this Republican-crafted bill and the measure passed in mid-May by the Democratically-controlled House. Both bills are wide-ranging, but there are some key provisions that are of particular interest to most of us. Both also use as a basis in many areas the Coronavirus Aid, Relief and Economic Security (CARES) Act provisions that were enacted in late March. Below is a comparison of seven key areas in the latest GOP Senate's Health, Economic Assistance, Liability Protection... Read more →

Classic television's Cleaver family, circa 1960. (Photo via Wikipedia Commons) Senate leaders and U.S. Treasury Secretary Steve Mnuchin promise they'll release next week the Republican response to the Democratic House's already approved next round of COVID-19 relief payments. Until then, we're still speculating on what will be in the counter proposal. It's a safe bet, however, that it will contain a second round of direct payments. The first payments, created by the Coronavirus Aid, Relief and Economic Security (CARES) Act that became law in late March. What's not clear, though, is who would qualify for this additional stimulus money. Halfway... Read more →

Tax season 2020 is over. That means the focus of most Americans returns to the same thing we've been fixating on (besides taxes) for the last few months: COVID-19. The coronavirus is still here. It's getting worse in some — OK, a lot of — states. Even in the areas where it seems to be under better control, people are still worrying about what it means to their lives and, of course, their livelihoods. Although some jobs returned earlier this summer, that partial economic recovery is not expected to last after coronavirus cases reemerged following state re-openings. So folks are... Read more →

Erin M. Collins took over as National Taxpayer Advocate on March 30, just as the United States was coming to grips with the coronavirus, so it's no surprise that the pandemic and its effects on taxes are part of her first official report to Congress. "Starting in the midst of a pandemic and witnessing IRS offices closing one by one was not the way I envisioned my role when I accepted the position," wrote Collins in the report's preface. But, added Collins, there's been a silver lining. In conference calls with her leadership team, Taxpayer Advocate Service (TAS) employees and... Read more →

A recent government survey found most people are spending their COVID stimulus money on necessities, like food. (Photo by Anna Shvets from Pexels) What did you do with your COVID-19 economic impact payment (EIP)? If you're like most of the folks who responded to a U.S. Census Bureau survey, you used it to pay household bills. Many in the White House and on Capitol Hill had hoped the funds would help jump-start the stalled economy and then keep it going as businesses started to reopen. Looks like that's a big sorry on both counts. Instead, it appears, at least in... Read more →

Millions of folks — around 152 million of us, by the Internal Revenue Service's latest count — have received COVID-19 economic impact payments, or EIPs as they are called in the acronym crazy federal government (and tax) world. The payments of up to $1,200 per individual and $500 for each eligible child were created by the Coronavirus Aid, Relief and Economic Security (CARES) Act. The IRS began sending out EIPs in April. But now, two months after the CARES Act became law on March 27, some EIP-eligible recipients are still waiting for direct deposit or a paper check or a... Read more →

There are a lot of footprints on many U.S. beaches this Memorial Day weekend as folks seek seashores after weeks of staying home due to the coronavirus. (Photo by Wendy Wei via Pexels) This Memorial Day long weekend is a big one for numbers. As most states have relaxed at least some COVID-19 stay home orders, Americans are taking advantage of more openings to celebrate this unofficial start of summer. They are, naturally, heading to spots that offer traditional seasonal activities. There's no official counts of how many folks have flocked to U.S. beaches and lakes and parks, but the... Read more →

Americans are plastic addicts. I'm not just talking packaging. We depend on plastic payments, aka credit and debit cards. That financial transaction method has made its way into the COVID-19 economic impact payment (EIP) distribution. This week, the Internal Revenue Service began sending debit cards loaded with coronavirus payment amounts to approximately 4 million Americans. As created under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the COVID-19 payment amounts are up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child who is younger than 17 at of the end of... Read more →

Some people. Trying to survive a global pandemic isn't enough for them. They have to go and break the law, too. I'm not talking about defying a state's closure order or hawking subpar face masks online. Nope, two New England businessmen this week became the first individuals to be arrested and charged with fraud in connection with the Paycheck Protection Program (PPP). The small business assistance program was created as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to help companies struggling due to the effects of the virus. David A. Staveley of Andover, Massachusetts, and David... Read more →

Click image to watch the Mos Eisley cantina scene, in which these musicians provide the catchy background tune, from the 1977 Star Wars movie that launched the acclaimed sci-fi film franchise. Welcome to the first week of May 2020. It's a decidedly weird month, in large part because of the coronavirus pandemic. When the deadly COVID-19 infection started spreading in force across the United States, most of the country shut down to some degree. Now many states are loosening their stay-home orders and things are starting to some degree to get back to normal, or what will pass as that... Read more →

Confused about who gets coronavirus relief payments? Apparently so is the Internal Revenue Service's distribution system. Thousands of foreign workers, many living overseas, were sent COVID-19 economic relief payments due to an unforeseen glitch that funneled the money, meant for U.S. taxpayers, to other countries, according to a Politico report. That story is this weekend's featured Sunday Shout Out. Former foreign college workers: The payments mostly went to college-age workers who spent time in the United States during the last two years. That's the time period the IRS is using to calculate who gets how much of the stimulus authorized... Read more →

More than 80 million stimulus checks went out last week, mostly to people who filed federal 2018 or 2019 returns and had the Internal Revenue Service directly deposit those tax years' refunds. Millions more have been anxiously checking the IRS' Get My Payment online tracking tool (guilty!) and/or their bank accounts (guilty again!) to find out just how far along their (my) COVID-19 relief payment is in the distribution system. In many cases, people who didn't get refunds, but are eligible for the coronavirus stimulus money are trying to speed up the delivery process by using the online tool to... Read more →

The law that created coronavirus stimulus payments just took effect yesterday and we're weeks at best from getting actual money. But tax planners have been thinking about COVID-19 tax intricacies since the illness exploded in the middle of this tax season. These payments just add a new tax filing wrinkle, since what we put on our 2019 returns could be a key part in the relief amount's ultimate dollar calculation. Tony Nitti, a CPA and tax partner with RubinBrown in Aspen, Colorado, has a good preview of what our tax filing actions now could mean to our potential coronavirus payments... Read more →

As you're getting your 2013 tax filing material together (you are doing that now, aren't you?) take a good look at your final W-2 of 2012. It's the last time you'll see that small of a FICA withholding amount. Since January 2011, the amount of FICA, sometimes indicated as Social Security tax on pay stubs, taken out of workers' paychecks has been 4.2 percent. That will change on Jan. 1, 2013. Next year the 6.2 percent withholding rate returns. The tax cut holiday always was meant to be temporary, a short-term stimulus measure to keep folks spending during the recession.... Read more →

The deficit reduction back-and-forth between Democrats and Republicans on the super committee continues. This Veterans Day week, Democrats suggested that savings from ending the Iraq and Afghanistan wars be used to pay for a new stimulus package, according to The Hill. A summary of the $2.3 trillion plan obtained by the Capitol Hill newspaper includes $200 billion in defense cuts and slashes $200 billion from other discretionary spending. Part of that savings, say the six Democrats on the Joint Select Committee on Deficit Reduction should go toward spending on infrastructure. The proposal also raises $650 billion in new federal revenue... Read more →

Americans are more pessimistic about the economic recovery. A report late last month from the Conference Board, a business research association, found that consumer confidence fell in May to its lowest level since last November. "Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Inflation concerns, which had eased last month, have picked up once again." I see those inflation concerns on every grocery shopping trip I make with my mother. She's a senior citizen living primarily on Social Security... Read more →

In most locations, the school year is over. But when it comes to paying higher education costs, students and parents need to do their financial homework year-round. One subject they want to study is 529 college savings plans. These accounts are named for the Internal Revenue Code section under which they were created. They also are a tax-saving way to bank bucks for college. Today, 5/29, also is 529 Plan Day. So it's only natural that the savings plan/tax code name is this week's By the Numbers figure. Tax benefits of 529s: Contributions to a 529 plan aren't tax deductible,... Read more →

Folks are pretty ticked off by a Government Accountability Office investigation that found thousands of contractors who got federal stimulus money back 2009 owed Uncle Sam big tax bucks. We all should be angry at tax scofflaws getting more of our tax money. But one proposed solution -- preventing such contracts from ever being awarded -- also could have major costs to the U.S. Treasury. First, let's look at the latest examination of the price of federal payments to companies that already owe the IRS. At least 3,700 Recovery Act contract and grant recipients -- including prime recipients, sub-recipients and... Read more →

Are you as excited as I am that Congress will be back at work next Monday, Nov. 15? Mark your calendars! Program C-SPAN as one of your TV remote's favorite channels! Really, Representatives and Senators swear they're going to work during this lame duck session. That, unlike all the other months, they'll actually get some bills to the White House for signature. However, gridlock is as just as likely. But, hey, I'm trying to be optimistic because that's just who I am (today, at least). And that roar of laughter you hear across the blogosphere is from the hubby. Anyway,... Read more →

If people dressed as Lady Gaga, Kim Kardashian, The Situation and various Twilight characters aren't scary enough for you this Halloween (and those get-ups are why adults should not be allowed to don costumes!), you can read the IRS watchdog report that reveals the agency let almost $111.4 million in stimulus-related tax payments go out to unqualified filers. "The passage of two significant tax laws impacted the 2010 Filing Season and presented additional challenges for the IRS," notes Michael Phillips, Deputy Inspector General for Audit for the Treasury Inspector General for Tax Administration, or TIGTA, in the Sept. 30 report.... Read more →