Image courtesy SimpsonsWorld via Giphy.com The IRS reform bill could not have come at a better time, based on a recent report from the federal tax agency oversight office. The Treasury Inspector General for Tax Administration (TIGTA) found that the IRS gave its taxpayer telephone assistance program better grades than it deserved. IRS customer service improvements planned: Each year, millions of taxpayers call the IRS toll-free telephone assistance lines seeking help to understand the tax laws and meet their tax obligations, notes TIGTA. Telephone assistance is one of the agency's crucial customer services, but the methods the IRS uses to... Read more →
Tax help
IRS building photo by Kari Bluff via Flickr CC The Taxpayer First Act, which is awaiting the president's signature to become law was signed into law on July 1, got a lot of attention for what wasn't in it. The controversial section that would have codified the Free File Alliance was removed in the bill's revised House version, which was approved by voice vote in that chamber on June 10. Three days later, the Senate approved the reworked bill, also by voice vote, and sent it to the White House. Opponents of the formalized Free File section argued that it... Read more →
Things that are never good: an unexpected envelope from the Internal Revenue Service. That's the assessment of one of my personal finance writer pals. Today, she's working to clear things up in connection with one of those mailing she got from Uncle Sam's tax man. It's not a fun exercise, but it's definitely one you should undertake if you disagree with an IRS decision. In fact, the IRS own Taxpayer Bill of Rights covers this situation in several of its tenets. Specifically, I'm looking at every taxpayer's right to: Pay no more than the correct amount of tax, Challenge the... Read more →
If you filed your taxes before May 16 and your earnings included investment income, you might want to take another look at your return. The Internal Revenue Service announced on its website yesterday, May 16, that the 2018 Schedule D tax worksheet in that form's instructions contained an error. "The tax calculation did not work correctly with the new TCJA [Tax Cuts and Jobs Act] regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed... Read more →
Free File is finally getting a lot of attention. Unfortunately for companies involved in the Internal Revenue Service/tax software partnership, it's not the kind of attention they want. The IRS now is following state officials in California and New York in looking into whether potential Free File users were intentionally directed away from the program. Free but not that popular: Free File, as the name indicates, was designed to allow most taxpayers access to no-cost online tax return completion and electronic filing. The 2019 filing season is its 17th. It's still available to taxpayers through the Oct. 15 extended filing... Read more →
Photo by Ken Hawkins via Flickr CC Free. It's the most magical word in the world. Everyone is always looking to get something for nothing. That includes tax filing. A couple of weeks ago, the tax and consumer protection worlds were abuzz over a provision in the Taxpayer First Act of 2019 that cleared the U.S. House with a provision that keeps the Internal Revenue Service from developing its own no-cost tax filing program. Such total IRS ownership of the form filling and electronic filing is the unicorn of the tax world for many. They oppose Uncle Sam acting as... Read more →
We made it! Tax Days 2019 — and yes, Days is correct, since there were two April deadlines this year — are done! OK, maybe we made it because we filed for an extension. That's OK. We got something in to the Internal Revenue Service on time. Now we can relax. But not too much. In addition to meeting that Oct. 15 due date, all of us need to be proactive with tax moves over the next few months to ensure that our 2020 bill is as small as possible when we file next year. That's what the Weekly Tax... Read more →
Two tornadoes struck the small East Texas town of Alto on Saturday, April 13. The National Weather Service confirmed on Sunday that the first was an EF-2 tornado and the second was an EF-3. Click image to see video from Disaster Compilations on YouTube. There are some things more important than taxes on April 15, 2019. Too many folks in the southern half of the United States are dealing with the loss of family and friends after a deadly weather system moved across that region over the weekend. At least eight people were killed by the storms, which in addition... Read more →
This wading bird doesn't mind being knee-deep, but it's not a good position if you're trying to dig through your taxes on this last weekend of the filing season. (Photo by I Am birdsaspoetry.com via Flickr CC) We're knee- or in some cases neck-deep into the final days of Tax Season 2019. How's it going for you? If you're among the more than 103 million U.S. taxpayers who have already filed their returns, you're probably feeling pretty good about things. So is Charles Rettig, who's overseeing his first federal filing season as commissioner of the Internal Revenue Service. "The filing... Read more →
My mother and my furry little brother Willie having a conversation. While walking Willie last October, my mom fell and broke her leg, a common occurrence among older dog owners. That accident has prompted ongoing discussions (OK, fights) on possible more hands-on care options for my octogenarian mother. (Photo by Kay Bell) I'm a cat person. Fight me. Or don't. Like cats, I'm not really concerned about your pet opinion. For almost a decade, though, I've been dealing with a dog. Not mine. My mom's. She has a dog, Willie, and he's the most spoiled animal I have ever known.... Read more →
I admit it, as a native Texan I get a kick out of this depiction of Lone Star State residents' skewed point of view of the United States. Click the image for a larger view of the map, which was part of a calendar I bought at Marfa Book Company while revisiting my West Texas roots a few years ago. Here on the ol' blog, I tend to focus on federal tax filings. That's because almost all of us at some point in our lives have to file paperwork with the Internal Revenue Service. But there also are state, and... Read more →
Prior year tax returns serve many purposes. This filing season, a check of last year's return will show you what your tax liability for 2017 was. You can compare that to your final 2018 tax bill to see if the Tax Cuts and Jobs Act (TCJA) did indeed lower your taxes even though your refund this year was smaller. You'll also need past year tax data if you're applying for a major loan, such as a mortgage. And if you're electronically filing your tax return this year, you'll need data from your previous year's taxes to complete that task. Record... Read more →
The National Taxpayer Advocate this year selected 21 major problems that taxpayers encounter in their dealings with the Internal Revenue Service. I found five of those issues particularly troublesome. Every year, the National Taxpayer Advocate issue a report to Congress. The 2018 version released this week included a look at, not surprising, how the recent government shutdown affected not only Internal Revenue Service operations, but also the taxpayers who, particularly at this time of year, are relying on IRS services. Part of that annual report also includes at least 20 tax matters that the Taxpayer Advocate identifies as the most... Read more →
Open-close sign via Giphy.com The drama continues in Washington, D.C., as far as keeping the federal government open. It looked like, despite some grumbling from all sides, that a bipartisan, bicameral deal reached this week would keep all of the federal government open past Feb. 15. We all need to keep our fingers (and toes) crossed that it happens, especially those of us — which mean most Americans — who deal with the Internal Revenue Service. The IRS obviously among those pushing for a resolution that will get the agency through the 2019 tax filing season. The agency is still... Read more →
Hello, February! If we ever were in need of your hearts and flowers, it is now. January was tough tax-wise. We had to worry about whether the Internal Revenue Service actually would get filing season open as the longest federal government shutdown in U.S. history dragged on. It opened as promised on Jan. 28, but be patient. Plus, we're dealing with our first filing season under the many, many changes brought about by the Tax Cuts and Jobs Act (TCJA). Yep, we definitely need some tax love. And some tax guidance, whether we're earlier filers awaiting refunds or procrastinators taking... Read more →
Just like the Highlander character of film and television fame, the new Tax Cuts and Jobs Act under which we're now filing our 2018 tax returns says there can be only one. One Form 1040, that is. The Internal Revenue Service today begins processing millions, if you go by the agency's prior filing season data, of early-filed tax returns. IRS staff are going to face more than the usual filing season chaos since most of them are coming back to work after 35 days of being shutout. (Short story: Get ready for some delays.) Filers, too, are in for some... Read more →
We're almost 13 months into the largest tax reform measure enacted in more than 30 years and one thing is clear. The Tax Cuts and Jobs Act (TCJA) is in no way tax simplification. In fact, taxpayers and the professionals they pay to help make filing less taxing in every sense of the word have been struggling with just what Congress meant in way too many of the tax bill's hastily drafted provisions. Big business bill, with small biz break and confusion: Although the TCJA contains many changes that will make filing returns this year interesting for individual taxpayers, it... Read more →
Internal Revenue Service offices nationwide, like this one in New York City, are closed due to the ongoing federal government shutdown. (Photo by Matthew Bisanz via Wikipedia Commons) Most of us don't have personal interactions with the Internal Revenue Service. We simply do our taxes every year, send them to the federal tax collector and move on with our lives. It's a different story in many places across the country. Those places have physical IRS offices where friends and family usually go each weekday to do their jobs. They want the government shutdown shut down so they can get back... Read more →
Longest U.S. federal government shutdown in history be damned! That's apparently the Internal Revenue Service's motto this year. It announced last week that it will start working on our 2018 tax returns — and issue any related refunds — this filing season, which is set to start on Monday, Jan. 28, even if it's technically still operating in modified shutdown mode. The IRS underscored that commitment on Friday, Jan. 11, when it announced that taxpayers who qualify to use Free File can now access the online no-cost tax preparation and e-filing option. Yep. Free File 2019 is now open for... Read more →
Hello 2019! I'm not sure we're ready for you, particularly when it comes to the major tax code changes under the Tax Cuts and Jobs Act (TCJA). We'll deal with the real-life effects of the new tax laws for the first time when we file our 2018 returns. When that will be is still up in the air and depends on a resolution to the partial government shutdown. But even though Capitol Hill and many of Uncle Sam's offices remain in limbo, we taxpayers need to start now taking an up close and personal look at what the TCJA will... Read more →