The Rock & Roll Hall of Fame (left) sits on the Lake Erie shore next to the Great Lakes Science Center (right) in Cleveland's North Coast Harbor. (Photo by Rona Proudfoot, CC BY-SA 2.0) For years, Austinites have been the target of the Buckeye State, and I’m not talking college football. A couple of years ago, billboards popped up in the Austin, Texas, metro area suggesting that Ohio had plenty of cool places to live that were less expensive. Now, the Ohio promotions are in television ads. And just as the Lone Star State capital’s annual Austin City Limits (ACL)... Read more →
Tax numbers
Will the federal government be open or closed on Oct. 1? We should get an idea this week as Congress considers yet another short-term funding bill for Uncle Sam's operations. (Open and Closed sign photos by Tim Mossholder) Here we go again. I wish I was talking about the great Ray Charles’ version of that classic song, but alas this post’s focus is, again, on a possible federal government shutdown. That could happen, at least partially, if Congress and the White House don’t agree on a funding measure beyond this fiscal year, which ends Sept. 30. Without money, Uncle Sam... Read more →
It’s not unusual, especially here in Texas, for undocumented workers to be employed in industries that depend on manual labor, such as agriculture or construction. (Photo by Zohair Mirza on Unsplash) “They’re eating the dogs” is now forever part of U.S. presidential campaign lore, for worse or worst since there’s no better take. Following Donald J. Trump’s exclamation of a false social media rumor of pet deaths in Springfield, Ohio, during his Sept. 10 debate last week with Kamala Harris, the municipality about half an hour northeast of Dayton has encountered much unwanted attention. It has included bomb threats to... Read more →
Any kind of saving is good, but for your retirement, a better option is a workplace retirement plan or IRA. A new Saver’s Match will help some when it takes effect in a couple of years. (Photo by Diane Helentjaris on Unsplash) The Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted at the end of 2022, includes a notable change in how eligible individuals can collect the Saver’s Credit. This tax credit turns contributions to popular retirement plans, which already are tax-favored, into addition funds. Qualifying lower- and middle-income savers who put $2,000 into an Internal Revenue Service-authorized... Read more →
However, opponents of the Internal Revenue Service's option that cuts out private tax software companies still aren't convinced of the program's value or security. UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states will be a part of the Internal Revenue Service’s Direct File program next year. When the 2025 filing season starts, more than 120,000 Maine and 600,000 Wisconsin taxpayers and will be eligible to file via the IRS created and managed free, online tax preparation and e-filing option. The potential Pine Tree State and... Read more →
When making retirement plans, be sure to include how taxes might affect your ability to spend your golden years the way you want. Taxation of Social Security is getting a closer look this year, mainly because the Republican presidential nominee has suggested ending the current federal tax paid by some retirees on up to 85 percent of their benefits. A handful of states also tax the federal retirement benefits that their residents receive. This is the case in Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Those nine Social Security taxing states are this weekend’s... Read more →
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. State participation in the Internal Revenue Service’s Direct File slowly keeps growing. Connecticut and North Carolina are the latest states that will allow some of their taxpayers to use the IRS’ direct tax preparation and e-filing online program next year. They join New Mexico, New Jersey, Oregon, and Pennsylvania as new participants during the 2025 tax filing season. Twelve states — Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. — were part... Read more →
The Department of Justice, per a Drug Enforcement Administration request, is moving to transfer of marijuana from Schedule I of the Controlled Substances Act (CSA) to Schedule III. That decision aligns with the stance of the U.S. Health and Human Services Department, and is supported by the Biden Administration. The change would not make cannabis legal nationally. It still will be a controlled substance under federal law. But the recategorization would provide state-legal cannabis businesses some banking access, and the ability to claim some tax breaks they currently are denied. Less of a stigma: Going from Schedule I to Schedule... Read more →
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. Two more states, New Mexico and Pennsylvania, joined Direct File last week. Direct File is the Internal Revenue Service created no-cost online tax preparation program. Eligible taxpayers can use it prepare and then e-file their annual tax returns for free. It is similar to Free File, the IRS partnership with some in the tax software industry, but Direct File cuts out the private sector and allows taxpayers to take care of filing directly with Uncle Sam. When Direct File launched... Read more →
The Senate recessed last week after failing to pass a bipartisan tax bill that the House approved back in January. On Jan. 31, after more than a year of negotiations, the House overwhelmingly approved a tax bill that included some popular business tax breaks and Child Tax Credit (CTC) enhancements. The House's 357-to-70 support of the Tax Relief for American Families and Workers Act, plus its bipartisan origin — it was a compromise worked out by Democratic Senate Finance Committee Chair Ron Wyden of Oregon and Republican House Ways and Means Chair Jason Smith of Missouri — seemed to indicate... Read more →
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. GOP members of congress and the Internal Revenue Service are on a collision course when it comes to the agency’s Direct File program. Republican Reps. Adrian Smith of Nebraska and Chuck Edwards of North Carolina last week introduced legislation to block the IRS from continuing its Direct File program. Meanwhile, the Treasury Department also announced last week that another state has joined the Direct File program for the coming 2025 filing season. New Jersey is the latest jurisdiction to allow... Read more →
Photo by Pixabay It’s true that correlation does not imply causation, but some Kentucky data seems to indicate that the Bluegrass State’s decision in 2018 to increase its cigarette tax rate not only boosted the state’s revenue, but also lowered smoking rates. It is also true that Kentucky's initial large tax revenue collection has steadily declined since the latest tax rate hike was implemented. But Kentucky Health News (KHN) reports that the last revenue count from the state’s department of revenue, $270.5 million as of June 30, is still well above the $211.8 million that was collected before the tobacco... Read more →
For most U.S. families, summer vacation involves a road trip. Taking to the country’s highways is a chance to enjoy new landscapes, listen to (and sing along with) favorite playlists, and share time with the family. Road trips also mean stops for fuel, both for auto occupants and the vehicle. The good news for summer 2024 drivers is that the cost of gasoline isn’t that bad. AAA data show that the average price of gas as of mid-July is just more than $3.50 a gallon. That’s the same as the average price per gallon in 2023. Motorists in seven states,... Read more →
That will leave a dozen states still taxing at least some food bought by grocery shoppers. My favorite section of my local H-E-B grocery. (Photo by Kay Bell) When you loaded up your grocery cart for your July 4th spread, you probably weren’t thinking about taxes. That’s because most of us live in states that, for the most part, don’t tax food. That’s not the case in 13 states. Those jurisdictions do tack a few percentage points of sales tax on most foodstuffs. But one of those states will join the no-grocery-tax ranks later this summer. In late August, Oklahoma’s... Read more →
Photo by cottonbro studio The Internal Revenue Service's whistleblower program helped the agency collect $338 million in fiscal year 2023. The IRS Whistleblower Office also noted in its 2023 report, issued on June 24, that it paid whistleblowers 121 awards, totaling $88.8 million, for the revenue-increasing information. That awards total was more than double the $37.8 million the office paid in fiscal 2022. But the total number of whistleblower awards for FY23 dropped, going from 132 in 2022 to 121 the following fiscal year. And to keep the Whistleblower Office on pace to help with tax compliance, the latest report... Read more →
An aerial view of planes at John F. Kennedy International Airport in New York City. (Photo by Miguel Ángel Sanz on Unsplash) It will be a while before we get a final accounting of the COVID-19 pandemic costs, but last week we some good and bad tax-related figures connected to the health crisis. On the negative side of the ledger, there are the Employee Retention Credit (ERC) claims. This program that helped businesses keep workers on payroll in 2020 and 2021, but a rash of post-pandemic claims has cost the U.S. Treasury, at last count, $230 billion. There is, however,... Read more →
Unsplash+ in collaboration with Getty Images Tax credits are better than deductions because credits provide a dollar-for-dollar reduction of tax you owe. But sometimes, getting a credit’s benefit in a real-life cash-flow situation is better than the financial results at tax filing time. That’s the case, for example, in making a major consumer purchase, like a car. And that’s why the Treasury Department and Internal Revenue Service last year issued guidance on the Biden Administration’s Inflation Reduction Act clean vehicle provisions to help buyers of qualifying energy-efficient autos get immediate use of the credit. Under the rules, eligible vehicle buyers... Read more →
There’s good news for the Internal Revenue Service’s efforts to get rid of as much paper as possible. The agency’s Document Upload Tool, or DUT, recently received its 1 millionth taxpayer submission. The online option lets taxpayers and tax professionals respond digitally to a wide range of tax issues. One of those issues is potentially underreported income, which prompts the IRS to issue Notice CP2000. With the DUT, taxpayers or their preparers can easily scan the material that answers the notice’s questions and electronically submit it to the agency, said the IRS. DUT growth: The upload tool was launched in... Read more →
The 2024 hurricane season has just begun, but some people are still dealing with disasters from last and earlier this year. Some of them now are facing a June 17 tax filing and payment deadline. Mother Nature has been Mommy Dearest across much of the United States so far this year. Way too many federal announcements and media reports have included the phrase “A historic severe weather outbreak occurred” in 2024, meaning that millions of Americans have found themselves in major disaster areas. And the current hurricane season has just begun! Unfortunately, the disastrous start to this year was a... Read more →
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. It seems the Internal Revenue Service, or at least its Direct File program, has a new public relations agency. It’s a group of Capitol Hill Democrats and Independents. The U.S. Senators and Representatives signed a May 15 letter to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel lauding the IRS free online tax preparation and e-filing option. The Direct File pilot program, created and run by the IRS, was rolled out this filing season in 12 states. When it... Read more →