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 →
Tax planning
UPDATE, Thursday, March 28: Well, I'm not the new Powerball multimillionaire. The lottery jackpot, which hit $768.4 million before the drawing last night, is going to the lucky person who bought the winning ticket in New Berlin, Wisconsin. But save this post. There will be other chances to win! Yes, I bought a ticket for the March 27 drawing of the $750 million and counting Powerball lottery. Yes, I know the odds of winning the jackpot, which is the fourth largest Powerball prize in U.S. history, are about 1 in 292 million. I know many of my hardcore personal financial... Read more →
April 1 could be costly for older retirement account owners. No fooling. That's the deadline for taking a required minimum distribution, or RMD, if you turned 70½ last year and did not take the specified amount from your tax-deferred retirement funds by Dec. 31. RMDs are, as the name says, required amounts that you must withdraw from a retirement plan that's been earning money over the years without you having to pay tax on it. The tax law has been letting these accounts ride for years, decades in many cases. But when you get halfway through your 70th year, the... Read more →
Rep. Mike Thompson opens a Ways and Means subcommittee hearing into temporary tax policy, aka tax extenders. (Screenshot from official hearing video via YouTube) House tax writers have finally, officially looked at expired tax provisions, known popularly as extenders. But anyone hoping for a quick resolution or an indication that the many now-dead tax breaks might be revived by the April filing deadline was disappointed. Rep. Mike Thompson (D-Calif.), chairman of the Ways and Means Select Revenue Measures Subcommittee, opened today's (March 12) hearing by making it clear that right now, his panel simply is examining the basis for creating... Read more →
Lee County, Alabama, March 3 tornado damage. (Photo: Nicholas Baretto via Twitter) As expected, once the White House declared parts of Alabama a major disaster area, the Internal Revenue Service followed up by offering affected residents a variety of tax relief. Victims of the deadly tornadoes and severe storms that raked areas of the Yellowhammer State now have until July 31 to file some individual and business tax returns and make certain tax payments. "With the regular deadline just a few weeks away, we want storm victims to focus on their families and recovering, rather than worrying about the tax... 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 →
Some of the destruction from a tornado, preliminary estimated to be an EF-4 with winds reaching 170 mph, that touched down on March 3, 2019, in Lee County, Alabama. (Photo courtesy National Weather Service, Birmingham via Twitter) Mother Nature showed her extremely mean side this weekend, with tornadoes in Alabama, Georgia, South Carolina and the Florida panhandle leaving a path of death and destruction. I know that folks just now getting a good look at the havoc are not in a mood to think about taxes. That's especially true of those in who lost loved ones when a twister roared... Read more →
I know February is the shortest month, but we sure seemed to blast right through these 28 days. That means folks who were waiting for their refunds based on Earned Income Tax Credit and/or additional child tax credit claims now or soon should have those U.S. Treasury checks. As for the rest of us who've yet to tackle our 1040s, we're part of the reason that filing is a bit slow this year. Many of us are waiting because we either know we'll owe or we're still trying to decipher the Tax Cuts and Jobs Act (TCJA) changes. The good... Read more →
Do you overwithhold to get an annual tax refund because money burns a hole in your pocket? (Photo by Matthew via Flickr) It's no secret that Americans like their tax refunds. The Internal Revenue Service for years has reported that most filers get at least some money back at tax-filing time. That refund data has fueled another annual debate. How to get people to adjust their withholding so that they get use of their money throughout the year in paychecks instead of having to wait for it in the form or a tax refund. As a tax journalist, I get... 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 →
Screenshot from a look at some of the people who depend on the gig economy. Watch the full YouTube video here. Everybody is looking for more money. Taxpayers want more in their tax refunds, especially those surprised by smaller amounts this filing season. Donald J. Trump wants more to build his campaigned-promised border wall. People who are unhappy with their current earnings are side hustling to get more income. It's that last group, says the Treasury Inspector General for Tax Administration (TIGTA), that the Internal Revenue Service should be focusing on as a way to get more money into the... Read more →
NASCAR's 2019 season started today with the auto racing series' biggest event, the Daytona 500. Congratulations to Denny Hamlin and Joe Gibbs Racing for taking the checkered flag in the Great American Race. Things aren't so clear-cut, though for the expired tax break for motorsports speedway improvements and more than two dozen other assorted tax benefits. These tax breaks expired in 2017 and are not on track for reinstatement. Yet. In fact, they're looking as messy as today's closing laps pile-up. Extenders indecision: These assorted tax breaks are known collectively as the extenders. They get that name because they are... Read more →
There was national anthem controversy at Super Bowl LIII, but it wasn't about what the players did during the song. It was about how long it took Gladys Knight to sing the Star-Spangled Banner and how it affected the associated prop bet. If you did come out on the winning side of the song, here's how to report that and other taxable gambling income. There's no disagreement that Gladys Knight's Star-Bangled Banner was magnificent. However, gamblers had some issue with how long the song lasted, which was one of the prop bets wagered on the game and its ancillary events.... 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 →
The 2019 tax filing season starts on Monday, Jan. 28. That's when the Internal Revenue Service will start accepting and, more importantly, processing tax returns. While there's still some concern as to whether the IRS is up to the job this year since will be operating on half-staff (or fewer, according to reports that many recalled agency employees are skipping [unpaid] work) one thing is certain. We taxpayers have to meet tax deadlines, government shutdown or no government shutdown. So mark your calendars for this year's key filing dates. Jan. 28, 2019: Filing season 2019 begins. If you filed early,... Read more →
Even if you've been filling out Form 1040 and any other associated forms and schedules for years, things will be different this filing season. This is the first year we taxpayers (and tax pros) will be filing under the extensive new Tax Cuts and Jobs Act (TCJA) changes. In addition to new tax rates and deduction amounts, there are a variety of other tax law tweaks that could affect what goes on — or now doesn't — your Form 1040, which itself is new. So before you start working with your tax preparer or open up your tax software, either... Read more →
As the longest federal government shutdown in U.S. history drags on with no end in sight, furloughed workers are looking at any and all ways to pay their bills. Some have taken hardship withdrawals from their workplace retirement accounts. Thousands of others have applied for unemployment. Few of us can blame folks who are struggling financially for taking these steps. At some point, many of us or our family members and friends have done the same. There's no shame in taking available help when bills you can't pay continue to arrive. And while such actions can help out-of-work folks make... Read more →
The Internal Revenue Service still is mostly closed due to the Capitol Hill impasse over how to fund the federal government. Just a relative handful of employees are in a few IRS offices, doing what have been deemed essential jobs, but not getting paid for their work. Some of the agency's online operations, however, are up and running. And other IRS services, particularly those that are funding in part by fees, could be restarted despite the closure of many of Uncle Sam's offices. In fact, one of those, the Income Verification Express Service (IVES) program, was restarted this week (more... Read more →
Jeff and MacKenzie Bezos are getting a divorce. I know, it's hard to feel too bad for folks who are so wealthy. They tend to come through difficult circumstances quite well. But the joint announcement today (on Twitter, of course) from the world's richest man and his soon-to-be ex-wife got me thinking about, of course, taxes. By making the decision to end their marriage in 2019, Bezos is losing a tax break while Mrs. Bezos is getting one. As I said, I'm sure neither Mr. or Mrs. Bezos won't suffer too much. Both he and his wife will have lots... Read more →
We still don't know when the 2019 tax filing season will start. But that uncertainty has no bearing on the tax deadlines we're all expected to meet, even when some of Uncle Sam's offices are closed or operating with fewer staff than normal. The Internal Revenue Service usually begins accepting and processing returns around mid- to late-January. Meeting that traditional opening date already was going to be tough. The agency has been in crunch mode for the last 12+ months with the added work of making sure forms, instructions and guidance reflect all the Tax Cuts and Jobs Act (TCJA)... Read more →