Most of these birthday celebrants at an Austin-area senior citizens' center are enjoying the shared festivities. Maybe the man on the right is worried about his upcoming RMD. (Photo by Kay Bell) Did you celebrate your 73rd birthday last year? Congratulations and belated best wishes. The Internal Revenue Service also applauds your milestone, but partly for selfish reasons. Individuals who have certain tax-deferred retirement plans must start withdrawing some of those funds and pay tax due on the amounts once they turn 73. These required minimum distributions (RMDs) are annual. But you can delay your first withdrawal until April 1... Read more →
Tax planning
Photo by Polina Tankilevitch Special needs individuals and those who work with them are understandable concerned about many of the changes being made or proposed by the Trump administration and its Department of Government Efficiency (DOGE) henchmen partners. But the Internal Revenue Service, even though it is dealing with its own DOGE issues, is reminding people with disabilities of how an Achieving a Better Life Experience, or ABLE, account can help. The accounts were created in 2014 by the eponymous Achieving a Better Life Experience (ABLE) Act, a federal law that allows states to create tax-advantaged savings programs for eligible... Read more →
Photo by Philipp Deus Every taxpayer and tax circumstance is unique. However, there are some things that trigger trained Internal Revenue Service examiners. As you’re finishing up your 2024 tax return, take another look to see if any of the 10 situations items show up on your Form 1040. They don’t guarantee that your return will be pulled for further attention and possibly a full-blown audit. But they could cause the IRS to conduct a correspondence audit, which is sending you a notice asking for clarification about a questionable item on your return. 1. You have income other than basic... Read more →
Instead of my usual weekend watching of sports, I’m glued to the Weather Channel. There’s a dangerous and already deadly tornado outbreak rumbling across the south this afternoon. This year is turning out to be awful as far as severe weather and other disasters. We had Southern California’s wildfires in January. In February, a severe winter storm wreaked havoc and left parts of Kentucky and West Virginia deemed major disaster areas. Now, with spring officially here, the severe thunderstorm/tornado season is off to an unfortunately robust start. Billion-dollar disasters in 2024: All this is happening on the heels of a... Read more →
Major flooding in Hazard, Kentucky, in February led to Perry County being declared a major disaster area. It’s just one of the counties in the Bluegrass State where residents are now eligible for tax relief. You can watch the video from which the screenshot above was taken at Live Storms Media's YouTube channel. We’re just more than a month away from the April 15 filing deadline, but some taxpayers will have until Nov. 3 to finish their 2024 returns. They live in areas of Kentucky and West Virginia that were pummeled in mid-February by a severe winter storm that move... Read more →
Getting to a doctor's appointment is challenging for many patients. But the travel costs could count as an itemized tax deduction. (Photo by RDNE Stock project) The Tax Cuts and Jobs Act’s increased standard deduction amounts moved me from an itemizing taxpayer to one who claims the standard deduction. Well, my improved health also helped. Even after the Republican tax reform bill took effect, for a couple of years I still had enough medical expenses — not to get too personal, but the serious medical scares included, even with insurance, some costly surgeries — to make tallying them on Schedule... Read more →
A towering city overlook is always impressive, but you don't necessarily need the telescopic help when it comes to overlooked tax breaks. Tax software, your tax adviser, and yes, the often-missed tax breaks listed below, can help you save on this year's filing. (Photo by Ricky Esquivel) The goal of every taxpayer is to pay Uncle Sam as little as legally possible. Even the Internal Revenue Service has enshrined that goal in its Taxpayer Bill of Rights. It’s number 3 on the 10-point list. A good way to ensure you pay no more tax than required is to claim all... Read more →
Photo by Porapak Apichodilok You took that job in Rome and things are working out great. But you discovered that there’s one part of the United States that hitched an international ride with you. The Internal Revenue Code. Thanks to our worldwide tax system for individuals, as a U.S. citizen you remain a U.S. taxpayer, regardless of where you live. That makes you responsible for filing federal tax returns on your overseas earnings. Uncle Sam, however, does provide some tax breaks to his citizens living and working abroad. They get more time to file, with a June 15 deadline. And... Read more →
Credit: Panoramio via Wikimedia Hello March! Good to see that you're following the traditional script and, at least here in the greater Austin area, roared in like a lion. But the weather bluster also is a good reminder that some feline-style aggressiveness could pay off on your taxes. Some of the four March tax moves below could cut your 2024 tax bill that you'll compute on the return due by April 15. Others are good tax moves for the current 2025, and future, tax years. A couple do both. If any of the suggested tax moves work for you, implement... Read more →
Photo by RDNE Stock project The Republican party has long opposed the federal estate tax, or as its members call it, the Death Tax. Bills are regularly introduced to kill the tax. Eliminating it even made it into the GOP-led House Budget Committee working paper on extending the tax cuts enacted the last time Donald J. Trump was president. Now, however, that committee’s chairman has decided that a, dare we say, more conservative approach would be better. Rather than eliminate the tax, he’s introduced a bill that would cut the current 40 percent estate tax rate in half. Short-lived tax... Read more →
Photo by Pixabay The Internal Revenue Service says that most taxpayers get refunds. Good for them. But those of us who end up owing Uncle Sam after we run our Form 1040 numbers have to come up with a way to pay. The easiest way, both for taxpayers and the tax collector, is electronic. Here's a quick review of six e-payment options available this 2025 tax filing, and paying, season. 1. Credit or Debit Card or Digital Wallet: Paying by plastic is one of the oldest and most popular tax e-pay methods, so Uncle Sam happily accepts our credit or... Read more →
The standard tax deduction is used by most filers. The amounts are substantial, thanks to the increases of the Tax Cuts and Jobs Act (TCJA) of 2017. Plus, it’s easy to claim. The standard amount for each filing status is listed directly on Form 1040. See more tax forms and more about them at Tax Forms 2024 and Tax Forms 2025. But that doesn’t mean you should stop looking for deductions. There are two dozen that are available to qualifying taxpayers, regardless of whether you take the standard claim or itemize. Here’s a look at these 24 tax write-offs that,... Read more →
Fortune cookie tax filing wisdom (Photo by Kay Bell) We’re into the second official day of the 2025 tax season and millions of taxpayers have already filed their returns. This post is not for you. It’s for folks who haven’t yet even thought about their 2024 tax year returns. That’s okay. We all work at our own pace. But there actually are some good reasons to get to your annual tax filing task sooner rather than later. Here are 10. 1. To get your federal tax refund sooner. This is the main reason early filers get their 1040 forms to... Read more →
We're still not sure what will happen with the tax code as we start the second Trump term, but here are some possibilities. Last weekend, one of my posts was on the long list of ways the Republicans might pay for extending this year’s expiring Tax Cuts and Jobs Act of 2017 provisions and other Donald J. Trump tax proposals. So, this weekend, it seems fitting to look at what those proposals might pay for. I’m giving Saturday Shout Outs to some articles on possible revived, tweaked, and/or new tax laws in 2025. The first is a slide show from... Read more →
Working from home is a convenience employees don't want to surrender, according to recent poll. Conducting business from your home is still an option is you're self-employed, and you also might be able to claim the home office tax deduction. Working from home has its own unique distractions, but almost half of employees who do their job from their homes say they would quit rather than return to a full 40 hours a week in their offices. (Photo by Ketut Subiyanto) Among the slew of presidential actions taken by Donald J. Trump since his return this week to the Oval... Read more →
Photo by Pixabay The 2025 federal tax filing season officially starts Monday, Jan. 27. Millions of taxpayers already are working on their returns. Some have even completed them. Most of these folks are in a hurry to get their Form 1040 to the Internal Revenue Service because they are expecting a refund. Many also don’t have very complicated tax situations. Or they think they don’t. But something may have changed in their personal lives that could affect their filings, for better or worse. So before they — or you — hit send on their tax year 2024 filing, it’s a... Read more →
The Internal Revenue Service will start processing 2024 tax year returns on Jan. 27. Millions of people will file then, or before, getting their forms into Uncle Sam’s tax queue. But to file a complete and accurate Form 1040, you need all the information that form requests. That’s generally income statements like W-2s and 1999s. But there are many other documents that have tax-filing relevance. And most of those aren’t require by law to be sent to you until the end of January. So, most of us are just going to have to be patient for a couple more weeks.... Read more →
UPDATE, Monday, Jan. 13, 2025: California officials also are offering taxpayers in Los Angeles County a postponement on filing 2024 state tax returns and making tax payments that would have been due between January 7 and October 15, 2025. The extent and ferocity of the wind-propelled Palisades fire is, in many cases, an insurmountable challenge for Los Angeles, California, firefighters. (Photo by CAL FIRE_Official - Palisades Fire, Public Domain) California firefighters, joined by their brethren from other states and Canada and Mexico, are still struggled to contain the catastrophic wildfires that have engulfed the Los Angeles metropolitan area. Since the... Read more →
That last Monday in January is when the Internal Revenue Service will start processing all 2024 tax year returns, including those filed earlier by taxpayers who qualified to use the already open Free File program. Photo by Nataliya Vaitkevich It’s official. Tax season 2025 starts Monday, Jan. 27. The Internal Revenue Service says it expects more than 140 million individual 2024 tax year returns to be filed by the April 15 deadline. IRS Commissioner Danny Werfel, who could be overseeing his final filing season if incoming president Donald J. Trump follows through on his plans for the agency, says the... Read more →
Updated, Wednesday, Jan. 8, 2025 Millions of taxpayers already are filling out their 2024 tax returns. Now they just need to know when the Internal Revenue Service will start processing them. On Friday, Jan. 10, Free File opens. The no-cost online tax preparation and e-filing option can be used by taxpayers whose adjusted gross income (AGI) is $84,000 or less. Business taxpayers will be able to electronically file their returns on Jan. 15. As for individual filers who make more than the Free File AGI threshold, they can start using Free File's Fillable Forms on Jan. 27. That date follows... Read more →