Welcome to Part 2 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. Today we look at standard and itemized deductions, certain limitations on some Schedule A claims and the sort-of still around personal exemption amount. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this... Read more →
Tax planning
It's that time of the tax year when things start coming at us fast. We just wrapped up the 2019 tax return filing season, giving us around two months to focus on tax moves to make before year's end to lessen the 2020 tax-year bite. Then each fall the Internal Revenue Service throws a ton of numbers at us that change things for the soon-to-arrive next tax year. C'mon, taxman! Sure, we've all learned to multitask, but really? Now? Do we really need this huge 2021 data dump at the end of a crazy COVID-19 tax year where we already... Read more →
The continuing COVID-19 chaos, plus an extended 2020 filing season for those coping with this year's natural disaster onslaught, could create more challenges in 2021 for taxpayers and the Internal Revenue Service. Are we — and the agency — ready for it? 2020, a year that many of us would just as soon forget, will end in just more than two months. This federal tax filing season, however, will continue for folks who've endured some of the notable natural disasters that have helped make 2020 so terrible. Last week, the Internal Revenue Service issued more disaster-related tax relief in connection... Read more →
Wildfire at night by Chenjack via Flickr While millions of taxpayers rushed to finish their 2109 tax filing last week in order to meet the Oct. 15 extended deadline, others weren't concerned about that deadline. They are the individual and business taxpayers who are dealing with something more pressing than taxes. They are trying to pick up the pieces from a major natural disaster. In these catastrophic cases, the Internal Revenue Service usually gives affected taxpayers more time to take care of their tax filing tasks. Some additional West Coast taxpayers have been added to this year's adjusted tax deadline... Read more →
For millions of U.S. workers, this month is the beginning of their benefits open enrollment period. This is your annual chance to switch, adjust or cancel usually tax-free company perks for you and your family. The biggest employer-provided benefit is medical insurance. Health coverage has taken on new importance during the coronavirus pandemic. But companies offer many more options that help make their workers' lives a bit easier and less costly. And many benefits experts expect COVID-19 considerations during this open season to alter the usual trend of workers simply letting existing coverages roll into the new year, which is... Read more →
The Social Security Administration (SSA) just gave retirees and other recipients of the program's payments some good news with the announcement of a small hike in their benefits year. Some higher earners, however, aren't so happy. In the same benefits raise announcement, the SSA noted that the amount of income subject to the Social Security payroll withholding also is going up in 2021. This amount, known as the Social Security wage base, is the maximum of earnings, by both salaried workers and the self-employed, that are subject to that portion of the Federal Insurance Contributions Act (FICA) tax. For the... Read more →
A quick Social Security note about for folks not yet at or near the benefits age about taxes on that pre-retirement income. More of it, known as the wage base, will be subject to the Social Security payroll tax. Details are in this post. Retirees checking on their investments. The income could make their Social Security benefits taxable. Today's a good day for millions of Social Security recipients. The Social Security Administration (SSA) has announced that benefits will increase a bit next year. Older folks who get regular monthly Social Security payments, along with those who receive Supplemental Security Income... Read more →
It's a bit hard to keep track if you're still isolating due to the coronavirus pandemic, but welcome to another Monday federal holiday. Today is Columbus Day. Yes, it's still an official federal holiday. The White House issued an announcement lauding namesake Christopher Columbus that's getting a lot of pushback on social media from folks who prefer to use this October day to celebrate the United States' indigenous populations. We should use this day to learn about the history of indigenous people. #IndigenousPeoplesDay so for the next 24 hours this account will be a flood of me RTing Native excellence,... Read more →
Millions of U.S. government employees in federal buildings across the country, like this one Sacramento, California, are being forced to participate in the Trump Administration's partial payroll tax deferral. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are continuing their efforts to cobble together a second round of COVID-19 stimulus payments. Some people, however, don't want the ostensible financial relief they're already getting. They are among the federal workers and military members who've had the Social Security portion of their Federal Insurance Contributions Act (FICA) payroll taxes automatically suspended. Forty-three Representatives say they've heard from these constituents who are... Read more →
Hello, October! You're always welcome at my house. I love your cooler temperatures that let me open windows and doors and put an end to exorbitant air conditioning costs. I love the color changes of trees and shrubs. And I love the candy that I accidentally (really!) over-buy in preparation for the young ghouls and goblins that knock on our front door each Oct. 31. I suspect I'm not alone in appreciating the arrival of autumn. But amid all these annual fall festivities, we need to make at least a few tax moves that could help out our upcoming tax... Read more →
Has the coronavirus pandemic got you stressing? Some ways to relief your COVID-19 anxiety might be covered by health insurance or associated medical savings accounts. (Photo by Gustavo Fring via Pexels) Life is stressful in the best of times. We definitely are not in the best of times. We're dealing with a contentious presidential election during a deadly pandemic. Plus, flu season is almost here. Mother Nature keeps whacking us with disasters. Kids are going back to school or not, both prospects producing parental problems. And way too many folks are unemployed or are worrying about losing their jobs. Whew!... Read more →
Depending on your personal situation, your deadline to claim any or additional coronavirus stimulus money is Sept. 30 or Oct. 15. Miss the deadline, and you'll have to wait until next year for much-needed COVID-19 cash. Since it's still unclear if or when we might get another COVID-19 relief payment, it's even more important that every person who's eligible get all they can from the first stimulus payout. And to do that, a lot of folks need to officially touch base with the Internal Revenue Service. Soon. Like in a couple of days for some families. Wednesday, Sept. 30, is... Read more →
Customs and Border Protection (CBP) Air and Marine agents survey Alabama Gulf Coast damage caused by Hurricane Sally on Sept. 16. (CBP photo by Jerry Glaser via Wikipedia Commons) Tax changes connected to the historic number of storms this 2020 Atlantic hurricane season keep on coming. This week the Internal Revenue Service announced that some Alabama individuals impacted by Hurricane Sally, which made official landfall near Gulf Shores, Alabama, on Sept. 16, now have until mid-January to deal with impending tax tasks. Sally actually began affecting Gulf Coast states on Sept. 14. That's the day cited by the IRS in... Read more →
The Brattain Fire near Paisley, Oregon, on Sept. 15, more than a week after it ignited. (Photo by Maj. Leslie Reed, Oregon Military Department Public Affairs, courtesy Oregon National Guard via Flickr) Tax season 2020 has been extended for some taxpayers. Unfortunately, the extra time to take care of tax tasks is because these individuals and businesses were threatened are dealing with the outbreak of wildfires in Oregon. The Internal Revenue Service announced that victims of the Oregon wildfires and straight-line winds that began on Sept. 7 now have until Jan. 15, 2021 to file various individual and business tax... Read more →
Taxpayers and their tax pros have faced many and new hassles this filing season, primarily because of COVID-19 challenges. Do any of these 2020 tax season situations qualify as an acceptable reason to waive associated filing penalties? Maybe. Technology, and especially tax tech, is great. Until it isn't. That was my reaction when I learned that a lot of tax professionals were left in the lurch yesterday when their tax software provider's e-file system crashed just as they were submitting — or trying to — businesses clients' tax returns that were due Sept. 15. The issue, as you can imagine,... Read more →
Couple waiting to get married at San Francisco City Hall. (Photo by Brian Kusler via Flickr) One good thing has come of my self-imposed pandemic lock down. Seeking a distraction from the news channels I usually watch, I'm finally getting more of my money's worth from our cable account. I've been exploring the many channels the hubby and I typically tend to click right past. For the last week or so, I've tuned in to WEtv because of its run of CSI: Miami episodes. No judging, please! Actually, the TV is more like a talking lamp (really!). The dramatic intonations... Read more →
If you get money that's not subject to income tax withholding, then this weekend's Saturday Shout Out posts are for you. Tuesday, Sept. 15* is the due date for the third quarter payment of estimated taxes. Our tax system is pay-as-you-earn. That's typically done by withholding from wages. But when there's no per-paycheck tax collection mechanism in place, the payment responsibility falls on the person getting the money. And the way it's done is through estimate tax payments. The type of earnings that typically trigger are full-time self-employment or occasional gig work income, investment earnings, rental income, certain alimony payments,... Read more →
Representatives also introduce legislation to overturn executive payroll action, which also affects members of the military. Internal Revenue Service workers are among the federal employees who will see their upcoming paychecks reflect Donald Trump's payroll tax deferral order. Some lawmakers say workers should get to make the final decision on their withholding. (Photo by David Boeke via Flickr) Maryland and Virginia, the two states that border the District of Columbia, are home to hundreds of thousands of federal employees. So it's no surprise that the four U.S. Senators representing those states — and workers who get checks from Uncle Sam... Read more →
It's Labor Day weekend. This holiday usually is time for end-of-summer revelry, with a little leftover celebration of the workers whose efforts are recognized on the first Monday of each September. This year's a bit different. Social distancing during the coronavirus pandemic have, for the most part, limited the usual three-day weekend parties. As for the workers, COVID-19 also means more attention is paid this year on those who aren't laboring because they lost their jobs. COVID-19 response work ramifications:Health decisions by states, several of which reacted to the novel coronavirus earlier than Uncle Sam, led to widespread business closures... Read more →
The fall 2020 semester is starting remotely in most parts of the country. (Photo by August de Richelieu via Pexels) School is back in session. Sort of. In most places, both at the K-12 and college levels, students and their families are dealing with hybrid education modes. Some classes are meeting in person, albeit dramatically altered to meet COVID-19 safe distancing policies. The rest of the time, the students are learning online. It's not ideal, but it's something. The price of learning: But one thing remains the same even when we're dealing with the coronavirus pandemic. Classes, at all levels,... Read more →