AARP While we were ringing in 2025, some new tax laws took effect when the clock officially clicked over to Jan. 1. Since I know many of you, and by you I mean me, have hangovers from eating, drinking and/or just plain staying up way past your normal bedtime last night (I'm guilty of all three!), I’m going to ease into the tax news on this first day of the brand New Year. I’m starting with a couple of reminders of tax changes announced as last year was winding down. You got it. The Internal Revenue Service's annual inflation adjustments... Read more →
Tax planning
Saying "I do" also means saying hello to some tax changes in your new wedded life. (Photo by Jakob Owens on Unsplash) The end of each year is a good time to reflect on what happened the previous 12 months. For most of us, that includes some good events, some sad ones, and some still shaking out as we’re about to enter a brand new year. Many of these changes also could affect our taxes. So, as a bit of year-end preplanning, here are six ways that the Internal Revenue Code shows up when we encounter personal and lifestyle changes.... Read more →
Photo by Alexas Fotos 2024 is almost over, with millions making plans to celebrate the calendar changed on New Year’s Eve. But before you don your party hat and raise your glass to say goodbye to the old year and ring in 2025, you need to be aware of the tax importance of Dec. 31. Actions on the final day of a year could affect your full 2024 tax bill. Here are five that could make a difference. 1. Getting married. If you say "I do" on 12/31, then the Internal Revenue Service considers you married for the whole year.... Read more →
It’s the day after Christmas. That means we’ll find a handful of holiday cards in our snail mail box. And watch the neighbors stack boxes that held presents on the curb, even though our recycling and trash pickups are days away. Those boxes also are a reminder that in many parts of the world Dec. 26 is Boxing Day. It’s typically a day to keep the season of giving going a bit longer. There are many explanations as to how Boxing Day, and its name, came to be. One commonly accepted origin story is that it began in the United... Read more →
Photo by Tatyana Mazepova It’s the holiday season, so many of us have travel on our minds. That includes the Internal Revenue Service. AAA expects 2.5 million more people will be on the roads for the year-end holiday period, which is classifies as Saturday, Dec. 21 to Wednesday, Jan. 1, 2025. That comes to a total of 107 million people making a road trip of 50 miles or more, just shy of the record 108 million drivers in 2019. But Uncle Sam’s tax collector isn’t narrowly focused on who is hitting the highways over the next few days. The IRS,... Read more →
Photo by Anna Nekrashevich I know, this month started off with 10 tax moves to make, or at least consider, by Dec. 31. With 2024 winding down, I wanted to remind you of those suggestions again. And now, because nagging reminding is just part of who I am, I have a couple more things you might want to think about. Specifically, you need to look at some of the tax numbers that will come into play when you file your return next year. This includes the tax brackets — rates and dollar amounts to which they apply — that will... Read more →
Prescription copays are a common way to spend flexible spending account (FSA) money, but there are lots of other options to use so you don't lose the tax-favored funds. Your most important list this time of year is the one detailing all the Christmas gifts you’ve got to find by Dec. 25. But you also need to make another for flexible spending account eligible items you need to buy by Dec. 31. A medical flexible spending account, or FSA as it’s usually referred to, is workplace benefit that allows you to set aside some pre-tax money from each paycheck. Then... Read more →
Regardless of your age, you need to think about retirement savings. One consideration is whether to convert a traditional IRA to a Roth retirement account. (Photo by Dany Kurniawan) Retirement is supposed to be a time of leisure. But getting enough money to enjoy post-work years is not so easy. That’s definitely the case when trying to decide whether to convert a traditional IRA to a Roth IRA. It’s an easier question for younger savers. They have more time for the tax-free Roth funds to grow and to recoup the taxes they had to pay on the conversion. But if... Read more →
Stumped when it comes to some Christmas presents? It can happen to even the most experienced gift-giver. Here are some tax-related suggestions that might help you be a good Tax Santa this year. Not that anyone is counting, but Christmas is just two weeks away. OK, we’re all counting. And some of us are freaking out a little bit over what to get certain people in our lives. If you, like me, haven’t finished your holiday shopping, here are five financial gifts, some with Internal Revenue Code benefits, that could help you be a great Tax Santa. Open a Roth... Read more →
You’re 73. You have a traditional IRA or other tax-deferred retirement account. You’ve yet to take your required minimum distribution (RMD). You better get to it. The deadline for most who are subject to this tax rule is Dec. 31. Here’s a quick RMD to-do list to help ensure you complete the task. As a bonus, there also are some suggestions on how to use the retirement money. Take out the mandated amount. Your traditional IRA or affected retirement account trustee should have been bugging you about this. It’s time to take the nagging seriously and withdraw your RMD. The... Read more →
UPDATE, Thursday, Dec. 12, 2024: President Joe Biden today signed into law H.R. 5863, the Federal Disaster Tax Relief Act of 2023, which provides tax relief with respect to certain federal major disasters. Wildfires to the west, hurricanes to the east. An array of major disasters now are covered under a tax relief bill that, after more than a year, finally will be law. (Photo by Caleb Cook on Unsplash) A long-awaited disaster relief finally is headed to the White House, where President Joe Biden is expected to sign it into law and was signed into law by President Joe... Read more →
I love Santa Claus, but even the Jolly Old Elf isn’t magical enough to provide the tax solutions you asked for in your letter to him. You’re going to have to make some tax moves, like the 10 below, yourself. (Photo by Kaboompics.com) Ho, Ho, Holy Moly! December sure got here quickly! Thanks to the 2024 calendar, we (or at least I) haven't even had time to sufficiently recover from Thanksgiving. But time, and taxes, march on, meaning we’ll just have to deal with a compressed holiday schedule as best we can. I hate to be the Tax Grinch adding... Read more →
Okay, one more turkey, but the Thanksgiving dinner version. To go along with the leftovers from this meal, below is a wrap-up (sans foil) of last week’s Five Tax Turkeys to Avoid. (Photo by cottonbro studio) How are you doing this post-Thanksgiving weekend? Still feeling a bit stuffed, and now looking at way too many leftovers? With the 2024 calendar pushing Turkey Day to the end of November, maybe you can repurpose some of the excess food for the Christmas gathering that will be upon us in less than a month. But rather than worry right now about the next... Read more →
Five turkeys might not technically be enough to be classified a rafter or gang or death row of turkeys — and yes, all are among the many collective nouns for a gathering of this particular fowl — but these birds represent today's fifth and final Tax Turkey to Avoid. (Photo by Chris Henry on Unsplash) Are you enjoying your Thanksgiving break? Maybe time off from work this week has you thinking about when you can leave the 9-to-5 completely. Whenever that happens, you’ll want to have enough of a nest egg to enjoy your retirement. That will be possible if... Read more →
In addition to donating cash to your favorite charity, there are other ways to give. Here are three alternative charitable giving options. (Photo by Mark John Hilario) 🦃 Happy 🍗 Thanksgiving! 🦃 Millions of Americans gather today with family and friends to give thanks for all the good things in their lives. This November holiday also is a major fundraising time for charities. Donations to nonprofits that help those in need — shelters, food banks and other meal programs, support services for those needing special services — increase this time of year. Technically, these donations could provide donors a tax... Read more →
You need to get your medical flexible spending account (FSA) expenditures in a row so you don’t lose any of the tax-favored account money. (Photo by Jackie A) Thanksgiving get-togethers can be wonderful. They also can be stressful. And in many cases, literally painful. There are headaches caused by traffic hassles, anxiety prompted by annoying relatives, indigestion from over eating, and back pain from sleeping on that horrid bed in your parent’s guest room. The good news is that you can use your flexible spending account (FSA) funds to pay for the Tums, aspirin, or whatever over-the-counter (OTC) remedies make... Read more →
You have two main deduction options when you file, standard or itemizing. This gobbler duo represents that choice, which you make each year, based on which gives you the most beneficial tax result. You can make sure you make the most of your deductions by having a bunching strategy. (Photo by sterlinglanier Lanier on Unsplash) Deductions are one way to trim you tax bill. But since the Tax Cuts and Jobs Act (TCJA) of 2017 essentially doubled the standard deduction amounts, most taxpayers claim that set amount instead of collecting receipts and itemizing. That’s the wisest tax move for most... Read more →
This showy Texas turkey, not to be confused with music icon Bob Wills' Turkey, Texas, hometown, is a spectacular representation of the ol’ blog’s first tax turkey to avoid this holiday season, or any time of year. It’s Thanksgiving week. Most Americans are looking forward to the upcoming fourth Thursday in November, when they’ll gather to share food and fun with family and friends. A turkey will be the featured food on most tables, a tradition dating from the turn of the 19th century. But turkey also is disparaging slang for loser. Tax turkeys, in addition to being unwanted, can... Read more →
Will this higher cost across the country be enough to convince lawmakers to revise the $10,000 state and local tax (SALT) federal tax deduction cap? Before the Tax Cuts and Jobs Act (TCJA) of 2017 was enacted, I’d spend this time of year deciding whether to pay our home’s annual property tax bill by Dec. 31 or wait until its due date of Jan. 31 the following year got closer. It wasn’t just a cashflow decision. It also affected our tax filing. Or did, as I noted, before the Republican tax reform bill limited the amount of state and local... Read more →
Last month, the Internal Revenue Service issued its annual inflation adjustments for myriad tax provisions. The new numbers were released before the Nov. 5, so there was a bit of concern that these figures could dramatically change after 2025. The trepidation was based on the expiration at the end of next year of mostly individual tax breaks in the Tax Cuts and Jobs Act (TCJA) of 2017, the signature tax law in Donald J. Trump’s first term. Now, with Trump returning to the Oval Office in January, along with Republican majorities in the House and Senate, there’s a bit more... Read more →