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 →
Recordkeeping
If you're self-employed, use your car for work, and have taken your last business trip of 2024, go out to your vehicle and take a photo of the odometer. It could help when you file your tax return next year. (Photo by Fortune Vieyra on Unsplash) I grocery shop every Tuesday. That meant today’s weekly trip was to my local H-E-B was on the last day of 2024. It was the last time I’ll get in the car this year. So when I pulled into my garage after stocking up on necessities (milk, bread, produce) and other items (potato chips... 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 →
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 →
If you sold more than $5,000 in products or services through only apps and marketplaces, get ready to receive a tax form next year alerting you, and the Internal Revenue Service, of the potentially taxable income. The amount will be reported on IRS Form 1099-K. Changing 1099-K amounts: The fluid nature of the amount of earnings that trigger issuance of the reporting form has been a hassle for both taxpayers and the IRS since changes were made in the American Rescue Plan Act (ARPA) of 2021. Before ARPA’s enactment, third-party settlement organizations, or TPSOs, — think PayPal, Venmo, CashApp, eBay,... 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 →
Tax season is done for most filers. We’ve made it through April’s main Tax Day, and this week’s extension filing deadline. Now it's time for some clean-up and record keeping. But before you start tossing tax documents, make sure you know which can go and which you need to keep. And for how long. The time frame for hanging on to tax-related material generally is determined by the Internal Revenue Service’s audit statute of limitations. That essentially means that you need to hang on to some of the material for as long as the IRS has to question your filing.... Read more →
“Oh, yeah. That’s the spot,” seems to be what this Chow Chow is thinking as he’s getting a neck rub from his owner. (Photo by Omid Armin on Unsplash) Happy National Dog Day! Or, for canine lovers, the 239th day of Dog Year 2024. Personally, I’m a cat fan. But many of my relatives are pooch parents. And let’s be honest, whatever creature you choose to welcome into your home, the animals are part of your family. So, we should be able to claim them as dependents, right? Sorry, but wrong. The Internal Revenue Service probably is full of pet... Read more →
Photo by Yan Krukau Some classes have already started. Others, like those in my local suburban Austin school district, begin next week. And most will be underway by the end of August. So, families are hitting the stores, especially in places with back-to-school tax holidays, picking up the supplies that will help their youngsters succeed this semester. But parents and guardians aren’t alone. Teachers also regularly spend their own money to make sure that their students have a positive educational experience. If you’re one of those educators who’s shelling out your own money for classroom supplies, save those receipts. You... Read more →
August is the month that brings us the sunsetting of summer. But amid the season's waning days, find some time to take care of some tax tasks. (Photo by Kay Bell) It’s August. Already! How did this final summer month sneak up on us, or at least on me? Maybe it was all the other distractions. The presidential campaign has been unusual, to say the least. The Paris Olympics kicked off with a controversial opening ceremony (I loved it!), and still have more than a week to go. Then there’s the unrelenting heat wave across the United States. And, of... Read more →
Drone composite image of the significant damage to structures in downtown Sulphur, Oklahoma. A large part of the small town in south-central Oklahoma was struck by an EF3+ tornado on April 27, 2024. (Photo by Wikiwillz via Wikipedia Commons) The United States’ tornado season used to be in the spring, with most of them occurring in the middle of the country known as Tornado Alley. But things have changed. Or maybe data collection improved. Whatever the reason, tornado-spawning storms are showing up almost year-round, and they’re showing up well beyond the original Tornado Alley boundaries. This year could be one... Read more →
Photo by Alexander Grey on Unsplash You made it through Tax Day. Now it's time to store all that information you used to fill out your Form 1040. While it's tempting to just toss it all, don't. It often takes the Internal Revenue Service a while to process filings. The agency could come back weeks, months, or even years from now with a question about an entry on your return. Just to be safe, you need to hang on to some of the material for as long as the IRS has to question your filing. Once that statute of limitations... Read more →
The Internal Revenue Service IRS is expected to process more than 160 million individual and business tax returns this filing season. Through March 15, the IRS had received nearly 71.6 million individual returns. Some taxpayers probably put off filing in the hopes that the Tax Relief for American Families and Workers Act would be enacted by Tax Day. Several of its provisions could help both personal and business filers. Whether that will happen is still unclear, as the tax bill that cleared the House has hit a lot of speed bumps in the Senate. Other taxpayers, however, aren't that concerned... Read more →
Unsplash+ in collaboration with Getty Images Most taxpayers claim the standard deduction. Those who opt to itemize do so because they have enough tax deductible expenses to exceed their filing status' standard amount. In most cases, those expenses are medical. Generally, you can claim allowable medical costs for yourself, your spouse, and dependents as long as the treatments were prescribed by a physician as necessary to diagnose, ease, or prevent a physical or mental illness. The amount of these medical costs that exceed 7.5 percent of your adjusted gross income count on your Schedule A, the form where you detail... Read more →
Last week, I finally got all the documents I need to file my 2023 tax return. As an independent contractor, the bulk of my income tax statements were 1099-NEC forms. But some folks are getting 1099-Ks. And these tax statements still are causing confusion. Form 1099-K has become more common with the growth of the gig workforce, and the delivery of products and services through online apps and marketplaces, such as PayPal, Venmo, CashApp, eBay, Etsy, Uber, Lyft, and Airbnb. Old form, new amounts: The forms are not new, but the amount of earnings that trigger their issuance has changed.... Read more →
Hello, February. Even though it's the second month of the year, it's the first full month of the annual tax-filing season. So if you're just now starting to focus on filing your return, don't feel bad or alone. A lot of us are right there with you. Since February is the shortest month, even with this year's extra Leap Year day, I'll keep the monthly tax moves list brief, too. Here are four tax moves to consider in the next 29 days. 1. Keep an eye out for tax statements. Yesterday, Jan. 31, was the day that employers were supposed... Read more →
Taking things a bit more slowly often is a good idea. For many, that approach also applies when it comes to filing their annual tax return. (Photo by Kay Bell) While millions of taxpayers are eager each January to get their returns to the Internal Revenue Service, there just as many who want to take their time. Some are just natural procrastinators. They wait until the last minute to finish every task. But when it comes to tax filing, there actually are some good reasons to not be in such a hurry. Here are seven. 1. To see if Congress... Read more →
Most taxpayers will never be as chill as this tabby, especially now that the annual tax filing season is here. But these tips could make the tax task a little easier. (Photo by Jacalyn Beales on Unsplash) If you've already got your 2023 tax return ready to send to the Internal Revenue Service tomorrow, Jan. 29, when the agency starts processing filings, you can peruse other items on the ol' blog. (Thank you!) If, however, you're not quite ready yet to tackle Form 1040, I got you. Even when your taxes aren't complicated, many of us dread filling out tax... Read more →
You're ready to file your tax return, but there's one problem. You don't have all the statements you need to complete your Form 1040 and associated schedules. Many of us, however, are just going to have to be patient for a couple more weeks. While some issuers have sent taxpayers the required statements, many don't get them out until close to, in most cases, the mandated Jan. 31 delivery date. The documents typically are snail mailed, but technology is gaining ground. Issuers of most of my annual tax statements now let me know by email the documents are ready. Then... Read more →
Photo via Unsplash+ in collaboration with Monika Grabkowska Happy New Year! I know, it's already two days old, so I'm a bit late. But I'm cutting myself some slack since it's the first work day of the year after a three-day holiday. I'm also cutting myself some slack when it comes to annual resolutions. I'm not making any. It's not that I'm opposed to setting goals. But I hate that annual judgy list. I'm still working on some prior year intentions, so I don't see a need to add to my tasks. If you, however, like to start off each... Read more →