You have a lot to do, and which you'd rather be doing, this month. But also take some time to check out a few December tax moves. (Photo via Unsplash+ in collaboration with Getty Images) It's December! Are you ready for all the decorating and shopping and cooking and parties and tax moves to make? Me neither. Although I love the holidays and Christmas decorating, my time and patience get shorter this time of year as my seasonal to-do list gets longer. So I understand if you are rolling your eyes right now as I suggest adding some tax moves... Read more →
Tax rebate
Photo by Alexander Mils So far this year, 17 states have or will issue rebate money to their residents. Massachusetts is about to up that list count to 18, thanks to a 1986 state law. The Bay State's Department of Revenue this summer reported a fiscal-year-end tax revenue surplus of nearly $3 billion. Once the state auditor certifies the amount, which at the last unofficial count was $2.941 billion, the tax cap law known as Chapter 62F takes effect. The payback law, a referendum approved 36 years ago by Massachusetts voters, requires the state rebate its taxpayers a percentage of... Read more →
Geralt via Pixabay Economists use a variety of measurements to track inflation, but the one that matters most to you and me is the personal consumption expenditure, or PCE, price index. This gauge of consumer spending increased 1.1 percent in June. The difficulty many folks are having in meeting their rising living expenses finally prompted some Congressional action. The Senate is expected to vote next week on what's been dubbed the Inflation Reduction Act of 2022, a budget reconciliation package that includes tax, climate change mitigation, and health care provisions. But closer to home, 16 state governments are taking more... Read more →
Massachusetts residents are well aware of their state's Taxachusetts nickname. But some excessive Bay State revenue soon could be coming back to them. The state's department of revenue last fiscal year collected much more than expected. In April alone, which is when the state's federally-aligned Tax Day arrives, it received $2+ billion more than it had anticipated. All that unexpected money means a rarely used law in place since 1986 will kick in, sending back some of the excess tax money to residents. Taxpayer repayments on the way: "We think the number's probably north of $2.5 billion that would be... Read more →
Photo by Kay Bell The 2022 filing season is already underway for many taxpayers even though the Internal Revenue Service won't start processing their returns until Jan. 24. But these early bird filers are on to something. Here are eight reasons you might want to consider completing your Form 1040 soon. 1. To get the rest of your Child Tax Credit. Around 36 million families last year got an early tax benefit. The IRS delivered half of their 2021 tax year Child Tax Credit (CTC) in advance as monthly payments from last July through December. The maximum advance amounts were... Read more →
Since the American Rescue Plan Act (ARPA) was enacted on March 11, the Internal Revenue Service has distributed approximately 159 million COVID-19 economic impact payments (EIPs). Those deliveries come to more than $376 billion. This third round of coronavirus pandemic payments, worth up to $1,400 per person, has been going out in batches. Recipients include taxpayers who've filed 2020 returns, Social Security recipients, and veterans and their families. Still, there are some folks who aren't on the IRS' EIP delivery list. These are, for the most part, people who haven't file a tax return because they're not legally required to... Read more →
You don't have to literally settle in next to your mail box, but do be on the lookout for your coronavirus economic relief payment. The IRS is sending out the next batch of this third round and many of them will be checks or debit cards delivered by the U.S. Postal Service. Attention taxpayers: More economic impact payments are on the way. That's the promise in an announcement today from the Internal Revenue Service. But the news is not all good. Many of this next batch of payments will be as paper checks or prepaid debit cards that eventually will... Read more →
DonkeyHotey via Flickr Around 90 million COVID-19 economic impact payments have been distributed in less than a week since the bill authorizing them was enacted. Those payments total more than $242 billion, according to the Internal Revenue Service. In announcing the relief payment data today, the IRS also noted that more payments per the American Rescue Plan Act (ARPA) will be going out in the coming weeks. All funds available today: Most of this first batch of payments, dubbed EIP3 since they are the third such pandemic financial relief effort, were sent by direct deposit. While some of these deposits... Read more →
U.S. Treasury check image courtesy frankieleon via Flickr Some people have already received the third economic impact payment (EIP), which is $1,400 per person, as authorized under the just enacted American Rescue Plan. Of course, we're already hearing some grumbling. That's to be expected any time the Internal Revenue Service, which once again is tasked with distributing the relief money, is involved. But at least initially the IRS seems to have the system down after having done this two previous times. So now we wait. Hopefully we don't have to wait too long. And while we wait, today's Saturday Shout... Read more →
I'm willing to bet that line 30 will be one of the most scrutinized lines on the 2020 tax year Form 1040. That's where taxpayers can claim the new Recovery Rebate Credit, or RRC. The RRC is the official name of the money issued in 2020 and earlier this year as COVID-19 economic impact payments, or EIPs. The payments actually were advance payments on this tax credit. If you didn't get any or all of either EIP last year, you can claim it this filing season on the aforementioned and likely popular line 30. Depending on your actual income amount... Read more →
Photo by Kay Bell The 2021 filing season won't start until Feb. 12 this year. That's frustrating for the millions of taxpayers who traditionally are early return filers. It's more frustrating for those taxpayers who, because of COVID-19 complications (which also created this year's filing delay), are really counting on their tax refunds to cover expenses. This year's later than usual filing start means it is even more important to get those 1040 forms into the Internal Revenue Service as soon as the agency will take them. If you're still debating about when to file your taxes, here are seven... Read more →
President Joe Biden's $1.9 trillion COVID-19 recovery proposal, dubbed the American Rescue Plan, includes among other things a third economic impact payment (EIP). This next payment is $1,400 for individuals earning less than $75,000 or $150,000 for a married couple filing a joint return. That would bring the $600 second EIP to the much-touted $2,000 total. And as with the other two payments, the Internal Revenue Service again will be in charge of getting the money out to eligible recipients. I know. Some of y'all are freaking out. You had issues getting your first EIP authorized by the Coronavirus Aid,... Read more →
Have you received your $600 COVID-19 economic impact payment (EIP)? If not, then you're probably doing the same thing as Purcival Fairweather. You're checking, double checking and rechecking yet again your bank account to see if the coronavirus cash is finally there. $600 check? More like check my account 600 times. — Purcival Fairweather 🍾 (@purcival) January 2, 2021 But your obsessive bank badgering won't have to go on very much longer. If your EIP doesn't arrive by Jan. 15 or shortly thereafter it's sent out as a debit card or paper U.S. Treasury check, then you're not getting it.... Read more →
More than 80 million stimulus checks went out last week, mostly to people who filed federal 2018 or 2019 returns and had the Internal Revenue Service directly deposit those tax years' refunds. Millions more have been anxiously checking the IRS' Get My Payment online tracking tool (guilty!) and/or their bank accounts (guilty again!) to find out just how far along their (my) COVID-19 relief payment is in the distribution system. In many cases, people who didn't get refunds, but are eligible for the coronavirus stimulus money are trying to speed up the delivery process by using the online tool to... Read more →
Treasury backtracks and now says Social Security recipients who qualify for the COVID-19 payments will get the money without having to file a tax return. Never underestimate the power of the older population. The U.S. government learned that lesson this week, when the Treasury Department announced, contrary to its prior assurances (and a new law), that folks on Social Security would have to file a tax return if they wanted to get their share of the coronavirus relief payments. Last night, Treasury Secretary Steve Mnuchin reversed that requirement. (Yes, on April 1. No, it was no an April Fool's Day... Read more →
The law that created coronavirus stimulus payments just took effect yesterday and we're weeks at best from getting actual money. But tax planners have been thinking about COVID-19 tax intricacies since the illness exploded in the middle of this tax season. These payments just add a new tax filing wrinkle, since what we put on our 2019 returns could be a key part in the relief amount's ultimate dollar calculation. Tony Nitti, a CPA and tax partner with RubinBrown in Aspen, Colorado, has a good preview of what our tax filing actions now could mean to our potential coronavirus payments... Read more →
Most folks have their income taxes, both federal and state, withheld from their paychecks. While your employer (or, in many cases, the payroll company it hires) will take care of the amount that comes out each pay period, it's up to you to make sure it's correct. Filling out your W-4: Your withholding is based on the information you provide on Form W-4. The key factor on this document is your number of withholding allowances. The more allowances you claim, the less tax withheld. The reasoning is that you need the money in hand each payday to take care of... Read more →
Taxes and politics are inextricably linked. Raising them, or even saying you might think about doing so, generally dooms campaigns. Lowering them, of course, is seen as a political plus. And actually giving people real tax money back goes a long way toward a ballot box win. At least that's what some New York incumbents no doubt are hoping happens this election year. Family tax credit rebates: Millions of Empire State residents soon will be $350 richer. Tax rebate checks for that amount are going out this week to New Yorkers who, among other things, had a child younger than... Read more →
Americans are more pessimistic about the economic recovery. A report late last month from the Conference Board, a business research association, found that consumer confidence fell in May to its lowest level since last November. "Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Inflation concerns, which had eased last month, have picked up once again." I see those inflation concerns on every grocery shopping trip I make with my mother. She's a senior citizen living primarily on Social Security... Read more →
The midterm election is just two weeks away and Democrats are in good shape because for the last two years every working American has seen his or her federal taxes go down. Say what? That's the reaction of most U.S. taxpayers. But it's true -- that being the statement that federal taxes have been reduced, not the part about Democratic candidates being in good political shape this year. I'm talking about the Making Work Pay tax credit. You remember this. It was the centerpiece of the 2009 Obama stimulus measure and, for 2009 and 2010 tax years, has cut income... Read more →