Tax Tip Feed

For folks with money in the stock market, the coronavirus' effect on their holdings is more terrifying than Michael Myers, the persistent slasher of "Halloween" horror movie fame. I confess. I've been glued to cable TV financial channels this week. They're showing, for owners of stocks, a real-life horror movie. The evil and infectious COVID-19 monster is maniacally slashing investment gains. Who or what can show up (soon, please!) to stop this crazed killer of our planned comfortable retirement? OK, I might be taking this sequel — and that's what it is; market corrections and recessions have happened before —... Read more →


(Pixabay via Pexels) When you're in the military, taxes are likely far down on your list of concerns. Members of the military, however, bear the same tax responsibility as do all U.S. citizens. The one bit of good tax news here is that the tax code and Internal Revenue Service take into account the special circumstances that armed services personnel face. Here are some tax highlights for military taxpayers. Affected armed forces: Military tax benefits typically apply to active duty or reserve members of the armed forces. The eligible forces are: United States Army (including Army Reserve and Army National... Read more →


Millions of Americans are self-employed. In the Internal Revenue Service's Statistics of Income count for tax year 2017, more than 26 million of U.S. nonfarm taxpayers filed as sole proprietors, submitting Schedule C along with their annual Form 1040 individual tax returns. The great thing about Schedule C is that is offers lots of ways sole proprietors, of which I'm one, can reduce our gross self-employment earnings. But one of those deductions that many likely claimed on their 2017 Schedule C has in subsequent years become a source of confusion and consternation. The tax break for business meals and entertainment... Read more →


To make sure you, not the U.S. Treasury, gets more of these, don't overlook possible tax deductions and credits. At tax time, filers are always searching for ways to reduce their final tax bill. You can claim deductions, either by itemizing if that gives you more than your standard deduction amount or by claiming some income adjustments, still referred to (by me, at least!) as above-the-line deductions that reduce the amount of income that's taxed. There also are tax credits, which are even better because the directly reduce what you owe Uncle Sam dollar-for-dollar and in some cases could produce... Read more →


Millions of us file taxes every year. And millions of us, even those who get refunds, dread it. Why? We worry that we'll make a mistake. That's a legitimate concern. Despite lawmakers' perpetual promises to make our tax lives easier, they somehow seem to screw up that political pledge. Yes, I am looking at you Tax Cuts and Jobs Act (TCJA), with your new forms and confusing tax breaks even when they provide some relief. Thanks, Congress! But sometimes, we filers have to bear some of the blame. We make things worse by making easily avoidable mistakes when we fill... Read more →


Photo by Carlos Cuadros via Pexels It's prime tax-filing time! That's not just my observation. The Internal Revenue Service itself says it typically sees a surge in filings in the final two weeks of February. One of the main reasons for the rush is that folks finally have the tax statements they need. Most of those documents were required to be issued, or at least in the snail mail, to taxpayers by Jan. 31. Even given U.S. Postal Service delays, it's now been plenty of time for the documents to arrive. The crucial document for most filers is the W-2... Read more →


First comes love. Then comes marriage. Then come two filing as one When it comes to their taxes. OK, "marriage" and "taxes" in my opening verse don't rhyme, which is why I'm a journalist, not a poet. But since I focus on taxes and today is, so romantics tell me, the most important day of the year for couples, I thought I'd give the marrying of taxes and wedded bliss a try. Here are five love and tax considerations. 1. Marriage date matters Sure you marry for love. But you might want to consider when you formally tie the knot.... Read more →


My [too] many medical treatment folders and dedicated medical travel log. (Kay Bell photo) I'm in the tax filing minority. I still itemize. Medical issues are the primary reason I've been filling out Schedule A for the last few years. Not to bore you with the gory details, but recently I've had a couple of medical scares and surgeries. Combine those with the requisite multiple physician follow-ups (this afternoon I'm heading to my fifth of sixth doctor appointments this month), continued testing and, of course, prescriptions and let's just say I'm helping many, many doctors pay off their vacation homes... Read more →


You're working on your tax return and discover you owe Uncle Sam more than you expected. It happens. And in most cases, you're stuck with that larger Internal Revenue Service bill. After all, the 2019 tax year is long gone. It's too late to make those year-end moves that could have helped cut your tax bill. But wait! In a couple of instances, you still might be able to reduce last year's taxes with some tax saving moves that are allowed as late as the April 15 filing deadline. You can make a potentially tax-deductible contribution to a traditional IRA.... Read more →


Every salaried worker is well aware of payroll taxes. These are taxes that come out of our earnings and go toward the Federal Insurance Contributions Act (FICA) programs, or what we know as Social Security and Medicare. Or, as the old first-time worker joker goes, "Who the heck if FICA and why is he getting some of my money?" FICA for now: Each FICA component is a percentage of a workers' pay and is paid by both the employer and employee. The total Social Security tax is 12.4 percent, split evenly between the two tax sources every pay period. The... Read more →


I finally got the final 1099 I was waiting for yesterday. Yay! Now I can file my return. The 1099 situation for a retired Southern California dentist, however, didn't go so smoothly. David Powell, got a 1099 from MetLife insurance showing he was paid $1,500 for dental work he says he never performed. Since MetLife also sent that 1099 to the Internal Revenue Service, this meant Powell was on the hook for taxes on money he never earned. Double check documents immediately: Powell's case is why you always need to look at every tax statement — 1099s, W-2s, bank, brokerage... Read more →


Millions of taxpayers finally got their tax statements this week and promptly filed their returns. Millions more of us are still in the data gathering stage — Hey, it's not my fault! One of my 1099s still isn't here. — and will file soon. But all of us still are potential tax identity theft targets. Yes, even early filers. Crooks know these taxpayers generally are expecting refunds, so they tailor their deceptive approaches accordingly. Look out for IRS pretenders reaching out to you to say there's a problem with your filing. It can only be fixed, say these scammers who... Read more →


If this filing season is anything like previous ones, millions of taxpayers have already sent their 1040s to the Internal Revenue Service. One of the perennial questions is how many filers use tax software, specifically the options offered by the IRS-tax software industry partnership known as Free File. Again, if the 2020 filing season is like most before it, the news isn't likely to be good. Despite efforts by the IRS over the years, the Free File program is just not that popular with taxpayers. And making things worse for the program is a just-released report that says more than... Read more →


We are heading into the heart of tax filing season. That means it's also prime tax identity theft time. As part of its continuing efforts to fight cyber tax crime, the Internal Revenue Service this week launched a new web page, Identity Theft Central. Among the areas this new IRS.gov section covers is what to do if you're a victim of tax identity theft. The one that caught my eye was getting a copy of a fraudulent return that was filed in your name. I know that my journalistic tendencies make me nosy in the first place. But if I... Read more →


Thanks to a 2018 Supreme Court ruling, many other states have joined Nevada in accepting bets on sporting events. But casino operations like this one in Las Vegas still get plenty of action on days like Super Bowl Sunday. Happy Tuesday to everyone who skipped work yesterday. I hope you've fully recovered from your Super Bowl hangover. I also hope that at least some of your prop bets on the NFL championship game also paid off. So does the Internal Revenue Service. All your Super Bowl LIV winnings, as well as any other gambling proceeds are taxable income. Yes, even... Read more →


The shortest month of the year is a little longer in 2020. It's a Leap Year. What will we do with that extra day, Feb. 29? Of course, we're going to devote those additional 24 hours to our taxes. OK, maybe not. For many, this first full week of February is getting off to a slow part, thanks to the annual Super Bowl Sunday hangover. Others simply aren't ready to think taxes yet. It's not their fault. They, and that includes me, are still waiting for necessary tax-filing statements. And some eager and on-the-ball taxpayers don't want to think about... Read more →


Are you having some trouble getting fired up for Super Bowl LIV? I feel ya. It's hard when your team isn't one of the competitors. But as a lifelong Dallas Cowboys fan, I've learned over the last 24 years — yes, that's how long it's been since Them Cowboys were in the National Football League championship game — creative ways to pique my interest in the annual match-up. This year, for example, it's pretty easy to find a reason to watch. Kansas City Chief's star quarterback Patrick Mahomes is not only a native Texan like the hubby and me, but... Read more →


What would you do with an extra $2,504? That's the average amount received by taxpayers who claimed the Earned Income Tax Credit (EITC) in 2019. Overall, the Internal Revenue Service says that across the country last year, 25 million taxpayers received more than $61 billion from this tax break for lower-and middle-income workers. Every tax year, however, folks who qualify for the Earned Income Tax Credit don't claim it. Many don't know about the tax break. Others don't realize that changes in their marital, parental or financial status means they now qualify. That's why for more than a decade, the... Read more →


Yes, I bought a ticket for the Jan. 29 Powerball. I always do when the jackpot of that and the other national lottery, Mega Millions, gets into the, well, mega million-dollar range. No, I didn't win. Again. Last night's Powerball payout, which had climbed to $396.9 million, is going to the lucky person who bought the winning ticket in Florida. Yes, I am contacting my Sunshine State friends and relatives! In addition to the one big winner, three other Powerball tickets worth $1 million each went to ticket holders in Ohio, Virginia and, again, Florida. If you're one of the... Read more →


Even before the Tax Cuts and Jobs Act (TCJA) greatly increased the standard deduction amounts, most people opted to claim the standard deduction amount. But one thing that the latest tax reform law didn't change is the ability for many to get some added deductions without itemizing. These used to be called, at least by the tax community, above-the-line deductions because. They got that moniker because pre-TCJA they appeared in the last section of the old long Form 1040, just above the last line of that form's first page where your adjusted gross income (AGI) was entered. (A handful also... Read more →