Tax Tip Feed

Photo by ivan sellar from Pexels You're finally ready to give up being the boss. Or maybe you got a great offer for your business. Or maybe the COVID-19 pandemic did a number on you and your company. Whatever your reason, you've decided it's time to close your company's doors. Make sure that during that process, you take taxes into account. The Internal Revenue Service offers these tips to business owners who've decided to call it quits. File the appropriate final return: This filing is for the year you close your business. The type of return you file, and the... Read more →


This has been a wonderful weather week here in the Austin area. Nights have been cool. Days have topped out in the seasonal upper 70s. But today is a tad warmer, a trend expected to continue through October. So it's goodbye to our brief autumn in Central Texas, and back to closing windows and cranking up the air conditioner. Don't get me wrong. I'm not complaining. Although it was hot this summer, it wasn't the hottest since we moved here 16 years ago. And after February's devastating ice storm, I'm never complaining about warm or warmer than normal or hot... Read more →


Millions of Americans rely on their workplace benefits to cover then health care and other needs. Most of them also are paying even more attention to those job-based benefits this year in light of the persistent COVID-19 pandemic. Medical insurance is a top priority. But other benefits also are getting added attention during this annual fall period, during which many U.S. companies allow workers to enroll in or change their benefits for the coming coverage year. Many of the office-based benefits also offer some tax advantages. Here are five questions with an Internal Revenue Service-inspired perspective to ask yourself as... Read more →


Free tax-preparation and filing help is offered ever tax season through groups community groups nationwide, like this Volunteer Income Tax Assistance (VITA) program run by the Summit-Medina, Ohio, United Way. As the COVID-compromised 2020 and 2021 tax filing seasons demonstrated, most taxpayers needed some help to make sure they got all the tax breaks they were entitled to, as well as just file their annual returns. That need for tax assistance isn't going away, even if we do (fingers and toes tightly crossed) get to a more normal tax season next year. And volunteers who've received the Internal Revenue Service... Read more →


Hurricane Ida is one reason why some taxpayers don't have to get their extended tax returns to the IRS on Oct. 15. (National Hurricane Center radar image of Ida making landfall) Millions of taxpayers are frantically filling out Internal Revenue Service forms right now. They are the folks who got an extension until today, Oct. 15, to submit their annual federal tax returns. Some, however, aren't in a hurry. The IRS has given them more time to complete their returns. Disaster related added delays: Unfortunately for those filers, the reason for an extended extension deadline isn't a welcome one. They... Read more →


Photo by Tima Miroshnichenko from Pexels It's Tax Day. For real. October 15. The absolutely final day to get your 1040 (and other forms, schedules, and attachments) to the Internal Revenue Service or face potential penalties for late filing. You also could be hit with late payment charges if you didn't pay enough when you got your extension to file, not extension to pay, months ago. I've been here. Not this year, thankfully, but in the past. It's nerve wracking. But you still have time. So take a breath and let's get this done. Hurry up if you're going old... Read more →


The Social Security Administration (SSA) gave retirees and other recipients of the program's payments good news this week. Next year, they'll bet the biggest benefits bump in decades. Some higher earners, however, aren't so happy. That government benefits announcement also noted that the amount of income subject to payroll taxes also is going up in 2022. This amount, known as the Social Security wage base, is the maximum earnings, by both salaried workers and the self-employed, that are subject to that retirement portion of the Federal Insurance Contributions Act (FICA) tax. In 2021, the wage base is $142,800. On Jan.... Read more →


Many Social Security recipients are celebrating the announcement that their benefits will increase in 2022. But if you get other income to help you enjoy your retirement, you could owe tax on your government benefits. There's some good news for the around 72 million people who receive Social Security benefits, either as retirees or Supplemental Security Income (SSI) recipients (or both). The Social Security Administration announced* on Wednesday, Oct. 13, that they will see a 5.9 percent increase in their benefit checks in 2022. It's the largest increase to the government benefits, which primarily go to retirees, in nearly four... Read more →


Did you discover when you filed your taxes, either earlier this year or this week to get in under the Oct. 15 extended deadline, that you were due a refund? Or, yikes, that you owed Uncle Sam? Either way, now is a good time to review your tax withholding. With 2021's third quarter just under way, you have plenty of time to deal with the differences either way. And there is enough time left in the year to spread the changes over several pay periods so they don't produce a major shock either way to your budget. Rationalizing over-withholding: Around... Read more →


Welcome to another Monday federal holiday. Today is Columbus Day. It's not necessarily manic, unless you're spending it finally finishing your 2020 tax return that you got extended until Oct. 15. In that case, this post for tax procrastinators might help. As with many — OK, all — retailers use these three-day federal holidays as reasons for sales. And usually tacky TV commercials. Got your mattress bargain yet? Then there are the associated celebrations. Parades. The coronavirus-delayed Boston Marathon this year. Myriad special events nationwide honoring special people associated with day or its origins or its namesake. Evolving views of... Read more →


Photo by Nataliya Vaitkevich from Pexels Hello, ultimate tax procrastinators. You now have just a week to finish your Form 1040 and get it to the Internal Revenue Service. A piece of cake for all y'all who push thing to the last minute, right? Ooooh-kaaaay. It's your tax life … and possible tax costs if you mess up anything or, yikes, miss this due date. But just in case you're open to a little at-the-wire tax filing advice, here are six questions, and some answers from me, to ask yourself in these last seven days until Oct 15. 1. Do... Read more →


Saving is a key component to reaching financial independence. However, for individuals facing added challenges, putting aside money for the future can be difficult. Achieving a Better Life Experience, or ABLE, accounts were created in 2014 to help in these cases. They are tax-advantaged savings accounts for individuals with disabilities (and their families) to help them maintain their health, independence, and quality of life. While money put into ABLE accounts isn't tax-deductible, the distributions are tax-free when they are used to pay qualified disability-related expenses. Here are some key questions and answers about ABLE accounts. Who is eligible for an... Read more →


The big deadline change for 2021 was when the Internal Revenue Service extended the regular income tax filing deadline from April 15 to May 17. But it also made a few more calendar moves, including one that this month affects folks with foreign financial accounts. The IRS left in place the due date for filing Form 114, Report of Foreign Bank and Financial Accounts, usually referred to as FBAR. Sort of. Although the tax agency didn't move the April deadline, it did grant FBAR filers an automatic extension until Oct. 15. That's right. Owners of foreign accounts now face the... Read more →


In addition to visiting your local pumpkin patch this month, make time for these October tax moves. (Photo by James Wheeler via Pexels) It's October. I know I say this every month, but wow, this day got here quickly. And it's just the start of a busy month. This first full month of fall means it's time to winterize your house if you live in a place with changing seasons. You've got candy to buy so trick-or-treaters won't be disappointed. But take it from me, don't buy the sweets too soon or you'll have to buy more by the time... Read more →


But despite the technical problem, IRS says still use online tool to make changes, including stopping Advance Child Tax Credit payments for the rest of the year. You'd think that by the time the Internal Revenue Service issued the third Advance Child Tax Credit (AdvCTC) payment, things would be automatic. Well, you've got another think coming. The IRS did deliver in mid-September around 35 million AdvCTC payments totaling $15 billion. But unfortunately for some eligible families, their money didn't show up on time. The explanation was the usual one. It was a technical issue. Yeah, I rolled my eyes, too.... Read more →


The Internal Revenue Service has signed new contracts with three private tax debt collection agencies. (Image via Giphy) When the Internal Revenue Service four years ago reinstituted, per Congressional mandate, the latest private tax collection program, it signed four collection companies. Today, the IRS announced new deals with three collection agencies. The private collection agency (PCA) contracts take effect tomorrow, following today's expiration of the old contracts. So starting Thursday, Sept. 23, taxpayers with unpaid tax bills may be contacted by one of the following agencies: CBE Group, Inc. P.O. Box 2217 Waterloo, IA 50704 800-910-5837 Coast Professional, Inc. P.O.... Read more →


If you have it in your heart, and bank account, consider donating to your favorite charity. It could help many through a difficult year, and also might provide you an enhanced tax deduction. 2021 has been, to put it as nicely as I can, one heck of a year. We commemorated the 20th year since the Sept. 11 foreign terrorists' attacks. We've had major and deadly natural disasters. We're still dealing with the COVID-19 pandemic. And we've got 3½ months to go. All these events, and the possibility of more (hurricane season, for example, lasts until the end of November),... Read more →


The IRS has decided that home COVID-19 tests are allowable medical expenses. This Tuesday was the week from hell, mainly due to dealing — again! — with medical insurance issues. I won't bore you with my personal, and continual, battles with insurance companies over paying for my health care procedures. I will say that even with the coverage, the hubby and I have been able to itemize our — and by our, I mean mostly my — medical costs over the last few years and claim them on our taxes. We're in the minority, both in itemizing and claiming medical... Read more →


The Great Resignation created by folks deciding not to return to their jobs after extended COVID-19 absences has led to a lot of new businesses. That means there a many new bosses out there, most of them dealing with a different part of the Internal Revenue Service for the first time. As business owners, they potentially face new types of taxes. Exactly which taxes depend largely on how their new company is established. That's why selection of a business entity is a major tax decision. Business entity options: As part of 2021's National Small Business Week, sponsored annually by the... Read more →


via GIPHY On a visceral financial level, we all hate paying taxes. But what we hate almost as much is that the tax laws often seem overly complicated or just plain goofy. Take estimated taxes. These are four extra payments that the Internal Revenue Service and many states require taxpayers to make to cover the taxes due on earnings that aren't subject to paycheck tax withholding. Straightforward enough, right? Until it comes to payment deadlines. Even though there are, in most cases, four of them and they're called quarterly estimated tax payments, the IRS uses a calendar that's a bit... Read more →