Life is tough for lots of people. Unfortunately, that’s true even during, or because of, the holiday season. But caring people still exist. They donate dollars and, more importantly in many cases, their time to help those in need. That’s true in the tax world, too. It’s no secret that Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs provide free help to many who need personal assistance, but can’t afford to pay a tax professional, to fill out and file their annual returns. Then there are those who offer similar free aid to those who... Read more →
Tax Tip
A federal court this week granted the Internal Revenue Service a John Doe summons to get information on individuals who answered client questions via a digital platform. (Photo by Olha Ruskykh) Some individuals who worked for an online site providing answers as experts in various fields soon could be hearing from the Internal Revenue Service. On Monday, Dec. 23, a federal court in California authorized the IRS to serve a John Doe summons on JustAnswer LLC. The federal tax agency is seeking information about U.S. taxpayers who were paid for answering questions during the years 2017-2020 on the Covina, California-based... 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 →
My phone is blowing up today, with every app suggesting that if I’m stumped for a present or two, considering giving a digital gift card from their establishment. Ditto my email. It’s not a bad idea. But the key here is to make sure that the gift card is real. So, on this Christmas Eve I’m harking back not to herald angels, but to my post earlier this month noting that gift cards are for good boys and girls, not to pay IRS tax bills. Avoid gift card scams: That post looks at how crooks tamper with actual plastic gift... Read more →
This pup is just making sure he got all his presents! (Photo by freestocks.org) In a couple of days, many families will welcome new members. No, I’m not talking about Christmas babies. I’m talking about Christmas fur babies. A puppy, kitten, or other pet of any type or age can be a wonderful addition to a home, as long as everyone is on the same page. Pros and cons of pets as presents: Many animal groups and veterinarians warn against giving a pet, especially as a surprise, during the holidays. The holiday season already is stressful for many. Suddenly having... Read more →
Photo by Kaboompics.com The Internal Revenue Service is sending out holiday gifts this month to around a million people. The recipients are people who were eligible for, but did not claim, the 2021 Recovery Rebate Credit (RRC). By the end of next month, they should have the funds in hand, or directly deposited into their bank accounts. The maximum RRC amount is $1,400 per person, but the exact amount will depend on the individuals’ specific circumstances, such as income, filing status, and number of dependents. Overall, the IRS says it will be delivering about $2.4 billion to the eligible recipients.... 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 →
Donald J. Trump signed 220 executive orders (EOs) the last time he was president. Some GOP lawmakers want him to end the IRS Direct File program by signing another EO to that effect on the first day he's back in the Oval Office next year. (Photo by Sean Spicer, White House Press Secretary via Twitter/Wikimedia Commons) Republicans who oppose the Internal Revenue Service’s online tax return preparation and e-filing program are hoping that it will end next month before the 2025 filing season starts. Direct File, the free online program expected to be available to qualifying taxpayers in 24 states... 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 →
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 →
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 →
Gift cards make great presents for family and friends. The cards, however, cannot be used to pay taxes during the holiday season or any time. (Gift card wreath via Pinterest) Gift cards are a great last-minute gift or a present for that hard-to-shop-for person in your life. That’s why they are so popular, particularly during the holiday season. The plastic presents also are popular with crooks. They tamper with easily accessible gift cards in store displays, obtain card barcodes and other information, then put them back on the rack. When a card is purchased and activated, the criminals use it... Read more →
The Internal Revenue Service today announced grants to groups that support volunteer tax preparation and tax-filing programs. (Photo by Liza Summer) It’s December, so you’re focusing, as you should, on holiday plans. But the arrival of the last month of the year also means that the 2025 tax-filing season is almost here. Lots of taxpayers already are planning to file as early as they can. And many do so by using free and personal tax preparation and filing help two nationwide programs, Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). Today the Internal Revenue Service announced... 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 →