Tax Tip Feed

Image from IRS Publication/Poster 5731-B Tax law changes often cause filing problems for taxpayers when they try to determine how they are affected. Things can get even more complicated when the Internal Revenue Service steps in with its take on a confusing law. That's exactly what's happened and still happening with Form 1099-K, Payment Card and Third Party Network Transactions. This tax form is supposed to be issued to individuals who get money via a third party processor for goods or services the taxpayers provided customers. 1099-K history: For more than a decade, online apps and marketplaces (think PayPal, Venmo,... Read more →


Photo by Elissa Garcia on Unsplash If you're ever tempted to utter "these kids today" with a sigh and head shake, then take a few minutes to read about some California teenagers who are making a big tax difference in their community. The Rancho Cucamonga high school students come back to campus every Saturday during tax filing season to run a Volunteer Income Tax Assistance (VITA) clinic. The students, many of whom are planning on financial careers once they graduate high school and college, filled out 250+/- Internal Revenue Service returns last year for taxpayers in the city just east... Read more →


March's arrival means it's time to start stalking some tax savings. (Photo via Unsplash+ in collaboration with Getty Images) While the saying that March comes in like and goes out like a lamb usually is a reference to this month's weather transition from winter to spring (or, here in Central Texas, to summer already), feline aggressiveness could come in handy at tax filing time. There are plenty of tax moves you can make during this final full month before Tax Day, which is this year is the normal April 15 due date. Here are five tax matters to consider in... Read more →


Consistent contributions to tax-advantaged retirement accounts can help them grow from seedlings to a solid and sizeable amount of money for your post-work years. (Photo by micheile henderson on Unsplash) The stock market has been on a roll, rather than a roller coaster, of late. On Friday, March 1, The Nasdaq recorded its first record close in more than two years. The Dow and S&P 500 are off to their best start to a year since 2019. That's more good news for investors, particularly those whose holdings are in retirement accounts. These savers already saw their retirement vehicles achieve their... Read more →


That's not going to stop the latest IRS effort to get wealthy individuals to file tax returns. (Image: Giphy) The Internal Revenue Service crackdown on wealthy taxpayers who are skirting tax laws continues. Last month, Uncle Sam's tax agency announced plans to audit business aircraft that were used, most often by well-paid corporate execs, for personal travel. Now it's cutting right to the chase, going after wealthy taxpayers who haven't filed federal tax returns for years. This week, the IRS issued compliance letters on more than 125,000 cases where tax returns haven't been filed since 2017. The mailings include more... 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 →


Update, Monday, March 4, 2024: Attention my fellow Texans and taxpayers in 11 other Direct File pilot states, I got an email today from the IRS letting me know that the program is now accepting returns from eligible new participants. You can find more on this free, direct to the IRS tax preparation and e-filing option in this post, as well as at the IRS.gov Direct File page. A recent poll indicates most taxpayers support a direct-to-IRS option Direct File, the Internal Revenue Service's pilot program that will let some taxpayers in 12 states prepare and submit their 2024 tax... Read more →


Photo by M.O. Stevens, CC BY-SA 3.0, via Wikimedia Commons The Federal Trade Commission (FTC) this afternoon announced it has filed an administrative complaint against H&R Block for wiping out customers' entered data as a way to pressure them to pay for higher-priced tax preparation software options. The data erasure, according to the FTC charge, was when the taxpayers tried to downgrade to more affordable H&R Block software products. In addition, the FTC alleges that the company deceptively marketed their products as free when many consumers actually had to pay for them. "H&R Block designed its online products to present... Read more →


Crooks know you're anxiously awaiting your tax refund. That's why this filing season they're again impersonating Internal Revenue Service agents. The latest refund scam is an email or text about your tax refund or tax refund e-statement. In both cases, warns the Federal Trade Commission (FTC), the messages are efforts to steal your identity and money. As in previous incarnations, these latest fake IRS messages encourage recipients to click a link, supposedly to "check on your tax refund e-statement," or "fill out a form to get your refund." The FTC provided the image below of one of these fake IRS... Read more →


The IRS is OK with celebrating the closing of a business deal on a corporate jet, but not so accepting when the aircraft is used for personal jaunts. (Unsplash+ in collaboration with Getty Images) If Elon Musk and Taylor Swift were unhappy with the attention their jet flights were getting from a private citizen, a federal agency's plans could cause them even more turbulence. The Internal Revenue Service today announced that it is initiating dozens of audits on business aircraft that were used for personal travel. The audits will focus on aircraft usage by large corporations, large partnerships, and high-income... Read more →


Photo by Ozan Safak on Unsplash Higher income taxpayers tend to take the most advantage of tax breaks. That's no surprise. They can afford to hire tax professionals, who keep track of all the benefits they qualify for and claim them on the well-to-do taxpayers' returns. But there are some valuable tax breaks for the rest of us who are far from wealthy. And while higher-income households do enjoy greater per dollar benefits tax benefits, the breaks available to us tax plebeian are more beneficial when they are measured as a share of our income. Tax credits provide the most... Read more →


Photo by Chandler Cruttenden on Unsplash Last August, parts of Michigan were struck by severe storms, tornadoes, and flooding, prompting the Federal Emergency Management Agency (FEMA) to issue this month a major disaster declaration for nine counties. The Internal Revenue Service subsequently announced tax relief for those individual residents and business owners. One of the tax considerations is a new June 17 filing and payment deadline for the affected Michigan taxpayers. The Great Lakes State is the sixth to be granted the new mid-June Tax Day due to disasters. Some Michigan residents join those who were ill-treated by Mother Nature... Read more →


Tax laws are full of unintended consequences. That became painfully clear during the COVID-19 pandemic, when a variety of tax relief provisions were created to help individuals and businesses deal with the virus' economic effects. Such was the case with the Employee Retention Credit, or ERC. "The ERC provided a financial lifeline to millions of businesses and exempt organizations during the pandemic," said IRS Commissioner Danny Werfel in his prepared testimony for the Feb. 15 hearing before the House Ways and Means Committee. "The IRS has worked hard to implement this credit, and we have processed about 3.6 million ERC... Read more →


Unsplash+ in collaboration with Planet Volumes In July 2021, the U.S. Department of Justice (DoJ) had charged 22 individuals in connection with an allegedly fraudulent Paycheck Protection Program (PPP) loan scheme that sought to defraud the federal government of $11.1 million. On Thursday, Feb. 15, two Georgians who were charged three years ago were convicted for their roles in the scheme. A 42-year-old Decatur man was convicted by a federal jury of bank fraud, wire fraud, conspiracy to commit bank fraud and wire fraud, making false statements to a federally insured financial institution, and money laundering in connection with 14... Read more →


Other IRS Taxpayer Assistance Center (TAC) Saturday openings will be on March 16, April 13, and May 18. Photo by Aaron Burden on Unsplash For the third consecutive year, the Internal Revenue Service is opening some of its Taxpayer Assistance Centers (TACs) on Saturdays. Face-to-face help at these IRS offices usually is available only on weekdays, and taxpayers must make appointments. But on Feb. 24, March 16, April 13, and May 18 certain TACs nationwide will be open. Even better, on those four Saturdays taxpayers won't need to call ahead. They can just walk into the TACs, which will be... Read more →


Photo by JESHOOTS.COM on Unsplash Throughout life, we all encounter momentous firsts. First day of school. First time at a paying job. First time holding your child. First time you file a tax return. OK, that last one is probably not an event you celebrate, even if it produced a tax refund. In fact, if you remember filing your first Form 1040 it at all, it's probably because it was not a good experience. There's no way to replace that bad tax memory. But there are steps that first-time tax filers can take to make sure their initiation into the... Read more →


Unsplash+ in collaboration with Meg Aghamyan First comes love. Then comes marriage. Then comes filing your taxes together in one package. 💘💕💗💕💘 Or not. OK, I pushed it trying to rhyme marriage and package. Now it's clear why I stick to prose instead of poetry And that "or not" stanza is a bit counterintuitive on Valentine's Day, a time when we traditionally celebrate love and inseparability. But we are talking taxes on this heart day, so there's always an exception. Married filing options: It's true that most of the time, it's better to file one return jointly. Not only is... Read more →


Tax season 2024 is off to a slow start compared to filings at this time last year. At this early point in the tax season last year, the Internal Revenue Service had received nearly 19 million returns. But by the end of the first week of the 2024 filing season, just around 15.3 million returns had arrived at the IRS. That's a substantial 19.1 percent decrease from 2023's early filings. Still, some 2024 taxpayers are happy. They're recipients of the more than 2.6 million refunds that the IRS issued by Feb. 2. The dollar total of those early refunds was... Read more →


Muddy tracks photo by Sean Foster on Unsplash June 17 is becoming the new Tax Day for many taxpayers. Unfortunately for them, the two additional months are because they live in areas hit by major disasters. West Virginia taxpayers are the latest to join this unwelcome club. Other states where individual and business tax filers have a disaster-related June 17 deadline are Connecticut, Maine, Rhode Island, and Tennessee. In West Virginia, the Internal Revenue Service has announced tax relief for Mountain State taxpayers in Boone, Calhoun, Clay, Harrison, and Kanawha counties. Those five WV counties sustained damages from severe storms,... 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 →