Screenshot from a look at some of the people who depend on the gig economy. Watch the full YouTube video here. Everybody is looking for more money. Taxpayers want more in their tax refunds, especially those surprised by smaller amounts this filing season. Donald J. Trump wants more to build his campaigned-promised border wall. People who are unhappy with their current earnings are side hustling to get more income. It's that last group, says the Treasury Inspector General for Tax Administration (TIGTA), that the Internal Revenue Service should be focusing on as a way to get more money into the... Read more →
Work-job-career
One of my favorite recent TV shows was The Americans, FX's series on embedded Russian spies during the 1980s Cold War. For six seasons, we fans watched the couple known to their suburban Washington, D.C. neighbors as Phillip and Elizabeth Jennings raise their two U.S.-born children, run their small travel agency and spy, sometimes in deadly fashion, for their native U.S.S.R. One of the underlying themes was how well and easily the Jennings assimilated into the America they were trying to bring down. It's a common trope, but one done well and with nuance by the television program. A radio... Read more →
The tax filing season every year starts with a rush of flings. Last year, the Internal Revenue Service received more than 18 million returns (that's almost 12 percent of all the returns filed in 2018) during the first week the filings were accepted. This year appears to be on a similar track. Through mid-day Monday, Jan. 28, the opening day of the 2019 filing season, the IRS says it received several million tax returns. Those early filers obviously are expecting a tax refund. They also had all the documentation they needed to file their returns. Some of us, however, no... Read more →
UPDATE, 9:05 p.m. Central Time: Donald J. Trump has signed into a law a short-term funding bill that should get paychecks flowing again for the around 800,000 federal workers affected by the longest government shutdown in U.S. history. UPDATE 2:30 p.m. Central Time: A deal to reopen the federal government fully for the next three weeks was announced by Donald J. Trump this afternoon. The government will reopen; Trump gets no funding (yet) for his campaign-promised physical border wall. This should solve the current furloughed workers' sick-out crisis. Will this truce last beyond Feb. 15, or will we go through... Read more →
Even if you've been filling out Form 1040 and any other associated forms and schedules for years, things will be different this filing season. This is the first year we taxpayers (and tax pros) will be filing under the extensive new Tax Cuts and Jobs Act (TCJA) changes. In addition to new tax rates and deduction amounts, there are a variety of other tax law tweaks that could affect what goes on — or now doesn't — your Form 1040, which itself is new. So before you start working with your tax preparer or open up your tax software, either... Read more →
Most taxpayers every year end up getting refunds. But some folks are at the opposite end of the tax spectrum. They owe Uncle Sam at filing time. And some of those owing taxpayers end up in an even worse situation. Their tax bills are large enough that they also face added penalty charges. This filing season, though, those penalty-paying taxpayers could get a break. Tax underpayment penalty calculations: A tax penalty assessment usually occurs when wage earners don't have enough income tax withheld from paychecks or, if they have other income not subject to withholding, don't pay enough (or any)... Read more →
We're almost 13 months into the largest tax reform measure enacted in more than 30 years and one thing is clear. The Tax Cuts and Jobs Act (TCJA) is in no way tax simplification. In fact, taxpayers and the professionals they pay to help make filing less taxing in every sense of the word have been struggling with just what Congress meant in way too many of the tax bill's hastily drafted provisions. Big business bill, with small biz break and confusion: Although the TCJA contains many changes that will make filing returns this year interesting for individual taxpayers, it... Read more →
As the longest federal government shutdown in U.S. history drags on with no end in sight, furloughed workers are looking at any and all ways to pay their bills. Some have taken hardship withdrawals from their workplace retirement accounts. Thousands of others have applied for unemployment. Few of us can blame folks who are struggling financially for taking these steps. At some point, many of us or our family members and friends have done the same. There's no shame in taking available help when bills you can't pay continue to arrive. And while such actions can help out-of-work folks make... Read more →
The current, and longest-ever, federal government shutdown has made it painfully clear that many of Uncle Sam's employees don't have an emergency savings cushion. They are not alone. A study released last summer found that only about a quarter of all Americans across nearly all ages and generations have no savings whatsoever in an emergency fund. Just more than a quarter of U.S. residents, 29 percent, had saved enough to cover six months' worth of living expenses. When people do save, they tend to do so for retirement. It's not necessarily that they're looking ahead to their golden years. Rather,... Read more →
Today should be payday for hundreds of thousands of federal government workers. The partial government shutdown, however, means they're not getting their money. And even though the White House, Treasury and the Internal Revenue Service say that the 2019 filing season will open at the end of January as it has in years past and that refunds will be issued, there's no guarantee that things will go smoothly. We are, after all, talking about Uncle Sam's operations. Can IRS meet refund challenge? The IRS says it will recall "a significant portion" of its currently furloughed workforce to open tax season... Read more →
Hello 2019! I'm not sure we're ready for you, particularly when it comes to the major tax code changes under the Tax Cuts and Jobs Act (TCJA). We'll deal with the real-life effects of the new tax laws for the first time when we file our 2018 returns. When that will be is still up in the air and depends on a resolution to the partial government shutdown. But even though Capitol Hill and many of Uncle Sam's offices remain in limbo, we taxpayers need to start now taking an up close and personal look at what the TCJA will... Read more →
There's one more day in 2018, but it's too late to adjust your withholding for this almost over tax year. Following enactment of the Tax Cuts and Jobs Act (TCJA), a lot of folks earlier this year should have tweaked the amount of federal taxes they have taken out of their paychecks. Those TCJA changes, which went into full effect for 2018, could mean some — OK, a lot; one estimate says 30 million — taxpayers could face an unexpected tax bill when they file their returns in 2019. If you discover in a few months that you're one of... Read more →
Kris Kringle (Edmund Gwenn in the 1947 classic "Miracle on 34th Street") gets in a little sleigh practice at Macy's Thanksgiving Day parade. Santa Claus is already hard at work, according to the Christmas specialists at NORAD, the North American Aerospace Defense Command, who are tracking his gift deliveries. (Yes, they're on the job despite the federal government's partial shutdown.) Santa's travels during this 24 hours of dropping off gifts for good girls and boys means he will travel around 212 million miles around the globe. As a small business owner, that's a lot of tax-deductible mileage — presuming that... Read more →
I'm getting a lot of feedback about the partial government shutdown, specifically about the pay status of Internal Revenue Service (and other federal) personnel who will report to work next week and those who are furloughed. More than 420,000 federal employees who will work will do so without pay, according to a report from the Democrats on the Senate Appropriations Committee. The additional 380,000 furloughed workers head home to wait out the closure, again without pay. Those 800,000 or so federal employees earn this week's By the Numbers honors. Many folks objected to my description in recent government shutdown blog... Read more →
Dr. Seuss' The Grinch movie image courtesy Illumination Entertainment Grinches aren't always green. Sometimes we don't even know what they look like. That's the case when they set their sights on stealing not only Christmas, but your identity by sending fake emails. This holiday season, ID thieves have stepped up their phishing efforts. And some of those fake emails are going to tax professionals as part of payroll direct deposit and wire transfer scams. Tax pros targeted, too: Phishing scams tend to be small-d democratic. The business email compromise and/or spoofing tactics generally target all types of industry and employers.... Read more →
If you have a medical flexible spending account, or FSA, one of the key year-end tasks you need to take care of this month is ensuring that you don't lose any of this tax-free money. Yes, some employers give workers a 2½-month grace period, until March 15, to use the prior year's FSA funds. Others let their workers roll over up to $500 left in their medical accounts. Both of those options are at the discretion of the companies offering the tax-favored benefit. A lot of companies, however, still just take advantage of the use it or lose it rule.... Read more →
Welcome to Part 8 of the ol' blog's 2019 series on tax inflation adjustments. Today we look at considerations of U.S. taxpayers living and working abroad. You can find links to all 2019 inflation posts in the series' first item: income tax brackets and rates. Note: The 2019 figures apply to 2019 returns that are due in April 2020. For comparison purposes, you'll also find 2018 amounts to be used in filing this year's 2018 tax return due April 15, 2019. Where's the best place for the world's estimated 57 million expatriates? InterNation's latest annual Expat Insider Survey says it's... Read more →
North Carolina flooding in the wake of extensive hurricane rains. Photo courtesy Federal Emergency Management Agency A bill that would extend some expired tax laws, enact a handful of new ones and correct some errors in last year's tax reform bill is now before the House of Representatives. The extensive and expensive — the Congressional Budget Office estimates it will add another $55 billion to the federal deficit over the next 10 years — measure has a decent chance of clearing the House, where all it needs is the votes of the Republicans who control that chamber. Its chances in... Read more →
Welcome to Part 7 of the ol' blog's 2019 series on tax inflation adjustments. Today we look at changes to the Alternative Minimum Tax (AMT) and next year's Social Security wage base. You can find links to all 2019 inflation posts in the series' first item: income tax brackets and rates. Note: The 2019 figures apply to 2019 returns that are due in April 2020. For comparison purposes, you'll also find 2018 amounts to be used in filing this year's 2018 tax return due April 15, 2019. Taxpayers who face the alternative minimum tax, or AMT, see it as the... Read more →
Welcome to Part 4 of the ol' blog's 2019 series on tax inflation adjustments. We started on Nov. 15 with a look at next year's income tax brackets and rates. Today we look at changes to credit and deduction amounts. Note: The 2019 figures apply to 2019 returns to be filed in 2020. For comparison purposes, you'll also find 2018 amounts to be used in filing 2018 returns due April 15, 2019. Taxpayers depend each year on tax deductions and tax credits to cut their annual tax bills. The biggies are, of course, the use of standard or itemized deductions... Read more →