Don't Mess With Taxes

Unemployment benefits can help relieve some of the sting of losing your job. But there are downsides. The monthly amounts again are fully taxable. And during the COVID pandemic, criminals have had a field day getting fraudulent payments, and causing tax troubles for those individuals whose identities they stole. The COVID-19 pandemic and employment still are inextricably linked. When the coronavirus hit the United States in 2020, the concern was for the companies that had to shut down, and their employees who suddenly were without paychecks. Congress passed a series of COVID relief bills that provided relief options for companies... Read more →

Not in the Lone Star State? IRS also looking to add personnel in Ogden, Utah; Kansas City, Missouri; and Puerto Rico. Looking for a job with the Internal Revenue Service? Good news. The tax agency, which earlier announced plans to fill 10,000 staff positions, is hiring. And it's starting in my backyard. The IRS has more than 900 open slots at its Austin, Texas, processing center. To get folks at these jobs as soon as possible, the agency is holding an In-Person Direct Hiring Event, its version of a job fair, on Wednesday, May 11, and Thursday, May 12. Specifically,... Read more →

For more than 50 years, the U.S. Small Business Administration (SBA) has celebrated National Small Business Week, which recognizes the contributions of America’s entrepreneurs and small business owners. The theme for this year's week, which wraps up today, May 7, is Building a Better America Through Entrepreneurship. As part of the May 1 through 7 recognition of small businesses, SBA Administrator Guzman visited nine cities across the United States to participate in, along with SBA local office personnel and local elected officials, celebrations of the country's 32.5 million small businesses. Since taxes are a critical component of small businesses, the... Read more →

Do check out these following related — and legitimate — tax write-offs Sometimes your home is indeed located at the intersection of favorable tax breaks. Sometimes it's not. Below is a look at the difference between some questionable and acceptable residential (and more!) write-offs. Every tax-filing season, the great quest by filers is to find the most tax breaks. But there are some deductions and credits you should steer clear of. These expenses that don't meet Internal Revenue Service guidelines mean the agency will stop processing your tax return to give it second (or third, or …) look. At best,... Read more →

Tax Day 2022 is a month away. That means lot of us are finally getting serious about filling out our 2021 tax returns. A lot of us also are making a disturbing discovery. Our refunds aren't as big as we expected. Even worse, in some cases we owe tax. There are several reasons your refund could be smaller or you must send Uncle Sam a check. You can check them out in my previous post, 5 reasons your tax refund this year might be smaller. But here's a preview of one of the reasons. You didn't have enough withheld. Or,... Read more →

The IRS regularly sends out postcards, like this one that arrived in my snail mail box, seeking new employees. This year, facing a massive pandemic paperwork backlog, the tax agency also is holing special job fairs. When thee COVID-pandemic hit the United States in 2020, Uncle Sam's tax agency did what many businesses did. It closed most of its offices for months. Many IRS agents did their jobs remotely, but there are some things that just can't be handled from a home office. That why, two years and three filing seasons later, the IRS still is trying to dig out... Read more →

FSA Store Medical flexible savings accounts are a great tax break. This workplace-provided benefit allows you to put money into an account before your paycheck's taxes are calculated. Then you use those tax-free funds to cover health care copays or treatments not covered by insurance. FSAs do, however, have one major drawback. The accounts are a use-it-or-lose-it benefit. Basically, if you don't spend your tax-favored money by the end of your benefits' year, your employer gets to keep it. In some cases, however, workers get ways to use more of their FSA money instead of losing it. And one of... Read more →

Scenic overlooks, like this view of the Austin skyline from my suburban neighborhood, can be lovely. But when it comes to taxes, you don't want to overlook tax breaks. (Photo by Kay Bell) If you're like most taxpayers, when you finally decide to do your taxes, you want to get it over with as soon as possible. But don't pay a price for you haste. If you rush through filling out your Form 1040, you could cheat yourself out of some tax savings. It happens every year. Folks overlook deductions, whether they itemize on Schedule A or claim above-the-line breaks... Read more →

Don't let filing your taxes scare you. Take that fear and turn it into awareness of common Form 1040 mistakes you need to avoid making. (Photo by Andrea Piacquadio from Pexels) The only thing worse than paying taxes is having to fill out the required paperwork every year. Just looking at a Form 1040, whether through the step-by-step Q&A lens of tax software or with the guiding hand of a tax pro, can send chills down the spines of most taxpayers, even those whose tax circumstances are relatively simple. There's that nagging fear that this is a test from Uncle... Read more →

Photo by Bich Tran from Pexels Sure, taxes are due on April 18 (this year), but March is big tax month. Today is the start of the final full month before your 2021 return — and, if you owe, any tax — is due. That means there's still time to take some steps to help shave some off that possible tax bill. Here are five March tax moves, mostly retirement related, to consider. 1. Open or add to your traditional IRA. You can put money into any IRA, traditional or Roth, by Tax Day and designate it as applying to... Read more →

Pixabay via Pexels We're well into the 2022 tax filing season, meaning most of us have received the documents we need to file our tax returns. The main ones, our W-2 forms from employers and 1099s reporting other types of compensation, were supposed to be sent by the end of January. But sometimes that doesn't happen. Or the tax form you got was wrong. When then? Here are four steps to take now, along with some other missing tax document issues to consider. 1. Check your email: More of our lives go electronic every day. That includes tax-related matters. Lots... Read more →

The 2022 tax filing season is off to a strong start. In its first two weeks, from Jan. 24 to Feb. 4, the Internal Revenue Service received almost 16.7 million returns, and processed almost 13 million of them. The most important statistic for these millions of early filers is the refund numbers. Drum roll, please. So far, the IRS distributed more than 4.3 million refunds. The average refund very early this tax season is $2,201. That's the early average. Yours might be more. Or it might be less. In fact, many folks this filing season might find their refunds are... Read more →

Despite last year's Great Resignation, the United States work scene seems to getting back on track. Today's Department of Labor weekly jobs report showed fewer first-time unemployment filings, continuing a recent downward trend. The latest national unemployment rate analysis in January showed a 4 percent unemployment rate, indicating the COVID-19 Omicron variant effects are subsiding. That's good news for those with new jobs, the companies hiring them, and the overall economy. But for the 223,000 individuals who most recently applied for unemployment, things are still challenging. Taxable unemployment: On top of learning to live on unemployment benefits, they'll face taxes... Read more →

And while the new $600 trigger for Venmo, PayPal, and other such electronic transfer options does apply to this year's transactions, you won't get the associated 1099-K forms until next (2023) filing season. Image by mohamed Hassan from Pixabay You and your pals regularly meet for lunch or happy hour and split the costs. You also send your baby sister some cash when she runs low. And, of course, you do all this via a peer-to-peer (P2P) payment app that lets you transfer money quickly to your friends and family members' mobile devices. Now you're freaking out because you heard... Read more →

Photo by Kay Bell I'm married to a procrastinator. The most infuriating thing about it is not that he puts off things, but that occasionally he's right to not rush to finish projects. And yes, projects is a euphemism for tasks I've asked him to do. Sometimes situations change, making moot what originally looked like the right move. Other times, the delay prevents making what would have been a wrong action. And in a few cases, if a job was done on my timetable, the changed circumstances would have meant redoing it. So over the many years we've been together,... Read more →

IRS via Twitter The millions of taxpayers who must make estimated tax payments this month get a few more days to come up with the money. Since the usual Jan. 15 deadline is Saturday, and the next business day is Monday's MLK Day federal holiday, the fourth estimated deadline for 2021 payments is Tuesday, Jan. 18. Taxes on self-employment earnings: More than 20 million individuals make these extra tax payments each year. They generally total four, with the payment amounts reflecting earnings that aren't subject to withholding received during four segments of the tax year. Estimated taxes typically are paid... Read more →

You're expecting a refund, so you're planning to file your tax return soon. Wait. You might want to take a step or two back. First, you need to make sure you have all the information you need to properly fill out your 2021 Form 1040. You can get an idea of that material in my post examining some common tax statements you need to complete your filing. Second, you need more than paperwork. You need to take a good look at your personal situation and answer some questions. The responses could affect your filing. This checklist can help. Start with... Read more →

I got my first tax statement today, a 1099 for some freelance work I did last year. That's just one of the documents that millions of taxpayers are awaiting so they can file their tax year 2021 returns. In addition to income statements, such as the 1099-NEC I got, 1099s with details on investment earnings, and W-2 forms for folks with wage-paying jobs, there are beau coup documents reporting tax-related transactions. Among the most common are forms detailing home related mortgage interest and taxes paid from escrow accounts, retirement account distributions, prize and gambling winnings, and in some cases, health... Read more →

I hope your 2022 welcoming plans are on track this New Year's Eve eve. But as the time tick tocks away, some folks need to think a few days further into the fast-approaching New Year. Specifically, their focus should be on Monday, Jan. 3, 2022. That's the day that some California residents whose lives and/or businesses were impacted by wildfires need to file certain 2020 returns. The first workday of the New Year also is the deadline for employers and self-employed individuals who deferred paying part of their 2020 Social Security taxes. California disaster delay: Mother Nature was not kind... Read more →

Photo by Norma Mortenson from Pexels For the last couple of COVID years, more of us have been getting more home deliveries. So we're already used to tipping the folks who bring us our groceries and prepared meals and prescriptions and books and just about everything else. But with the holidays here — Christmas is just a week away! How in the heck did that happen? — we also should consider tipping other people who help make our lives more pleasant. These include our garbage and recycling workers, hairdressers, childcare help, and more. Rather than list all the possible tip... Read more →