The Internal Revenue Service is already accepting e-filed business returns and says Free File for eligible individuals to do their taxes and electronically file at no cost will open in mid-January. If you use Free File, get ready. The Internal Revenue Service says it will open in mid-January. Yes, the IRS announcement is a bit of vague posting. It did not give a precise date of when the 2021 version of the no-cost online tax return preparation and e-filing web page will be available for eligible filers. A few filing facts: However, we do know a couple of things for... Read more →
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Millions of taxpayers are facing a deadline at the end of this week. No, unfortunately I am not talking about the Jan. 15 mark that the Internal Revenue Service is required by law to meet in distributing the second round of COVID-19 economic relief payments. I'm talking about paying Uncle Sam instead of getting money from him. The final estimated tax payment for tax year 2020 is due on Friday, Jan. 15. Taking care of taxes yourself: Around 22 million individuals file these extra tax payments, which total four if you make them for the full tax year. They are... Read more →
Photo by Olya Kobruseva via Pexels Happy New Year! Oh, sorry. Was I typing too loud? I'm glad you were able to festively, and I hope safely, ring in 2021. Now that it's here, it also brings a new tax filing season. The Internal Revenue Service's delivery of the second round of COVID-19 relief money shouldn't hamper its handling of 2020 returns, which should officially start later this month. So if the IRS can be ready, so can we. So here are a few tax things to think about and take care of, after, of course, you're fully recovered from... Read more →
Most of us are cheering the rapidly approaching end of tumultuous 2020. I definitely am right there with you with some pre-New Year's Eve joyfulness. But take a little time off from your anticipatory year-end celebrations to check out these tax moves. These final three tax tasks for the final three days of the year could pay off at filing time in 2021. 1. Know the value of donating items instead of cash. You have until Dec. 31 to donate to an IRS-qualified charity so you can claim the gift as a deduction on your 2020 tax return. If you... Read more →
My neighborhood optometrist is encouraging medical flexible spending account (FSA) owners to stop by and spend that money before the end of the year. (Photo by Kay Bell) You just discovered that you have money in your medical flexible spending account (FSA). For folks who don't have an FSA, this is a workplace benefit that allows you to put money into the account as an automatic withdrawal from your paychecks. In 2020, you could put up to $2,750 into your FSA. Since inflation has been low, that amount stays the same in 2021. You then use FSA funds to pay... Read more →
Welcome to Part 10 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. Today we wrap up the series (finally!) with standard optional mileage rate changes. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15, 2021. via GIPHY As... Read more →
It's been a tough year for millions. In addition to worrying about keeping themselves and their families safe during the coronavirus pandemic, millions have lost their jobs. But there may be a little bit of help for those relying on government payments as 2020 winds down. The House and Senate are working on a compromise COVID-19 relief bill. It's huge and there still are congressional hurdles to overcome, but right now the proposal calls for a federal unemployment benefit of $300 a week for 16 weeks. That's welcome news for the nearly 13 million Americans who, without Congressional help, are... Read more →
Christmas at the computer. (Photo by Nataliya Vaitkevich from Pexels) You've adjusted to working from home during the coronavirus pandemic. Now are you ready for the virtual office holiday party? That's the route some companies are taking as they try to hang on to some semblance of seasonal traditions. Fewer parties, some virtual: Plans for any type of office holiday party are, not surprisingly, down dramatically from last year. In 2019, nearly 76 percent of companies planned year-end events. This year, just 23 percent of businesses are planning parties, with almost three-quarters of the 2020 festivities expected to be virtual,... Read more →
Among the many things COVID-19 has changed, possibly forever, is how and where we do our jobs. The work from home trend also has provided cyber criminals new ways to steal our identities and money — corporate cash, too — using telework security lapses and system flaws. TGIF! Yeah, workers still say this. However, there's a little less exultation in the announcement nowadays, what with many of us still working from home due to continuing coronavirus pandemic precautions. Plus, COVID-19 means our prior welcome weekend happy hours now are via Zoom. The work from home (WFH) shift also has created... Read more →
Have coronavirus money troubles forced you to break into some of your next eggs? COVID-19 legislation made getting to retirement money easier, but you probably will still owe tax on the early withdrawals and must deal with a new form to report your distributions (or paybacks) to the IRS at filing time. With the holidays here and no additional immediate COVID-19 economic relief payment in sight, some folks likely have or are considering tapping their retirement accounts. That option was made easier as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27. It provides... Read more →
Welcome to Part 8 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at the tax considerations of U.S. taxpayers living and working abroad. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15, 2021.... Read more →
Remote work has been among the many COVID-related challenges of 2020. Many employees have appreciated the added flexibility and no commute. Those who aren't that social say they've been more productive since they haven't had to spend time schmoozing with coworkers and bosses. The experience has many workers and companies exploring whether widespread working from home will — or should — continue once the coronavirus pandemic is under control. It's also raised tax questions, including an intriguing and unexpected one. A major European bank says that employees who work from home (WFH) should pay for the opportunity via a new... Read more →
Of course 2020 has multiple Fridays that fall on the 13th of the month. The year's first was on March 13, right when as a nation we were realizing that COVID-19 would define everything about this year, and beyond. Back then, I offered 13 good luck tax breaks. Today, Friday, November 13, 2020, arrives as we're dealing with a resurgence of the coronavirus. So it seem appropriate to revisit that first list of 13 tax opportunities that could ease some of your tax fears on this traditional day of superstitions, while we're in the midst of a pandemic and beyond.... Read more →
Welcome to Part 7 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. Today's post looks at next year's changes to Alternative Minimum Tax (AMT) calculations, as well as Social Security and nanny tax changes. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this... Read more →
Welcome to Part 4 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In In today's post, at changes to tax credit, deduction and income exclusion amounts. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15, 2021. Deductions are... Read more →
Welcome to Part 3 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at annual retirement plan contribution amounts, and, for some taxpayers, tax deduction and credit options and limitations. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this... Read more →
For millions of U.S. workers, this month is the beginning of their benefits open enrollment period. This is your annual chance to switch, adjust or cancel usually tax-free company perks for you and your family. The biggest employer-provided benefit is medical insurance. Health coverage has taken on new importance during the coronavirus pandemic. But companies offer many more options that help make their workers' lives a bit easier and less costly. And many benefits experts expect COVID-19 considerations during this open season to alter the usual trend of workers simply letting existing coverages roll into the new year, which is... Read more →
The Social Security Administration (SSA) just gave retirees and other recipients of the program's payments some good news with the announcement of a small hike in their benefits year. Some higher earners, however, aren't so happy. In the same benefits raise announcement, the SSA noted that the amount of income subject to the Social Security payroll withholding also is going up in 2021. This amount, known as the Social Security wage base, is the maximum of earnings, by both salaried workers and the self-employed, that are subject to that portion of the Federal Insurance Contributions Act (FICA) tax. For the... Read more →
A quick Social Security note about for folks not yet at or near the benefits age about taxes on that pre-retirement income. More of it, known as the wage base, will be subject to the Social Security payroll tax. Details are in this post. Retirees checking on their investments. The income could make their Social Security benefits taxable. Today's a good day for millions of Social Security recipients. The Social Security Administration (SSA) has announced that benefits will increase a bit next year. Older folks who get regular monthly Social Security payments, along with those who receive Supplemental Security Income... Read more →
Millions of U.S. government employees in federal buildings across the country, like this one Sacramento, California, are being forced to participate in the Trump Administration's partial payroll tax deferral. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are continuing their efforts to cobble together a second round of COVID-19 stimulus payments. Some people, however, don't want the ostensible financial relief they're already getting. They are among the federal workers and military members who've had the Social Security portion of their Federal Insurance Contributions Act (FICA) payroll taxes automatically suspended. Forty-three Representatives say they've heard from these constituents who are... Read more →