Working from home is a convenience employees don't want to surrender, according to recent poll. Conducting business from your home is still an option is you're self-employed, and you also might be able to claim the home office tax deduction. Working from home has its own unique distractions, but almost half of employees who do their job from their homes say they would quit rather than return to a full 40 hours a week in their offices. (Photo by Ketut Subiyanto) Among the slew of presidential actions taken by Donald J. Trump since his return this week to the Oval... Read more →
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Photo by Anna Shvets from Pexels The 2025 tax season officially starts Jan. 27, and millions of taxpayers are working on their returns. Some, however, are asking whether they must file a Form 1040 at all. I hate to dash your no-filing hopes, but the answer probably is yes. When you make money, it’s generally a safe bet that the Internal Revenue Service will want to know about it, and collect a portion. But not always. Here's a look at whether you might be among the select few legal nonfilers. Basic filing requirements: Generally, if you are a U.S. citizen... Read more →
Image by Clker-Free-Vector-Images from Pixabay Even in those few years when Congress mercifully stays out of major messing with the Internal Revenue Code, we taxpayers still encounter some changes at return filing time. Here are some highlights of what you might find as you file your taxes this year. Standard deduction amount increased. Around 90 percent of taxpayers claim the standard deduction. The choice was always the favorite, in large part because it’s easy. The numbers are show directly on Form 1040. But the number of standard deduction claims increased when the Tax Cuts and Jobs Act of 2017 essentially... Read more →
The Internal Revenue Service will start processing 2024 tax year returns on Jan. 27. Millions of people will file then, or before, getting their forms into Uncle Sam’s tax queue. But to file a complete and accurate Form 1040, you need all the information that form requests. That’s generally income statements like W-2s and 1999s. But there are many other documents that have tax-filing relevance. And most of those aren’t require by law to be sent to you until the end of January. So, most of us are just going to have to be patient for a couple more weeks.... Read more →
Saying "I do" also means saying hello to some tax changes in your new wedded life. (Photo by Jakob Owens on Unsplash) The end of each year is a good time to reflect on what happened the previous 12 months. For most of us, that includes some good events, some sad ones, and some still shaking out as we’re about to enter a brand new year. Many of these changes also could affect our taxes. So, as a bit of year-end preplanning, here are six ways that the Internal Revenue Code shows up when we encounter personal and lifestyle changes.... Read more →
Photo by Alexas Fotos 2024 is almost over, with millions making plans to celebrate the calendar changed on New Year’s Eve. But before you don your party hat and raise your glass to say goodbye to the old year and ring in 2025, you need to be aware of the tax importance of Dec. 31. Actions on the final day of a year could affect your full 2024 tax bill. Here are five that could make a difference. 1. Getting married. If you say "I do" on 12/31, then the Internal Revenue Service considers you married for the whole year.... Read more →
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 →
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 →
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 →
Prescription co-pays are just one medical expense that can be paid with money in a healthcare flexible spending arrangement, or FSA. If you watch cable television (or like me, too much cable TV), you know that it’s Medicare open season for older Americans. Many younger people also are making medical selections for the coming year from the cafeteria of benefits offered by their companies. The biggest employer-provided benefit is health care. In addition to medical insurance coverage, lots of businesses also offer their workers the option of opening a healthcare medical flexible spending arrangement (or account), popularly known as an... Read more →
Whether your dream retirement is traveling the world or enjoying your own backyard, you need to save now so you can enjoy it. One way to ensure your post-work years are golden is to take full advantage of tax-favored retirement plans. Regardless of who wins the White House, the Social Security system is going to get a lot of attention in the coming years. The aging population, combined with the much ballyhooed birth dearth, is going to put more pressure on Uncle Sam’s retirement program. Even if the new president and Congress can agree on ways to bolster Social Security,... Read more →
Photo by Julentto Photography on Unsplash International travel is a dream for many Americans. Some enjoy their jaunts so much, they decide to move instead of just vacation abroad. A foreign relocation means many changes. But one thing doesn’t change. U.S. citizens who live and work abroad still owe U.S. taxes on their income. Thanks to Uncle Sam's reliance on a worldwide tax system at the individual level, the U.S. Treasury gets a piece of your earnings regardless of where in the world you make it. There are, however, some tax provisions that can help U.S. workers in other countries.... Read more →
Before law changes, the now inflation-indexed Alternative Minimum Tax, known as the AMT, seemed to work like an ATM for the U.S. Treasury. When the AMT was created in 1969 to ensure wealthy individuals paid at least some tax, it wasn't indexed for inflation. Until that changed with the 2017 tax reform law, the AMT adversely affected a lot of less-wealthy taxpayers. (Photo by Ali Mkumbwa on Unsplash) What's worse than figuring your tax bill? Having to figure a second, higher, parallel amount you might owe. That's a situation that taxpayers who owe the Alternative Minimum Tax, or AMT, end... Read more →
Taking advantage of these inflation-adjusted tax breaks could put more money in your hands instead of Uncle Sam's bank account. (Photo by Osarugue Igbinoba on Unsplash) Many taxpayers look forward to tax filing season because they are getting a refund. Others just want to pay the smallest possible tax bill. Some Internal Revenue Code provisions, ranging from tax deductions to tax credits to income exclusions, can help in both cases. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a relatively easy, and popular, way to reduce a tax bill. Deductions... Read more →
The coming wage base bump also means more FICA taxes for higher earners. Running the numbers is important for everyone, but critical for older folks who rely on Social Security benefits, and the annual cost-of-living increases, to cover much of their expenses. (Photo by Getty Images via Unsplash) There’s some good news for the more than 72.5 million recipients of Social Security payments. The Social Security Administration (SSA) today announced they’ll soon see an increase in their retirement and/or Supplemental Security Income (SSI) benefits. Nearly 68 million retirees who receive monthly Social Security deposits will see a 2.5 percent cost-of-living... Read more →
If that sticky note retirement is your goal, then you need to save as much as possible, especially if you're self-employed. And yes, I did put that note on the board. 😉 (Photo by Kay Bell) Most IRA contributions must be made by April’s Tax Day. Unless you’re self-employed and got an extension to file your tax return. That means you also might be able to contribute to, and even establish, a retirement plan for your entrepreneurial endeavor. Here's an overview of some of the more popular, and relatively easy, self-employed retirement plans to which you can still contribute by... Read more →
Unsplash+ in collaboration with Getty Images Congressional proposals to exempt gratuities from income pop up periodically, usually in election years. It’s happening again in 2024. Republican presidential nominee Donald J. Trump suggested tax-free tips during a June campaign stop in Nevada, where workers in tourist meccas like Las Vegas depend on the added income. Vice President Kamala Harris, the Democratic counterpart hoping to hold the White House for the party, endorsed easing taxes on tips in August. So, of course, lawmakers on Capitol Hill got in on the tax-free pledge. So far, bills to exempt tip income have been introduced... Read more →
Sometimes the cost of treating your illness makes you feel worse. (Photo by cottonbro studio) Not so long ago, the Affordable Care Act (ACA) was a hot federal campaign issue. Republican congressional and presidential candidates vowed to repeal and replace Obamacare, the originally pejorative political term that simply became an ACA synonym. Health care did come up briefly during the debate this week of presidential candidates Kamala Harris and Donald Trump. The former president, who once promised a new health program within two weeks, said he had “concepts of a plan” to replace Obamacare. Meanwhile, six Capitol Hill lawmakers from... Read more →
So how was your summer? That’s right, it’s that time of year again. The summer break officially ended on Sept. 1 with the arrival of meteorological fall, which runs through Nov. 30. I know, it’s kind of an arcane tidbit, but we have other more recognizable autumnal indicators. Youngsters across the country are back in classrooms. Their parents are back to the 9-to-5 grind after the long Labor Day holiday, with the next extended break not until the holidays. And temperatures here in Central Texas have dropped into the upper 80s! Yes, that’s early fall weather for us. I hope... Read more →
Having trouble making your student loan repayment plan and your budget add up? A workplace benefit that helps cover college debt could help. (Photo by George Becker) School is, or soon will be, starting across the United States. That means students, parents, and teachers are hearing about the variety of educational tax breaks that could help them. But what about all the former students, especially those who took out loans to cover higher education costs? You and your lots of student loans are not forgotten. Almost 43 million U.S. borrowers have federal student loan debt, according to data collected by... Read more →