One of the biggest challenges for any business, whether new or established, small or larger, is hiring. It's also a challenge for the Internal Revenue Service, especially when companies don't understand or intentionally avoid employment taxes. Money lost from unpaid payroll taxes, both unreported or underreported, is huge, notes a recent Kiplinger's Tax Newsletter, accounting for a large portion of the overall federal Tax Gap. This is the amount of money the IRS is owed, but hasn't been able to collect. Kiplinger cites IRS data from 2019 that found $77 billion of payroll taxes fell through the cracks yearly from... Read more →
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Some taxpayers might not be this happy in 2023 with their federal tax refund. (Image via Giphy) Many folks are already eagerly anticipating the 2023 tax filing season because they expect to get a refund from Uncle Sam. They might be disappointed. In a recent news release encouraging taxpayers to get ready for the upcoming filing season, the Internal Revenue Service slipped in this warning: Refunds may be smaller in 2023. There are three tax issues in 2022 that contribute to why the IRS will be sending some taxpayers smaller refunds when they file next year. No extra coronavirus funds:... Read more →
Many companies are sending workers home from their cubicles permanently. Last week's U.S. jobs numbers were surprisingly good. But another group was focused on a different workforce statistic: layoffs. In the last few weeks, there have been mass personnel reductions. Workers at CNN, HLN, Twitter, Meta, Amazon, Salesforce, HP, Lyft, Doordash, and more have been shown the doors in what some are terming, after the pandemic prompted Great Resignation and quiet quitting when workers returned to offices, the era of loud layoffs. At least those let go received some sort of severance package. But that small consolation also has tax... Read more →
Photo by Eric Prouzet on Unsplash The U.S. jobs report today was way better than expected. Employers added 263,000 jobs. That meant that the country's unemployment rate held at 3.7 percent. That's just a couple of minuscule notches higher than the half-century low of 3.5 percent. Wages are up, too. The October-to-November average hourly earnings crept up 0.6 percent, making it the strongest month-to-month gain since January. The latest hiring data has left economists, the Federal Reserve, and stock managers at a loss. One of the persistent questions as unemployment remains low is why so many businesses are still scrambling... Read more →
Women are making some advances in workplaces, but still face challenges when it comes to saving for a secure retirement. (Photo by Christina @ wocintechchat.com on Unsplash) I've spent most of my professional life writing and, for the most part, I've enjoyed it. But I've also, for the most part, looked forward to tapping away at a keyboard because I want to, not because I have to. That's part of the reason I shifted to freelancing. The freedom of being an independent contractor is, (one more time) for the most part, the best thing about the arrangement. So that I... Read more →
Photo by Chris Henry on Unsplash You're heading home from your Thanksgiving get-together, loaded down with leftovers and maybe something less welcome. Yeah, your indigestion has been acting up, inflamed by overly rich food and some family members who just wouldn't let things go. The good news is that you can use your flexible spending account (FSA) funds to pay for the Tums or Gaviscon or whatever over-the-counter (OTC) remedy works for you. You may remember that not too long ago, you had to jump through hoops to get FSA coverage for these store shelf treatments under an Affordable Care... Read more →
Happy Thanksgiving Day! Once you retire, you might be able to spend the holiday in a different way, depending on your golden year dreams and how much money you've saved for post-work years. (Photo by sterlinglanier Lanier on Unsplash) How's your Thanksgiving morning going? It's pretty quiet at our house, since it's only the hubby and me. And aside from baking a pumpkin pie, our meal is Texas smoked brisket, sausage, and sides we picked up from a local barbecue joint yesterday afternoon. If your Turkey Day is more hectic, enjoy! When I was growing up in West Texas, my... Read more →
What better topic for Thanksgiving than tax turkeys and how to avoid them. Our first tax turkey, represented by this solo strutting showy bird, is incorrect withholding. (Photo by Chris Henry on Unsplash) Thanksgiving, a time of gathering with family you haven't seen for a while. But sometimes, even when we get along with our relatives, we need a break from all that familial reconnecting. You could take a walk. Or check out a calming app. Or take care of a tax task. To help with that third suggestion, the rest of this Thanksgiving week (and weekend) the ol' blog... Read more →
Is your retirement plan on target? Maybe not, thanks (no thanks!) in part to the COVID pandemic and inflation. People have been, understandably, more focused of late on meeting daily living expenses than saving for the future. Such financial concerns likely are partially responsible for the results of a new retirement savings report from Fidelity. The Boston-based investment company found that the average 401(k) balance declined for the third straight quarter. It dipped below the six-figure mark, coming in at $97,200. That's 23 percent lower than a year ago. The average individual retirement arrangement (IRA) balance also dropped. The average... Read more →
With the holiday season fast approaching, companies are looking to add employees for the end-of-year rush. The Internal Revenue Service is among them this year. Its new workers, however, will be instrumental during next year's tax filing season. In late October, the IRS announced it had made "significant progress" toward a (hopefully) smoother 2023 tax season by hiring 4,000 new customer service representatives. Those new staffers, who are undergoing training, will help answer phones and provide other services when the new year rolls around. Today, Uncle Sam's tax collector put out another "help wanted" sign. The IRS is seeking more... Read more →
UPDATE, Nov. 5, 2022, 10:25 p.m. CDT: The Houston Astros win game 6 by a 4-1 score and are 2022 World Series Champions! Houston Astros mascot Orbit hopes to trade in his extra-large regular season cap tonight for a 2022 World Series Champion one. (Photo by Kay Bell) The Houston Astros will play what fans, including me, hope is their last game of the 2022 Major League Baseball season tonight in Minute Maid Park. If they beat the Philadelphia Phillies, they get to hoist the World Series trophy in front of their hometown fans. Some H-Town businesses, however, might be... Read more →
Sifting through all the options during workplace benefits enrollment season can be confusing and frustrating. Here are some things to think about, including taxes, as you evaluate your company's offerings. (Photo by MART PRODUCTION) We're in the heart of the annual benefits enrollment season. Not only is the Affordable Care Act healthcare marketplace open for business, but older Americans are signing up for Medicare. But a big segment of American workers rely on workplace-provided benefits to cover then health care and other needs. If you're checking out your company's benefits, either to enroll for the first time or continue the... Read more →
Fornillo Beach in Positano along Italy's Amalfi Coast. (Photo by Mihael Grmek via Wikipedia Commons) The hubby and I just finished watching the second season of Stanley Tucci's culinary trek across Italy. So, at least for a few more weeks, we're thinking (OK, dreaming) about moving to that boot-shaped Mediterranean peninsula. If we did, which we won't, we wouldn't renounce our U.S. citizenship. That comes with too steep a tax price. But officially remaining American nationals also carries a tax cost. Most Americans who move abroad still owe U.S. taxes on their income, regardless of where it's earned. That's because... Read more →
Getting your tax ducks in a row takes on a different meaning in November. But whatever bird you choose for the metaphor, make some time this month to complete tasks that will prevent tax turkeys. (Photo by Mohan Nannapaneni) November, the eleventh and penultimate month of the year, is like everything else in life. As a deadline nears, the end of 2022 in this case, the number of tasks to tackle grows. A lot. During these next 30 days we have holidays, both official like Thanksgiving and Veterans Day, and unofficial like National Doughnut Appreciation Day on 11/5, and which... Read more →
Gig work is the preferred employment life for millions. They enjoy being their own boss. There's the freedom to take as many or as few assignments as desired. You can do the jobs the way you want and during the hours you choose. There's no commuting. Sometimes, however, clients try to control contractor workers a bit too much. When that happens, the workers could in fact be employees, not contractors. They'd lose some of the freedom mentioned earlier, but as employees, they would be entitled to workplace benefits, including health care, paid time off, compensation for expenses, and a minimum... Read more →
Before law changes, the now inflation-indexed Alternative Minimum Tax, known as the AMT, seemed to work like an ATM for the Internal Revenue Service, allowing it to collect this parallel tax from more than the wealthy for whom it was created. (Photo by Erik Mclean) Calculating one tax bill is bad enough, but some people have to deal with a second one at tax filing time. The Alternative Minimum Tax, or AMT, is a separate tax system created to ensure that the wealthiest pay at least some tax. The parallel AMT was added to the Internal Revenue Code in 1969... Read more →
Very few of us share the same tax circumstances. However, there is one thing every taxpayer can agree on. We all want to pay the least amount of federal tax as possible. Deductions, like the standard amounts discussed in Part 2 of the ol' blogs annual tax inflation series, are a major way of reducing our annual tax bill. But wait. There's more. There are the adjustments to income, listed on Form 1040 Schedule 1 and still known as above-the-line deductions. You can claim all of these 25 tax breaks regardless of whether you itemize or take the standard deduction.... Read more →
With some tax planning now, along with some help from tax-favored accounts, you can ensure your retirement is full of smiles, love, and flowers. (Photo by RODNAE Productions) It's always a good time to start saving for your eventual retirement. The U.S. tax code helps via a variety of tax favored retirement options. And the Internal Revenue Service helps every year by making cost-of-living (COLA) adjustments that boost the amounts you can put into your post-work accounts. The tax agency today announced how much you can stash in 2023 in tax-deferred — or tax-free — retirement accounts and pension plans.... Read more →
No person, place, or animal is left untouched after a natural disaster. Florida's cattle ranchers and other agribusinesses were slammed by Hurricane Ian. (Photo by Jo-Anne McArthur on Unsplash) Hurricane Ian hit southwest Florida around three weeks ago. The deadly storm moved across that state, and then, after entering the Atlantic, curved into the Carolinas for a second U.S. landfall. People are still in shock. Some are dealing with property still underwater. All are worrying about how they'll recover. The federal government, through the Federal Emergency Management Agency and Small Business Administration, is offering relief programs. Some folks are looking... Read more →
Texas National Guard at Texas-Mexico border as part of Operation Lone Star. (Image via Texas Military Department Facebook page) Military personnel face lots of challenges. One unexpected one for some Texas troops is the Internal Revenue Service. Texas National Guard members deployed to the Texas-Mexico border as part of Gov. Greg Abbott's Operation Lone Star could end up paying hundreds or even thousands of dollars in unexpected federal taxes, according to a report by the Texas Tribune. The problem is a payroll error made by state officials. Incorrect withholding by employer: The Tribune story says the payroll system used by... Read more →
Updated Oct. 6, 2023, to reflect added Hurricane Ian tax relief and new filing deadline. Before you and your family celebrate Halloween, check out these October tax moves. Your calendar isn't wrong. We're already into the first week of October, the beginning of the fourth quarter of the year. Once you get through repeating (like me) "Already?", it's time for the annual fall push. Between picking out your Halloween outfit and locating a secure hiding place for the holiday treats that your family can't find, it's time to make some tax moves. Here are four tax tasks that you need... Read more →