March's arrival means it's time to start stalking some tax savings. (Photo via Unsplash+ in collaboration with Getty Images) While the saying that March comes in like and goes out like a lamb usually is a reference to this month's weather transition from winter to spring (or, here in Central Texas, to summer already), feline aggressiveness could come in handy at tax filing time. There are plenty of tax moves you can make during this final full month before Tax Day, which is this year is the normal April 15 due date. Here are five tax matters to consider in... Read more →
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Consistent contributions to tax-advantaged retirement accounts can help them grow from seedlings to a solid and sizeable amount of money for your post-work years. (Photo by micheile henderson on Unsplash) The stock market has been on a roll, rather than a roller coaster, of late. On Friday, March 1, The Nasdaq recorded its first record close in more than two years. The Dow and S&P 500 are off to their best start to a year since 2019. That's more good news for investors, particularly those whose holdings are in retirement accounts. These savers already saw their retirement vehicles achieve their... Read more →
Photo by Ozan Safak on Unsplash Higher income taxpayers tend to take the most advantage of tax breaks. That's no surprise. They can afford to hire tax professionals, who keep track of all the benefits they qualify for and claim them on the well-to-do taxpayers' returns. But there are some valuable tax breaks for the rest of us who are far from wealthy. And while higher-income households do enjoy greater per dollar benefits tax benefits, the breaks available to us tax plebeian are more beneficial when they are measured as a share of our income. Tax credits provide the most... Read more →
Last week, I finally got all the documents I need to file my 2023 tax return. As an independent contractor, the bulk of my income tax statements were 1099-NEC forms. But some folks are getting 1099-Ks. And these tax statements still are causing confusion. Form 1099-K has become more common with the growth of the gig workforce, and the delivery of products and services through online apps and marketplaces, such as PayPal, Venmo, CashApp, eBay, Etsy, Uber, Lyft, and Airbnb. Old form, new amounts: The forms are not new, but the amount of earnings that trigger their issuance has changed.... Read more →
Taking things a bit more slowly often is a good idea. For many, that approach also applies when it comes to filing their annual tax return. (Photo by Kay Bell) While millions of taxpayers are eager each January to get their returns to the Internal Revenue Service, there just as many who want to take their time. Some are just natural procrastinators. They wait until the last minute to finish every task. But when it comes to tax filing, there actually are some good reasons to not be in such a hurry. Here are seven. 1. To see if Congress... Read more →
Unsplash+ in collaboration with Getty Images Tax season 2024 officially starts Monday, Jan. 29. Lots of taxpayers have already filled out their 1040 forms and are just waiting for the Internal Revenue Service to start processing them next week. Most of these early filers are expecting tax refunds. They also likely have relatively simple tax lives. Lucky them. Others, however, have more complicated tax and financial circumstances. These folks have more tax documents with details that must be transferred to their return forms and schedules. They also need to consider how their situations might affect their tax returns. Below is... Read more →
Tax season 2024 officially starts on Jan. 29, and millions of taxpayers are getting ready to deliver their returns that day to the Internal Revenue Service. Some, however, are asking a more basic question. Do I have to file a Form 1040 at all? The answer probably is yes. If you're asking the question, you likely made some money, and the Internal Revenue Code doesn't exempt much from taxation. But as with all things tax, there are exceptions. In some situations, Uncle Sam doesn't demand individuals file. Here's a look at whether you might be able to join that group... Read more →
You're ready to file your tax return, but there's one problem. You don't have all the statements you need to complete your Form 1040 and associated schedules. Many of us, however, are just going to have to be patient for a couple more weeks. While some issuers have sent taxpayers the required statements, many don't get them out until close to, in most cases, the mandated Jan. 31 delivery date. The documents typically are snail mailed, but technology is gaining ground. Issuers of most of my annual tax statements now let me know by email the documents are ready. Then... Read more →
You probably are getting ready for the three-day weekend coming up with the Rev. Dr. Martin Luther King, Jr. federal holiday on Monday, Jan. 15. But if you pay estimated taxes, you also know that date usually is the deadline for the prior tax year's fourth payment. Since it's MLK Day this year, this due date is pushed to the next business day, Tuesday, Jan. 16. You need to meet that final deadline to avoid a possible tax bill or penalty (or both) when your file your 2023 tax return later this year. Why estimated tax? Most of us pay... Read more →
Updated Monday, Jan. 8, 2024, to include the just announced official start of the 2024 tax filing season. Not only is it the first week of a brand, spanking new year, it's the first week of the 2024 tax filing season. I know, the Internal Revenue Service isn't yet accepting 2023 tax returns. That won't happen until the official start of the 2024 filing season on Monday, Jan. 29. But lots of taxpayers already are getting their forms in order, so they can send them the minute the IRS officially opens its doors, and computer system, to process them. And... Read more →
Although hybrid work is still around, most companies returned mostly to pre-COVID-19 pandemic operations in 2023. That apparently includes bonuses for workers. These added employee payments came back in a big way this year, according to a survey last month by the national staffing firm Robert Half. The agency found that 96 percent of employers expect to award year-end bonuses, with 54 percent of those generous employers saying the amounts will be more than a year ago. If you're among those who got a little (or a lot of) extra cash from your boss, congratulations. Now let's talk taxes. Bonus... Read more →
Only 80% of wrongly-claimed Employee Retention Credit amounts must be repaid. Photo by Anastasiia Chepinska on Unsplash We're all aware of the continuing medical issues from long COVID. The coronavirus' tax effects appear to be just as persistent. The Internal Revenue Service is still dealing with law changes enacted to provide pandemic relief. The Employee Retention Credit, or ERC, is one of them. This refundable business tax credit was designed for companies that continued paying employees during the COVID-19 pandemic despite financial hardship. To qualify, the businesses were either fully or partially suspended due to a government order, or had... Read more →
To ensure you have the type of retirement you want, you must do some calculations, including figuring how your required minimum distributions fit in, financially and tax-wise. (Photo via Unsplash+ in collaboration with Getty Images) Retirement savings can make a big difference in how enjoyable your post-work years will be. If you have tax-deferred retirement accounts, those savings also present new tax responsibilities once you reach a certain age. Some money in a traditional IRA that's been out of the Internal Revenue Service's reach for years must be taken out as a required minimum distribution, or RMD. Uncle Sam also... Read more →
Photo by Xingchen Yan on Unsplash If your work involves driving, the Internal Revenue Service has some good news for your 2024 business trips. Today, the tax agency announced that on Jan. 1, 2024, the standard optional mileage rate you can use to claim those eligible miles will go to 67 cents per mile. That's a 1.5 cent increase over the 2023 mileage rate. However, the other two mileage rates that the IRS evaluates and adjusts each year are going down. Travel for medical and, in the case of qualified active-duty members of the Armed Forces, moving purposes will be... Read more →
My H-E-B helps me keep track of store purchases that might be eligible for FSA reimbursement. (Crumpled receipt photo by Kay Bell) After today's weekly grocery buying trip, I'm pulling out my stash of COVID-19 pandemic masks. Yes, I bought a lot. A whole lot! As before, the facial protection is to shield me from the sneezes and coughs of many of my uncovered fellow H-E-B shoppers. This time, though, I'm hoping the upper respiratory cacophony is due to the changing weather, dust stirred up by the firing up of furnaces, and, here in Central Texas, cedar fever. But you... Read more →
You have a lot to do, and which you'd rather be doing, this month. But also take some time to check out a few December tax moves. (Photo via Unsplash+ in collaboration with Getty Images) It's December! Are you ready for all the decorating and shopping and cooking and parties and tax moves to make? Me neither. Although I love the holidays and Christmas decorating, my time and patience get shorter this time of year as my seasonal to-do list gets longer. So I understand if you are rolling your eyes right now as I suggest adding some tax moves... Read more →
Are you enjoying Thanksgiving? I hope so. And if your Turkey Day celebration extends, like it does for most of us, into Friday and the weekend, Happy Beyond Thanksgiving! But when you're ready (or forced) to get back to your regular routine, you might want to make time to consider the items in the box below: five tax turkeys and how to avoid them. A few relatively easy tax moves in these areas could help make your tax life easier. 2023's Tax Turkeys 🦃 🍗 🦃 to Avoid Not adjusting your incorrect withholding Not collecting your employer's maximum 401(k) match... Read more →
IRS also ups payment threshold trigger to $5,000 for the 2024 tax year. Thanksgiving is this week, but the Internal Revenue Service today skipped all the way to Christmas, giving an estimated 44 million taxpayers an early gift. Most of these individuals won't have to deal with 1099-K forms in 2024. They now have another year before they'll get this tax statement detailing their self-employment income. They also can make much more next year — up to $5,000 instead of $600 — before this third-party reporting document must be issued in January 2025. This latest delay decision, detailed in IRS... Read more →
Photo by Kyle Glenn on Unsplash This Thanksgiving week is a big travel week for millions of Americans. Most people are heading to friends' and/or relatives' where they'll share a Turkey Day spread. Others are using the time for other, non-holiday recreational pursuits. By this time next week, they'll be back home. In most cases, they'll return to homes are in the United States. However, thousands of U.S. citizens have relocated internationally. Despite the location distances, those Americans abroad share something with domestic residents other than celebrating a traditional U.S. holiday. They still owe U.S. taxes on their income, regardless... 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. The AMT was created 54 years ago to ensure the rich paid at least some tax, but since it originally wasn't indexed for inflation, it increasingly affected a lot of less-wealthy taxpayers. (Photo by Unsplash+ in collaboration with Getty Images) What's worse than figuring your tax bill? Having to figure a second, parallel amount you might owe. That's a situation that taxpayers who owe the Alternative Minimum Tax, or AMT, end up facing at filing time. The... Read more →