Don't Mess With Taxes

… and yes, there is a tax connection beyond winning wagers being taxable income. Photo by Scott Webb As is usual each Super Bowl Sunday, bets are getting a lot of attention. There are the big-dollar wagers on the game. Two seven-figure bets were placed last week on the Philadelphia Eagles to defeat the Kansas City Chiefs in today's Super Bowl LVII championship game. Then there are the prop bets, many of which have nothing to do with National Football League plays on the field. For any of those bets that pay off, the winners will owe taxes to the... Read more →

Plus a look at how higher costs of living affect capital gains, youngsters' investment earnings, gifts, and more. Image via Giphy Them that got, are them that get. Not only is that a lyric (and theme) from a fabulous Ray Charles song, it's a good synopsis of the current estate tax law, especially with 2023 inflation adjustments. Many of the current wealth-related tax provisions help the richest among us stay that way. But some of them can help all of us, regardless of our income level, increase our relative wealth. And, as reviewed in this Part 6 of the ol'... Read more →

Current political talk (OK, fights) on Capitol Hill is full of discussions (OK, fights) over how and how much to tax the rich. The discussions (OK, fights) are driven by the fact that the tax code already is full of provisions that help the wealthiest among us stay that way. But some of the tax laws can help all of us, regardless of our income level, increase our relative wealth. And some of those Internal Tax Code components are adjusted each year for inflation. This Part 6 of the ol' blog's annual tax inflation series looks at how these annual... Read more →

Elected officials come into office with grand plans. Then the reality of governing hits. Although President Joe Biden has a nominally Democratic House and Senate, the margin in both chambers, especially when we're talking about the perpetually infighting Dems, is razor thin. That means Biden is not going to get everything he proposed on the campaign trail. That's become obvious in the wrangling still going on over his scaled-back Build Back Better (BBB) budget bill. Estate tax/other benefits tradeoff: The Biden Administration had hoped to help pay for new and increased family-focused tax breaks in the BBB by upping another... Read more →

Young boy feeding the chickens. (Photo by ArtHouse Studio from Pexels) As we wind down the first weekend in October, Democrats are continuing to fight amongst themselves and with Republicans over how big President Joe Biden's economic plan should be and how to pay for however much it ultimately is. But one group of taxpayers is happy about what isn't in the mix. Potential changes to the tax treatment of inherited property are off the table, at least for now. There had been talk that the stepped-up basis rule would be eliminated. This tax rule allows heirs to set the... Read more →

UPDATE, Jan. 10, 2023: The two national lottery jackpots are huge. The next Powerball drawing on Wednesday, Jan. 11, will be at least $360 million ($188.7 million lump sum). Mega Millions is now mega billion-plus. The drawing Tuesday, Jan. 10 (that's tonight!) will pay out more than $1.1 billion ($568.7 million cash) to a single winner. If your numbers do come up, congratulations! After you recover from the shock and elation, check out these tips to help you cope with being a sudden millionaire. Picking lucky numbers from a lottery game dispenser. Benjamin Franklin wasn't wrong, but he was pre-national... Read more →

We need to follow Santa Claus' example this month. Just as he checks his naughty or nice list, we need to check on tax moves to make by Dec. 31. It's December. 2020 and its craziness is almost over! Are you ready? Specifically, are you ready for the holidays? For those of us still committed to pandemic precautions, it's going to be a different, and yes, a bit less jolly, season. But one thing is the same as in previous Decembers. We still need to make some tax moves before Jan. 1. Some December tax moves will demand a little... Read more →

Welcome to Part 6 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 how the annual changes help investors, high-earners and, eventually, estate heirs. 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,... Read more →

The Setting Up Every Community for Retirement Enhancement Act, or SECURE Act as it's popularly known, was attached to the omnibus spending legislation enacted in late 2019. Taxpayers, lawmakers and investment advisers generally supported most of the measure's changes to how we stash and ultimately access our retirement funds. One SECURE provision, however, is causing some concerns, especially among those who have accumulated large IRA holdings and who had planned to leave the bulk of that money to heirs. They and, more importantly, their heirs no longer have access to what used to be known as a stretch IRA. Ending... Read more →

First comes love. Then comes marriage. Then come two filing as one When it comes to their taxes. OK, "marriage" and "taxes" in my opening verse don't rhyme, which is why I'm a journalist, not a poet. But since I focus on taxes and today is, so romantics tell me, the most important day of the year for couples, I thought I'd give the marrying of taxes and wedded bliss a try. Here are five love and tax considerations. 1. Marriage date matters Sure you marry for love. But you might want to consider when you formally tie the knot.... Read more →

Yes, I bought a ticket for the Jan. 29 Powerball. I always do when the jackpot of that and the other national lottery, Mega Millions, gets into the, well, mega million-dollar range. No, I didn't win. Again. Last night's Powerball payout, which had climbed to $396.9 million, is going to the lucky person who bought the winning ticket in Florida. Yes, I am contacting my Sunshine State friends and relatives! In addition to the one big winner, three other Powerball tickets worth $1 million each went to ticket holders in Ohio, Virginia and, again, Florida. If you're one of the... Read more →

These carolers, dressed in Dickensian attire, are no doubt singing traditional Christmas tunes, not my reworked and tax-themed "O Tannenbaum." (Photo by Chris Waits via Flickr CC) O Tax Year-End (O Tax Year Moves) O Tax Year-End, O Tax Year-End, How are thy days so nearing! O Tax Year Moves, O Tax Year Moves, How are thy days so wearing! Not only in the wintertime, But even in young spring is thy prime. O Tax Year-End, O Tax Year Moves, How are thy days so nearing! Yes, that's my attempt at tax lyrics to the tune "O Tannenbaum," known here... Read more →

Welcome to Part 6 of the ol' blog's 2020 series on tax inflation adjustments. We started on Nov. 6 with a look at next year's income tax brackets and rates. Today we look at how the annual changes help investors their families and eventual heirs. Note: The 2020 figures in this post apply to 2020 returns to be filed in 2021. For comparison purposes, you'll also find 2019 amounts to be used in filing 2019 returns due April 15, 2020. OK, maybe the rich don't literally burn money. But as the saying goes, the very wealthy really are different from... Read more →

November is the place for perfectly roasted Thanksgiving bird, not the many tax turkeys that can gobble up your money. These monthly tax moves are a great garnish as you finalize your 2019 tax year menu. Turkey attack from South Park via GIPHY It's November. You know what that means. Year-end tax move time. Oh yeah, and holiday plans. I hear ya. It's that crazy hectic part of the year, whether you're the host/hostess with the most/mostest or planning to travel to your Thanksgiving festivities. But you also need to add taxes to the mix. Now. Before you get all... Read more →

Leonardo DiCaprio living the rich life in a scene from The Great Gatsby. (Film publicity photo courtesy Warner Bros.) The hubby and I are of that age where we're thinking about our estate plan. I know, financial planners say that every age is a good one to think about your estate. Planning helps you accumulate it, not just decide where it goes after you're gone. Still, most people, rightly or wrongly, don't tend to think about their estates until they get older. One thing a lot of us won't have to worry about, at least not if we shuffle off... Read more →

North Carolina offers many gorgeous vistas, but the tax view for some trusts wasn't nearly so nice until a recent Supreme Court ruling. Now they can claim refunds of overpayments. (Blue Ridge Mountains viewed from Blue Ridge Parkway's Deep Gap overlook in western North Carolina; photo by Ken Thomas via Wikipedia Commons) You've got to appreciate the audacity of Tar Heel State tax officials. North Carolina decided it was due tax on a trust because a beneficiary was a state resident. That recipient of trust proceeds, Kimberley Rice Kaestner, was North Carolina's only connection to the trust. The person who... Read more →

When it comes to expired tax laws, Congress is in much the same situation as the builders of this unfinished bridge. The basics are there, but there's still work to be done. (Photo by Paul Mannix via Flickr CC) UPDATE, June 21, 2019: After almost more than 11 hours of discussion, the House Ways and Means Committee on Thursday, June 20, passed along a 25-to-17 party-line vote a measure to extend through 2020 a variety of tax breaks that expired in 2017 and 2018 or will expire at the end of this year, some of which are highlighted in this... Read more →

UPDATE, Thursday, March 28: Well, I'm not the new Powerball multimillionaire. The lottery jackpot, which hit $768.4 million before the drawing last night, is going to the lucky person who bought the winning ticket in New Berlin, Wisconsin. But save this post. There will be other chances to win! Yes, I bought a ticket for the March 27 drawing of the $750 million and counting Powerball lottery. Yes, I know the odds of winning the jackpot, which is the fourth largest Powerball prize in U.S. history, are about 1 in 292 million. I know many of my hardcore personal financial... Read more →

Truman the cat guarding presents under the Christmas tree. (Photo by Shawn Kinkade via Flickr CC) Ho, Ho, Ho, Happy Holidays! December is here. Time to decorate and, most importantly, get cracking on those gift lists. If you're not into frantic, crowd-fighting, last-minute shopping trips, here are five easy tax-related gifts for just about everyone on your nice list, including yourself. 1. Give to your favorite charities. You're probably already well aware of this option, since nonprofits have been sending out year-end donation solicitations since Halloween. Their urgency can be forgiven a bit more this year because of the tax... Read more →

In just more than a month we'll welcome 2019 and begin the first tax filing season under the Tax Cuts and Jobs Act (TCJA). Are you worried yet? Not to be too pessimistic, but tax law changes always produce some unintended consequences. Some are caught beforehand, usually by the tax community that raises questions and pushes for law changes or at least Internal Revenue Service regulatory clarifications. That process is still on going for many TCJA provisions, but one group of taxpayers now is breathing a bit easier. The Treasury Department and the IRS have issued proposed regulations that will... Read more →