Photo by Eric Prouzet on Unsplash In my neighborhood, the windows of businesses large and small are plastered with "Help Wanted" signs. My suburban Austin area is not alone. In the best of times, businesses face challenges in finding the best workers for their needs. This is not the best of times when it comes to hiring. Right now, according to the U.S. Chamber of Commerce, there are 9.9 million job openings in the United States, but only 5.8 million unemployed workers. This tight job market is why it's critical that companies don't undercut their hiring efforts. Some do just... Read more →
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Two enterprising women packing up items they sold for shipping. (Photo by Kampus Production) A major contributor to the Tax Gap is unreported taxable income. The Internal Revenue Service thought it was going to be able to collect more when Congress new reporting rules were included in American Rescue Plan Act (ARPA) of 2021. ARPA dramatically reduced the income level at which third-party, e-commerce payment platforms — such as eBay, PayPal, Etsy, CashApp, and Venmo, — must issue 1099-K forms to sellers who got money through them. It was set to drop from $20,000 to $600 beginning in 2023. That... Read more →
Spring is the traditional time to clean out all the junk you've accumulated. Our neighborhood has a community yard sale the first weekend in May. Some of what doesn't get sold ends up going to local charities. That's a good way to dispose of clothing and household goods that are in good condition and, if you itemize, claim a tax deduction. Follow donation rules: The state of the donated goods is just one of the conditions you must take into consideration, especially if you're planning to deduct their value as an itemized charitable gift. The other key donation deduction factor... Read more →
In February 2022, the Internal Revenue Service announced that it was suspending several automatic tax notices. The move was prompted in large part by the massive backlog of tax filings that piled up when the agency closed offices as a precaution early in the COVID-19 pandemic. Now, taxpayers can expect those mailings to resume, starting with 2022 balance due notices. Current CP14s going out first: IRS Deputy Commissioner for Collection and Operations Support Darren Guillot, who was part of an American Bar Association tax conference panel in Washington, D.C., last week, said that approximately 5-to-8 million CP14 Notices, should start... Read more →
Whatever your reason for moving, be it a temporary disaster displacement or settling into your forever dream home, you need to let the Internal Revenue Service know where you are. (Photo by HiveBoxx on Unsplash) A couple of houses on our block are for sale. We've been watching the painters and window washers and steam cleaners and landscapers come and go. And that's just part of the sale process. Once the deeds are transferred, my former neighbors get to alert everyone of their new addresses. That includes family, friends, creditors (if they're not family or friends), subscription services, financial account... Read more →
Earth Day is tomorrow, April 22. This annual celebration of Mother Earth's beauty and its focus on ways to make a positive impact on our planet has lots of folks thinking about how they can reduce their carbon footprints In keeping with the 2023 theme "Invest in Our Planet," a lot of folks are considering investing in an electric or other alternative energy vehicle to lower their dependence on fossil fuels. Of course, tax breaks also could nudge them down that road. The good news is that the Biden Administration pushed through a new $7,500 electric vehicle (EV) tax credit.... Read more →
Tax Day means double tax duty for millions of taxpayers. In addition to filing their annual return for last year's earnings, they also must make their first estimated tax payment for the current year. For 2023, these dual payments are due next week, on Tuesday, April 18. Next week's April 18 Tax Day is the end of the 2022 tax year for millions of filers. It's also the beginning of the 2023 tax year for those who pay estimated taxes. Our tax system is pay as earn, which for most employed people is taken care via withholding from their paychecks.... Read more →
Photo by Karolina Grabowska Nearly 1.5 million people across the United States are due tax refunds they didn't claim in 2020 by filing a 2019 tax year return. They can get that money, which totals almost $1.5 billion, by filing that old return. Even better, they don't have to mess with the old filing by this year's April 18 filing deadline. Instead, they get until July 17 to file for their 2019 refunds. 3-year window's opening and closing: Tax law gives taxpayers three years to file a return and collect the associated refund. The three-year filing period is from the... Read more →
Residents in 21 states got some good news from the Internal Revenue Service earlier this year. In 2022, they received general welfare, disaster, or stimulus payments from their state officials. These generally were referred to as refunds. Basic state tax refunds in some instances are taxable at the federal level. But the IRS announced on Feb. 10 that in most cases these special 2022 state payments were not. The affected taxpayers live in Alaska, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, and Virginia.... Read more →
Scammers tend to use tried and true techniques to con people out of their identities and money. One of the most popular schemes involves crooks pretending to be real-life officials. And the Internal Revenue Service is near the top of government agencies that con artists impersonate. CloudFlare, a company which provides security for many companies' online operations, says that the IRS ranks sixth in the 50 top brands when it comes to phishing attempts that use fake sites. The example given by CloudFlare included "IRS" along with the words "contact" and "payment." A big tip-off that the URL is fake... Read more →
Doing taxes isn't nearly as much fun as riding a carousel, but a round of tax credits can help families save some tax dollars. (Photo by Brett Sayles) Tax deductions get a lot of attention, mainly because the Internal Revenue Service makes us choose between taking the standard deduction or itemizing. We make this decision every year, based on which method gives us the better write-off amount. Standard has always won, and since the Tax Cuts and Jobs Act of 2017 became law and nearly doubled the standard, adjusted annually for inflation amounts, the margin of victory has grown. But... Read more →
If you're in your seventies, it's time to start preparing for nest egg withdrawals, some of which are required by federal tax law. A couple of new retirement laws over the last few years, collectively known as the Setting Every Community Up for Retirement Enhancement (SECURE) Acts, have made a lot of changes to retirement plans and the collection of associated taxes. One revision was the bumping up the date when most older owners of tax-deferred retirement accounts must start taking some money from these savings. Starting in 2023, required minimum distributions, known by the acronym RMDs, don't kick in... Read more →
Photo by Annie Spratt on Unsplash Unless we're getting a big refund, most of us put off dealing with our taxes. That's happening again this filing season. The Internal Revenue Service reports that through March 10, it had received 63.4 million returns. That's about the same number of returns it received at the same point last year. If 2023 filings continue to follow the 2022 pattern, then the IRS is still waiting for more than 100 million returns. Some people have good reasons for the delay. Their tax situations are complicated, taking time to sort through. Others are missing necessary... Read more →
Photo by Chris F In February, Austin took another winter weather hit. A surprisingly heavy freeze ended with broken tree limbs taking out power lines, leaving tens of thousands of Austin households and businesses without electricity for days. We were among the powerless. During the three days we sat huddled in our increasingly cold house, griping about the third consecutive and unusually cold winter (thanks, no thanks, La Niña!), we realized we needed to look into making some improvements to our house. The energy efficient upgrades will also help in a couple of months when we're dealing with the area's... Read more →
… and some special instructions for those who owe $1 or less or $1 million or more. While bank checks may seem antiquated to most people today, some people still like to pay that way. That includes writing a check to cover their tax bill. (Photo by Steve Shook via Flickr CC) Since most of us e-file our taxes, it's only natural that when we owe, we pay Uncle Sam electronically, too. But most is not all. Some folks still file paper returns. And some taxpayers who do e-file still prefer to pay with an old fashioned, handwritten paper check... Read more →
Photo by Kris Gonzalez via Flickr CC Parenting presents many challenges. One of them is finding quality child care. The tax code can help a bit here if you, and your spouse if you're married, both work. The Child and Dependent Care Credit offsets some child care expenses. Since it's a tax credit, it does that by reducing your tax liability dollar-for-dollar. But if you're a working mom or dad who enjoyed the pandemic-prompted enhancements to the child care credit last year, get ready to be disappointed when you file your 2022 return. The tax break afforded by the Child... Read more →
Photo by Leeloo Thefirst Tax statements are crucial not only to taxpayers, but also tax collectors who rely on the forms' information to verify what people put on their returns. Some crooks, however, are trying to slip false filing data by the Internal Revenue Service, and are entrapping taxpayers in the process. The IRS today issued a warning about a new scam involving fake W-2 forms, the document used by taxpayers and tax departments to verify a taxpayer's earnings. The W-2 info is the main earnings data entered on annual tax returns by millions of filers. Con artists, in many... Read more →
Photo by Pixabay We haven't filed our 2022 tax return because we're missing one 1099 form. OK, that's just one reason we (and by we, I mean I) haven't yet filed. But it's one of them, and we're not alone. Lots of taxpayers every filing season must wait for tax documents so they can correctly complete their returns. We did, however, get a letter today explaining why this tax statement was late. It also promised the form's arrival soon, and definitely in time to meet the April filing deadline. We shall see. Fingers 🤞 crossed. The wait has been annoying,... Read more →
via GIPHY Where's your tax refund? Use the IRS' online tracker to find out The first look at 2023 tax filing data revealed that while returns were coming in at a brisker pace than last year, the average tax refund amount was smaller. That's still true, three weeks into the season. The average refund amount issued for the week ending Feb. 17 is less than at the same period in 2022. Again. However, that comparatively smaller refund so far this year actually is a decent amount, specifically $3,140. I haven't filed yet, so I don't know what my refund will... Read more →
Most U.S. workers get a salary or wages. Those amounts are reported to them early every year on Form W-2, which they use to file their annual tax return. But a lot of those folks also get other money throughout the year, and the Internal Revenue Service wants to know about that, too. These amounts, basically any income not reported on a W-2, go in Part I of Form 1040's Schedule 1, appropriately titled Additional Income. In many, but not all, cases the additional earnings are reported on one of the many types of 1099 forms. As with W-2s, 1099s... Read more →