A new tax credit for dependents offers a break for extended family members and even non-relatives. My mom is a fiercely independent octogenarian, but she still depends on me. Like today, when I'm taking her to have some dental surgery. She is not, however, a tax dependent. That means the hubby and I can't claim her on our tax returns in order to get the $500 Credit for Other Dependents. This tax break, newly-created by the Tax Cuts and Jobs Act (TJCA), also has been dubbed the Family Tax Credit or Non-Child Tax Credit. It's an add-on to the Child... Read more →
Tax Tip
Ransomware has evolved over the last three decades from a targeted cyber attack distributed on literal floppy discs to a major electronic security crisis for individuals, companies and governments. This type of malware typically locks out computer users and locks down their systems until the cyber hijackers are paid to return access to the information. In 2017, WannaCry ransomware went global, infecting more than 200,000 computers across 150 countries. Most recently, almost two dozen Texas towns were victims of a coordinated attack. The Lone Star State electronic lockouts follow patterns set by ransomware demands in Florida, Maryland and New York.... Read more →
Paycheck withholding is most Americans' introduction to taxes. But even though millions of us have been seeing income taxes come out of our checks for years, the system still is confusing for many. It became a bigger mess this filing season, when folks filed their first tax returns under the Tax Cuts and Jobs Act (TCJA) changes. A lot of them were not amused. The unexpected price of wrong withholding: They discovered that they weren't getting the same big tax refunds they had in prior years. These annual spring payouts had served as distributions from their withholding tax deposits to... Read more →
August is here, but few of us have put out the welcome mat. The eighth month of the year tends to be one of the hottest of the year. Most of the summer's fun events have come and gone. And school is about to start. OK, that last point is a positive for many parents who are running out of patience with the kids being underfoot all the time. Those moms, dads and all other shoppers in 13 states at least will get some state sales tax holidays to make this muggy month a bit more tolerable. Those tax-free events... Read more →
Kissing up to the IRS, on this National Lipstick Day or any other, won't help with dubious business expense claims. Your work-related expenses must be ordinary and necessary. My collection of lip colorings, mostly unused since I began working from home. When I quit working in an office, I quit regularly applying makeup. Now I only pull out the mascara and powder and lipstick when I have an in-person meeting or must make a media appearance. So today, National Lipstick Day, really isn't a big deal for me. Others, however, are celebrating, especially by taking advantage of the lipstick deals,... Read more →
School has already started in many places, but one state is still holding a sales tax holiday for folks looking to get a tax bargain on children's (and actually anyone's) clothing and shoes. Connecticut's qualifying items will be tax-free through Aug. 24. We Americans just can't seem to slow down, even during the traditional summer vacation season. We always are looking ahead. School's just been out a few weeks in most places and already ads for back-to-school sales are showing up in our television shows, print publications (yeah, a few are still around and read by some of us) and... Read more →
You don't have to have this many candles on your birthday cake to use Form 1040-SR. Hitting age 65 qualifies you to use file this new form starting next filing season. It's lose three, add one for the Internal Revenue Service when it comes to 2019 tax year forms. Uncle Sam's tax collector is proposing tweaks to the Form 1040 and elimination of three of the six schedules created to go with that annual individual return that was redesigned last year in the wake of the Tax Cuts and Jobs Act (TCJA) changes. But the net result of forms available... Read more →
If the changes to Form 1040 this filing season frustrated you, there's some good news and some bad news. The good news is that the Internal Revenue Service is revising the Form 1040 to be used for 2019 tax filings. No, it's still not quite a postcard. But there will be fewer schedules to file — three instead of six — if your taxes are a bit more complicated. The bad news is that many of us still have to fill out those schedules (and the accompanying forms for additional tax break claims that remained) instead of having things on... Read more →
Hello, July! The heat is definitely on, but there are plenty of ways to chill out, both personally and to put your 2019 tax bill on ice. Yes, I know you want to head to the pool or beach or catch up on neglected novels or just be generally lazy. I'm right there with you. But you'll enjoy those recreational pursuits a lot more once you've taken some steps, like the seven listed below, to lower your 2019 tax bill. Let's get to 'em! 1. Get weather ready. A low pressure trough moved overnight from Georgia to the Florida panhandle... Read more →
These pups probably would be cooler inside under the A/C instead of atop the condenser. As a general rule, your cooling system works better when you keep the outside air conditioning unit clear of everything, including pets! Summer's been official for just a week, but folks in many areas have been dealing with hot temperatures for a while. Some, including my neighbors who've had air conditioning repair trucks parked in front of their houses for what seems like weeks, already are feeling the often costly effects of warmer weather. That's why it's a good time to think about tuning up... Read more →
Things that are never good: an unexpected envelope from the Internal Revenue Service. That's the assessment of one of my personal finance writer pals. Today, she's working to clear things up in connection with one of those mailing she got from Uncle Sam's tax man. It's not a fun exercise, but it's definitely one you should undertake if you disagree with an IRS decision. In fact, the IRS own Taxpayer Bill of Rights covers this situation in several of its tenets. Specifically, I'm looking at every taxpayer's right to: Pay no more than the correct amount of tax, Challenge the... Read more →
Why yes, that is a bill you just got from the Internal Revenue Service. And like all past-due notifications, the sooner you take care of it, the better for you and your bottom line. The IRS is mailing letters or notices, including CP14s and CP501s, to taxpayers who filed their returns on time, but did not pay the tax that was due at that time. The notifications, most of which are going out in June and July, let the recipients know that they have a tax balance due. To minimize the associated non- or underpayment penalties, the IRS recommends that... Read more →
June is one of the most popular months to get married. Why? Some point to the weather. Peak spring thunderstorm season has passed. Temperature wise, it's warm, but not hot (unless you're in Texas, but that's another post). Ditto with humidity, meaning that June is one of the better months for an outdoor wedding. Then there's matrimonial history. The early Romans gave us Juno, the goddess protector of women in all aspects of life, but especially in marriage and childbearing. So a wedding in the month named for Juno was, and still is for many, considered most auspicious, notes the... Read more →
The Internal Revenue Service did do away with two versions of Form 1040 and shortened, a bit, the lone document we now use to file our annual tax returns. But the tax agency went the other way with Form W-4. This form, officially titled Employee's Withholding Allowance Certificate. is what we give to our bosses to ensure that the correct amount of income taxes come out of our paychecks each pay period. Now instead of a brief, 10-item form, the IRS' W-4 proposed revision takes up a full letter-sized page. And while there are just seven boxes to fill out,... Read more →
Photo by vxla via Flickr CC If gratuities are part of your work, then the 10th of the month is an important tax date for you. It's the day — or the next businesses day if the 10th falls on a weekend or holiday — that you must report your tip amount for the previous month when it totals $20 or more. The Internal Revenue Service requires these reports because the tax code considers all types of tips as discretionary, fully taxable income. Wisconsin workers, however, may soon get a break on the state tax level when it comes to... Read more →
Uh oh. How did that 1099-MISC end up that desk drawer instead of with all your other tax documents you used to file your annual tax return? That mystery might never be solved, but an X filing can help you get the truth about your taxes to the Internal Revenue Service. I'm talking about IRS Form 1040X. It's the document you use to correct filing mistakes. It's known as the amended tax return form and it's really not that puzzling. Basically, Form 1040X lets you tell the IRS what you originally reported, what your revised numbers are and why you... Read more →
New parents Harry and Meghan don't have to worry about the expense of their new bundle of joy. But for us non-royals, raising children is costly. We former colonists here across the pond can get some help covering those costs thanks to several U.S. tax breaks. An obviously elated Prince Harry announces the birth of his and wife Meghan's son. (Screen shot from the Sussex Royal Instagram) It's a boy! Watchers of the Royal Family in the United Kingdom, here across the pond and yes, worldwide, are celebrating today's announcement that the Duke and Duchess of Sussex are now parents... Read more →
Children celebrate May Day by dancing around a maypole on the Village Green in Tewin, near Welwyn Garden City, Hertfordshire, England. (Photo by Paul Barnett via Wikimedia Commons) Happy May Day! It's the annual May 1 global holiday celebrating the contributions of workers. But the other mayday often comes to mind when taxes are involved. If it's a tax distress signal you're sending out as the merry month of May begins, here are some moves that could help ease your tax trepidations. 1. File your 2018 return. If last month you didn't file your 2018 tax return, either because you... Read more →
Independent contractor life could be for you if you're tired of having the boss constantly over your shoulder and on your back. But you and your employer must meet some IRS guidelines in order to achieve this nonemployee work relationship. (Photo by Sebastiaan ter Burg via Flickr CC) Uber is about to go public. It could mean billions for the company and its investors. That folks are so bullish on Uber's initial public offering (IPO) is astounding to most of us, considering the company's fiscal history. Uber lost about $3 billion in 2018 and has lost about $10 billion over... Read more →
Tax season is over for another year. Now all that's left cleaning up after the filing crunch. I know many of y'all are tempted to simply toss everything in the trash. Don't. You don't have to the tax version of television's Hoarders, but there are some tax-related documents you need to hang onto, at least for a while. These 7 frequently asked questions and answers can help you get a better handle on your tax record keeping. 1. Why should I keep records? Well-organized records make it easier to prepare your tax return. Documentation, both the amount and in good... Read more →