Photo: JHL via Flickr The last couple of years have been challenging for U.S. citizens living and working abroad. The COVID-19 era for expatriates has meant they've had to deal with changing demands from their American-based employers along with the health rules of the nation where they live. One thing, however, has remained the same. Most Americans who go abroad for work still must deal with the Internal Revenue Service. They owe U.S. taxes on their income, regardless of where it's earned, because Uncle Sam still relies on a worldwide tax system at the individual level. There are, however, some... Read more →
Tax Tip
Single parenting can be challenging, especially at tax time and you and your ex-spouse are vying for the same child-related tax breaks. (Photo by MART PRODUCTION from Pexels) For some, this Thanksgiving was quieter than normal. Their youngsters spent Turkey Day with their parent as part of the alternating holidays agreement reached in the divorce decree. Breaking up is always hard. It's also complicated when it involves lawyers, court hearings and the Internal Revenue Service. It's can get even more complex when children are involved. I'm not a lawyer. I don't play one on the ol' blog. And I don't... Read more →
Photo: Satya Murthy Happy Thanksgiving! This holiday obviously is about acknowledging all we have to be thankful for in the past year and beyond. It's best when spent with family and friends. And, of course, it's about eating! Turkey and dressing. Green bean casserole. Double-stuffed baked potatoes. Celery stalks overflowing with pimento cheese. Fruit salad. Pies. Lots of pies. That was what I grew up eating. We lived in the same West Texas town as grandparents, so the fourth Thursday of November definitely was a beloved routine. My Mom always helped out my Mam-ma, her mom, and on most occasions... Read more →
This Thanksgiving for the first time in months (or years) families will be getting together to share and make new memories. (Photo by Photo by cottonbro from Pexels) This Thanksgiving week, many of us are seeing family for the first time in months, if not years. (Thanks, no thanks, COVID-19.) If your family members include aging parents, in addition to lots of long hugs and catching up and crying, you probably should spend some time making sure they're doing OK when you're not around. If you do find Mom and Dad could use a little, or even a lot of... Read more →
A tax credit for dependents offers a break for older children, extended family members, and even non-relatives. Thanksgiving is the traditional time for families to gather. But not all families are traditional. That's evident in real and tax life. The family-friendly tax break that's been getting most attention of late is the Child Tax Credit (CTC) and the advance payments for 2021 that are going out through December. I'm guilty, as a perusal of the ol' blog quickly shows. But some families aren't eligible for the CTC, either the money being distributed now or when they file their annual tax... Read more →
Image courtesy IRS It's Thanksgiving week! Nov. 25 is circled in green for go by families across the United States. They finally will see their COVID vaccinated families and friends in person for the first time in almost two years. But folks in parts of California and all of Mississippi need to mark another calendar date a bit farther down the road. Jan. 3, 2022, is the new 2020 tax year deadline for them. Yep, we're well past October's extended filing deadline and other Internal Revenue Service due dates, but the tax ramifications of major disasters continue to be felt.... Read more →
AMT law changes plus annual inflation adjustments mean that this parallel tax aimed at the wealthy is no longer such a broadly-based ATM for the tax collector. The political and legislative battle over how to collect from the wealthiest taxes, which was mentioned in yesterday's Part 6 tax inflation post on (among other things) estate taxes, is not new. It's been going on for decades. The Alternative Minimum Tax, or AMT, is one way that Washington, D.C., came up with to ensure that the rich pay at least some taxes. This post, Part 7 of the ol' blog's 10-part inflation... 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 →
Medical matters have been front and center for the last two years due to the COVID-19 pandemic. Even without a global health crisis, taxpayers know they need to keep an eye on not just their wellbeing, but also on how medical expenses could create a tax outcome that's healthier for the filers rather than the Internal Revenue Service. There are a variety of medical tax breaks. And several of them are adjusted each year to account for inflation. Here, in this Part 5 of the ol' blog's annual tax inflation series, is a look at those changes for the 2022... Read more →
There's one thing that every taxpayer, regardless of their financial situation, can agree on. We all want to pay the least amount of taxes to Uncle Sam as possible. The key way to get our taxable income to the lowest possible level is by claiming deductions, either the standard option by itemizing as discussed in Part 2 of the ol' blog's annual inflation adjustment series. Either option helps lower your taxable income. But there are additional deductions we should check out at filing time, like the above-the-line deductions anyone can claim. Then there are tax credits, which are a better... Read more →
Photo: Juan Pablo Serrano Arenas from Pexels The Internal Revenue Service has a holiday gift for eligible families who've yet to collect their Advance Child Tax Credit payments. If sign up by Monday, Nov. 15, for the early-issue amounts, which are up to $300 per month for each child younger than age 6 and up to $250 per month for each child ages 6 through 17, you'll get all the money you qualify for in mid-December. That definitely could challenge Santa for the seasonal present delivery crown. Bumped up and early tax break: The Child Tax Credit (CTC) already was... Read more →
Tax year-in and tax year-out, most filers claim the standard deduction instead of itemizing. The option has always been appealing because it's easy. There are no receipts to save, no added calculations. Even better, the Internal Revenue Service provides the standard amount you can claim, based on your filing status, right there on the first page of Form 1040. The standard deduction trend got even more participants after the Tax Cuts and Jobs Act (TCJA) of 2017 essentially doubled the standard amounts. And those now more valuable deduction amounts still usually get a boost at the end of every year... Read more →
Inflation has spiked, which doesn't leave any of us as happy as this rising hot air balloon. However, some tax related-inflation figures for 2022 could put a smile on some taxpayers' faces. (Photo by Don Hainzl from Pexels) Inflation is all the talk right now, with October's 6.2 percent jump in consumer prices grabbing the attention of shoppers, politicians, and news media. But inflation also matters when it comes to taxes. Every year, the Internal Revenue Service revises an expansive array amounts that apply to tax situations. Today is that day for the agency's annual inflation adjustments that will generally... Read more →
Democrats still are looking to ease the limit on the federal tax deduction on state and local taxes, or SALT as the tax world, and now every affected state and local taxpayer, refers to it. The latest proposal is to raise the $10,000 cap imposed by the Tax Cuts and Jobs Act of 2017 to $80,000 through 2020, then revert to $10,000 in 2031. Yeah, budget machinations at work. Surpassing standard amounts: That's got some folks looking at whether it would be worth itemizing again. To opt for detailing deductions on Schedule A, you'll need to come up with enough... Read more →
Banks can be imposing, but having an account can mean quicker receipt of your tax refund via direct deposit. (Photo by Expect Best from Pexels) It's been a busy year for the Internal Revenue Service. The agency continues to feel the reverberations from COVID-19. Throughout 2021, the IRS has been distributing coronavirus-relief-related tax money, including Advance Child Tax Credit payments and refunds based on unemployment benefits adjustments. Meanwhile, there was its main tax job. Through Oct. 22, the IRS had received almost 168 million tax returns. The good news for the tax agency is that most of those returns —... Read more →
Hurricane Ida remnants arrive in the northeast United States in early September 2021. (Satellite image via National Oceanic and Atmospheric Administration/National Hurricane Center) The effects of Hurricane Ida just keep coming. Connecticut is the latest state where areas have been declared major presidential disasters. That makes them eligible for assistance from the Federal Emergency Management Agency (FEMA). It also means the Internal Revenue Service is offering corresponding tax relief. Certain Connecticut individual and business taxpayers now have until Jan. 3, 2022, to file various tax returns and make tax payments. The disaster and tax relief are for those who encountered... Read more →
This could be you in a few (or more) years. Make sure your retirement days truly turn into golden years by saving for them now. And by using tax-advantaged accounts to their fullest. If you're younger than I am, you need to be thinking about retirement. Actually, especially if you're younger than I am, you need to be thinking — and doing something — about your future retirement. You've got more time than I do (natch!) to build up your nest egg so you can retire the way you want. Being in control of your retirement is especially important nowadays.... Read more →
Yes, cash sometimes is called lettuce, but tax gain harvesting isn't just about more green for your wallet. It could help reduce taxes you sell on assets you sell in the future. Even if you're not among the wealthiest, if you have invested a bit, you probably keep an eye on the markets. And you probably took a long look yesterday, when the Dow topped 36,000 for the first time ever. Hey, I'm right there with you. I checked my holdings to see how much they were up at that point. We all like positive reinforcement. If you're investing for... Read more →
UPDATE, Nov. 2, 2021: OK, #1 in this list now is moot. But the 5 remaining November tax moves still apply. Autumn leaves in our backyard stream. (Photo by Kay Bell) You can stop staring at your calendar. October is gone, apparently roaring through 2021. Today really is the first day of November. Once you regain your temporal composure, it's time to get busy. Even though some of us started dealing with upcoming year-end festivities last month (guilty!), it's now officially holiday season. And we have to adjust to the time change. And vote. And, of course, deal with our... Read more →
Shutterstock There's one terrifying ghoul who hangs around long after Halloween. In fact, he and his ilk have been busy all year. It's the tax scammer. The Federal Trade Commission (FTC) just this week warned that scammers are sending yet another phony Internal Revenue Service email about COVID-19 relief payments. "There's a fake IRS email that keeps popping into people's inboxes. It says that you can get a third Economic Impact Payment (EIP) if you click a link that lets you 'access the form for your additional information' and 'get help' with the application," says Cristina Miranda of the FTC's... Read more →