Thursday, October 21, 2021

Tax Tips After January 1, 2022

 If you think your tax bill is chiseled in stone at the end of the year, think again. Though it’s true that most money-saving options to defer income or accelerate deductions become much more limited after December 31, there is still a lot you can do to make the tax-filing season cheaper and easier. Here are 10 tax tips for the new year to help you lower your taxes, save money when preparing your tax return, and avoid tax penalties ...

Read more at TurboTax - 6 min. read

Thursday, October 7, 2021

What Is the Capital Gain Tax?

 Capital Gains Tax

Capital gains are the profits realized from the sale of capital assets such as stocks, bonds, and property. The capital gain tax is triggered only when an asset is sold, not while the asset is held by an investor. However, when a mutual fund sells shares of its holdings during the year, mutual fund investors could be charged capital gains. (A fund’s capital gains distribution is not taxable if the fund is held in a tax-deferred account.)

There are two types of capital gains: long term and short term; each is subject to different tax rates. Long-term gains are profits on assets held longer than 12 months before they are sold by the investor. The American Taxpayer Relief Act of 2012 instituted a long-term capital gains tax rate for taxpayers of up to 20%. Short-term gains (on assets held for 12 months or less) are taxed as ordinary income at the seller’s marginal income tax rate.

Social Security’s Uncertain Future: What You Should Know

Social Security is a pay-as-you-go system, which means today’s workers are paying taxes for the benefits received by today’s retirees. However, demographic trends such as lower birth rates, higher retirement rates, and longer life spans are causing long-run fiscal challenges. There are simply not enough U.S. workers to support the growing number of beneficiaries. Social Security is not in danger of collapsing, but the clock is ticking on the program’s ability to pay full benefits.

Photo of Social Security Administration building

Each year, the Trustees of the Social Security Trust Funds provide a detailed report to Congress that tracks the program’s current financial condition and projected financial outlook. In the latest report, released in August 2021, the Trustees estimate that the retirement program will have funds to pay full benefits only until 2033, unless Congress acts to shore up the program. This day of reckoning is expected to come one year sooner than previously projected because of the economic fallout from the COVID-19 pandemic.

Thursday, September 30, 2021

Audit: IRS Needs to Improve How It Wipes Taxpayer Data from Devices

 Computer and laptop hard drives that aren’t properly scrubbed could allow exposure of private taxpayer data.

A report from the U.S. Treasury Inspector General for Tax Administration found flaws regarding how the IRS sanitizes—or gets rid of—taxpayer data contained on agency-owned desktop computers and laptop hard disks.

Read more at NextGov - 2 min. read

IRS: New Contracts Awarded to Private Collection Agencies

WASHINGTON — The Internal Revenue Service has awarded new contracts to three private-sector collection agencies for collection of overdue tax debts. The new contracts begin Thursday following today's expiration of the old contracts.

Beginning Thursday, Sept. 23, 2021, taxpayers with unpaid tax bills may be contacted by one of the following three agencies:

CBE Group, Inc.
PO Box 2217
Waterloo, IA 50704
800-910-5837

Coast Professional, Inc.
PO Box 526
Albion, NY 14411
888-928-0510

ConServe
PO Box 307
Fairport, NY 14450
844-853-4875

The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA).

Read more at IRS.gov - 5 min. read

Monday, September 27, 2021

How the wealthy are preparing for higher taxes

 As Democrats get closer to raising taxes, financial advisors and their well-off clients are taking steps now to avoid some of those steeper levies later.  “Our clients are concerned,” said Michael Nathanson, CEO and chair of The Colony Group. “This would be among the largest tax increases in history.”

Read more at CNBC - 4 min. read

Many People Left Waiting For Payments From IRS For Tax Refunds, Stimulus Checks, Child Tax Credits

 The IRS is acknowleding the delays for some child tax credit payments, some stimulus checks and some refunds but it essentially says its doing the best it can ...

Read more at KDKA2 CBS Pittsburgh - 2 min. read

Sunday, September 26, 2021

Fourth Stimulus Check: Is Another Relief Payment Coming?

 A fourth stimulus check could help those still struggling to make ends meet. A few places, including California, have recognized that need for additional help and stepped up with additional payments. But will the Internal Revenue Service (IRS) provide another stimulus check in 2021?

Read more at 62CBS Detroit - 6 min. read

Saturday, September 25, 2021

North Carolina Woman Sentenced to 36 Months in $1.49 Million Tax Preparer Case

According to the United States Attorney's Office, Middle District of North Carolina, Nikki Decole Cunningham-Quick - a tax preparer and owner of Nikki's Tax Service in Raeford, North Carolina - routinely included false items on federal income tax returns of some clients, including the use of false dependents, false income, and false education credits. According to court records, the tax loss from the fraudulent returns she prepared totalled $1,494,924.26.

2021 Charitable Deduction Reminder

 Individuals claiming the standard deduction, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to certain qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns.

Read more at Lexology

Friday, September 24, 2021

Child Tax Credit for 2021: Will You Get More?

 If you have qualifying children under the age of 18, you may be able to claim a child tax credit. (You may also be able to claim a partial credit for certain other dependents who are not qualifying children.) The American Rescue Plan Act of 2021 makes substantial, temporary improvements to the child tax credit for 2021, which may increase the amount you might receive.



Ages of Qualifying Children

Wednesday, September 22, 2021

A looming crackdown on a popular retirement tax strategy has some investors worried

 via MarketWatch

Roth conversions are one way Americans can save on their tax liabilities in retirement - but the House recently proposed a bill that would curb these conversions for high earners.  While this may appear to be bad news for some workers, there is a silver lining ...

Read more - 5 min. read