Category: Taxes

It may be hard to think about anything but the illness and trauma that COVID-19 is causing here and around the world right now. We have just experienced a “springtime” that was at best lost and at worst only a taste of what may be coming down the pike. Outside my front window the sun is shining, but even though everything may look serene, it’s really not. Intellectually, we all know that eventually this pandemic will end. But way before it does end, we are all going to be facing several issues, and among them is this: How will the pandemic affect our local taxes? Will there be a property tax increase?

Taxing Times Are Ahead of Us

Around the world and here at home, cities, states, and local governments are looking to close the massive budget shortfalls created by the coronavirus pandemic. They all have spent tons of money helping fight this disease and even though there has been money doled out by national and federal government agencies, private companies and public donations, local and state governments are considering raising taxes on homes, cigarettes, alcohol, local businesses, and even global tech giants. Why? Because local economies have seen their budgets decimated because of this virus.

It’s just six weeks away from the filing deadline for 2019 federal taxes and if you are like most Americans, you are not a big fan of having to pay them. Typically, it’s a conversation we have (at least with ourselves) as we tend to mumble about how much we pay and how it is spent—and sometimes wasted—by our government. It really doesn’t matter which side of the political spectrum you are on, all of us would love to pay no income tax and take home more of our paychecks, wouldn’t we?

If you take nothing else away from today’s post please take this: Check and file a new W-4 tax form where you work that will guarantee that you have the correct amount withheld from your paycheck each week and will not cause you to get a giant refund with no interest! You can have whatever amount you want withheld, even zero if you want and that is perfectly legal if you believe that you will not owe any taxes for the year!

For the umpteenth time, I have to rail about tax returns and big tax refunds as I always do at this point in the year! Right now is the time of year taxpayers are thinking about their taxes and that long awaited tax refund. Nearly 72% of taxpayers received a tax refund last year, and the average direct deposit tax refund was close to $3,000 according to the IRS. And that’s even in the real life case that so many filers feel like their tax refund was actually a little low.

But since I opened up the box, I now have to ask the question:

Why does getting a tax refund (of your own money) make you so happy?

Amazing at it may seem, 2019 is quickly fading and it’s actually time to start making those year end tax moves to get ready for April…now!

As you’re putting the finishing touches on your financial and tax planning for this year, there’s a lot to review. The second tax year under the Tax Cuts and Jobs Act (TCJA) of 2017 has brought to light some additional considerations that were either unclear or overlooked in 2018. Sometimes, when laws like this one come along you learn from them slowly. So here are some year end tax planning strategies for individual taxpayers, Schedule C taxpayers and business owners to carefully consider.

Just when you have adjusted to the new tax forms of 2018, you may be in for a surprise if you are over age 65 for your 2019 tax return. It’s the newest twist for seniors and it is the new 1040-SR senior tax form that may in fact be the perfect thing for seniors to use!

Fifteen million of the 150 million Americans who filed taxes last year were seniors, so filing an IRS tax return is likely to be simpler next year for about 10% of those who do so. To use this form, you have to be 65 prior to January 1, 2020.

Getting ready for your next tax return due by April 15, 2019 should be on your mind as this year ends. That’s why Part 1 and Part 2 of this post are so important! So here is Part 2, but first…

Stop and Think

Before splurging on holiday gifts this year, ask yourself if you’re going to get a big or far bigger tax bill than you’re accustomed to next year. Or if you get a tax refund, is it likely to be smaller? Millions of Americans won’t get their usual tax refunds next year because of the confusing tax law changes.Continue reading“It’s Time to Get Your Federal Taxes in Order, Part 2”