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Tag: taxes

  • Dear Penny: Can My Daughter Claim Her Lazy Boyfriend as a Dependent?

    Dear Penny: Can My Daughter Claim Her Lazy Boyfriend as a Dependent?

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    Dear Penny,

    My 21-year-old daughter has been living with her boyfriend for the past seven months. He is the same age as she is and is unemployed. He shows absolutely no desire to find employment, nor does he have the drive to do so, which makes me irritated knowing that he is taking advantage of her kindness. 

    I asked her about it and all she tells me is, “I don’t mind helping him.” I know she is hurting financially because she pays the rent, groceries, gas, etc. My question is: When it’s time to file 2022 income taxes, could she legally claim him as a “dependent” even though they are NOT married? And what other deductions can she claim?

    -L.

    Dear L.,

    Clearly, taxes are the least of your daughter’s problems. But unfortunately, it doesn’t sound like your daughter can legally claim her boyfriend on her 2022 tax return.

    To claim someone as a dependent on a federal tax return, they need to meet a four-part IRS definition of a “qualifying relative.” (No, they don’t have to actually be a relative to meet the criteria). They need to live with you for the entire calendar year, they have to have less than $4,400 in gross income for 2022, you have to pay more than half of their support for the year, and no one else can claim them as a dependent.

    If your daughter’s boyfriend has only lived with her for seven months, he wouldn’t meet the first criteria. But if this living situation continues through the entirety of the next calendar year — and I really hope it doesn’t — your daughter could claim him in 2023.

    It’s also doubtful that your daughter would qualify for other deductions. The Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction. For 2022, the standard deduction is $12,950. For the overwhelming majority of taxpayers, particularly renters, itemizing deductions doesn’t make sense. Any deductions they qualify for will add up to far less than $12,950. So if you’re looking for a silver lining in this relationship, it’s not going to come in the form of a bigger tax refund for 2022.

    For complex tax situations, I typically recommend readers consult with a certified public accountant or an attorney instead of relying on an advice columnist. But this one’s not especially complicated, so I don’t think your daughter needs to shell out money for a pro. When she files her return next year, she can use a free tax software program, which will guide her to the same answers I’m giving you.

    What interests me, though, is the fact that you’re thinking about your adult daughter’s taxes — and it’s only October. I suspect you’re trying to muster whatever advice you can to fix this financial trainwreck. You can’t motivate her boyfriend to work, nor can you lower her rent or grocery bill, so tax guidance is the only thing you can offer.

    Now it’s time to step back. She knows you don’t approve of her boyfriend. Focus on maintaining a good relationship with your daughter. That means you’ll need to be cordial to her boyfriend.

    Sometimes these situations have a way of working themselves out. Living with someone who has zero ambition gets old after a while. Even though your daughter claims she doesn’t mind helping her boyfriend, I’d say the odds of her eventually concluding that he’s a mooch are pretty high.

    What you can do is avoid enabling this situation. Even though you assume your daughter is struggling financially, it doesn’t sound like she’s asking you for money. But should she turn to you at some point for financial help, don’t give her money. Be firm that if she needs assistance with bills, that will need to come from her boyfriend.

    Your frustration is understandable. But having the freedom to make mistakes is what forces us to grow up. If you harp on the issue, you may wind up only sharpening your daughter’s resolve to make this relationship work. Don’t offer financial or relationship advice unless your daughter asks for it. But do say a silent prayer that this relationship will be over before tax season.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].


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    robin@thepennyhoarder.com (Robin Hartill, CFP®)

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  • IRS Hires 4,000 Customer Service Workers Ahead Of Tax Season

    IRS Hires 4,000 Customer Service Workers Ahead Of Tax Season

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    WASHINGTON (AP) — The IRS said Thursday it has hired an additional 4,000 customer service representatives who are being trained to answer taxpayer questions during the 2023 tax filing season.

    It’s part of the new hiring made possible when congressional Democrats gave the IRS an $80 billion boost through the flagship climate and health care law signed this summer. It is meant to help rebuild an agency that hadn’t seen additional funding in decades.

    The IRS is still working out how it will spend the extra $80 billion, but has emphasized that resources will be focused on improving customer service and scrutiny of high-income earners. The newest hires are being trained in taxpayer rights and technical account management issues.

    Last tax season, the IRS answered so few taxpayer phone calls that a bipartisan group of lawmakers wrote to agency officials to complain that calls were only being answered 9% of the time.

    Treasury and IRS officials have said they want to put an end to poor customer service.

    “We have been unable to provide the help that IRS employees want to give and that the nation’s taxpayers deserve,” IRS Commissioner Chuck Rettig said in a Thursday statement, “but help is on the way for taxpayers.”

    “As the newly hired employees are trained and move online in 2023, we will have more assistors on the phone than any time in recent history,” Rettig said.

    Ahead of the midterm elections, GOP candidates across the country have said they want to strip the IRS of its new funding, saying that the Democratic legislation will bankroll an army of auditors that will harass middle-class taxpayers rather than help them.

    Those claims are generally alarmist and misleading. IRS management says its goal is to add another 1,000 customer service representatives by the end of the year, bringing total new hires in this area to 5,000.

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  • IRS Is Sending Letters to Millions Still Eligible for Stimulus Checks

    IRS Is Sending Letters to Millions Still Eligible for Stimulus Checks

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    If you didn’t file an income tax return earlier this year, check your mailbox. Normally nobody wants to hear from the IRS, but you definitely need to be looking for anything that comes from the government agency.

    It could mean serious money for you.

    The Internal Revenue Service has started mailing letters to 9 million people and households who could be leaving thousands of dollars on the table because they didn’t file 2021 tax returns.

    Those potential payments include:

    • The third round of stimulus checks, worth as much as $1,400 for individuals or $2,800 for couples.
    • Child tax credits of up to $3,600 per child.
    • The earned income tax credit that’s worth up to $1,500 for childless workers, and rises to more than $6,700 for people who have at least three children.

    We know the term “tax credit” isn’t exactly sexy, but in this case it could mean actual money in your pocket.

    To get that money, you’ll need to file an income tax return by mid-November — even if you normally don’t need to file.

    Who’s Eligible for This Money From the IRS?

    Who are these 9 million people who could be eligible to get thousands of dollars from the IRS?

    To be blunt, we’re mostly talking about low-income households. The IRS says people who weren’t required to file 2021 tax returns are typically individuals earning less than $12,500, or married couples who earned less than $25,000 last year.

    But there are also higher-earning people who, for various reasons, haven’t gotten around to filing their 2021 taxes. However, the IRS is only mailing letters to people who appear to qualify for these tax credits but haven’t filed a 2021 tax return yet.

    Which means if you don’t hear from the IRS, they’re not trying to give you money, so you’re not missing out on anything. Sorry.

    So Who’s Eligible for What, Exactly?

    Every year, millions of eligible taxpayers fail to claim tax credits that they’re eligible for. Various studies and reports say this is largely due to misperceptions about how hard it is to claim them, and whether people qualify for them.

    All of those potential tax credits and things can be a lot to keep track of. Here’s how it all shakes out:

    Stimulus Checks

    Last year, the $1.9 trillion American Rescue Plan sent stimulus payments to millions of Americans. Technically, these payments were an advance of a credit that’s referred to on Forms 1040 and 1040-SR as the “Recovery Rebate Credit.”

    Some people didn’t get the full amount of money they were entitled to, so the IRS is trying to reach them now.

    For the third round of payments, eligible Americans with an individual adjusted gross income of $75,000 or less were entitled to the full $1,400 payment. (Your AGI is the amount of your income that’s subject to federal income taxes. It’s your income minus tax deductions and adjustments like retirement plan contributions.)

    Eligible taxpayers could also claim a $1,400 stimulus payment for each dependent. That included dependent college students, disabled adult children or parents you were supporting.

    Tax Credits

    The 2021 American Rescue Plan that authorized the stimulus checks also made existing child tax credits and earned income tax credits more generous.

    Again, millions of Americans never claimed the full amount of money they were entitled to, according to the IRS.

    For example, thousands of families received advance monthly payments for up to half the value of their overall child tax credit — $3,600 for each child under 6 and up to $3,000 for each child ages 6 to 17. But they still have to file their taxes to get the rest of the money they’re eligible for.

    How Do You Claim Your Money?

    If the IRS says you’re eligible for any of these payments, you’re going to need to file a 2021 income tax return — even if you didn’t have much income last year, or any income.

    Technically, you have up to three years from the original filing deadline to claim tax credits that you’re eligible for. So in this case, your ultimate deadline will be in April 2025.

    But realistically, you should try to do it by mid-November. That’s the deadline to use most of the online tools that streamline the process for people who don’t typically file.

    • IRS Free File is open until Nov. 17. If you make $73,000 or less, you can file your tax return for free there.
    • Another tool, GetCTC.org, is open through Nov. 15. It gives tax filers a simple way to claim the third stimulus checks, child tax credits and earned income tax credits.
    • ChildTaxCredit.gov is another way for people to file 2021 tax returns to get the stimulus checks or child tax credit payments they’re eligible for.

    Like always, you need to gather some forms before filing your tax return. That includes W-2s and 1099s. It also includes the total amount of child tax credits or stimulus check payments you received for 2021. You can find that information by opening an online account at IRS.gov.

    Claiming This Money Won’t Hurt Your Other Benefits

    The IRS is stressing that if you claim these 2021 tax credits, it won’t change whether you’re eligible for other federal benefits for low-income households — namely the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), or the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).

    So don’t worry about that.

    Watch Your Mailbox Like a Hawk

    The bottom line here is: If you see a letter from the IRS in your mailbox, don’t throw it away. Open it!

    That letter could mean serious money for you. But in order to close the deal, you’ve got to be prepared to take action pretty soon.

    Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.


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    mike@thepennyhoarder.com (Mike Brassfield)

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  • Inflation hike: IRS is raising the 401(k) contribution limit by record amount

    Inflation hike: IRS is raising the 401(k) contribution limit by record amount

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    The IRS on Friday said it is boosting the 2023 contribution limits for 401(k)s by a record $2,000 due to the high pace of inflation, which will allow workers to sock away more money in 2023. 

    Individuals will be able to save up to $22,500 in their 401(k)s next year, an increase of 9.8% from the current year’s limit of $20,500, the agency said in a statement. The new limit also applies to other types of defined contribution plans, including 403(b), most 457 plans and the federal government’s Thrift Savings Plan.

    It’s the biggest inflation adjustment since 401(k) plans began indexing to inflation in 2007. Typically, the IRS has increased the contribution limit by either $500 a year or kept it at the same level since the plans began instituting cost-of-living increases 15 years ago.

    The IRS makes inflation adjustments annually to everything from tax brackets to the Earned Income Tax Credit, but this year’s hot inflation means that many of the changes are more significant than in a typical year. Americans are struggling with the highest inflation in 40 years, which is eating into their purchasing power as average wage gains lag the sharp rise in prices.

    On Tuesday, the IRS announced higher tax brackets for 2023, which could trim tax bills for many workers next year. Higher contribution limits for retirement plans could also help millions of Americans lower their tax bills, since socking away money for retirement is often made on a tax-deductible basis — in other words, every dollar that is contributed to a 401(k) can be deducted from taxable income.

    The IRS said the catch-up contribution for people over 50 who participate in 401(k)s and similar programs will rise to $7,500 in 2023, up from $6,500 in the current year. 

    “Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $30,000, starting in 2023,” the IRS said in the statement.

    New 2023 IRA limit: $6,500

    The IRS said the contribution limit for IRAs will increase to $6,500 next year, a boost of 8.3% from the 2022 limit of $6,000. 

    However, the catch-up contribution for people over the age of 50 will remain at $1,000, because that rule isn’t subject to an annual adjustment for inflation, the agency said. 

    The IRS said it is also boosting the “phase-out” range for whether an individual can deduct their contributions to a traditional IRA. If a taxpayer or their spouse is covered by a workplace retirement plan — like a 401(k) — and earns above a certain amount, they may be limited or prohibited from deducting their IRA contributions from their taxable income.

    The IRS said single taxpayers who have a workplace retirement plan will see the phase-out range increased to between $73,000 to $83,000 next year, up from between $68,000 to $78,000 in 2022. That means single taxpayers with a 401(k) or similar type of plan won’t be able to deduct an IRA contribution from their taxable income if they earn over $83,000 next year. 

    Phase-out ranges for other types of taxpayers, such as married couples filing jointly, have also been increased. The IRS has published those new limits here.

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  • The IRS just changed its tax brackets. Here’s the impact on your taxes.

    The IRS just changed its tax brackets. Here’s the impact on your taxes.

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    The IRS said it is adjusting many of its rules to account for the impact of inflation, ranging from individual income tax brackets for 2023 to the standard deduction. The changes could mean tax savings for some taxpayers next year.

    The higher limits are aimed at avoiding “bracket creep” due to inflation, which can push workers who received annual cost-of-living pay increases into higher tax brackets even though their standard of living hasn’t changed. 

    The IRS makes such adjustments annually, but this year’s hot inflation means that many of the changes are more significant than in a typical year. Americans are struggling with stubbornly high inflation, which is eating into their purchasing power as average wage gains lag the sharp rise in prices.

    The higher provision thresholds could provide relief to some taxpayers who fall into lower tax brackets as a result, said Tim Steffen, director of tax planning with Baird, in an email. For instance, Steffen noted that a married couple earning $200,000 in both 2022 and 2023 would save $900 in taxes next year because more of their income would be taxed at a lower rate.

    Here are the changes announced by the IRS on October 18, with the inflation-adjusted provisions taking effect for the 2023 tax year. Taxpayers will file their 2023 tax returns in early 2024. 

    Standard deduction

    The standard deduction is used by people who don’t itemize their taxes, and it reduces the amount of income you must pay taxes on. 

    • For married couples filing jointly, the standard deduction will rise to $27,700, up from $25,900 in the current tax year. That’s an increase of $1,800, or a 7% bump. 
    • For single taxpayers and married individuals filing separately, the standard deduction will rise to $13,850 in 2023 from $12,950 currently. That’s an increase of about 6.9%.
    • Heads of households will see their standard deduction in 2023 jump to $20,800 from $19,400 this year. That’s an increase of 7.2%. 

    “The flip side of this, though, is that it’s going to be harder to itemize your deductions in 2023,” Steffen said. “That means your tax payments, mortgage interest and charitable contributions are less likely to provide you a tax benefit next year.”

    Most taxpayers take the standard deduction, especially after the 2017 Tax Cuts and Jobs Act enacted a more generous deduction. Only about 14% of taxpayers itemized their taxes after the passage of the tax overhaul, or a 17 percentage-point drop compared with prior to the law, according to the Tax Foundation.

    Tax brackets

    The IRS is boosting tax brackets by about 7% for each type of tax filer, such as those filing separately or as married couples. The top marginal rate, or the highest tax rate based on income, remains 37% for individual single taxpayers with incomes above $578,125 or for married couples with income higher than $693,750. 

    The lowest rate remains 10%, which will impact individuals with incomes of $11,000 or less and married couples earning $22,000 or less. Below are charts with the new tax brackets.

    Tax brackets show the percentage you’ll pay in taxes on each portion of your income. A common misconception is that the highest rate is what you’ll pay on all of your income, but that is incorrect. 

    Take a single taxpayer who earns $110,000. In 2023, she will take a standard deduction of $13,850, reducing her taxable income to $96,150. She’ll pay:

    • 10% tax on her first $11,000 of income, or $1,100 in taxes
    • 12% tax on income from $11,000 to $44,735, or $4,048
    • 22% tax on the portion of income from $44,735 up to $95,375, or $11,140
    • 24% tax on the portion of her income from $95,374 to her limit of taxable income, $96,150, or $775

    Together, she’ll pay the IRS $17,063 in taxes, which gives her an effective tax rate of 17.7% on her taxable income. 

    Flexible spending accounts

    Flexible spending accounts allow workers to put money, up to the limit allowed by the IRS, in an account that can be used to pay for medical expenses. Because the funds are taken from their accounts on a pre-tax basis, it offers tax savings for many workers. 

    The new IRS limit for FSA contributions for 2023 is $3,050, an increase of about 7% from the current tax year’s threshold of $2,850. 

    Because employees set their FSA limits in the fall, ahead of the new calendar year, people will be using this new IRS threshold to decide on their contributions within the next few weeks.

    Earned Income Tax Credit

    The maximum amount for households who claim the Earned Income Tax Credit will be $7,430 for those who have at least three children, compared with $6,935 in the current tax year, the IRS said.

    Capital gains tax brackets

    Capital gains — the profit from investments or other assets — are taxed using different brackets and rates than earned income. The income thresholds for capital gains taxes are also being adjusted due to inflation, the IRS said. 

    For instance, in 2022 single taxpayers who earn below $41,675 aren’t required to pay capital gains taxes on their investments. That threshold will rise about 7% to $44,625 in 2023. Single taxpayers who earn above that amount are subject to a 15% capital gains tax, while those who earn above $492,300 in 2023 will be subject to the top capital gains rate of 20%.

    Bigger gift exclusion

    People can also give up to $17,000 in gifts in 2023 without paying taxes on the money, up from $16,000 in the current year.

    Estate tax limit

    The estates of wealthy Americans will also get a bigger break in 2023. The IRS will exempt up to $12.92 million from the estate tax, up from $12.06 million for people who died in 2022 — an increase of 7.1%.

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  • Open enrollment: Employees have big changes to consider — here’s what to know.

    Open enrollment: Employees have big changes to consider — here’s what to know.

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    Employers typically offer a period of open enrollment in the fall, when their workers are allowed to pick new health plans, enroll in a Flexible Spending Account or make other changes to their benefits. This year, there are some changes ahead that could help  employees, while also potentially opening up some financial pitfalls. 

    Among the biggest changes for 2023 are with two tax-advantaged health savings accounts — Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA). These accounts can save workers a nice chunk of change by allowing them to sock away pre-tax money to pay for medical expenses. Basically, you save what you would have paid in taxes on money you put in the accounts. 

    In 2023, employees can put away as much as $3,050 in an FSA, an increase of about 7% from the current tax year’s cap of $2,850. Meanwhile, single workers who want to fund an HSA can save up to $3,850 next year, a 5.5% increase from 2022, while families can save up to $7,750, up 6.2%.

    Those increases are helpful at a time when inflation is at it highest in four decades, with consumer prices having jumped more than 8% from a year ago. But there are several “gotchas” that workers need to be aware of, especially when it comes to Flexible Spending Accounts, with the foremost being that FSAs are “use-it-or-lose-it” programs. In other words, if you don’t use all the money you set aside, you’ll lose it — your employer keeps any unused funds.

    “Open enrollment typically opens in late October and early November,” said Lisa Myers, director of client services, benefits accounts, at Willis Towers Watson. “Planning carefully is important, and knowing the deadlines.”

    Indeed, U.S. workers end up forfeiting a total of about $3 billion a year in unused FSA funds, according to an analysis from Money. 

    Here’s what to consider during open enrollment. 

    What’s the difference between an FSA and HSA? 

    Both accounts are aimed at helping workers pay for medical expenses with pre-tax money. The biggest difference is that FSAs are controlled by your employer, while HSAs are owned by the individual. 

    That means that if you leave your job, your FSA won’t move with you. But once you open and fund an HSA, that account does stay with you, like your 401(k), which continues to be yours even after you leave a job and start at a new employer. 

    Another big difference: Health Savings Accounts are designed for people with high-deductible health care plans. This means that not every employee will have access to an HSA. 

    HSAs generally have more flexibility than FSAs. For instance, unused funds roll over each year, unlike with a FSA, where funds are forfeited if not used by your employer’s claim deadline. And you can change your contributions to your HSA at any time; with a FSA, contributions are set during open enrollment. 

    Can I enroll in both an FSA and HSA? 

    Generally, no, noted Myers of Willis Towers Watson. However, people with HSAs can opt for a slimmed-down version of a Flexible Spending Account, known as a “limited purpose FSA.” These accounts can only be used for vision and dental expenses, which shrinks their usefulness.

    That means employees who qualify for both programs will generally need to decide whether it makes more sense to fund either an FSA or an HSA for 2023.

    How much should I set aside for 2023?

    Some employers offer tools to help workers estimate their potential annual health costs, but you can also look at your out-of-pocket medical expenses for the past year to help gauge your likely expenditures for the upcoming year, Myers said.

    People with HSAs also may want to set aside the amount that they’ll pay due to their health plan deductible, since that’s out-of-pocket spending that they could get reimbursed through that tax-advantaged account. 

    There’s more at stake for people who are opting for FSAs, since overestimating your medical expenses could leave money sitting in your account that eventually returns to your employer. 

    What deadlines should I be aware of? 

    You’ll need to stay on top of the deadline for claiming your FSA funds. 

    Employers can give employees a grace period of up to two and a half months after the end of a calendar year to claim the money. But you’ll have to check if your company offers extra time and mark on your calendar when you’ll need to claim the money by.

    Some employees may be surprised by deadlines this year because a pandemic stimulus bill and the IRS relaxed the rules for claiming FSA funds, providing more time for people to file claims in 2020 and 2021. But those provisions have expired, which means people with FSAs in 2022 must claim their money by year-end or by an employer’s grace period in early 2023.

    “That was temporary relief due to the pandemic, so employees may have larger than usual balances in their health and dependent-care FSAs, and that they may forfeit going into 2023,” Myers said. “It’s important to check your balances, check the plan rules, so they can plan their spending for the remainder of 2022.”

    What can I spend my FSA money on?

    Employees are sometimes surprised at what their FSA plans will cover, including Band-Aids, reading glasses, first-aid kits and over-the-counter medicine, Myers said. 

    She recommends that people check the FSAStore.com, which carries all FSA-eligible items, especially if you are getting close to your deadline for claiming your funds and need to use the money. 

    Myers also advises that you check your 2022 FSA balance and claim deadlines now, rather than waiting until the end of the year. Generally, a health service or good must be purchased in 2022 to qualify for a 2022 FSA claim, so waiting until the last minute to try to spend the funds could increase your risk of running into a barrier — such as if your eye doctor is booked up, which could hinder renewing your prescription to get new glasses.

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  • The 2023 Tax Brackets Are Here. How Much Will You Pay Next Year?

    The 2023 Tax Brackets Are Here. How Much Will You Pay Next Year?

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    The Internal Revenue Service released its inflation adjustments for 2023 federal income tax rates and brackets this week.

    The IRS automatically adjusts tax rates each year to reflect inflation. Usually these adjustments are small. But following the fastest price growth in four decades, Americans can expect noticeably higher tax brackets and a larger standard deduction next tax year.

    The breakpoint for each tax bracket will be about 7% higher across the board in 2023.

    The IRS hasn’t yet released 2023 limits for 401(k) accounts and individual retirement accounts (IRAs), but those numbers are expected next month.

    2023 Tax Brackets

    There are seven tax brackets that range from 10% to 37%.

    You’ll use the 2022 brackets to determine your tax bill that will be due on or before April 18, 2023. You’ll use 2023 brackets when you file your taxes in 2024.

    Tax brackets are also used to determine your ordinary income rate.

    Unmarried Individuals

    Tax Bracket 2022 Taxable Income (use when you file in 2023) 2023 Taxable Income (use when you file in 2024)
    10% Up to $10,275 Up to $11,000
    12% $10,275 to $41,775 $11,000 to $44,725
    22% $41,775 to $89,075 $44,725 to $95,375
    24% $89,075 to $170,050 $95,375 to $182,100
    32% $170,050 to $215,950 $182,100 to $231,250
    35% $215,950 to $539,900 $231,250 to $578,125
    37% Over $539,900 Over $578,125

    Married Individuals Filing Jointly or Surviving Spouses

    Tax Bracket 2022 Taxable Income (use when you file in 2023) 2023 Taxable Income (use when you file in 2024)
    10% Up to $20,550 Up to $22,000
    12% $20,550 to $83,550 $22,000 to $89,450
    22% $83,550 to $178,150 $89,450 to $190,750
    24% $178,150 to $340,100 $190,750 to $364,200
    32% $340,100 to $431,900 $364,200 to $462,500
    35% $431,900 to $647,850 $462,500 to $693,750
    37% Over $647,850 Over $693,750

    Head of Household

    Tax Bracket 2022 Taxable Income (use when you file in 2023) 2023 Taxable Income (use when you file in 2024)
    10% Up to $14,650 Up to $15,700
    12% $14,650 to $55,900 $15,700 to $59,850
    22% $55,900 to $89,050 $59,850 to $95,350
    24% $89,050 to $170,050 $95,350 to $182,100
    32% $170,050 to $215,950 $182,100 to $231,250
    35% $215,950 to $539,900 $231,250 to $578,100
    37% Over $539,900 Over $578,100
    Pro Tip

    Not sure of your filing status? This interactive IRS quiz can help you determine the correct status. If you qualify for more than one, it tells you which one will result in the lowest tax bill.

    Tax rates apply to the income within each bracket. So if you’re an unmarried individual with taxable income of $50,000, you won’t pay 22% of that $50,000 to Uncle Sam.

    According to the 2023 tax brackets, you’d pay:

    • $1,110 — 10% on the first $11,000
    • $4,047 — 12% on the next $33,725 ($44,725 – $11,000 = $33,725)
    • $1,160.50 — 22% on the next $5,275 ($50,000 – $44,725  = $5,275)
    • $6,317.50 — total tax bill

    Even though your marginal tax rate is 22%, you’d only pay 12.64% of your taxable income to Uncle Sam.

    3 Tax Changes to Know for 2023

    Modified tax brackets aren’t the only changes for 2023. Over 60 tax provisions will be adjusted in the new tax year. A few highlights:

    1. Some Limited-Income Families Can Get an Extra $495

    The maximum Earned Income Tax Credit will increase in 2023 to $7,430, from $6,935 in 2022. You need at least three children to qualify for the maximum amount.

     2. The Standard Deduction Is Higher

    Most taxpayers get the biggest tax savings by taking advantage of the standard deduction instead of itemizing.

    For the 2023 tax year, the standard deduction is:

    • $13,850 for single taxpayers and married individuals filing separately, up $900.
    • $27,700 for married couples filing jointly and surviving spouses, up $1,800 from tax year 2022.
    • $20,800 for heads of household, a $1,400 increase.

    3. Estate Tax and Gift Tax Limits Increase

    Most Americans don’t need to worry about estate tax or gift tax, but those numbers are going up as well.

    In the 2023 tax year, you can give anyone (and as many people as you want) $17,000 in gifts — an increase of $1,000 from 2022 — without paying gift tax.

    The estates of people who die during 2023 have a basic exclusion amount of $12.92 million, an increase of $850,000 from 2022. As long as your assets don’t exceed $12.92 million, your heirs don’t need to pay taxes on your estate.

    Ready to Start Your 2023 Tax Prep?

    If you’re ready to dive into your taxes, you can check out this comprehensive summary of 2023 tax changes courtesy of the IRS.

    Even if you’re not ready to jump into 2023 tax planning mode just yet, keep in mind it’s a good time to check your tax withholdings and make adjustments if necessary.

    Remember: 2023 tax brackets and other adjustments apply to tax returns filed in 2024.

    Just make sure you file your 2022 return or ask for an extension by the April 18, 2023 deadline. If you can’t afford your tax bill, it’s essential that you file a tax return anyway and ask for an IRS payment plan.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected].

    Rachel Christian, a senior writer at The Penny Hoarder, contributed to this story.


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    robin@thepennyhoarder.com (Robin Hartill, CFP®)

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  • The Wealthy Enjoy A Massive Loophole In New York’s Tax Code — And Are Fighting To Keep It

    The Wealthy Enjoy A Massive Loophole In New York’s Tax Code — And Are Fighting To Keep It

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    Eight years ago, a whistleblower accused a credit card processor for many of Manhattan’s topflight hotels, including the Waldorf Astoria and the Trump Hotels, of dodging New York state taxes.

    The person alleged that the company, POST Integrations, was using the fact that it is headquartered in Arizona as an excuse not to pay New York, despite doing much of its business there. The case went to court.

    But instead of battling over the core issue — whether POST Integrations knowingly committed tax fraud — the two sides spent years litigating over whether the company had technically ever lied about it. The company initially argued that it couldn’t be accused of submitting a false record because it never filed that New York tax return. And, in a sense, they were right.

    The New York state law that allows whistleblowers to expose tax fraud has what critics say is a glaring loophole that protects the state’s most skillful tax cheats. While filing a false tax return is criminal, the law doesn’t allow whistleblowers to bring an accusation without pointing to a false record.

    It remains difficult to prosecute someone who is not paying the taxes they owe but who is clever enough not to leave a paper trail.

    “Why in the world should it matter to authorities whether someone committed tax fraud by filing a false tax return or by never filing anything?” asked Gregory Krakower, who drafted the original law more than a decade ago as counsel to the New York attorney general and has fought to close the loophole; he is now an adjunct professor at Cardozo Law School. “If a large, out-of-state company knowingly and improperly pays no taxes and never filed a return, are we going to protect and empower that? It makes no sense.”

    But as bizarre as the loophole may be, it has survived multiple attempts to slam it shut. Now, a bill to close the loophole is headed to New York Gov. Kathy Hochul’s desk — with a coalition of the state’s largest business interests lined up in opposition.

    A court allowed the case against POST Integrations to go forward in 2017 based on another section of the law, which continues to this day. An attorney for the company did not respond to a request for comment.

    The loophole exists within a law that allows the attorney general or whistleblowers to sue wealthy individuals and corporations they believe are committing tax fraud.

    New York is the realm of legendary tax cheats, like hotel heiress Leona Helmsley and the ex-corporate titan Dennis Kozlowski. He dodged millions in sales taxes on fine art and spent stolen corporate funds on such extravagances as a $6,000 shower curtain. In 2010, under the shadow of scandals like these, the state legislature updated the New York False Claims Act, an existing law against making fraudulent claims to the government, to include tax fraud.

    “Why in the world should it matter to authorities whether someone committed tax fraud by filing a false tax return, or by never filing anything?”

    – Gregory Krakower, drafter of the original law

    The new law permitted suits against people or companies with more than $1 million in annual income who allegedly owe at least $350,000. It entitled a whistleblower who brings a successful lawsuit to receive about 20% of any recovered tax revenue.

    Large, powerful interests were “apoplectic,” Krakower recalled. And so, in 2013, they fought back when the legislature attempted to amend the False Claims Act again. Lawmakers passed a new provision that made it a crime to “knowingly” defraud the state government, even if the violator never made a false statement or false record — but a group of Republicans inserted a loophole that excepted cases of tax fraud.

    Proponents of closing the loophole fear this favors out-of-state corporations. Such as those that do business in New York but pretend otherwise or the wealthy snowbird who files his returns in low-tax Florida but secretly spends most of his time in New York.

    “These are not people the tax department could find on their own,” said New York State Sen. Liz Krueger, who chairs the chamber’s finance committee.

    Krueger has sponsored a bill, which has passed in the state legislature and is now heading to the governor’s desk, that would close the loophole by making it a crime to “knowingly” commit tax fraud whether or not that involved a false record.

    “It is a small, senseless loophole that allows tax cheats to get away with tax fraud by carefully avoiding using a false record or filing a false N.Y. tax return,” Krueger and State Assemblywoman Helene Weinstein, who sponsored the legislation in the general assembly, wrote in a recent letter to Hochul.

    A broad coalition of business councils from around the state and an organization representing thousands of employees for the Big Four accounting firms — Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers — have all called for Hochul to veto the bill. She vetoed a similar measure on New Year’s Eve in 2021, echoing their concerns that the bill is too broad and might implicate corporations and accountants unaware they owed state taxes.

    “It is a small, senseless loophole that allows tax cheats to get away with tax fraud.”

    – New York state Sen. Liz Krueger

    Krueger believes this latest version addresses those concerns, noting the bill only criminalizes “knowing” fraud. But the opposition is holding fast.

    “Why should we want to be liable for conduct that we don’t know about, or if our client supplies us with fraudulent information?” said Kevin McCoy, chair of the New York State Society of CPA’s legislative task force.

    “They should be worried that we’re writing a law where there’s a liability for them,” Krueger said. “Getting it right is what they get paid to do.”

    A spokesman for Hochul, Justin Henry, said she’s reviewing the legislation.

    Notwithstanding the loophole, the originators of whistleblower law hold it up as a runaway success. Since 2010, New York has recovered roughly $585 million from tax matters. A hedge fund that claimed to be located in Alabama paid the city and state $70 million. In 2018, Sprint settled with New York City and the state for a whopping $330 million in unpaid sales taxes.

    Because these fraud claims proceed through the court, they are not bogged down by the interminable delays that face whistleblowers at the federal level, where the IRS handles tips. At the same time, the overall number of cases in New York, about 20 per year, has been modest — proof said Krueger and others, that the cases tend to be high-quality and not the kinds of fishing expeditions opponents of the law once warned about.

    Other states have taken notice. Lawmakers in California and Connecticut have attempted to pass a version of New York’s whistleblower statute. The District of Columbia passed a version in 2021 without New York’s loophole.

    Krueger and Weinstein’s bill is headed imminently to Hochul’s desk, at which point she will have 10 days to sign the bill, veto it, or allow it to become law.

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  • The IRS is adjusting its rules for inflation. Here’s your new tax bracket.

    The IRS is adjusting its rules for inflation. Here’s your new tax bracket.

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    The IRS on Tuesday said it is adjusting many of its rules to account for the impact of inflation, ranging from individual income tax brackets for 2023 to the standard deduction.

    The higher limits are aimed at avoiding “bracket creep” due to inflation, which can push workers who received annual cost-of-living pay increases into higher tax brackets even though their standard of living hasn’t changed. 

    The IRS makes such adjustments annually, but this year’s hot inflation means that many of the changes are more significant than in a typical year. Americans are struggling with stubbornly high inflation, which is eating into their purchasing power as average wage gains lag the sharp rise in prices. The higher provision thresholds could provide relief to some taxpayers who fall into lower tax brackets as a result. 

    Here are the changes announced by the IRS on Tuesday, with the inflation-adjusted provisions taking effect for the 2023 tax year. Taxpayers will file their 2023 tax returns in early 2024. 

    Standard deduction

    The standard deduction is used by people who don’t itemize their taxes, and it reduces the amount of income you must pay taxes on. 

    • For married couples filing jointly, the standard deduction will rise to $27,700, up from $25,900 in the current tax year. That’s an increase of $1,800, or a 7% bump. 
    • For single taxpayers and married individuals filing separately, the standard deduction will rise to $13,850 in 2023 from $12,950 currently. That’s an increase of about 6.9%.
    • Heads of households will see their standard deduction in 2023 jump to $20,800 from $19,400 this year. That’s an increase of 7.2%. 

    Tax brackets

    The IRS is boosting tax brackets by about 7% for each type of tax filer, such as those filing separately or as married couples. The top marginal rate, or the highest tax rate based on income, remains 37% for individual single taxpayers with incomes above $578,125 or for married couples with income higher than $693,750. 

    The lowest rate remains 10%, which will impact individuals with incomes of $11,000 or less and married couples earning $22,000 or less. Below are charts with the new tax brackets.

    Flexible spending accounts

    Flexible spending accounts allow workers to put money, up to the limit allowed by the IRS, in an account that can be used to pay for medical expenses. Because the funds are taken from their accounts on a pre-tax basis, it offers tax savings for many workers. 

    The new IRS limit for FSA contributions for 2023 is $3,050, an increase of about 7% from the current tax year’s threshold of $2,850. 

    Because employees set their FSA limits in the fall, ahead of the new calendar year, people will be using this new IRS threshold to decide on their contributions within the next few weeks.

    Earned Income Tax Credit

    The maximum amount for households who claim the Earned Income Tax Credit will be $7,430 for those who have at least three children, compared with $6,935 in the current tax year, the IRS said.

    Bigger gift exclusion

    People can also give up to $17,000 in gifts in 2023 without paying taxes on the money, up from $16,000 in the current year.

    Estate tax limit

    The estates of wealthy Americans will also get a bigger break in 2023. The IRS will exempt up to $12.92 million from the estate tax, up from $12.06 million for people who died in 2022 — an increase of 7.1%.

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  • Biden calls British Prime Minister Liz Truss’ tax cut plan a “mistake”

    Biden calls British Prime Minister Liz Truss’ tax cut plan a “mistake”

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    “I wasn’t the only one that thought it was a mistake. I disagree with the policy, but that’s up to Great Britain.”

    President Biden on Saturday called embattled British Prime Minister Liz Truss’ abandoned tax cut plan a “mistake,” and said he is worried that other nations’ fiscal policies may hurt the U.S. amid “worldwide inflation.”

    Mr. Biden said it was “predictable” that the new prime minister on Friday was forced to walk back plans to aggressively cut taxes without identifying cost savings, after Truss’ proposal caused turmoil in global financial markets. It marked an unusual criticism by a U.S. president of the domestic policy decisions of one of its closest allies.

    “I wasn’t the only one that thought it was a mistake,” Mr. Biden said. “I disagree with the policy, but that’s up to Great Britain.”

    Mr. Biden’s comments came after weeks of White House officials declining to criticize Truss’ plans, though they emphasized they were monitoring the economic fallout closely. He was speaking to reporters at an Oregon ice cream shop where he made an unannounced stop to promote the candidacy of Democratic gubernatorial candidate Tina Kotek, as Democrats across the country face a tough political environment amid GOP criticism of their handling of the economy.

    Mr. Biden said he was not concerned about the strength of the dollar — it set a new record against the British Pound in recent weeks — which benefits U.S. imports but makes the country’s exports more expensive to the rest of the world.

    The president said the U.S. economy “is strong as hell.”

    “I’m concerned about the rest of the world,” he added. “The problem is the lack of economic growth and sound policy in other countries.”

    Said Mr. Biden: “It’s worldwide inflation, that’s consequential.”

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  • Tax extension: The October deadline for filing your return is almost here

    Tax extension: The October deadline for filing your return is almost here

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    If you are among the roughly 19 million people who asked the IRS for another six months to file their taxes in 2022, time is almost up. 

    Almost 1 in 8 taxpayers asked for an extension to file their taxes this year, according to data from the IRS, which expects a total of about 160 million tax returns to be filed in 2022. While most Americans file their returns before the traditional April 15 deadline, people who needed more time were able to automatically receive another six months from the tax agency in order to get their files in order. 

    This year, the tax extension deadline for filing your 2021 return is October 17, rather than the typical date of October 15, because the 15th falls on a Saturday. Yet while that gives taxpayers a little more breathing room, experts have recommended filing as soon as possible in order to avoid last-minute pitfalls. They also recommend sending your return electronically, since the IRS has struggled mightily with processing paper returns during the pandemic.

    “Using the electronic filing options can make people’s lives easier than mailing in paper tax returns,” said Eric Bronnenkant, head of tax at Betterment, told CBS MoneyWatch.

    Typically, about 1 in 10 taxpayers asks for an extension, but this year may have seen a jump in requests for extra time because of the ongoing pandemic and the complexity of a tax year that included the enhanced Child Tax Credit and other tax changes.

    Tax extension due date

    If you filled out a Form 4868 before this year’s April tax deadline, you received an automatic six-month extension to file your taxes. As mentioned above, the extended deadline this year is October 17. 

    However, if you underpaid your taxes and owe money to the IRS, those payments were actually due in April. (Typically, the tax filing deadline is April 15, but in 2022 taxpayers had until April 18 to file and settle up with the IRS because the 15th fell on Emancipation Day, which is observed as a holiday in Washington, D.C.) 

    In other words, receiving an extension to file your taxes doesn’t give you an extension to pay the IRS. 

    What if I owe the IRS? 

    If you didn’t know you had to pay the IRS by April 18, you will likely face a “failure to pay” penalty. The same will occur if you paid the IRS in April but didn’t estimate correctly and still owe more. 

    The IRS says the penalty for these situations is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. The penalty is capped at 25% of your unpaid taxes. 

    Take a taxpayer who failed to pay $1,000 in taxes that they owed by the April 18 deadline. In this case, the taxpayer will face $30 in penalties for the non-payment — $5, or 0.5% of the $1,000, per month during the six months between April 18 and the October 17 extended filing deadline.

    But the IRS also charges interest on penalties — and the tax agency just raised that rate to 6% on October 1 from 5% previously. 

    Can I still contribute to my retirement fund?

    That depends whether you have a SEP IRA account, which stands for a “simplified employee pension” (or SEP) individual retirement account. 

    These are typically used by self-employed individuals, but are also common among small business owners. Under IRS rules, people with SEP IRA accounts can contribute to their accounts until the due date for filing their federal income tax return for the year, which means people who asked for an extension have until October 17 to sock away some money. 

    That can help self-employed workers or small business employees both save money and lower their taxable income for the 2021 tax year. However, the deadlines for contributing to IRA and 401(k) accounts have passed for people filing their 2021 tax returns via an extension.

    What if I don’t file by October 17? 

    People who fail to file their return by the extended tax deadline will face harsher penalties. The IRS charges 5% of the unpaid taxes for each month that a tax return is late — or 10 times more than the underpayment penalty. It caps the penalty at 25% of your unpaid taxes. The tax agency also charges interest on the penalty. 

    Do disaster victims get more time to file?

    Yes, the IRS is giving more time to file for people who are victims of recent natural disasters:

    • Hurricane Ian victims who live in Florida and have a valid extension to file their tax returns by October 17 now have until February 15 to file their tax returns. 
    • Victims of storms and flooding that started on September 15 in parts of Alaska and who had also asked for an October extension now have until February 15 to file their returns. 
    • Likewise, Hurricane Fiona victims in Puerto Rico who had a tax filing extension now have until February 15 to file their 2021 returns.

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  • Innovation Refunds Helps Connect California Animal Feed Company with ERC Benefits and Relief

    Innovation Refunds Helps Connect California Animal Feed Company with ERC Benefits and Relief

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    The ERC benefits helped Lomita Feed retain workers and cover costs amid the pandemic when fears of a feed shortage nearly put the industry into supply shock.

    Press Release
    –

    Sep 28, 2022


    DES MOINES, Iowa, September 28, 2022 (Newswire.com)
    –
    With help from Innovation Refunds, the industry leader in turnkey tax solutions, California-based Lomita Feed successfully obtained critical Employee Retention Credit (ERC) funding. The 101-year-old animal feed storefront used the ERC benefits to retain employees and cover expansion costs throughout the COVID-19 pandemic.

    Lomita Feed owner Bill Lockwood first heard about Innovation Refunds through a radio ad. With the pandemic in full swing, feed stores in the U.S. began experiencing the effects of the supply chain shortage. Lockwood, along with other feed store owners, urged buyers to minimize over-shopping as inventories reached critical levels across the country.

    By guiding Lockwood and his team through the ERC application process, Innovation Refunds connected Lomita Feed with critical ERC funding to expand the original storefront to include the Doc Gunner Saddlery. Named after one of Lockwood’s late horses, Gunner, the saddlery was launched in tandem with the Doc Gunner Foundation.

    Lockwood, driven by his passion for rescuing animals, expressed his gratitude for the Innovation Refunds team’s assistance during such a stressful period, saying, “Innovation Refunds made it very simple. Just had to get a few of my records together, submit that, and they made it as painless as possible. It allowed us to keep the amount of people that we needed.”

    Lockwood’s plans include helping underprivileged children learn to ride and take care of horses through the Doc Gunner Foundation, made possible by the increased profits from the expanded storefront. He also plans to dedicate a percentage of all sales to Hyperkalemic Periodic Paralysis (HYPP) research. “I believe that you take care of the people that take care of you,” added Lockwood. “The community has taken care of us. The employees have allowed that to occur. Because of that, I had a responsibility to take care of all of them as well.”

    “Our team is thrilled to hear about Lomita Feed’s expansion project and charitable efforts made possible through ERC relief,” said Howard Makler, CEO of Innovation Refunds. “Stories from mission-driven companies like Lomita Feed are great reminders as to why we are helping small and midsize businesses with their claims.”

    To learn more about Innovation Refunds’ mission to help small and midsize businesses secure funding through government relief programs, please visit www.innovationrefunds.com.

    About Innovation Refunds

    Our mission is to assist small and medium-sized businesses to attain cash incentives from federal and state governments.

    Innovation Refunds began providing its services in 2020. Since then, it has been able to provide financial solutions to thousands of companies, with billions in cash refunds available for small and medium-sized businesses.

    Source: Innovation Refunds

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  • Phoenix Nursing Home Received Critical ERC Benefits With Help From Innovation Refunds

    Phoenix Nursing Home Received Critical ERC Benefits With Help From Innovation Refunds

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    The benefits allowed Paradise for Parents to maintain healthy resident standards while rewarding its deserving staff amid critical supply shortages.

    Press Release
    –

    Sep 26, 2022


    DES MOINES, Iowa, September 26, 2022 (Newswire.com)
    –
    Through a key partnership with Innovation Refunds, Phoenix-based nursing home Paradise for Parents was able to secure critical ERC funding, which paid for essential facility equipment and a much-deserved employee bonus. As a turnkey tax solutions firm specializing in Employee Retention Credit (ERC) and payroll tax refunds, Innovation Refunds took care of the entire ERC application process and was able to connect Paradise for Parents with the capital they needed to maintain operations.

    When Hal Cranmer, co-owner of Paradise for Parents, first heard about Innovation Refunds through a radio advertisement, he knew he needed to take immediate action. At the time, the COVID-19 pandemic was in full swing. The spread of the virus severely impacted the U.S. supply chain, and the nursing home needed capital to cover the costs of critical supplies for residents. 

    The impact on the supply chain put substantial pressure on Cranmer and his staff. He still recalls the stress, remembering when he desperately made calls to secure enough toilet paper for 50 residents in the middle of the initial supply chain shortage.

    The facility needed additional funding to secure protective gear to prevent COVID from spreading to its residents and employees and to install technology that would allow residents to see and speak with their families, who were no longer allowed to visit due to government restrictions. The Innovation Refunds team oversaw and managed the entire ERC application process for Paradise for Parents. After conducting a cross-checking analysis, the team determined that the nursing home qualified to receive employee retention credit.

    “Hal and his team had a strong desire to keep residents and staff members safe amid the most challenging moments of the pandemic,” said Innovation Refunds CEO Howard Makler. “Once we verified Paradise for Parents’ refund eligibility, our team was motivated to accelerate the application process to supply the home with the funding they needed as fast as possible.” 

    Upon receiving the ERC benefits, Cranmer decided to dedicate a portion of the funds to support his employees directly in the form of a bonus. 

    “Several employees called me, saying they thought I paid too much,” said Cranmer. “I would tell them, ‘No, I didn’t. We got this refund because of you, so you deserve it.’ I felt it was essential to recognize and compensate our staff members who worked and persevered through such difficult times.”

    Cranmer also utilized some ERC funding to hire an immigration lawyer to help bring some of the caregivers’ families to America to reunite them during the pandemic.

    To learn more about Innovation Refunds and its Employee Retention Credit and payroll tax refund services, please visit www.innovationrefunds.com. 

    About Innovation Refunds
    Our mission is to assist small and medium-sized businesses to attain cash incentives from federal and state governments.

    Innovation Refunds began providing its services in 2020. Since then, it has been able to provide financial solutions to thousands of companies, with billions in cash refunds available for small and medium-sized businesses.

    Source: Innovation Refunds

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  • Tamarac to Receive $4 Million in Penny Surtax Funding

    Tamarac to Receive $4 Million in Penny Surtax Funding

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    Press Release
    –


    updated: Jun 19, 2020


    TAMARAC, Fla., June 19, 2020 (Newswire.com)
    –
    ​Tamarac residents have paid Broward County’s penny surtax for transportation since it went into effect in January 2019 and will soon start to see the benefits. Tamarac just received approval for approximately $4 million in funding for projects throughout the community.  

    The independent oversight board that evaluates and recommends projects recently evaluated projects for its first cycle of funding and gave the green light to five Tamarac projects. Those recommended projects received final approval from the Broward County Commission on June 18.

    “Alleviating traffic congestion is a high priority in Tamarac. These funds will be used to address immediate needs, identify concerns and plan for the future,” said Tamarac Mayor Michelle J. Gomez. “In light of today’s economic concerns and the effect of the pandemic on the City’s budget, we want to do all we can to maximize the value that our residents receive from their investment into this County initiative.”

    The largest City of Tamarac project up for approval was the approximately $2.8 million Mainlands 1 – 5 Rehabilitation and Maintenance (R&M) project. Because it’s an R&M project, it required Tamarac’s City Commission to pass a resolution of support, which it did in a 5-0 vote.  

    The project encompasses removing existing asphalt and providing new asphalt for deteriorating roadways in the Mainlands 1 -5 communities as well as ADA curbing, concrete removal, the maintenance of traffic and pavement markings, and restoration.

    “The Mainlands communities are some of our oldest and most charming communities, and they need to be kept up,” said Vice Mayor Marlon D. Bolton, who represents Tamarac’s District 1, where the Mainlands communities are located. “I am very pleased to see them among the first to benefit from the surtax.”

    The City also requested $528,902 to install traffic calming devices in various neighborhoods throughout Tamarac, $445,817 for an emergency traffic control device in front of Fire Station 15 on Hiatus Road, $135,000 for bicycle safety and connectivity projects and $120,000 for a multi-modal planning study. This study will analyze existing transportation data system deficiencies within the City’s transportation network to recommend strategies to resolve or mitigate these issues. It will address congestion issues and provide the framework for a comprehensive vision for Tamarac’s transportation system.                     

    ABOUT THE CITY OF TAMARAC

    Tamarac covers a 12-square mile area in western Broward County and is home to more than 65,000 residents and approximately 2,000 businesses. Ideally situated, Tamarac provides easy access to highways, railways, airports and waterways, and a wealth of cultural and sports activities. Tamarac’s median age continues to grow younger and the population more diverse, as people recognize the City as a great place to spend their lives. For more information, visit www.Tamarac.org.

    Source: City Of Tamarac

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  • An Apple a Day Keeps the Doctor Away? Our CPAs Say a PayCheckUp Keeps the IRS at Bay

    An Apple a Day Keeps the Doctor Away? Our CPAs Say a PayCheckUp Keeps the IRS at Bay

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    Learn Why the Changes in Tax Law Affected Your Paycheck and What You Should Do Now

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  • Research Square: Cracking the (Tax) Code to True Love

    Research Square: Cracking the (Tax) Code to True Love

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    Press Release
    –


    updated: Feb 28, 2018


    DURHAM, N.C., February 28, 2018 (Newswire.com)
    –
    They don’t usually top the list of reasons to get married, but tax bonuses are a real perk for many newlyweds. New research shows, however, that they could actually stop a couple from getting married. The findings were published by an international team of researchers hailing from the University of Augsburg in Germany, the University of Toulouse Capitole in France, and the University of Bologna in Italy. Using game theory, they’ve concluded that couples who stand to gain a tax incentive from marriage are – perhaps surprisingly – less likely to wed.

    The team modeled the fate of a fictitious couple – Sam and Robin – under two different scenarios: whether their marriage boosted their earnings thanks to a tax bonus or came at the cost of a tax penalty. Surprisingly, they found that a tax bonus could actually lower the probability that the couple gets married.

    A marriage proposal, on the other hand, entails costs – for example, Sam has to spend the time to plan the proposal and is exposed to the potential cost of divorce. Only a strongly-in-love partner is willing to pay these costs.

    Kerstin Roeder, Professor for Applied Microeconomics, University of Augsburg

    Just why would the chance to bring in extra cash potentially lead to an “I don’t”? The answer may come down to a matter of motive.

    A tax liability can affect the communication of strong love by changing the costs associated with marriage, according to the researchers. “A simple ‘I love you’ doesn’t cost anything and is therefore not credible for Robin,” says Kerstin Roeder, one of the investigators for the work. “A marriage proposal, on the other hand, entails costs – for example, Sam has to spend the time to plan the proposal, and is exposed to the potential cost of divorce. Only a strongly-in-love partner is willing to pay these costs.”

    And tax penalties add to the cost, signaling to Robin that Sam’s eagerness to get married comes only from a place of true love.

    The model’s predictions help reveal the effects that a tax system can have on the marriage decision, which could have important repercussions for how tax policy is designed. “Our analysis shows that tax (dis)incentives for marriage can have strong implications on the number of marriages,” Roeder says, “and on whether they are based on love or tax benefits.”

    Original citation: Barigozzi, Francesca and Cremer, Helmuth and Roeder, Kerstin, Until Taxes Do Us Part: Tax Penalties or Bonuses and the Marriage Decision (October 24, 2017). Quaderni – Working Paper DSE N° 1111. Available at SSRN: https://ssrn.com/abstract=3058874 or http://dx.doi.org/10.2139/ssrn.3058874

    Source: Research Square

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  • Are You About to Miss the Tax-Filing Deadline? File an Extension — Then Use NCFilesFree.org

    Are You About to Miss the Tax-Filing Deadline? File an Extension — Then Use NCFilesFree.org

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    Press Release
    –


    updated: Apr 17, 2017


    Durham, NC, April 17, 2017 (Newswire.com)
    –
     Those struggling to file their federal and state income taxes on time may request an extension through this yearʼs deadline on April 18.

    The Benefit Bank® of North Carolina (TBB™-NC) offers free, easy-to-use online tax assistance at NCFilesFree.org. There are no additional fees or charges of any kind. TBB-NC is managed by MDC, a Durham-based nonprofit organization dedicated to eliminating barriers that separate people and communities from opportunity.

    Most volunteer sites shut down after April 18. It can be difficult to obtain free tax assistance after that date, but you can use NCFilesFree.org until your extension ends.

    Ralph Gildehaus, Senior Program Director.MDC

    “Many wait to file right at the tax deadline and extensions must also be filed by April 18,” says MDC Senior Program Director, Ralph Gildehaus. Taxpayers can visit IRS.gov and dor.state.nc.us and follow the steps to file an automatic six-month extension to complete their taxes by October 18. “Remember, if you owe money, you still need to pay the estimated taxes to avoid tax penalties and interest.”

    “Most volunteer sites shut down after April 18,” Gildehaus says. “It can be difficult to obtain free tax assistance after that date, but you can use NCFilesFree.org until your extension ends. You can even use this site to prepare up to three prior years of back taxes.”

    The system is designed to maximize refunds and help families claim the Earned Income Tax Credit (EITC). To qualify to use NCFilesFree.org, a household income must be less than $95,000 (filing jointly) or $65,000, (filing single). Users can also arrange for refunds to be directly deposited into their bank accounts.

    Other services offered by The Benefit Bank® of North Carolina include options to complete the Free Application for Federal Student Aid (FAFSA) and voter registration. Users can also screen for potential eligibility for work support programs, such as nutrition and health assistance.

    To learn more about free online tax assistance through The Benefit Bank® of North Carolina go to NCFilesFree.org. You may also call 2-1-1 for information about free tax assistance services that may be available in your community.

    Source: The Benefit Bank® of North Carolina

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  • Free Online Tax Assistance Offered Through NCFilesFree.org

    Free Online Tax Assistance Offered Through NCFilesFree.org

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    Press Release
    –


    updated: Apr 14, 2017


    Durham, NC, April 14, 2017 (Newswire.com)
    –
    ​While the tax-filing deadline is just days away, there’s no need to panic. Taxpayers can still file their federal and state income tax returns — for free — online through April 18. They can even request extensions through that date.

    Taxpayers can access an easy-to-use free tax assistance service online at NCFilesFree.org. The system is designed to maximize refunds and help families claim the Earned Income Tax Credit (EITC). The service, offered by The Benefit Bank® of North Carolina, is available to low- and moderate-income taxpayers through the Durham-based nonprofit organization, MDC. There are no fees or charges of any kind.

    Ralph Gildehaus, MDC Senior Program Director, says most people either file their taxes in January or right before the April deadline. “If you need to file an extension, be sure to do so by April 18,” Gildehaus says. “After that point, almost all of the volunteer tax sites shut down, but you can use NCFilesFree.org up until your extension expires on October 18.”

    What you need to file:

    • Government issued ID
    • Social Security number(s)
    • W2ʼs, 1099ʼs, 1098ʼs
    • Previous yearʼs tax return (if available)
    • Information about other income
    • Deduction and credit information
    • Health coverage information (including 1095-A, 1095-B, 1095-C, if applicable)

    To qualify for using The Benefit Bank for taxes, gross household incomes (filing jointly) must be less than $95,000, or less than $65,000 (filing single).

    For more information, go to NCFilesFree.org. You may also call 2-1-1 for information about other free tax assistance services that may be available in your community.

    Source: The Benefit Bank® of North Carolina

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