Thu, March 12, 2009
Recently I was listening to an IRS webcast on tax law changes (yes, it’s just as exciting as it sounds!) and something caught my attention. I was already aware that people living in disaster areas are eligible for various kinds of tax relief, but I realized that I’d missed an important fact. You don’t have to live in a disaster area to get a tax break; the Heartland Disaster Tax Relief Act of 2008 includes special provisions for educational expenses incurred by students attending college in areas struck by disaster in 2008. This article will be of interest even if you don’t qualify for the expanded disaster relief benefits but are interested in tax benefits available to households with college expenses. Read the full article
Mon, March 09, 2009
Sometimes truth is stranger than fiction. I’ve learned that it's not unheard-of for a professional tax preparer to advise a married individual to file his or her tax return using the single filer status. No! No! Bad tax preparer! Read the full article
Thu, February 26, 2009
Many employers offer Flexible Spending Accounts (FSAs) that can be used to pay for healthcare expenses not covered by health insurance. If you participate in one, the money that you have withheld in the account has use-it-or-lose-it status. In some plans, the deadline for spending funds contributed in 2008 was 12-31-08, but many plans have taken advantage of an IRS provision that allows prior-year FSA funds to be used up to 2.5 months after yearend. The deadline this year is March 16th (the 15th is a Sunday).
FSA funds can be used to pay for co-payments, deductibles, or other expenses not covered by your health insurance. In addition to prescription drugs, the IRS has ruled that FSA funds can be used for certain over-the-counter medications.
A number of online over-the-counter drug vendors provide information at their sites regarding which medicines qualify as FSA-reimbursable expenses. Medications for acne, cold medications, pain relievers, and a wide variety of other items can be purchased to use up remaining funds in your account (the IRS frowns on “stockpiling,” though, so don’t buy thirty bottles of Beano®). Be sure to maintain receipts showing the items purchased so that you can substantiate the eligibility of your expenses.
Any funds not used by the deadline are lost to you, so if you’re not sure when your FSA’s deadline is and you have money left from last year's funds, check to be certain.
Read the full article
Tue, February 17, 2009
The final version of the 1071-page American Recovery and Reinvestment Act of 2009 is due to be signed by President Obama tomorrow. My summary of the bill's key tax items two weeks ago was not far off the mark, but there are a number of nips and tucks in the final version. Read the full article
Tue, February 10, 2009
Just before Christmas of 2008, the president signed the Worker, Retiree, and Employer Recovery Act of 2008. The bill suspended 2009 Required Minimum Distributions (RMDs) for IRAs, 401(k)s and 403(b)s. Read the full article
Mon, February 02, 2009
As promised, the House and Senate have been busy working on The American Recovery and Reinvestment Act of 2009, which includes several tax law changes intended to boost the economy. Read the full article
Wed, January 21, 2009
It's too early to say with certainty what changes will be made in the tax laws this year. But it's possible to make some educated guesses. Read the full article
Fri, January 16, 2009
The Emergency Economic Stabilization Act of 2008 (a.k.a. “the Bailout Bill”) changed the reporting requirements for annual tax statements from brokers. Form 1099-B, which formerly had to be sent by January 31, is now due on February 17 this year (the statutory date is February 15, but in 2009 that's a Sunday and the 16th is Presidents' Day). Read the full article
Mon, December 08, 2008
With stock markets down precipitously and few asset classes that haven’t declined significantly this year, many investors in 529 college savings plans are wondering what to do. In some situations, it may make sense to make a change in your child’s 529 plan. Read the full article
Wed, November 26, 2008
In my earlier post on Roth IRA conversions, I noted that if you converted an IRA into a Roth earlier this year it may make sense to recharacterize the funds if the value of your account has slumped and you still owe taxes on the earlier, larger conversion amount. I also stated that you can’t go back this year and do another conversion. However, I realized that there is a way to sort of do a conversion/recharacterization/reconversion. Read the full article
Wed, November 26, 2008
As 2008 draws to a close, take some time to consider what you can do before year-end to reduce your income tax bill. Read the full article
Mon, November 17, 2008
With stock market indices down 30% or more from their January 1st levels, most investors are battered, bruised, and hoping for happier times. In the midst of a generally depressed stock market, there are still a couple of clever ways to make the most of a bad situation using a Roth IRA. Read the full article
Tue, November 04, 2008
With so much attention being given to the $700 billion bailout of banks and the financial industry in the Emergency Economic Stabilization Act of 2008, not much has been said about the individual income tax provisions included in the massive 440-page bill passed last month.
If you'd like to avoid searching the full bill for the parts that might be personally relevant, here's a quick summary of some provisions that could be interesting to you even if you're not an enormous bank.
Read the full article
Tue, October 28, 2008
The IRS is reporting that more than 383,000 regular refund and economic stimulus checks have been returned as undeliverable by the Postal Service.
Taxpayers whose economic stimulus checks are not in the mail by Dec. 31 will lose out, because by law the checks cannot be sent out after that date. If you're expecting a check and haven't received it yet, browse over to the IRS's website and use the Stimulus Payment tool. Addressing errors must be corrected by Nov. 28 in order for checks to be processed in time. The "Where's My Stimulus Payment" tool provides instructions on how to update your address if needed or you can call (866) 234-2942.
Read the full article
Wed, October 15, 2008
Today, the FFS Blog is participating in Blog Action Day 2008. Along with over eight thousand 9,700 other bloggers, my topic today is poverty.
Read the full article
Mon, September 22, 2008
The Subprime mortgage mess and its aftermath were partly the result of risks not being priced appropriately. Interest rates for risky mortgages and bonds should have been much higher given the level of risk involved. As financial markets still recover from the aftermath of risk being underestimated, there is a good chance that there are now areas where risk is being overestimated. This week’s issue of Barron’s has two interesting suggestions in this regard. Read the full article
Wed, August 20, 2008
Although gas prices have retreated from their highs, the recent surge over $4/gallon is not yet a distant memory. Gas prices have us thinking more about how much we spend on gas. Does it make sense to trade your car in for a fuel-sipping hybrid? Read the full article
Sat, July 26, 2008
Well, it seems late in the year for this, but today I received the first phony IRS e-mail of the season. The message appears to be a "phishing" scam in which I'm suppose to click on a fake IRS link provided in the message. Clicking the link would take you to an official-looking site that would collect confidential information - most likely, the thieves are looking for Social Security numbers. The IRS has noted a number of e-mail and telephone scams involving IRS impersonators; the stimulus rebates this year provide another premise for identity thieves to use as they "reach out" to potential prey. Read the full article
Mon, June 30, 2008
The IRS announced last week that the business mileage rate, often used to determine the deduction for business use of a car, will go up effective July 1st.
Read the full article
Thu, June 12, 2008
Taxpayers who previously set up their tax refunds to be deposited directly to their IRAs this year will need to be vigilant: Economic Stimulus rebate checks will also be automatically deposited into any IRAs whose owners have set them up to receive tax refunds. Read the full article
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