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☆ A perfect storm of food-stamp cuts and low tax refunds is looming — and discount chains like Dollar General and Big Lots could feel the pain
▼ + stars: | 2023-03-17 | by ( Avery Hartmans | ) www.businessinsider.com time to read: +5 min

Off-price retailers are worried that cuts to food stamps and smaller tax refunds will hurt sales. Tax refunds are also likely to be smaller because of the wind-down of some expanded tax credits. At the same time, certain beefed-up tax credits are no longer available, which means many taxpayers are preparing for smaller tax refunds this year. "At this point, 30% of that lower household income customer, their expenses today are greater than their income coming in. The 32 states that will wind down SNAP benefits this month join the 18 states that cut those benefits last year.

☆ Unlike last year, this tax season has been going smoothly
▼ + stars: | 2023-03-16 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +3 min

But by comparison, this year’s tax-filing season has been going relatively smoothly, tax preparers say. “After a few years of pandemic-related updates, mid-tax season IRS guidance, last-minute tax law changes and more, the ‘quiet’ is a welcome change to many,” the National Association of Tax Preparers said in a statement. Better but far from perfectA return to a more normal tax-filing season doesn’t mean tax preparers and their clients are getting all the guidance that they need, though. But the quality of the answers to their questions and request for guidance has still left some tax preparers wanting. And when it comes to online services, Colorado-based enrolled agent John Dundon II has noticed some improvements as well.

☆ A popular tax-avoidance tool that home sellers and real-estate investors have been using for decades is at risk — again
▼ + stars: | 2023-03-09 | by ( Aj Latrace | ) www.businessinsider.com time to read: +3 min

The 1031 exchange is a popular tactic that allows home sellers to avoid paying taxes. The strategy allows sellers to postpone paying taxes on any capital gains — or the money they made in addition to their original investment — by using those funds to immediately buy a similar property elsewhere. This isn't the first time that the president has targeted the 1031 exchange. In 2020, Biden's "caring economy" plan sought to close the 1031 exchange to raise funds for other programs, like universal preschool and a childcare tax credit. Biden's previous threats to end the 1031 exchange were met with stiff resistance from the real-estate industry and were never passed.

☆ President Biden’s proposed 2024 budget calls for top 39.6% tax rate
▼ + stars: | 2023-03-09 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The plan calls for a top marginal income tax rate of 39.6%, up from 37%, which was reduced as part of former President Donald Trump's signature tax legislation. Biden's plan aims to reform the tax code to "reward work, not wealth," White House Office of Management and Budget Director Shalanda Young told reporters on a call. The plan includes a 25% minimum tax on Americans with wealth exceeding $100 million, and would "ensure that no billionaire pays a lower tax rate than a teacher or firefighter," Young said. watch nowBiden's 2023 federal budget plan proposed a 20% levy on households with the same level of wealth, applying to "total income," including regular earnings and so-called unrealized gains. Without additional changes by Congress, several provisions from the Tax Cuts and Jobs Act will sunset in 2026, bumping the top income tax rate back to 39.6%.

☆ Biden calls for tax on the wealthy to extend Medicare funding
▼ + stars: | 2023-03-08 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

President Joe Biden delivers remarks on his plan to protect Americans access to affordable health care in Virginia Beach, Virginia, on Feb. 28, 2023. President Joe Biden this week called for higher taxes on wealthy Americans to boost Medicare as part of his 2024 budget, aiming to help fund the program for at least 25 years. The plan would increase the net investment income tax from 3.8% to 5% for earnings of more than $400,000, including regular income, capital gains and so-called pass-through business income, which flows to individual tax returns, according to the White House. Enacted through the Affordable Care Act, the net investment income tax currently applies to earnings above $200,000 for single filers and $250,000 for married couples filing together. "By asking those with the highest incomes to contribute modestly more, we can keep the Medicare program strong for decades to come."

☆ 5 ways to file your taxes for free this season
▼ + stars: | 2023-03-07 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

IRS Free FileIRS Free File offers free online guided tax preparation for your federal tax returns and some state filings if your adjusted gross income was $73,000 or less in 2022. It's a good option for those who have simple returns, don't need ongoing tax planning advice and could benefit financially from the free service. Although 70% of taxpayers qualify for IRS Free File, only 2% used it during the 2022 filing season, according to the National Taxpayer Advocate. Tax prep for older AmericansOlder Americans may also qualify for free in-person and virtual tax help through the AARP Foundation Tax-Aide program. The program works with VITA and Tax Counseling for the Elderly, or TCE, which also provides free tax preparation for those who qualify.

☆ Inflation boosted the 2023 federal income tax brackets. Here's how your taxes may compare to 2022
▼ + stars: | 2023-03-06 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

Drakula & Co. | Moment | Getty ImagesAfter a year of soaring prices, the IRS made annual inflation adjustments for dozens of tax provisions, including the federal income tax brackets for 2023, which may affect next year's taxes, experts say. While the rates didn't change, the brackets show the federal income taxes you'll owe on each portion of your taxable income, which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income. The goal of yearly inflation adjustments is to offset "tax rate bracket creep," he said, which happens when you owe more income taxes after wage increases without economic benefit due to inflation. How the 2023 federal income tax brackets changedThere was roughly a 7% change in the federal income tax brackets from 2022 to 2023, said Kyle Pomerleau, senior fellow and federal tax expert with the American Enterprise Institute. How to prepare for 2023 tax bracket changesWith tax law changes going into effect and others being proposed, 2023 may be "another year for the record books in terms of tax complexity and tax refund volatility," Steber said.

☆ What Is Adjusted Gross Income?
▼ + stars: | 2023-03-05 | by ( ) www.wsj.com time to read: +11 min

Your adjusted gross income, or AGI, is your gross income—the sum of all your income sources for the year—less certain above-the-line deductions allowed by the Internal Revenue Service. Your adjusted gross income acts as a guidepost for several aspects of your finances. For instance, if you earned $55,000 from your job, rental income of $10,000 and dividend income of $630, your annual gross income would be $65,630. Here’s a tip: Your AGI will never be more than your gross income, and some taxpayers may find their gross income and AGI are the same. No conversation about adjusted gross income is complete without discussing modified adjusted gross income, or MAGI.

☆ Child Tax Credit: What to Know for 2022 and 2023
▼ + stars: | 2023-03-03 | by ( Laura Saunders | ) www.wsj.com time to read: 1 min

The 2017 tax overhaul doubled the maximum child tax credit to $2,000 from $1,000 for each child in a family under age 17 at year-end. It applies for both 2022 and 2023. What is the child tax credit? The credit—currently up to $2,000 for each child in a family under age 17 at year-end—is a dollar-for-dollar reduction in taxes that many families with children can claim. It begins to phase out at $400,000 of adjusted gross income for married joint filers and $200,000 for single filers.

☆ How to Read a Form 1098-E
▼ + stars: | 2023-03-02 | by ( ) www.wsj.com time to read: +10 min

By Kerri Anne RenzulliIf you have student loans, chances are you’ll encounter the IRS’s Form 1098-E. Those with multiple loans across multiple lenders will be sent a separate 1098-E form by each lending institution. But for those who do, this mark indicates that you took out your student loan before Sept. 1, 2004. Instead of relying on the Form 1098-E, you’ll need to request or download records of what you paid in interest and your payment history from your loan servicer, says Greene-Lewis. Who can claim the student loan interest deduction The $2,500 deduction phases out as your modified adjusted gross income rises.

☆ The 10 U.S. states where people earning $75,000 owe the most in taxes—none are New York or California
▼ + stars: | 2023-02-27 | by ( Mike Winters | ) www.cnbc.com time to read: +3 min

Like most states, Oregon uses a progressive or marginal income tax, which collects at an increasing rate the more income you earn. Additionally, every dollar is taxed, unlike some marginal tax states where low earners are exempt from paying taxes. Here's a look at the 10 states where people earning $75,000 owe the most in state income taxes, based on Tax Foundation calculations. That's why effective tax rates are a better measure of a taxpayer's overall bill, according to the Tax Foundation. Every dollar above $10,200 is taxed 8.75% in Oregon, while many other states tax income under $75,000 around 5%.

☆ Supreme Court rules 9-0 that bankruptcy filers can't avoid debt incurred by another's fraud
▼ + stars: | 2023-02-22 | by ( Dan Mangan | ) www.cnbc.com time to read: +4 min

"Innocent people are sometimes held liable for fraud they did not personally commit, and, if they de-clare bankruptcy, [the bankruptcy code] bars discharge of that debt," Barrett wrote. The couple was unable to pay the award or other creditors and filed for protection under Chapter 7 of the bankruptcy code, which normally allows people to void all of their debts. . . false pretenses, a false representation, or actual fraud,'" Barrett wrote. A U.S. Bankruptcy Court judge ruled in his favor, saying "that neither David nor Kate Bartenwerfer could discharge their debt to Buckley," the opinion by Barrett noted. "Based on testimony from the parties, real-estate agents, and contractors, the court found that David had knowingly concealed the house's defects from Buckley," Barrett wrote.

☆ This under-the-radar stock has 20% upside and could get a boost during tax season, Wells Fargo says
▼ + stars: | 2023-02-22 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +1 min

Tax season is shining a spotlight on Intuit , and it could be a catalyst for the maker of TurboTax software. "The IRS began accepting e-filings in late January, which brings the TurboTax-led consumer segment of Intuit into greater focus for investors," wrote Wells Fargo analyst Michael Turrin in a Wednesday report. "We think the relative resilience of Intuit's core businesses is flying under the radar currently and focus in on tax season as a catalyst in this report," he said. Turrin rated the stock overweight and gave it a price target of $475 per share – or upside of 19.9% from Tuesday's close. Intuit's TurboTax is also outpacing its competitors, expanding at a 4.3% compound annual growth rate since 2012, versus 3.1% for others in the DIY tax prep space, according to Wells Fargo.

Pros Check mark icon A check mark. Expert help is available with every filing package Check mark icon A check mark. Pay less than H&R Block and TurboTax and get a comparable experience Check mark icon A check mark. Efficient and streamlined interface Check mark icon A check mark. Ability to set up reminders to pay estimated quarterly taxes throughout the year Check mark icon A check mark.

☆ Black couples pay a higher tax penalty for marriage than White couples. Here’s why
▼ + stars: | 2023-02-20 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +4 min

A recent study by the Tax Policy Center, for example, found that Black couples on average face higher tax costs associated with marriage than White couples. “We find that Black couples are more likely than White couples to experience an income tax penalty from marriage and to face higher penalties. Differences in dollars and centsResearchers found that among couples hit with a marriage penalty, Black couples paid less in dollars ($1,804 versus $2,091) but more as a share of their income than White couples (1.8% versus 1.4%). Only 33% of Black couples got a marriage bonus compared to 44% of Whites, and those bonuses were roughly $170 smaller on average. “Taken together, Black couples in this income group paid, on average, a net penalty of $358.

☆ Don’t Forget These Tax Changes as You Prepare Your 2022 Returns
▼ + stars: | 2023-02-16 | by ( Tom Herman | ) www.wsj.com time to read: 1 min

Some of the changes that affect returns for the 2022 tax year could lead to smaller refunds for many filers. Tax Day is about two months away, and there are some changes taxpayers need to be aware of—ranging from this year’s filing deadline to tax breaks that have expired or shrunk. As a result of numerous changes, many people may be surprised by getting smaller refunds for 2022. Others who had been expecting a refund may discover that they owe money for last year, depending on their individual situations and what they did with their withholdings.

☆ How to pay 0% capital gains taxes with a six-figure income in 2023
▼ + stars: | 2023-02-15 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Here's why: The IRS made dozens of inflation adjustments for 2023, including the long-term capital gains brackets, applying to investments held for more than one year. This means you can have more taxable income before reaching the 15% or 20% brackets for investment earnings. Here's your capital gains tax bracketWith higher standard deductions and income thresholds for capital gains, it's more likely you'll fall into the 0% bracket in 2023, Lucas said. The rates use "taxable income," calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income. For example, if a married couple makes $100,000 together in 2023, their taxable income may easily fall below $89,250 taxable income after subtracting the $27,700 married filing jointly standard deduction.

☆ Do you need to file a federal tax return? See if your income qualifies
▼ + stars: | 2023-02-15 | by ( Kamaron Mcnair | ) www.cnbc.com time to read: +4 min

Generally speaking, if you’ve made any money this year, you have to pay or have already paid federal income tax. But depending on how much income you brought in, you might not have to file a federal tax return. You might even benefit from filing a tax return when you’re not required to, thanks to refundable tax credits. 2022 federal tax return income requirementsYour income, age and filing status can affect whether you’re required to file a federal tax return. For each filing status, you must file a federal tax return if your gross income was over the following amounts.

☆ The IRS has issued nearly 8 million tax refunds. Here’s the average payment
▼ + stars: | 2023-02-14 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Bill Oxford | E+ | Getty ImagesThe tax season is underway, and the IRS has issued nearly 8 million refunds worth about $15.7 billion as of Feb. 3, the agency reported. The average refund amount was $1,963, down from last year's payment of $2,201 at the same point in the filing season. Of course, the average may change as the IRS processes millions more returns before the April 18 deadline. As of Feb. 3, the IRS processed more than 16.7 million returns, over 29% more than the previous year, according to the report released last Friday. The nearly 8 million refunds compare to around 4.3 million the previous year.

☆ Do you owe federal taxes on relief checks? Not if you live in these 16 states
▼ + stars: | 2023-02-13 | by ( Mike Winters | ) www.cnbc.com time to read: +3 min

You probably don't need to pay federal taxes if you received state-issued inflation or tax surplus rebates this year, the Internal Revenue Service has concluded. On Friday, the IRS provided guidance that confirms most filers won't have to pay federal taxes, although there are some exceptions. For five other states it's a bit more nuanced — but again, the majority of filers in these states likely won't need to pay federal taxes on their rebates. In Alaska, tax filers won't pay federal taxes on 2022's extra energy-relief payment. If a filer's SALT deduction is larger than it would normally be because of a state's rebate, federal taxes would have to be paid on the difference created by the state's rebate.

☆ Over 16 million taxpayers from states like California should hold off on filing their taxes because of extra stimulus checks, the IRS says
▼ + stars: | 2023-02-08 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +4 min

In 2022, some states opted to give residents checks or tax rebates to offset the cost of inflation. Now, the IRS is looking into those payments and their taxability, and advising taxpayers who received them to wait on filing their federal returns. Now, it's unclear whether those checks might lead to a surprise tax burden, and even the IRS isn't sure. The IRS said that, for filers who aren't sure whether their state payments will be taxed, they recommend waiting until there's more guidance. By the state's accounting, its Middle Class Tax Refund — which ranged from $350 to $1,050 — reached over 31 million taxpayers and dependents.

☆ Why the IRS says to hold off filing your tax return if you received a relief check in 2022
▼ + stars: | 2023-02-08 | by ( Mike Winters | ) www.cnbc.com time to read: +2 min

The agency is clarifying whether these special state tax rebates should be taxed federally, an IRS spokesperson tells CNBC Make It. The IRS recommends that tax filers who qualified for relief checks wait until "additional guidance is available or consult with a reputable tax professional." The IRS also recommended that those who have already filed a 2022 tax return not file an amendment. Each state relief program is run differently, too, which adds to the confusion. However, the site also says that the "department cannot comment on any federal tax consequences of the rebates and relief payments."

(Some partners also offer free state filing.) This is an opportunity many people overlook: About 70% of Americans qualified for IRS Free File in 2022, according to the Taxpayer Advocate,, but only 2% actually used it. Even if you meet the income requirements, Free File might not have the forms you need. If you don't meet the income requirement for Free File, you can still use the site's fillable forms. Bottom lineThere are lots of ways to file your taxes for free, whether that's with the IRS or a commercial tax software company.

Persons: TurboTax, Read, There's, isn't Organizations: CNBC Select's, Read CNBC, IRS, Social Security, Child Tax, Elderly, AARP, Department of Defense, CNBC, Facebook, Twitter Locations: Mobile, Arizona , California, Florida , Massachusetts, Nevada , New Hampshire , New York, South Dakota , Tennessee , Texas, Washington and Wyoming

☆ IRS suggests waiting to file your taxes if you got a special payment from your state in 2022
▼ + stars: | 2023-02-07 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +2 min

Millions of taxpayers in other states got different types of special payments from their state governments as well — such as income or property tax rebates. In the meantime, the agency advises filers who received special state payments to hold off on filing their returns until guidance is issued. “The best course of action is to wait for additional clarification on state payments rather than calling the IRS,” the agency said. Keep in mind, each state issued special payments for different reasons (e.g., inflation relief, surplus revenue rebates, disaster relief, etc.). So the amounts that potentially are subject to federal income tax may not be large,

☆ Want your tax refund faster? Here’s what to do
▼ + stars: | 2023-02-07 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +5 min

The IRS says it typically issues federal refunds within 21 calendar days of accepting your tax return, assuming there are no issues. Tom O’Saben, director of tax content for the National Association of Tax Professionals, said some of his clients have received their refunds in as little as 10 days. “If you filed on paper and are expecting a refund, it could take four weeks or more to process your return,” the IRS notes on its website. This can be an issue if you got married recently and changed your last name but failed to inform the Social Security Administration of your name change. If the IRS finds you still owe tax on that unreported income, you may have to return some or all of your refund, plus interest, and possibly an underpayment penalty.

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