As gas prices hit $5 per gallon for the first time, IRS makes mileage deduction for gas costs more generous in rare mid-year move

© Getty ImagesAs gas prices hit $5 per gallon for the first time, IRS makes mileage deduction for gas costs more generous in rare mid-year move

TAXWATCH

The federal tax deduction that businesses and self-employed taxpayers can use for their work-related miles on the road is suddenly getting more generous, in a nod to gas prices that keep breaking records.

The optional standard mileage rate for business-related driving is increasing to 62.5 cents a mile, starting in July, the Internal Revenue Service announced Thursday. That’s up from the 58.5 cents-a-mile rate first announced in December.

It’s a tax administration tweak that will not apply to everyone, but it’s a notable development.

When it’s time to calculate the standard mileage rate, the IRS normally comes up with its numbers once a year. 2011 was the...

The IRS said Wednesday it is delaying the April 15 tax filing deadline to May 17 giving taxpayers more time to prepare their filings amid the slew of pandemic-related tax changes.

The Treasury Department and the IRS said "the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021."

This will happen automatically, and individuals don’t need to file any forms or contact the IRS.

"Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed," the IRS said.

These changes don’t apply to state tax returns and payments, the IRS noted.

The relief does not apply to estimated tax payments that are still due on April 15, 2021, the IRS said.

The IRS said Wednesday it is delaying the April 15 tax filing deadline to May 17 giving taxpayers more time to prepare their filings amid the slew of pandemic-related tax changes.

The Treasury Department and the IRS said "the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021."

This will happen automatically, and individuals don’t need to file any forms or contact the IRS.

"Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed," the IRS said.

These changes don’t apply to state tax returns and payments, the IRS noted.

The relief does not apply to estimated tax payments that are still due on April 15, 2021, the IRS said.

If you got furloughed or laid off or couldn’t work due to the pandemic in 2020, and you received unemployment benefits, the American Rescue Plan President Biden signed last week might have some money for you in the form of a tax refund.

Usually, unemployment benefits are taxable. But this time it will be different. This will exempt up to $10,200 per person.

For example, let’s say you received $5,000 in unemployment insurance, you won’t pay taxes on any of that. And then if you received $15,000 in unemployment insurance, you’ll pay taxes on $4,800 of that.

This potentially affects a lot of people – 40 million Americans received unemployment payments last year — about 1-in-4 people who had jobs before the pandemic. 

The average benefit for most people will be between $1,000 and $1,500.00 plus any previously withheld 2020 income tax on your unemployment benefits received.

If you have already filed your 2020 taxes you will need to file an...

If you received unemployment benefits in 2020 and you've already filed your tax returns, the Internal Revenue Service is saying you don't have to file an amended return to claim the new tax waiver on up to $10,200 of your benefit payments.

President Joe Biden signed the $1.9 trillion American Rescue Plan Act last Thursday, which provides a tax waiver on up to $10,200 of unemployment insurance benefits for 2020 for those earning less than $150,000. The waiver expands up to $20,400 for couples who are married and filing jointly if both partners filed for unemployment. The waiver was a late addition to the package by Democrats who wanted to help out-of-work Americans avoid major surprise tax bills. 

However, the IRS has already started the 2020 tax season, and more than 45 million tax returns have already been filed with the IRS, according to the Tax Foundation. 

On Friday, the IRS issued guidance that says it "strongly...

The IRS Just Released New 2021 Tax Brackets. Here's What They Mean.

You might still be focused on surviving 2020, but when it comes to taxes, it doesn’t hurt to plan ahead.

This month, the IRS released updates to the tax code for the tax year 2021. Though actual tax brackets remained the same (10%, 12%, 22%, 24%, 32%, and 35%), income limits for each bracket were increased to account for inflation. The standard deduction for 2021 was also increased.

These changes will affect how much you pay when you file income taxes in 2022. Here’s a look at the 2021 tax brackets and other changes to personal taxes next year.

Tax Brackets For Tax Year 2021

Single filers:

• 10%: Up to $9,950
• 12%: Income of $9,951 to $40,525
• 22%: Income of $40,526 to $86,375
• 24%: Income of $86,376 to $164,925
• 32%: Income of $164,926 to $209,425
• 35%: Income of $209,426 to $523,600
• 37%: Income over $523,600

Married, filing jointly:

• 10%: Up to $19,900
• 12%: Income of...

Americans who own stocks are pulling further away from those who don't, as Wall Street roars back to record heights while much of the economy struggles. 

All three indexes ended on a high Monday, with the Dow up almost 1% to 28,837, the S&P 500-stock index up more than 1.5%, and the tech-heavy Nasdaq composite up more than 2.5% to 11,876, its best day since September 2. 

But Black households are much more likely to be in that not-as-fortunate group that isn't in the stock market.

According to data released recently by the Federal Reserve, only 33.5% of Black households owned stocks in 2019. Among white households, the ownership rate was nearly 61%. Hispanic and other minority households also were less likely than white families to own stock.

Many reasons are behind the split. Experts say chief among them is a longstanding preference by many Black investors for safer places to put their money — the legacy, some say, of decades of discrimination and fear. Also,...

Americans who filed their 2019 federal income tax returns on time should expect a refund this week. 

The Internal Revenue Service and the Treasury Department will send interest payments with an average of $18 to about 13.9 million taxpayers, according to a statement by the IRS. 

The interest payments will be deposited to taxpayers who filed their tax return by this year's July 15 deadline and either received a refund in the past three months or will receive a refund.

Most interest payments will be issued separately from tax refunds, according to the statement. 

More than 12 million taxpayers who received their refund by direct deposit will see their interest payment direct deposited in the same account.

Those who didn't receive their payments through direct deposit will receive a check. A notation on the check − saying "INT Amount" − will identify it as a refund interest payment and indicate the interest amount.

These interest payments...

In general, section 2202 of the CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from eligible retirement plans (specific employer retirement plans, such as section 401(k) and 403(b) plans and IRAs) to qualified individuals, as well as special rollover rules concerning such distributions. It also increases the limit on the amount a qualified individual may borrow from an eligible retirement plan (not including an IRA) and permits a plan sponsor to provide qualified individuals up to an additional year to repay their plan loans.

You are a qualified individual if –

·       You are diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;

·       Your spouse or dependent is diagnosed with SARS-CoV-2 or with COVID-19 by a...

The Treasury Department announced Monday that it would not be moving the tax-filing deadline for a second time, despite some pressure to do so because of the coronavirus pandemic.

After considering an additional postponement, the agency said the evening that it is sticking with the current July 15 deadline and that people who need more time can ask for a normal extension that would give them until mid-October to complete their returns.

An extension would give taxpayers until Oct. 15 to file their returns, though they would still have to pay what they owe by July 15 to avoid interest and penalties.