Taxes

Tax Brackets Tax Tables 2023

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irs taxes tax form

The tax tables for 2023, which determine the tax brackets for 2023, used by most people in Spring of 2024, while filing their 2023 taxes, have been set by the IRS. As always, there are seven different tax brackets based upon the taxpayer’s filing status. The different brackets are the Single tax bracket, the Married filing jointly tax bracket (also used by Qualifying widows or widowers), Married filing separately, and Head of household. All the tax filing types have the same tiers of tax rates, 10%, 12%, 22%, 24%, 32%, 35%, and 37%. As you can see, the biggest tax bracket rate jump occurs between the 12% and 22% tax level. So those under $41,775 (single) or $83,550 (married) are the “low” taxpayers, and those above are the “higher” taxpayers. There is another big jump between the 24% tax bracket and the 32% tax bracket. You can consider this the “upper class” or “upper income” portion of the U.S. population, at least when speaking about taxes and the rates each class, or tier pays. As always, your actual percentage of taxes paid varies based upon various factors including tax deductions. Typically, taxes begin based upon the taxpayer’s Adjusted Gross Income …

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Remote Work Taxes

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remote work taxes

Remote work is changing every aspect of the modern professional’s life. No more long commutes. No more monthly parking expenses. Maybe even no more car. How remote work taxes occur is the next frontier. Taxes for Remote Work The evolution of the workplace has seen a significant shift towards remote work, a trend accentuated by recent global events like the COVID-19 pandemic. With an increasing number of individuals and businesses embracing this new normal, it’s vital to understand the accompanying tax implications. This guide outlines key points to consider and strategies to optimally manage taxes in the world of remote work. Federal Income Taxes on Remote Work If you live or work in America, the U.S. government requires your income to be taxable. If you are a citizen of another country and you don’t spend too much time in the U.S. there can be some ways around it. For average, middle-class workers looking at their tax options, there is no difference between a job in Utah, and an office in Minnesota than there is from a job in the same building as the company headquarters. You’ll get your W2 and you will pay income tax. What about state taxes and …

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Is My Colorado Refund Tax Free?

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Colorado income taxes delay

The IRS decides some of your Colorado refund is tax free, but it’s the IRS, so it can’t be that simple. Colorado Cash Back Refund Is Tax Free I don’t know how good your memory is, but in 2022, Colorado officials realized that Colorado residents would be in line for big Tabor refunds for 2022. Usually when Colorado gives out TABOR refunds, you get it as a part of the Colorado State income tax that you file tax returns for in the early part of the following year. For example, the 2022 TABOR refunds would normally be a part of your 2023 income taxes (part of it still is). However, with the economy potentially sputtering to a halt and the end of the various federal income tax refunds sent early to prop up a post-Covid economy, Colorado politicians decided that they would send out some of the 2022 TABOR refunds in the fall instead of waiting until folks got around to filing taxes that are due in April 2023. To pull this economic transfer off, Colorado officials had to anticipate how much the TABOR refund of 2022 would be with only half of the year’s data, so they picked a …

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2024 Section 179 Deduction Limits for Small Businesses Taxes

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small business section 179

Small business tax deductions are important in order to offset high business taxes levied against small business owners and entrepreneurs. This is especially true for work from home entrepreneurs who file as sole proprietors, or as a Limited Liability Company aka LLC, with sole proprietor tax status. Small business owners can get hit with high tax bills thanks to Self-Employment Taxes. Self-employment tax, or SE Tax, is so high because it includes taxes that would usually be paid by the employer. In a typical employer-employee scenario, the employee pays 6.2% in Social Security Taxes. The employer withholds this amount from the employee’s paycheck. What many people don’t realize is that the employer also pays 6.2% in social security tax for the employee. A small business owner that files as a sole proprietor is on the hook for the whole amount! The self-employment tax rate – sometimes called the SE tax rate – is 15.3%, which is 12.4% for social security taxes plus another 2.9% for Medicare taxes. That 15.3% is on top of regular Federal Income Taxes. A successful small business owner in the 30% tax bracket, pays a blood curdling 45% tax rate. And that is before adding Medicare …

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When Can I File Colorado Income Taxes

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Colorado income taxes delay

Colorado Delays Acceptance of 2022 Online Taxes A majority of Coloradoans file their income taxes for free, or via a paid tax program like TurboTax, using Colorado’s online tax forms. Once you know how to file Colorado income tax, the rest is easy. The Colorado Department of Revenue will not accept income tax returns until January 2023. Filing Colorado Income Taxes Online Several laws passed during the 2022 legislative session changed numbers, percentages, forms, and eligibility for various tax deductions, tax credits, and tax-advanced contributions. The one-month delay won’t affect most Colorado income taxpayers. Colorado taxes require completion of Federal income taxes to generate most of the inputs needed for Colorado income taxes. Both state and federal law give employers, and others, until January 31 to generate and send most required tax forms. Thus, the change will only affect taxpayers with simplified taxes whose only employers and contractors created and sent the various W2, 1099, and K-1 forms. Use the Colorado Department of Revenue’s tax updates site to keep up with any new changes.

Tricks to Save Money On Taxes

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save money on taxes tips

If you have fairly simple taxes, that is ones that do not include several complicated schedules or worksheets that have to be filed, then you might not want to pay for TurboTax or TaxCut or other tax preparation software.  But you still don’t really want to go it alone without some sort of double-check. Let’s jump right in with some tricks to save money on taxes. TurboTax For Free TurboTax offers a marketing gimmick where they allow you to do your taxes on the online version of TurboTax for free.  You only have to pay when you print or e-file your return.  But who says you have to print anything? When you have finished inputting all of your information, and TurboTax has finished crunching all of the numbers, switch to the form view where you actually are looking at an electronic version of the tax form.  Copy the numbers down onto Form 1040 that you printed off of the IRS website, and voila.  Your taxes are done, and all for free! Obviously, if you have to generate a bunch of extra paperwork or IRS Schedules, this isn’t the method for you.  But keep in mind that many of the worksheets …

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How Long To Keep Tax Returns

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how long keep tax return records

Tax Day is today. Hope you are ready! If you have already filed, there is one more piece of tax business you can attend to before you run off into your summer. Time to shred some old tax returns and documents. IRS Rule For How Long to Keep Taxes The general rule for how long you have to keep your tax returns and other tax records is three years. HOWEVER, this is the IRS we are talking about, so there are some exceptions, and sub-rules to the general rule. First, you need to know when to count from. The 3-year rule counts three years from the date you FILED them. So, if you filed early, you don’t technically have to wait until April 15 (I always do. Better safe than sorry.) On the other hand, if you filed late, whether with an extension or not, you need to keep them for three years from that date. Also, the IRS says you should keep your returns for two years after you paid the tax, so if you ended up paying late, or on some sort of payment plan, be sure to keep them for two years after that tax bill has been …

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Not Cashing Savings Bonds to Avoid Taxes

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taxes on savings bonds

There is a common misconception about avoiding taxes by not cashing savings bonds. While there are no penalties for not cashing mature savings bonds, there is no benefit to holding them for tax purposes, either. Sometimes people wonder, “Do savings bonds expire?” For the most part, I typically assume that people who have misinformation came by it honestly. Usually, they didn’t quite understand fully what they read or were told. After all, one of the trickiest things about achieving financial independence and personal finance is that there are so many exceptions and nuances. In a lot of cases, what is absolutely true for one person is not true for someone else because of their individual circumstances. Tax Consequences of Cashing In Savings Bonds Unfortunately, while the internet has given people easy access to vast amounts of information, it does so without any verification that the information published is true. The problem is compounded by those who read something inaccurate and then repeat it elsewhere. This makes the false information seem more valid because it is corroborated by another source, which, in fact, is just repeating something that was wrong. That is why it is so important to verify financial planning …

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House Child Tax Credit Bill

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congress tax laws

Recently, the Democrats passed a bill called the American Rescue Plan Act, that made some changes and updates to the child tax credit. This was quickly spun as either a middle-class tax cut or raising taxes on the poor. It’s weird to see how people can distort what is really happening in order to fit their own agenda. The Child Tax Credit is $3,000 per child between 6 and 17 years old. The Child Tax Credit is $3,600 for each child under 6 years old. Child Tax Credit Basics The child tax credit is a credit. This is different than a tax deduction. A deduction is something that reduces your taxable income. The actual amount you save on your taxes then is a fraction of the amount deducted. For example, if you made $80,000 and you get $20,000 in deductions, then you pay taxes only on $60,000 in income, which means you get only a percentage of that $20,000 in deductions. A credit, on the other hand, is a reduction not in your income, but in your actual tax. So, a $1,000 tax credit means you actually pay $1,000 less in taxes. A credit is much better than a deduction …

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Colorado Refund Checks Here Now

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colorado refund tabor line

Taxpayers in Colorado began receiving their 2022 Colorado refund checks in the mail this week. Several readers have reported getting theirs, and I got mine on Monday, so they are definitely coming. To qualify for a refund check from Colorado you had to be a full-time resident in 2021, and you had to be 18 by December 31, 2022. You also had to file your Colorado income taxes. Check out this in-depth look at Acorns investing. Colorado Tabor Refund Checks Politicians were fast to break their arms patting themselves on the backs for getting $750 to each Colorado taxpayer. It is a nice surprise, and the Democrats get credit for getting $750 to your mailbox in August 2022 instead of making you wait until early 2023 to get your refund when you file your Colorado income taxes. Republicans are quick to point out that Democrats have supported ending Tabor in the past, so they think they get credit. Check out Where Your Colorado Refund Check Comes From You like free money as much as the next guy, but you are an intelligent and curious srot, so you’d like to know exactly where this refund check money is coming from. That’s …

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