We do a lot of shopping these days especially during the holidays like Christmas. The more you buy, the more taxes you pay which can be huge if you are a typical American consumer. Most of us spend around 8% in tax for the stuff you buy unless you live in the states like Alaska that don't make you pay… Continue reading Pay No Tax When Shopping Online
Are you wondering if you are going to benefit from the new tax reform? Here is a tool to find out. First, from your gross pay deduct Nontaxable wages [Dental, medical, HSA, Uniform allowance etc] Tax-deferred wages [401-k, 403-b, TSP contributions] This calculation will give you Taxable income. … Continue reading 2018 Tax Reform, What it means to you?
Your children should meet all the criteria, and your income should be below the income limit threshold. The threshold is: MAGI /based [ For most AGI and MAGI are the same numbers ] $110,000 on a joint return $75,000 for an unmarried individual $55,000 for a married individual filing a separate return So if you… Continue reading Am I eligible for child tax credit.
All these years I thought that I am getting 25% of the mortgage interest back since I am in the 25% tax bracket. Not so true. I am filing jointly and my standard deduction is higher than the mortgage interest. In other words, my itemized deduction is less than the standard deduction. So I… Continue reading Am I getting part of the mortgage interest back when filing tax
Why it is important. Like your AGI, your MAGI can determine whether you qualify for certain tax benefits. One of the most popular is the ability to deduct your IRA contributions on your tax return. However, you may not qualify for that deduction if your MAGI is above a certain level. Your MAGI differs from… Continue reading Modified Adjusted Gross Income (MAGI)
Why it is important. Your AGI is the basis for several tax thresholds. Determining whether you qualify for certain tax credits Determining whether you can deduct medical expense Your state tax is based on this number. The first step is to find out your Taxable income. You can find this number in box#1 on your W2… Continue reading How to calculate Adjusted gross income [AGI]
Gross Pay - nontaxable wages [ HSA, Medical premium, Dental premium, uniform allowance] - Tax deferred wages [ Traditional retirement plan] Example Gross pay 3,000 Non taxable wages 200 [HSA] + 150 [Medical] + 50 [ Dental] + 10 [ Uniform allowance] Tax-deferred wages 500 [… Continue reading How to calculate taxable wages [Box 1 on W-2]