ITS TAX TIME!
- Thread starter Rasan
- Start date
TAX 101
AGI = Adjusted gross income
It's your gross taxable income. Say you and your wife made 75,000 before taxes, when you do your tax return you can itemize your deductions (adding up receipts for expenses you can deduct) or take the standard deduction for $10,300 (married, filing jointly). Now your taxable income would be $64,700, but you have 3 kids (exemptions) and they are worth $3,300 a piece, lol, so thats $9,900 from your income which makes your AGI $54,800. That is what you'll be taxed on. The tax on that total will be $8,772.50 + 25% of anything over $63,700 ($100), which equals $8,797.50 and that is what you should have had withheld throughout the year. If you had more than that, you get a refund, if you had less, then you owe. Now this is just for federal because in Washington we don't have state tax so I don't know too much about it but it should be similar except different numbers.
There are many other deductions you can take to adjust your gross income.
EIC is Earned Income Credit, this is different than a deduction. You actually get paid based on your income and children but you're over the limit anyways. We just did a return where the client had about $9000 income, paid $610 in taxes, and is getting $3500 back because she qualified for the EIC.
This year there is also a credit (free money) available to everyone who does their taxes and is called the Telephone Excise Tax Refund. If you want to read about why you get click here, but most of you guys won't care why you get free money because it's free! To get this you can go through the last 41 months of telephone bills and add up the tax paid on long distance, or you can take the standard amount
* One exemption, the standard refund amount is $30;
* Two exemptions, the standard refund amount is $40;
* Three exemptions, the standard refund amount is $50;
* Four exemptions or more, the standard refund amount is $60.
AGI = Adjusted gross income
It's your gross taxable income. Say you and your wife made 75,000 before taxes, when you do your tax return you can itemize your deductions (adding up receipts for expenses you can deduct) or take the standard deduction for $10,300 (married, filing jointly). Now your taxable income would be $64,700, but you have 3 kids (exemptions) and they are worth $3,300 a piece, lol, so thats $9,900 from your income which makes your AGI $54,800. That is what you'll be taxed on. The tax on that total will be $8,772.50 + 25% of anything over $63,700 ($100), which equals $8,797.50 and that is what you should have had withheld throughout the year. If you had more than that, you get a refund, if you had less, then you owe. Now this is just for federal because in Washington we don't have state tax so I don't know too much about it but it should be similar except different numbers.
There are many other deductions you can take to adjust your gross income.
EIC is Earned Income Credit, this is different than a deduction. You actually get paid based on your income and children but you're over the limit anyways. We just did a return where the client had about $9000 income, paid $610 in taxes, and is getting $3500 back because she qualified for the EIC.
This year there is also a credit (free money) available to everyone who does their taxes and is called the Telephone Excise Tax Refund. If you want to read about why you get click here, but most of you guys won't care why you get free money because it's free! To get this you can go through the last 41 months of telephone bills and add up the tax paid on long distance, or you can take the standard amount
* One exemption, the standard refund amount is $30;
* Two exemptions, the standard refund amount is $40;
* Three exemptions, the standard refund amount is $50;
* Four exemptions or more, the standard refund amount is $60.
What are you claiming on your return? The standard deduction for filing single is $5,150. If you don't even have estimated $5,500 in deductions then don't even worry.
Here's what you could potentially deduct if itemizing:
Medical and dental expenses,
State and local income taxes, or sales tax,
Real estate and personal property taxes,
Home mortgage and investment interest,
Charitable contributions,
Casualty and theft losses,
Job expenses, and
Miscellaneous deductions.
Here's what you could potentially deduct if itemizing:
Medical and dental expenses,
State and local income taxes, or sales tax,
Real estate and personal property taxes,
Home mortgage and investment interest,
Charitable contributions,
Casualty and theft losses,
Job expenses, and
Miscellaneous deductions.