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Federal Income Tax Rate in Texas: 2019

Federal Income Tax Rate in Texas: 2019

By on Oct 8, 2019 in blog, Consultation | 0 comments

Everyone must pay their federal taxes in the United States. Some states, however, offer more leeway than others do. The state of Texas, for example, does not charge an additional income tax; you will have to pay a .375% franchise tax if you run a business. You also do not have to pay estate or inheritance taxes, and counties determine if you have to do so for real estate or personal property.  Every state will see some changes with the 2018 tax legislation. People will have to pay differing amounts due to what the can and cannot write off in their return. Your income will determine part of that, of which tax bracket you will fill.  Your 2019 federal tax return will be due on April 1, 2020. If you get an extension, you will have to turn it in by October 1, 2020. Rates have slightly changed, so we’ll discuss the basics for what you need to know.   Federal Income Tax Brackets How do tax brackets work? They work on dividing your income into taxable amounts so that you are not paying the same rate uniformly. Instead, you pay the amount by which the maximum in each bracket. The brackets are as follows: 10% for $9700, 12% for $39,475, 22% for $84200, 24% for $160,725, 32% for $204,100, 35% for $510,300 and 37% for any amount above $510,300. The more income you earn, the more brackets you fill.   Confused? Maybe a concrete example will help. Let’s say that you earn 10,000 a year in USD. That puts you in the first marginalized bracket, which pays a ten percent margin rate. You only pay ten percent, however, on $9700 of that income, or $970. The remaining $300 is taxed 12%, or $360. Your total thus is $1360 to pay in taxes.    For salaried employees, the good news is that employers automatically deduct taxes from your paycheck. You then have that withheld amount to assist with paying taxes for the following year. In some cases, you may even get a refund if your income is below a certain amount.  Freelancers, business owners, and entrepreneurs are a different story. If you are freelancing, that must mean you do the withholding for...

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How to Find, Locate, and Recover an Old 401(k) Account

How to Find, Locate, and Recover an Old 401(k) Account

By on Jul 24, 2019 in blog, Tax | 0 comments

The vast majority of unclaimed income comes from brokerage, checking and savings accounts, plus annuities, 401(k)s and IRAs inadvertently left behind by people who switch jobs or financial institutions leaving valuable assets behind. The good news is that it’s relatively painless to locate lost funds. Since companies are required by law to mail send the funds to the owner’s last known address but if they’re returned or the owner can’t be reached, the assets must be relinquished to the state. Also, online resources allow you to search for old accounts anywhere you might have lived or worked. And if you do find money is owed to you, it’s easy to fill out a simple online form to get it back. Find and Locate Your Money Contact your old employer Contact your old employer directly via their human resources department. They should have records of your current retirement-plan account and the associated assets. With the proper forms, you can roll over your retirement money to a different 401(k) or to an IRA, or to any outside financial institution overseeing your financial plan. By doing the appropriate instructions you get, you’ll be able to move your retirement money where you want. Refer to an old statement Old 401(k) statement will typically have the information you need to get in contact with either your employer or a plan administrator. Then, you can inquire about your options for moving money and get the information you need to do so. Hopefully, you’ve kept good records but don’t be shy to track these down online from your banks and investors. Search for unclaimed retirement benefits A private company handles the processing of retirement distributions nationwide set up the National Registry of Unclaimed Retirement Benefits. Since employers can have trouble finding former employees to claim their retirement benefits. This service will allow you to perform a free search for any retirement plan balances in your name. In order to appear in the database, your employer must participate in the service. Look for corporate mergers In case your former employer is no longer an independent business after being merged with another company, then your old 401(k) plan might have been merged into the new company’s 401(k) plan....

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What is IRS Form 1040-ES?

What is IRS Form 1040-ES?

By on Jul 8, 2019 in blog | 0 comments

The IRS Form 1040 is an official documents that U.S. taxpayers can use to file their annual income tax return. You can use Form 1040-ES to pay income tax, self-employment tax and any other tax you may be liable for. ES stands for estimated tax, not to be confused with the standard 1040 which relates to the previous year. Depending on the type of income you report, it may be necessary to attach other forms or schedules to it, but the form has easily marked sections where you can report your income and deductions to determine the amount of tax you owe or the refund you can expect to receive. Who Pays Estimated Tax? Certain forms of income are not deducted at the source. For example, independent contractors and freelancers need to deduct their own taxes from their pay. Also, earnings from interest, dividends and rent, taxable unemployment compensation, retirement benefits and the taxable part of your Social Security benefits are other examples of income that is not taxed at the source. Consider If you have these types of income and then count on paying estimated tax. Paying Estimated Taxes Because the estimated tax payment is based on the estimation of your income for the current year, it’s easy to underestimate, resulting in an underpayment penalty. To avoid this, use your previous year’s taxes as a guide. Simply put, as long as you pay 100 percent of the previous year’s tax, you won’t have to pay the penalty. And don’t worry about overpaying – if you do you’ll receive a tax refund at the end of the year. This doesn’t apply to quarterly taxes however. Even if you overpaid the total tax due for the year and are eligible for a refund, if you pay quarterly taxes late you will receive a penalty. The Form 1040-ES package includes worksheets to help you account for differences between the previous and current year’s income and calculate the tax you owe. And remember, Success Tax Relief is always here to help When To File 1040-ES for Quarterly Taxes Estimated tax payments are due four times in a tax year. Most individuals are calendar year taxpayers with the infamous due date April 15...

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Settling an IRS Tax Debt: Step by Step Guide

Settling an IRS Tax Debt: Step by Step Guide

By on Oct 31, 2018 in blog | 0 comments

While the Internal Revenue Service (IRS) doesn’t act like a debt collector for Americans, it can certainly be a beast to deal with. Since the IRS acts on behalf of Uncle Sam, they have a good deal of authority that regular collection agencies don’t. Even though they’re not going to harass you all the time, they’re more than capable of garnishing your wages! Fortunately, the following steps can go a long way toward settling your debt for good.   File for Monthly Installments   If you can’t pay off your debt in the foreseeable future, then consider filing for monthly installments to help you pay off what you owe the IRS. While you might balk at the application fee, you get the option of paying a fixed regular bill if you’re approved. You might not think that you’re making a huge dent in your total burden, but you’d be doing more than enough to help pay things down bet in nigeria. A tax professional can help you prepare the necessary IRS forms to file for an installment agreement.   Determine Your Reasonable Collection Potential   By providing detailed information about your current financial situation to the IRS, you can help them to determine your reasonable collection potential or RCP. Your total RCP includes things like possible future income and any investments or credit lines you might have. If your RCP is low enough, then you might be able to negotiate an offer and settle a compromise. When the IRS approves this kind of offer, they agree to accept less money than you owe overall.   Request Relief for Married Couples   If you’re married and filing a joint return, then the IRS has three special relief programs that can help. Innocent spouse relief can cut any additional taxes you might owe because your spouse or former spouse didn’t report some earned income. You may qualify for equitable relief if your return was filed properly but taxes weren’t paid with the return. Separation of liability relief could apply if you’re legally separated from your spouse. In all three cases, these programs will take away any tax debt that’s not legally yours.   File for Penalty Abatement   Part of your...

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IRS Tax Brackets Under the New Tax Bill

IRS Tax Brackets Under the New Tax Bill

By on Oct 25, 2018 in blog | 0 comments

When the new tax bill was signed into law in December 2017, it seemed like it made instant headlines. Taxpayers who were used to the bracket they may have been in for years were suddenly unsure of how the following year’s worth of income was going to be taxed. Fortunately, there are now a number of certified documents from the IRS that help to explain the current situation.   Perhaps some of the biggest news was that the bracket realignment also changed the standard deduction in the process.   Standard Deduction Amounts in 2018   Individuals who file single returns will now receive a standard deduction of $12,000 while those who are married filing jointly will receive one twice that. At the same time, there won’t be personal exemptions for 2018 the same way that there were just a year ago. This confused some taxpayers, because the IRS originally provided different information for them that is now been superseded by the new tax bill. This also applies to the bracket values themselves.   Guide to the New 2018 Tax Brackets   Under the new law, people who both kinds of returns can fall into one of seven different brackets. While this might sound complex, it’s too not much different from the way things were done before even if some of the percentages have been changed around. This adjusted the withholding tables in the process. There’s also a zero rate, though anyone who is taxed at zero percent on some income still has to report that income. click here.   Individual taxpayers are looking at the following brackets:   10 percent for the first $9,525 12 percent between $9,525 & $38,700 22 percent between $38,700 & $82,500 24 percent between $82,500 & $157,500 32 percent between $157,500 & $200,000 35 percent between $200,000 & $500,000 37 for everything over that   If you’re married filing a joint return, then you’ll be looking at the following picture instead:   10 percent for the first $19,050 12 percent between $19,050 & $77,400 22 percent between $77,400 & $165,000 24 percent between $165,000 & $315,000 32 percent between $315,000 & $400,000 35 percent between $400,000 & $600,000 37 percent for everything over that...

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4 Ways to Know How Much You Owe the IRS

4 Ways to Know How Much You Owe the IRS

By on Oct 18, 2018 in blog | 0 comments

Not knowing how much you owe the IRS can be scary, but there’s a few easy ways to find out for certain. Don’t put off finding out. While you might dread the possibility of learning you owe much more than you though, waiting around won’t make things any easier. You can start to make preparations to settle the debt as soon as you know the amount.   Success Tax Relief put together this list so you can take that first step toward being free of your tax debt.   Four Ways to Find Out What You Owe   1) Use the View Your Tax Account App   An online browser-based app is available right on the IRS website that lets you view the balance for every tax year you owe. You can also use it to see the last 24 months of payment history as well as a decent amount of information from the current tax year. While you can only access it during certain hours since the site has to be monitored by human IRS agents, it’s easy enough for anyone to use. Regular taxpayers can create or view an account just by clicking a button. Since you won’t have to wait to speak with a person, this is usually the fastest way to find out. 2) Log on the IRS Get Transcript Site   You may find that you need additional information beyond simply the amount that you owe. If that’s the case, then access the Get Transcript app through your browser and request a full transcript from the IRS. Since you can have it sent to you digitally, you won’t have to wait nearly as long as you might if you were requesting a paper one. Keep in mind that the method you used to file influences the availability of your transcript, so there’s a small chance you won’t be able to get any information this way. 3) Make an Inquiry by Phone   If you need to know how much you owe and can’t wait, then you can call the IRS directly at 1-800-829-1040. While it seems a tad silly, their phone number for individuals really does end with the four digits for the 1040...

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