The Federal Tax Credits Blog

Posts Tagged ‘business’

Segment 2: Home energy savers that pay off

Question: What will my tax liability be?

I expect to make about 20,000 by the end of this year. I have claimed single, 2 allowances. I have no dependants. I cannot be claimed as dependent either. I have only had $170 withheld in federal taxes so far, but I am worried that I may owe(thats the IRS withholding calculator says, it says i will owe 460, because my tax bill will be 783). I exempt the last paycheck and my bonus check(they come together at one time) because alot of taxes can take almost the entire check( i need that money.)
Last year, I owed $11, but that wasnt so bad. I only made around 6000 that year.

I am wondering if the Making Work Pay credit(i think it will $400 for me) will help me. Also, can I get the standard deduction($5700) and the personal exemption(like $3000 something) at the same time?

I was just wondering if any one could let me know what my actual tax liability would be after the deduction and exemptions(if any) are applied. I am 19 years old.

thanks so much!!!

Answer: You can’t file as exempt for a bonus check unless your employer breaks the law. There is a mandatory withholding rate for all irregular wages such as commissions and bonuses. The rate is 25% on cumulative payments up to $1,000,000 in a year and 35% on amounts over that. It’s nearly impossible for taxes to take most of a bonus check. The highest state tax rate is 11% (Hawaii, but in New York City the combined state and city rate tops out at a little over 12%). Social Security is 6.2%, Medicare is 1.45%. That makes the highest possible tax withholding percentage would be less than 44%.

The standard deduction ($5,700 in 2010) and the personal exemption ($3,650) are not related to each other.

An income of $20,000 would create a federal tax liability of $1,179. You would get the Making Work Pay credit of $400 so your total liability with the tax return would be $607.

I used the calculator at KJE Computer solutions for my calculation. http://www.dinkytown.net/java/Tax1040.html

I hope this helps.
Gary

Shell at MIT’s Technology Review EmTech 2010

Question: What is this about earning interest on my First time home Buyers Tax Credit?

So I’ve been waiting for my tax credit for 4+ months now and I keep reading about people getting their credit + interest. Is this true and if so how much can I expect?

Answer: Not sure but my son waited six months and no interest was sent with his.

Bush in 2000, Palin in 2008

The Energy Independence Implications of the Auto Bailout Proposal (Part 2 of 2)

Question: Would you like cash to be abolished?

http://www.bbc.co.uk/news/world-europe-10538032

In this BBC article, it is reported that Sweden is steadily phasing out cash, as more and more people use only debit or credit cards. Ex ABBA member Bjorn Ulvaeus says he sees no practical reasons to have coins or banknotes.

How would you like to live without cash, and what are the pros and cons? What about the chance to cut crime? Some financial crimes may vanish with no cash – certain people don’t want a trail of electronic evidence. We could see what people have earned, so no tax fraud. But what about paying for certain things like the services of tradesmen, taxis, etc. Would you like cash abolished, or is it just madness?

Answer: It would not work.

People in the black economy would switch to using other means or items of value to barter and or exchange, creating more problems than exist already – like prohibition it would create a new criminal industry.

Better to allow the people to choose cashlessness that force it upon them, in time it may well happen, but not yet

Organized Crime in Charge of EU Carbon Trade, Europol Says