What is income, anyway? A reader sent me an email after my last post and asked me to clarify what I meant when I referred to income when figuring tax rates. That same day, another reader on @twitter asked me to explain how our progressive income tax system works – did all income get taxed…
And just like that, summer is nearly over and it’s back to work. This week, I’ve been sorting through the “Ask the Taxgirl” mailbag and I’m seeing a number of questions that are similar in nature. Many of them are related to the same, tired arguments that taxpayers make over and over. Just because your…
What’s your number? You know, your tax rate for federal income tax purposes? I know, you’re thinking 20%, 30%, maybe even 35%. Far higher than Mitt Romney, right? You probably pay much less than you think. Most people think of their marginal tax rates when you ask them what they pay in tax. A marginal…
Taxpayer asks: I’m confused by part of the notice I got from the IRS about my 2010 taxes. The first part was clear – I apparently never got a tax form for some interest so didn’t declare it, and I have no quarrels about paying the tax plus penalty on that. However, the second part…
President Obama and the First Lady managed to do something that many taxpayers haven’t yet done: they have filed their federal income tax returns for the 2011 tax year (downloads as a pdf). Like most married couples, President Obama and the First Lady file as married filing jointly. They also itemized their deductions, something that…
I’ll be the first to admit that the Tax Code is filled with crazy acronyms – like FBAR, EITC, and AGI – and convoluted titles (my current favorite is “IRS Facilitated Self-Assistance”). In fact, the Tax Code and the IRS tend to be painfully over descriptive when naming credits, deductions, and the like. What you…
T is for Tuition and Fees Deduction. College can be expensive. Crazy expensive. I say this as a former student now repaying tons of student loans – and eying my three kids and thinking about how in the world I’m going to pay for them, too. Fortunately, there are some tax breaks available for paying…
P is for Penalty on Estimated Tax. If you receive payments or other funds without having any federal income taxes withheld, you should consider making estimated payments throughout the year to avoid any penalties. This applies not only to the self-employed or occasional freelancers but also to those taxpayers who may receive income from other…
J is for Job Search Expenses. Despite recent news that seems to hint that the job market might be recovering, many Americans are still out of work. The prospects, however, of finding a job seem a little brighter as the U.S. continues to add jobs. If you’re one of those still searching, take heart. And…
I’m back in North Carolina for the second time in two weeks, this time with Nurse Kate (my daughter) in tow. My mom had heart valve replacement surgery last week and it wasn’t without her complications: her lung collapsed the day after the surgery and the resulting 24 hours was quite stressful. Mom is back…