Capital Gains Tax Questions
Capital Gains Tax Exemptions
Capital Gains Tax Exemptions
If you have sold any stocks, bonds, or real estate then these would be considered your capital gains. You are not required to pay capital gains on these assets from year to year, only when they are sold. The capital gain amount will be determined by comparing the original purchase price to the sale price.
You will then be taxed on that profit by the federal government. This amount is taxed at a much lower rate than income is. The capital gains tax tends to help out the wealthy more than it does the middle class as it offers a break to high income individuals.
How Much?
You will typically be taxed the 5% capital gains tax if your income is between the 10%-15% income bracket. You will be charged the 10% capital gains tax if your income is on the 25% income bracket or above. You will be charged the 25% capital gains tax on any real estate that was sold and had depreciated. The 28% capital gains tax will be applied to the sale of collectibles and small business stock.
New in 2008
There is a tax break for 2008. Any taxpayers that sold long term capital assets that fall within the 10%-15% income bracket will be exempt from the tax. This means that a married couple must have income below $65,100.00 and a single filer must have income below $32,550.00. This tax break will expire in 2010 so if you are thinking about selling long term assets, now is the time.
Federal Inheritance Tax Calculator, Guide, Planning, & Limits
If you have any capital gains tax questions, be sure to visit TurboTax Online for free tips on capital gains exemptions.
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The FICA Limit Does Not Affect The Medicare Portion Of The Tax
FICA Limit
FICA Limit
There is a FICA limit that defines the amount of tax that you and your employees are responsible for.
FICA tax, which stands for the Federal Insurance Contributions Act, includes two types of taxes that, as an employer, you must withhold from your employees’ earnings. As the employer, you must pay this tax to the government.
FICA consists of a Social Security tax and Medicare tax. The Social Security portion includes Old Age, retirement and disability, while the Medicare portion consists of Hospital insurance. This tax is imposed on both employers and employees to fund these benefit programs.
The total FICA tax rate is 7.65%, which includes the Social Security tax rate of 6.2% and the Medicare tax rate of 1.45%. The FICA limit comes in to play by limiting the income to be taxed for the Social Security portion. The FICA limit stipulates that the income to be taxed is capped at $106,800, meaning if you earn more than $106,800 you still will only be responsible for tax on $106,800. The FICA limit does not affect the Medicare portion of the tax. The Medicare tax of 1.45% is taxed on all earnings with no limit.
If you own a small business and are interested in saving yourself time and money, as well as improving your system of organization, you may want to look at a small business software program such as QuickBooks Online Payroll. They offer an online program for a nominal fee that will calculate all of the necessary payroll taxes for you.
QuickBooks Online Payroll has the most up-to-date tax tables available to create payroll. This program will pay your employees the correct amount and have all the necessary taxes withheld from their paychecks. Within the standard reports, the amount you are responsible for as the employer will be calculated for you.
QuickBooks Payroll also offers a guarantee that the software will pay for itself in the first 60 days or you’ll get your money back. In addition, most of their software editions come with a 30-day free trial offer to try the software before you purchase it.
Visit QuickBooks Online Payroll to learn how they can save you time and money in areas regarding FICA tax, FICA limits, and all other aspects of preparing payroll.
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A Nice Tax Deduction For Mileage
Allowable Mileage Tax Deduction
The Current Allowable Mileage Tax Deduction Amount is 50 Cents Per Mile.
You are currently able to deduct expenses related to cost of your car for business purposes. If you would like to explore tax deductions for vehicles or miles driven, there are other purposes which you could qualify for to claim a tax deduction for driving. Did you know you can claim miles driven for medical purposes? How about claiming miles for charitable purposes?
Self Employed Federal Tax Deduction Tips
IRS Vehicle Mileage Information Resources
The best advice I can give you would be to use the web site of TurboTax by clicking on the upper, right support tab. After you click on support, you can enter allowable mileage tax deductions, and you will be pleasantly surprised to find a lot of mileage tax information right from the tax experts who are trained to stay on top of all the current mileage tax laws. You may be surprised to find a nice tax deduction for mileage that you didn’t even know existed.
IRS Federal Tax Rebate Checks Status
There are Two Different Ways to Deduct Vehicle Expenses:
•Standard Mileage – If you chose to use this method, then you will take the standard mileage deduction amount allowed by the IRS and multiply it by the amount of miles you drove for business related purposes.
•Actual Vehicle Expenses – If you chose this method, then you will need to keep track of all costs related to business travel. You will be able to deduct: Depreciation, licenses, gas, oil, tools, lease payments, insurance, garage rent, parking fees, registration fees, repairs, and tires.
You need to keep excellent record no matter what method you use. The IRS does not consider travel from home to work as work related. You must be able to provide dates of travel along with the reason for the travel and either amount spent on gas or miles driven. You may want to try and calculate your tax deduction using both methods and see which one allows you a larger vehicle tax deduction. If your company owns your vehicle, then you may not deduct any related expenses to that vehicle.
Hybrid Tax Breaks for Cars & Vehicles
There are many tax deductions available for tax payers. Above are just a few of them. To learn how to claim more tax deductions and get a bigger refund, please visit TurboTax Online. TurboTax Online offers free tax software to help you maximize your mileage reimbursement tax deductions.
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Tax Returns Can Be Very Stressful
Business Tax Return Help
Are you getting ready to file your tax return for your business? Do you have questions or need assistance? Help is available.
Child Tax Credit Calculator & Worksheet
Tax returns can be very stressful and time consuming. If help is available, I think we would all agree that it would make the process easier. With the economy in the crisis that it is, I’m sure you want to claim any and all deductions that you qualify for.
Selecting an online service can give you the assurance that all deductions and credits available will be included in your return, which will help you reduce your liability to the IRS and thus save you money.
Whether you are looking for step-by-step instructions or just have questions regarding your taxes, there are online services available. I would recommend TurboTax Online. They have a service that will guide you through all of the questions necessary to complete your tax return and it is guaranteed to be 100% accurate. A support service of tax experts is included to answer any questions you may have.
There are many deductions available for small business owners; in fact there are many that are frequently overlooked. Depending on your type of business, some deductions may be more important to you than others. Here is a short list of common deductions that are missed that could save you money:
•Bank charges, fees, etc.
•Business gifts
•Health insurance premiums
•Losses from theft
•Trade show exhibits
•Any many more…
Individual Tax Deduction Online Tips
Visit TurboTax Online to receive answers to all of your small business tax related questions.
A qualifying dependent must be twelve years of age or younger. The child must be related to you and live with you for at least half of the tax year. Another form of qualifying dependent care cost would be care for a disabled adult that is unable to care for themselves. The care must be provided by someone other than your spouse and the care provider must be over the age of 19.
To calculate your child care tax credit, Visit TurboTax Online.
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Estate Tax Exclusion Amount
Annual Gift Tax Exclusion
Annual Gift Tax Exclusion
If you do not want to pay too much estate tax and you want to ensure that your assets will stay within your family, the best thing to do is to give certain amounts of money to your children or grandchildren. The annual gift tax exclusion makes it possible for you to give money to any number of people without having to pay gift or estate taxes. In the years 2010 and 2011, the amount of money needed to be gifted in order to be eligible for annual gift tax exclusion is $13,000.
Stimulus Check, Receive $300 – $1200
•Gift Tax Return Form 709
By giving annual money gifts to your children or grandchildren, you can remove certain assets in your estate and eliminate the likelihood that they will appreciate and become a more significant part of your taxable estate. As such, you can significantly reduce your exposure to estate taxes in the future. You can give $13,000 to each of your children as well as their spouses and children annually. If you have a big family, you can make more than 10 exclusion gifts totaling more than $130,000 every year, without using unified credit. You can also split the gifts with your spouse to double the amount of money given. By doing so, you can actually transfer a lot more money annually without incurring gift tax liability.
Emergency Economic Government Bailout Bill, Plan
If you are uncertain whether you should leave large sums of money in the hands of minors, you can consider giving money to your children or grandchildren through Uniform Transfers to Minor Act accounts. Your children and grandchildren will be regarded as owners of the money in their accounts, and they will only have access to the money after they reach the age of majority, which can be 18 to 21 depending on the state. While they are still minors, their money will be held and managed by a custodian. You should make sure that you or your spouse is not named as a custodian, because the account will become a part of your taxable estate if you pass away while you are assuming control over it.
One thing you have to know is that you can only obtain annual donee exclusion if the money gift that you are giving is of a “present interest”, and not “future interest”. With this in mind, you have to make special planning considerations when you are offering money gifts to minors. However, there is a way to avoid these obstacles, and that is to use a trust.
Tax Stimulus Rebate Stimulus Payment
Under the current law, the estate tax exclusion amount is not the same as the lifetime gift tax exclusion amount. In the years 2010 and 2011, all money gifts that are below the annual exclusion amount of $13,000 will be regarded as gifts that are subject to tax. The lifetime gift tax exclusion allows you to give money gifts amounting to $1 million over your lifetime, without having to pay federal gift taxes. In the event that a person passes away after giving away $1 million worth of taxable gifts during the course of his or her life, none of his or her assets will be excluded from estate taxes. The exclusion amount has to apply to lifetime gifts first, and then transfers at death
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