Tax Facts & Figures
As we begin a new year, many people create budgets so they manage their finances well and then refine them through out the year. We are strong advocates of the Dave Ramsey Financial Peace University program and highly recommend it regardless if you are just beginning your journey, trying to work your way out of debt, or are nearing retirement. In that vain, it’s always a good idea to understand the impact taxes have on our cash flow. The U.S. has a graduated federal income tax system at both the corporate and individual level. Social security tax impacts employers and employees. Many states also have an income tax. In general, overall tax rates range from 30-50% of income.
The individual rate is impacted by a number of factors including the following:
–Marital status (residency can impact this)
–Income type (wages, self-employed, ordinary, capital gain)
–Thresholds which determine phase outs of exemptions and itemized deductions as well as other taxes such as Additional Medicare tax and net investment income tax
The 2017 Tax Facts and Figures provides an overview of the federal individual income tax system which can be used to help you create and fine tune your 2017 budget. The 2016 Tax Facts and Figures is a great tool to aid in understanding the final results of the current individual tax returns which are due April 18th.
- Copyright© 2016 Tax Materials, Inc.
Payroll Federal Rates and Limits
Paychex has released a tool that provides federal and state-specific payroll and retirement rate information. With this tool, we are able to provide businesses with federal rates and limits for each state without the business having to look all over the internet for incorrect or outdated information. The best part of this tool is that we can customize it to your specific situation!
Please click here for a Tax Facts Chart which includes California, Florida, Georgia, New Mexico, New York, and Texas. Please contact our office if you would like a customized Chart.
“The wisdom of the prudent is to give thought to their ways, but the folly of fools is deception.” Proverbs 14:8 NIV
- Life Application Study Bible, New International Version. Grand Rapids, MI, Zondervan.
- Scripture taken from the HOLY BIBLE, NEW INTERNATIONAL VERSION©. Copyright © 1973, 1978, 1984 by International Bible Society. Used by permission of Zondervan. All rights reserved.
When presented an investment opportunity or tax transaction; it is always important to make sure it is not running afoul of the IRS’ intent. As momma always said “if it sounds too good to be true, it probably is!” Such is the case of those large tax deductions for charitable contributions of Syndicated Conservative Tax Easements.
The Internal Revenue Service (IRS) and Department of Treasury are aware that promoters are offering investors the possibility of a charitable contribution deduction that equals or exceeds two and one-half times the amount of the investor’s investment. To avoid penalties and fines, taxpayers that have already filed tax returns with these transactions should take appropriate corrective action to ensure that the proper disclosure is made.
To see the official notice from the IRS, please click here.
United States. Internal Revenue Service. Income Tax & Accounting. Listing Notice-Syndicated Conservation Easement Transactions. By Angella L. Warren and Maxine M. Woo-Garcia. N.p.: n.p., n.d. Web. 21 Jan. 2017. <https://www.irs.gov/pub/irs-drop/n-17-10.pdf>.
There are quite a few due date changes for tax returns and information returns this year. The specifics may be found in the Due-Date Summary-Chart and Information Return Due Date Chart. Of note is that Individual (1040), S Corporation (1120S), and Foreign Trusts with a U.S. Owner (Form 3520-A) do not have changes. For those with Foreign Bank Account Reporting obligations, the due date for the FinCEN Report 114 (FBAR) is now due April 15th and the extension due date is October 15th.
Also of note is that Exempt Organizations (Forms 990) will now have a single automatic 6 month extension eliminating the need to process the current first 90-day extension.
Original and Extended Tax Return Due Dates. N.p.: AICPA.org, May-June 2016. Pdf.