1040

April 15 th unless that date falls on a weekend or holiday 1040 EZ OR 1040 A OR 1040 Your Total Income is $9,075 (this amount changes) or more ($6,200 if you are a dependent) Earned Income Unearned Income OR Self-Employed & your Total Profit is More Than $400

Wages or salaries Commissions Tips Fringe benefits and stock options Paid Sick, Holiday & Vacation Days Bonuses Health & Life Insurance Retirement Contributions Workman’s Compensation Earned Income is Generally Shown on a Form W-2 Or 1099-MISC

Interest from a Savings Account Interest from Bonds Dividends from Stock Gains from Selling Investments Income from Rental Property Gifts & Inheritance Prizes Money from Retirement Fund Royalties In-Kind & In-Cash Transfers 1099-INT; 1099-DIV Nothing Other 1099 Forms

Must File Schedule C to Figure Income Required to file if net income (profit) is over $400

Moving Expenses if Related to Your Present Job or Starting a New Job Retirement Account Investments Tuition and Fees Student Loan Interest Money Spent/Invested That Lowers a Tax Payers Total Income

Total Income – Income Adjustments

Who’s a Dependent? Someone Who Lives with You More Than ½ the Year & Under 19, or 24 if student & Did Not Provide Over Half his/her own Support & Is Not Filing a Joint Return unless only for a refund For Tax Purposes?

Tax Payer Dependent Over 65 Blind NOTE: Exemptions Lower AGI (Adjusted Gross Income) Exemptions Worth $3,950 for 2014 (this amount changes) For Each:

Standard Deduction (amounts change) $6,200 for Single $12,400 for Married Filing Jointly OR Itemized Deductions—Schedule A NOTE: Use whichever is Larger

Medical & Dental Expenses (Limited) Real Estate Taxes Paid Vehicle Taxes from Registration Donations of Money or Goods Safe Deposit Box Fees Union Dues Losses Due to Theft, Vandalism, Fire, Storm (Limited) Cost of Special Tools, Uniforms, or Protective Clothing (Limited) Business Use of Home (Home Office) (Limited)

Lower Tax Amount If Tax Amount is Zero, Can Give a Refund More Valuable Than Deductions You owe $1,003 in tax. You are eligible for either a $1,000 tax deduction or a $1,000 tax credit. Which would you choose? Tax Credit

Tax Credits are More Valuable Than Deductions- How? $1000 Deduction—If your Original Income was $9,480, your tax is $1,003 When you deduct the $1000, $9,480 - $1,000=$8,480 is your new income Your new tax is $853 so you saved $150 $1003-$853=$150

Tax Credits are More Valuable Than Deductions- How? $1,000 Credit—These are taken AFTER you calculate your tax Your tax on $9,480 is $1003 When you take a $1,000 credit Your new tax is $3 $1,003 - $1,000=$3 Which is a savings of $1,000

Child Care Expenses American Opportunity Credit for College Children Under 18 Who Live With You Home Energy Savings First-Time Homebuyer Lower Income Families

Filing Status-Married, Single, Etc. AND Taxable Income

Tax Bracket Single Married Filing Jointly Head of Household 10% Bracket $0 – $8,500$0 – $17,000$0 – $12,150 15% Bracket $8,500 – $34,500$17,000 – $69,000$12,150 – $46,250 25% Bracket $34,500 – $83,600 $69,000 – $139,350 $46,250 – $119,400 28% Bracket $83,600 – $174,400 $139,350 – $212,300 $119,400 – $193,350 33% Bracket $174,400 – $379,150 $212,300 – $379,150 $193,350 – $379,150 35% Bracket $379, Tax Brackets

Samantha’s 2011 taxable income is $40,000. This puts her in the 25% tax bracket. If that meant that all of her income was taxed at 25%, she would be paying $10,000 in income taxes (40,000 x 25%). Instead, she’ll be paying much less.

Samantha will actually end up paying $6, calculated as follows: 1) Her first $8,500 of taxable income is taxed at 10%. So $8,500 X 10% = $850 in tax 2) $34,500 - $8,500 = $26,000 is taxed at 15%. So $26,000 X 15% = $3,900 in tax 3) $40,000 - $34,500 = $5,500 is taxed at 25%. So $5,500 X 25% = $1,375 in tax 4) $850 + $3,900 + $1,375 = $6,125

Single 2011 Tax Bracket Taxable IncomeTax $0 – $8,50010% of taxable income $8,500 – $34,500$850 plus 15% of excess over $8,500 $34,500 – $83,600$4,750 plus 25% of excess over $34,500 $83,600 – $174,400$17,025 plus 28% of excess over $83,600 $174,400 – $379,150$42,449 plus 33% of excess over $174,400 $379,150+$110, plus 35% of excess over $379,150

National Defense (Wars) Social Security Medicare/Medicaid Interest on the National Debt President, Senators and House Representatives All White House Workers Agriculture Foreign Affairs Veteran Benefits Environmental and Natural Resources

Education Public Transportation Fire Fighters & Police Officers Road & Traffic Light Repair Capitol & Government Building Maintenance Congress, Governors, Mayors, State Representatives All Government Workers Garbage Collecting Healthy Drinking Water

How Tax Money is Used Vote

Created in th Amendment Gave Congress the Power to Tax

In 1916, Congress changed the text of the income tax law, removing the word "lawful" from "lawful business" Now ALL income, whether attained by legal means or not, was taxable. Because of this, many criminals who were guilty of other infractions were sent to prison for tax evasion.

Income Payroll Unemployment State & Federal ½ of Medicare & Social Security Sales Real Estate Personal Property

Certified Public Accountant (CPA) H & R Block IRS Tax Programs If you have a professional complete taxes, make sure they sign off on the return. If they make a mistake, the will at least cover your penalty and interest.

Social Security Administration keeps track of your earnings to determine benefits you will get when retire, become disabled, or die and survivors get. IRS uses it to identify you