Planning Your Tax Strategy Tax Strategy

Only two things in life are certain: Death and Taxes Benjamin Franklin

Develop an awareness of how your tax status is a critical part of managing your financial future ‒ Discover the four main categories of taxes and identify the specific taxes in each category ‒ Distinguish between tax deductions and tax credits ‒ Ascertain why some people may pay more or less taxes than others ‒ Select appropriate tax strategies for different financial and personal situations ‒ Discern how tax revenues benefit you and where tax revenues go ‒ Explain common taxes assessed as payroll deductions ‒ Prepare individual income tax forms

Your Subtopics Go Here 1.Taxes on Earnings Income Taxes ‒ Federal Income Taxes ‒ State Income Taxes ‒ Local Income Taxes  Live or work within the city Social Security and Medicare #Social_Security_and_Medicare_taxeshttp://en.wikipedia.org/wiki/Payroll_tax #Social_Security_and_Medicare_taxes 2.Taxes on Purchases Sales Tax ‒ Excise Tax ‒ Levied on specific goods and services ‒ Gasoline, Cigarettes, Alcohol, Airline tickets

Your Subtopics Go Here 3.Taxes on Property Real Estate Taxes ‒ Taxes on Wealth Estate Taxes ‒ Unified Gift and Estate Tax system in the United States  library/unified-gift-and-estate-tax- system.html library/unified-gift-and-estate-tax- system.html

Tax Credit ‒ An amount that directly reduces tax owed  Entered on your personal income tax form after amount of tax due is determined Tax Deduction ‒ Reduces your taxable income --the amount of income you earned minus the deduction  Moves you into a lower tax bracket which means the amount of tax you will owe is lower

Tax Deductions 1.Medical and Dental Expenses 2.Taxes You Paid 3.Mortgage Interest You Paid 4.Gifts to Charity 5.Casualty and Theft Losses 6.Job Expenses and Most Other Misc. Deductions

Tax Credits –Refundable or Nonrefundable Refundable- can get paid even if you do not owe income taxes! Must file to collect!  Federal Earned Income Tax Credit (EITC) For tax year 2012, a worker with no children who made less than $13,980 can receive up to $475. Single parents with three or more children who made less than $45,060 are eligible for $5,891. Married couples must file taxes jointly. Couples earning less than $19,190 qualify for a credit of $475. Those with three or more children qualify for $5,891 if they made less than $50,270.  The IRS estimates that more than 26 million citizens received over $60 billion in federal, refundable credits in 2011.

Hope Scholarship Credit Lifetime Learning Credit Earned Income Credit Child Tax Credit Child and Dependent Care Credit Adoption Credit Mortgage Interest Credit Retirement Savings Contribution Credit Elderly or Disabled Tax Credit Energy-Savings Tax Credit

Tax Evasion—Not Legal ‒ Not paying taxes that you owe or by not filing a tax return to report what you owe Tax Avoidance ‒ By legally reducing your taxable income or by avoiding paying undue taxes can result in significant amounts of money that can be put to work to enhance your financial plan  Tax deductions, Tax Credits

W-4, W-2, W-WHO Withholding-Calculator 1040, 1040EZ, & Tax Schedules IRS will process electronically filed returns in as little as 10 days but paper refunds will take 4-6 weeks.

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_individual/individual/2012/PIT_IT1040EZ.pdf Ohio Tax Forms—1040EZ Federal Tax Forms—1040EZ City of Canton Electronic Income Tax Filing filing /