Читать книгу Family Financial Freedom - Floyd Saunders - Страница 18

Fortunately determining your tax liability is not that difficult for most of us. A simple formula would be to answer the question, “How much did you make? Fine sent it in.” But seriously, a 100% tax rate would never work. So you have to determine not only how much did you earn, but what can lawfully be taken as a deduction from income before you figure out how much you will pay in taxes.

Here is a simple formula:

1 Gross Taxable Income, minus

2 Adjustments to Your gross, equals

3 Adjusted Gross Income, minus

4 Itemized Deductions (or standard deduction) and minus

5 Exemptions, equals

6 Taxable Income, minus any

7 Tax credits, minus

8 Taxes paid, equals

9 Taxes due (or refund owed).

Now the devil is in the details.

Gross Taxable Income - This includes all taxable income: salary, wages, tips, dividends, taxable pensions, farm income, interest income, partnership income, taxable social security and all other taxable income.

Adjustments - Subtract adjustments from your gross income to arrive at Adjusted Gross Income or AGI. Adjustable items can change from time to time, based on what Congress wants to allow you to include. They include things like: IRA contributions (with limits), Keogh contributions, self-employed medical insurance premiums and alimony paid.

Itemized Deductions - Special rules govern these deductions and sometimes you may only qualify for the standard deduction. Currently itemized deductions include: medical expenses, taxes paid (State & Local), mortgage interest, charitable contributions, casualty loses, employee business expense and moving expenses. Some of these deductions are subject to income limits, so you might need to study these carefully to see what you can take as deductions and which ones don’t work in your situation.

If you do not itemize, use the standard deductions. A higher standard deduction is allowed for those over 65 and the blind.

Exemptions and Credits - In order to arrive at your actual taxable income, you also get the personal exemptions as a deduction, before you determine taxable income. Now most of might think we are finished, just calculate the taxes owed on your taxable income, but Uncle Sam and Congress likes provide a number of different tax credits which work just like tax payments. It would be best to review all of the current tax credits available and subtract any credits from the taxes due. Credits are attractive because they reduce your tax liability dollar for dollar.

Additional taxes - Whew it would be nice if we were done, but there might be one more tax that can increase you taxes owed, the Alternative Minimum Tax. The AMT came into being with the Tax Reform Act of 1969. Its purpose was to target a small number of high-income taxpayers who could claim so many deductions they owed little or no income tax. A growing number of middle-income taxpayers are discovering they are subject to the AMT. Fortunately the IRS has provided on its web site the AMT Assistant, an easy-to-use worksheet to see if you need to pay the additional tax. Generally this only applies if you have taken a number of the credits available, have a higher income or have used special deductions to reduce your tax liability. After all we all should be paying some taxes.