Simply Junior

Retirement plans are an excellent way to plan for your future. It is a way to guarantee a stream of income when you retire or stop working due to any other reason. An Individual Retirement Account is commonly known as an IRA. It is a retirement plan that offers many tax advantages for retirement savings.

There are different types of retirement plans. IRAs can be obtained through work or provided by you, as a self-employed individual. Many different types of IRA plans exist in the USA, with the most common being the traditional IRA. Traditional IRAs are held at banks and brokerage firms, called a custodian. These institutions may place the contributions in certificates of deposit, mutual funds and stocks. Contributions to the IRA are tax deductible. This type of IRA takes into consideration some requirements such as income, filing status, and other accessible retirement plans, according to the guidelines of the Internal Revenue Service (IRS) of the United States.

Another type of IRA is the Roth IRA. These retirement plans invest in securities, common stocks, or mutual funds. Because the contributions are made from the individual’s income after it has been taxed, they are not tax deductible. Withdrawals from this type of IRA will be Federal Tax free for the total amount of contributions as well as the total amount of earnings. The drawback is that this IRA, as mentioned, is not tax deductible and a Traditional IRA is. As with the traditional IRA, there are penalties for early withdrawals of earnings that may not qualify under the plan’s withdrawal guidelines. Penalties take the form of Federal income tax and an additional 10% penalty of the amount for early withdrawal.

Simply put, a basic IRA retirement plan in the United States is provided by the employer. It comes in many forms and the most known is a 401k plan. There are also profit sharing plans and 403b plans. This is a simple plan in the sense that it reduces the cost of administration procedures.

Free Tax Software Online

I bet you never thought you would hear the words “free” and “income tax” in the same sentence!

Well, you’re right, there is nothing free about taxes, however there are some free tools on the Internet to help you at tax time.

In the past we waited for the tax kiosks to open and went down with our receipts and W2s wadded up in a box and waited in plastic chairs for our turn to hear “the bad news”. Now, thanks to technology, we can calculate, estimate and e file online in the privacy of our own home, and take our time too.

We can access free tax preparation software online anytime throughout the year to keep tabs on the our tax liability status. What are advantages of utilizing technology vs. a “real person?”

Well, you are still going to need to gather all of your information regardless, but with online income tax software, if you forget something you don’t have to go back home, you simply find the information and then continue. Online tax software is designed to prompt you through the process quickly and easily.

You can elect to e file your state and federal income tax at the same time. This will cost you a small fee starting at about $10. Inaccuracies are checked by the tax software and errors often prevented at the same time, while you are on line. Did you ever get a form back that you forgot to sign? See what I mean?

What if you have a lot of deductions, several sources of income, or allowable adjustments, can a tax software online program handle it?

Absolutely! You name it: capital gains, unemployment compensation, rental income or loss, IRAs, student loan interest, medical saving plans, alimony payments, medical and dental expenses, mortgage interest, charitable contributions, gambling losses, state and local income tax, foreign tax, all of that and more.

Tax software online programs can do everything your taxman used to do. In the convenience of your home, accurately, and with faster refund returns.

So, you’ve heard about (free tax filing) and you might have even heard it’s available at Turbo Tax. Well, you’re right, there is a program available at Turbo Tax which is called the Tax Freedom Edition free tax filing program. Because of an agreement with the (IRS), this free tax filing program is available to those taxpayers who have an adjusted gross income (AGI) of $28.000 or less.

Why is the Government and Turbo Tax doing this? Because, it helps them, and it helps you!

Since initially debuting in 2003, the IRS has received more than 15 million tax returns through the Free File program, representing a cost-savings to the government of more than $32 million in processing costs of an electronic return compared to that of paper. You the taxpayer, get to file your taxes in a more efficient and timely manner than ever before. By using online tax software for your tax filing you get a number of benefits not previously available. Mainly… Free Tax Filing!
The Freedom Edition Tax Software Program, through the Free Tax File Alliance, provides free tax preparation services to millions of Americans with low-to-medium incomes. A partnership between the Government and 19 private tax software companies has been reached which allows you to prepare and file your Federal income tax return for free. There are also 21 States which have a similar program.

If you think you might qualify for (free tax filing) then do yourself a favor and check it out and see. You might get to save yourself a buck in the process and also learn an easier way of doing taxes. One thing is for sure… Online tax filing is here to stay. This is your chance to get started for free.

Those who are regularly paying taxes know well how it is time-consuming and complicated to do taxes. But today, with the computer technology and internet, you can easily prepare taxes online and file tax return electronically from your home. Doing income tax online is much easier compared to the paper filing. When it comes to filing taxes, you need to get your taxes prepared either by a professional tax preparer or you can do your taxes on your own using online tax software programs. For the individual with less complicated tax situation, doing online income tax is easy and faster. You can search for the best tax preparation and e-filing services that can make your task simpler, easier, and faster.

You can do your taxes with Income Tax Online (which offers free federal income tax preparation and e-filing tax return services. Their tax preparation software program is such a user-friendly that you just need to follow its step-by-step procedure and your taxes are ready. Their easy-to-use interface provide you simple tax forms that you can fill up easily supplying necessary tax related information asked by the program. Moreover, you can also choose tax credits and deductions appropriately keeping in mind your tax situation. Once you’ve completed your return, you can preview it and make corrections if required prior to submitting it. You can do your taxes from anywhere in the world and at anytime you wish if you have access to the internet.

Once you’ve finished your taxes online free, then you can submit it to the IRS. It is good to file your taxes electronically before the deadline. You should e-file your tax return online so that you can get confirmation from the IRS whether your return is accepted to rejected for certain reasons. If you send your tax return electronically, then the IRS team or the service center do not have to re-type your documents. So, it saves a time and increases the chances of your return being processed soon.

While submitting your return, make sure that you are using direct deposit option to get your refund. This will help you get fast tax refund directly deposited into your bank account. If you wish to learn more about how to benefit from free income tax preparation services, you can visit the IRS website and get to know about the latest tax related news and information.

This article will guide you through the small business tax maze and describe in details the various tax types your small business may be expose to. Use the article to learn which federal and state taxes you, as the owner of a sole proprietorship, general member in an LLC or officer of an S. Corporation is responsible for.

Federal Income Tax

The Internal Revenue Code (the IRC) is the source for imposing income tax on small businesses. The tax code treats each entity type a little different but in the end the income tax on the business taxable profits is payable by the small business owner. Sole Proprietor has to file schedule C to report business income and expenses and then report the taxable income on form 1040 where he discloses all of his income sources. Member of a partnership or an LLC reports his/her share from the business taxable income on form 1040 and Owner of an S. Corporation does the same. The rates of the federal income tax that a small business owner will pay depend on his/her filing status and residency status. For current tax rates please refer to IRS Publication 17 To register with the IRS you must fill out IRS form SS4 to obtain Employer ID Number (EIN).

State Income Tax

If your business is operating in a state that imposes income tax on business income, you will be liable for that tax in addition and regardless of the federal tax due on the same income. Very few States (Seven to be exact) do not impose income tax and among them are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income. In general state income tax rates range from the lowest rate of 3% in Illinois to the highest rate of 11% in Hawaii. To register with each State’s Department of Revenue, you must complete the applicable registration forms to obtain State Tax ID Number.

Payroll taxAs soon as your business start hiring part or full time employees, it will be subject to Federal & State tax withholding from the employees’ gross wages (For current Federal Withholding rates please refer to IRS Publication 17 and for the Stare withholding rate, please refer to the State’s Revenue or Finance department), Social Security, also known as FICA (currently at 6.2% of gross wages is the employer’s responsibility and the same amount is the employee’s contributions with cap of $106,800 on gross wages) and Medicare (currently at 1.45% of gross wages is the employer’s part and the same amount is the employee’s contributions), Federal & State income tax withholding (at the rates publishes by the IRS and each State’s department of Revenue), Federal Unemployment, also known as FUTA (currently at a rate of 0.008 of gross wages up to $7,000 per year) and State Unemployment, also known as SUTA, at rates assessed by each State Unemployment Insurance Department. To register with each State, you should complete an employer application with the Department of Revenue and open an account with the State’s Unemployment Insurance Department.

Sales Tax

Sales tax is tax imposed on gross sales made to end users (as appose to resellers who purchase the product for inventory) and has many names: transaction privilege tax, gross receipts tax, general excise tax and more. The tax is imposed by each State, and in many cases includes Base Rates for all States residents and then additional rates that vary by county and city. Rates of sales tax vary by States with few States that impose zero percent tax (such as Delaware, Montana & Oregon) and others that impose rates in excess of 10% (such as Chicago Illinois)

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