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Tax Guide

Federal Tax Brackets 2012

Tax rates, in other words the percentage of income you pay in taxes, vary depending on the sources of your income and the total amount of income you earn. The system was originally designed to be regressive, ensuring that the very rich would pay a higher percentage of their income in taxes than the very poor. The second reason was to encourage certain types of economic activity such as investment and home ownership.

Key concepts underlying federal tax brackets 2012 are “taxable income” and “tax bracket”.

Taxable Income

Your taxable income is based on your net income, that is your gross income minus deductions and exemptions. Gross income includes your salary, tips, gambling profits, … Read more →

Tax Free Income?

You work hard for your money. Whether it’s running your own business or working for someone else, you know that you’ve come by every penny honestly. And while you’re more than willing to pay your fair share in taxes, you don’t want to pay more than what’s absolutely necessary.

Fortunately, there are a number of ways to create tax free income. Even if you don’t itemize deductions, you can still see significant tax savings in certain areas.

Here are some tax free income possibilities you might consider, especially if you’re right on the cusp of a higher tax bracket:

Obtain a cash rewards credit card. When you get cash back from a credit card, you might say… Read more →
Standard Mileage Rate or Actual Expenses?

Standard Mileage Rate Question:

“I am doing a long term contract out of state 6 month. Car rental was to much, so I purchased a vehicle. Can I use the section 179 deduction how much of the vehicle purchase price can I deduct, and how much of my millage can I write off and are they different things. I pretty much drive the car to and from my apartment and work, to go eat or to the movies, or anything I would use my car at home for.”

Answer:

Certified Tax Coach, Eric Levenhagen, CPA CTC

Deducting the cost of your car and deducting mileage are two different options you have when taking vehicle … Read more →

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