INCOME

Mar 21 2020

#After #tax #net #income-After tax net income



After tax net income

Federal Income Tax Calculator

Overview of Federal Taxes

Income in America is taxed by the federal government, most state governments and many local governments. The federal income tax system is progressive, so the rate of taxation increases as income increases. Marginal tax rates range from 10% to 37%.

Your Income Taxes Breakdown

Tax Type Marginal
Tax Rate
Effective
Tax Rate
2019
Taxes*
Federal
FICA
State
Local
Total Income Taxes
Income After Taxes
Retirement Contributions
Take-Home Pay

* These are the taxes owed for the 20192020 filing season.

Your 2019 Federal Income Tax Comparison

Total Estimated 2019 Tax Burden

Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 20192020 filing season based on the Trump Tax Plan.

How Income Taxes Are Calculated

When Do We Update? – We regularly check for any updates to the latest tax rates and regulations.

Customer Service – If you would like to leave any feedback, feel free to email info@smartasset.com.

Jennifer Mansfield, CPA Tax

Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

Taxes can really put a dent in your paycheck. But with a Savings or CD account, you can let your money work for you. Check out these deals below:

Please enter your email if you’d like to be contacted to help.

The Federal Income Tax

The federal personal income tax that is administered by the Internal Revenue Service (IRS) is the largest source of revenue for the U.S. federal government. Nearly all working Americans are required to file a tax return with the IRS each year. In addition to this, most people pay taxes throughout the year in the form of payroll taxes that are withheld from their paychecks.

Income taxes in the U.S. are calculated based on tax rates that range from 10% to 37%. Taxpayers can lower their tax burden and the amount of taxes they owe by claiming deductions and credits.

A financial advisor can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.

Calculating Income Tax Rate

The United States has a progressive income tax. This means there are higher tax rates for higher income levels. These are called “marginal tax rates,” meaning they do not apply to total income, but only to the income within a specific range.

These ranges are called brackets. Income falling within a specific bracket is taxed at the rate for that bracket. The table below shows the tax brackets for the federal income tax. It also reflects the rates for the 2019 tax year, which are the taxes you pay in early 2020.

2019 – 2020 Income Tax Brackets

Submit No Thanks
Single Filers
Taxable Income Rate
$0 – $9,700 10%
$9,700 – $39,475 12%
$39,475 – $84,200 22%
$84,200 – $160,725 24%
$160,725 – $204,100 32%
$204,100 – $510,300 35%
$510,300+ 37%
Married, Filing Jointly
Taxable Income Rate
$0 – $19,400 10%
$19,400 – $78,950 12%
$78,950 – $168,400 22%
$168,400 – $321,450 24%
$321,450 – $408,200 32%
$408,200 – $612,350 35%
$612,350+ 37%
Married, Filing Separately
Taxable Income Rate
$0 – $9,700 10%
$9,700 – $39,475 12%
$39,475 – $84,200 22%
$84,200 – $160,725 24%
$160,725 – $204,100 32%
$204,100 – $306,175 35%
$306,175+ 37%
Head of Household
Taxable Income Rate
$0 – $13,850 10%
$13,850 – $52,850 12%
$52,850 – $84,200 22%
$84,200 – $160,700 24%
$160,700 – $204,100 32%
$204,100 – $510,300 35%
$510,300+ 37%

You’ll note that the brackets vary depending on whether you are single, married or the head of a household. These different categories are called filing statuses. Married persons can choose to file separately or jointly. While it often makes sense to file jointly, filing separately may be the better choice in certain situations.

Based on the rates in the table above, a single filer with an income of $50,000 would have a top marginal tax rate of 22%. However, that taxpayer would not pay that rate on all $50,000. The rate on the first $9,700 of taxable income would be 10%, then 12% on the next $29,775, then 22% on the final $10,525 falling in the third tax bracket. This is because marginal tax rates only apply to income that falls within that specific bracket. Based on these rates, this hypothetical $50,000 earner owes $6,858.50, an effective tax rate of 13.7%.

Calculating Taxable Income Using Exemptions and Deductions

Of course, calculating how much you owe in taxes is not quite that simple. For starters, federal tax rates apply only to taxable income. This is different than your total income (also called gross income). Taxable income is always lower than gross income since the U.S. allows taxpayers to deduct certain income from their gross income to determine taxable income.

To calculate taxable income, you begin by making certain adjustments from gross income to arrive at adjusted gross income (AGI). Once you have calculated adjusted gross income, you can subtract any deductions for which you qualify (either itemized or standard) to arrive at taxable income.

Note that for the 2019 tax year, there are no longer personal exemptions. Prior to 2018, taxpayers could claim a personal exemption ($4,050 in 2017), which lowered taxable income. The new tax plan signed by President Trump in late 2017 eliminated the personal exemption.

Deductions are somewhat more complicated. Many taxpayers claim the standard deduction, which varies depending on filing status, as shown in the table below.

Standard Deductions (Updated December 2019)

All Filers
Filing Status Standard Deduction Amount
Single Filers $12,200
Married, Filing Jointly $24,400
Married, Filing Separately $12,200
Head of Household $18,350

Some taxpayers, however, may choose to itemize their deductions. This means subtracting certain eligible expenses and expenditures. Possible deductions include those for student loan interest payments, contributions to an IRA, moving expenses and health-insurance contributions for self-employed persons. The most common itemized deductions also include:

Keep in mind that most taxpayers don’t itemize their deductions. If the standard deduction is larger than the sum of your itemized deductions (as it is for many taxpayers), you receive the standard deduction.

Once you have subtracted deductions from your adjusted gross income, you have your taxable income. If your taxable income is zero, that means you do not owe any income tax.

How to Calculate Federal Tax Credits

Unlike adjustments and deductions, which apply to your income, tax credits apply to your tax liability (which means the amount of tax that you owe).

For example, if you calculate that you have tax liability of $1,000 based on your taxable income and your tax bracket, and you are eligible for a tax credit of $200, that would reduce your liability to $800. In other words, you would only owe $800.

Tax credits are only awarded in certain circumstances, however. Some credits are refundable, which means you can receive payment for them even if you don’t owe any income tax. (By contrast, nonrefundable tax credits can reduce your liability no lower than zero.) The list below describes the most common federal income tax credits.

  • The Earned Income Tax Credit is a refundable credit for taxpayers with income below a certain level. The credit can be up to $6,557 per year for taxpayers with three or more children, or lower amounts for taxpayers with two, one or no children.
  • The Child and Dependent Care Credit is a nonrefundable credit of up to $3,000 (for one child) or $6,000 (for two or more children) related to childcare expenses incurred while working or looking for work.
  • The Adoption Credit is a nonrefundable credit equal to certain expenses related to the adoption of a child.
  • The American Opportunity Credit is a partially refundable credit of up to $2,500 per year for enrollment fees, tuition and course materials for the first four years of post-secondary education.

There are numerous other credits, including credits for the installation of energy-efficient equipment, a credit for foreign taxes paid and a credit for health insurance payments in some situations.

Calculating Your Tax Refund

Whether or not you get a tax refund depends on the amount of taxes you paid during the year (because they were withheld from your paycheck), your tax liability and whether or not you received any refundable tax credits.

When you file your tax return, if the amount of taxes you owe (your tax liability) is less than the amount that was withheld from your paycheck during the course of the year, you will receive a refund for the difference. This is the most common reason people receive a tax refund.

If you paid no taxes during the year and owe no taxes, but are eligible for one or more refundable tax credits, you will also receive a refund equal to the refundable amount of the credits.

Paying Your Taxes

If you aren’t getting a tax refund and instead owe money come tax day, there may be a way to lessen the sting. For starters, you should still file your taxes on time. Otherwise, you will also have to pay a fee for filing late.

If you don’t think you can afford your full tax bill, then you should pay as much as you can and contact the IRS at 1-800-829-1040. The agency may be able to offer you a few payment options to help you pay off your bill. For example, the IRS may offer a short-term extension or temporarily delay collection. You may also have the option to pay your remaining bill over multiple installments. You will likely still pay any interest charges on overdue balances, but in some cases, the IRS may even waive penalties or fees. Again, you should call the agency at the number above to discuss your options.

As you pay your tax bill, another thing to consider is using a tax-filing service that lets you pay your taxes by credit card. That way you can at least get valuable credit card rewards and points when you pay your bill. The IRS has authorized three payment processors to collect tax payments by credit card: PayUSAtax, Pay1040 and Official Payments. However, it’s important to keep in mind that all three processors charge fees of about 2% of your payment for credit card payments. If you had a bill of $100, a 2% fee would mean you pay an extra $2. Double check that any rewards you will earn are worth that extra cost.

The cheapest way to pay a tax bill is still via a check or via IRS Direct Pay, which allows you to pay your bill directly from a savings or checking account. All major tax filing services will provide you with instructions for both of these payment options.

State and Local Income Taxes

Many states, as well as some cities and counties, have their own income tax, which is collected in addition to the federal income tax. States that do have a state income tax require that you file a separate state tax return, as they have their own rules. If you are curious about a particular state’s tax system and rules, visit one of our state tax pages.

After tax net income



After tax net income

After tax net income

Calculate your federal, state and local taxes for the 2019-2020 filing year with our free income tax calculator. Enter your income and location to estimate your tax burden.
SOURCE: http://smartasset.com/taxes/income-taxes After tax net income

USA News. American News.

News latest news news today news headlines breaking news new current news world news top news latest news today,

headline news online news today's news headlines daily news local news breaking news today new news to day news recent news latest news headlines top news today top news stories news stories national news international.

News news update current news today today's national news news updates headlines news update today latest breaking news breaking news headlines latestnews latest national news english news latest world news latest,

news update latest news headlines for today hot news today headlines today news websites current news events the news today's news headlines in english current news headlines top news headlines national news headlines top.
Headlines latest headlines newspaper headlines today latest it news top stories current news stories news sites.

Written by admin


%d bloggers like this: