Get out your pencils and calculators: The IRS has released a breakdown of what's ahead for the 2020 tax year.
Taxpayers who've been paying close attention will notice that the Tax Cuts and Jobs Act overhauled the tax code.
Those sweeping changes include a higher standard deduction — it's now $12,400 for singles and $24,800 for married joint filers in 2020. Following the overhaul, individual income tax rates also went down, and personal exemptions were eliminated.
For the 2020 tax year, the IRS tweaked the individual income tax brackets, adjusting them for inflation.
See below for your new bracket.
Your retirement savings
The taxman is also allowing you to save a few more dollars in 2020.
The IRS has raised the employee contribution limit for 401(k), 403(b) and most 457 plans to $19,500, up from $19,000 in 2019.
If you're 50 or older, you can sock away another $6,500 in that workplace retirement plan. That's up from $6,000 in 2019.
The contribution limit for individual...
Tax refunds are lower this year. Here's what to do.
There’s some good news for anyone worried about owing Uncle Sam this year: You still have time to lower your 2018 taxable income before the April 15 filing deadline. Certain tax deductions are retroactive and there are a few tricks that can maximize your refund.
Here are five ways to lower your 2018 taxable income (or reduce what you owe) before you file your tax returns this year.
1. Make an IRA contribution
Your ability to make tax-deductible contributions to individual retirement accounts for tax year 2018 didn’t expire on Dec. 31. Instead, you can make retroactive contributions to a traditional IRA up until April 15, 2019.
You can make deductible prior-year contributions up until the tax filing deadline, as long as your total contributions aren’t over $5,500. The catch-up contribution limit for taxpayers over 50 is $6,500. If you have a SEP IRA, your contributions can’t exceed $55,000 or 25% of...
You don't have to own a small island or a luxury jet to take a (legal) hint from how millionaires and billionaires protect their money from taxes. Here are three ways you can navigate your own taxes like the wealthy do:
Assess your taxable income
Your first step is to know how you are being taxed, especially because the new tax laws are in effect for 2018. Taxable income is whatever money you made during the year, minus deductions or exemptions. It includes your salary, wages, bonuses, tips, and investment and unearned income.
Close to dropping a bracket? The big breaks in the new tax bill for married taxpayers filing jointly is below $77,400 (12% vs. 22%) and below $315,000 (24% vs. 32%).
If you do find yourself on the edge of a bracket (or not), look for opportunities to reduce your taxable income this year. Here are some ways to leverage different accounts you may have available to you.
Now that the standard deduction has increased from $12,700 for people...
Millions of Americans are benefiting from lower federal income tax rates, yet an unusual number of them may be surprised to find they owe taxes when they file their 2018 returns.
To prevent this from causing you too much financial distress, it helps to know what's coming and how to prepare for it. (See TAX-R-US 2018 Tax Reform Review).
Why you might owe money - despite lower taxes
When federal income tax rates were lowered for this year, millions of workers started seeing more money in their weekly paychecks. They may also associate a tax cut with the probability of getting a tax refund next year. Instead though, changes in how paycheck withholding is being handled may result in more Americans owing money next tax season than in past years.
The sources of the problem include both how withholding instructions are given and the new tax laws themselves. Responsibility for providing withholding tables to employers was transferred from the Internal Revenue Service to the Treasury...
How to manage your career and investments so you will never have to work again.
Implementing these Basic Seven (7) Habits will insure You Reach Financial Independence.
When your assets generate enough income to cover your expenses you have achieved financial independence.
Financial independence typically means having enough income to pay your living expenses for the rest of your life without having to work full time. Some people achieve this through saving and investing over many years, while others build successful businesses that can generate income without daily supervision. There are many ways to reach financial independence, and it’s not just for the wealthy, it’s for you. Here are some wealth generating habits that can make financial independence a part of your future: