Taxes are the one thing we cannot escape without the help of some inside knowledge of the system. This is why tax attorneys make large salaries and firms like Deloitte Touche and Accenture make fabulous fees from those who wish to avoid paying the taxes that the government thinks is its due.
So, how can you a normal person get some tax relief and perhaps get a bit more back on your refund check without shelling out big bucks to one of these “Loophole Gurus” that help the rich avoid paying taxes and keeps their wealth intact?
You can educate yourself on the tax codes yourself and learn the tax tables, income tax brackets, and not only the 2014 tax table but the 2015 tax tables as well. Armed with the information you can make sure you only pay Uncle Sam the exact amount you owe and you may even find that you have overpaid and can use that information to receive a bigger refund when the refund checks are mailed out.
That is what we are going to highlight for your today, in this article. You will learn where to go to find information on US tax brackets for yourself. Then you will be able to make the tax system work for you instead of against you.
Federal Tax brackets
The IRS Tax brackets are the standards for the entire tax structure of the United States. Without them, the entire country would grind to a halt and no amount of government printing will keep things running without your tax dollars. Social services would stop and civilization as you know it would collapse in weeks or even days without a constant flow of tax revenue into the government coffers.
As of 2015, things have changed yet again and you need to keep up to date on what’s what with the IRS Tax Brackets 2015 of which the following information is provided for you. http://www.bankrate.com/finance/taxes/tax-brackets.aspx
For those of you in the lower Range of 9,226 - 37,450, it is now 15%, which is some good news as if you are in the next range that goes to 90K you pay 25%. The next three ranges increase the tax by 33%, 35%, and 39.6%, which make things, seem rosy until you discover that people like Bill Gates, Warren Buffet are not paying anywhere the 39.6% percent of their incomes. If you look at the 2014 table, you see the IRS has shifted the ranges and you might find yourself in a new tax bracket if you are not paying attention. http://www.forbes.com/sites/kellyphillipserb/2013/10/31/irs-announces-2014-tax-brackets-standard-deduction-amounts-and-more/
Use the tax tables to your benefit.
Calculators can help you figure where you are tax-wise
The tables themselves are complicated, but it can be made simpler if you use one of the many online tax calculators available on the web. These calculators help by figuring you tax liability using the tax table values automatically.
Let’s look at what is available:
Self-Employment Tax Calculator
Here you are a calculator that uses the 2014 tables that are in use for figuring the April 2015 numbers. http://www.bankrate.com/calculators/tax-planning/self-employed-business-tax-calculator.aspx
You will find a plethora of other information that helps you figure other tax and credits you have as well when doing your tax forms. This is important, as you don’t have an employer automatically deducting the correct amount for your wages.
This is one of the traps of being self-employed and is a key factor that the IRS uses during an audit. Because they know, most people don’t hold back the required amount of tax and often spend money that should be used to pay the tax debt owed. The IRS makes their money not so much on the taxes themselves, but by the fines levied against those who didn’t hold back enough to pay for tax purposes.
The self-employed need to be aware of these facts about tax withholding/audit rules and by knowing them keeps them out of hot water with the federal tax collectors and save time and effort going through a tax audit.
So, do you need a 1040EZ calculator?
Most people use the 1040EX but often agonize over every line of this form. Now with a calculator like this one is like having you own tax consultant. http://www.bankrate.com/calculators/tax-planning/1040-form-tax-calculator.aspx
In this way, you have the exact information needed to put on each line of the form. This, of course, saves you the cost of going to a tax preparer who doesn’t/can’t give you the individualized attention you require to find the amount of tax you really need to pay. This is why you need to look at the tables yourself and see what applies to you.
Where do I find the Tax tables and code?
Go directly to the source for your information and don’t rely on others that offer to interpret it for you. https://www.irs.gov/uac/Tax-Withholding-Tables
Then you can use reputable sites like the Motley Fool to see what is there in plain English. http://www.fool.com/investing/general/2014/03/24/2014-tax-brackets-and-tax-tables.aspx
You’ll also find the latest information about the IRS’s plan to retrieve hidden monies. So this is of vital interest for many who what to keep their money intact. For example look at. https://www.irs.gov/uac/Newsroom/Offshore-Compliance-Programs-Generate-$8-Billion;-IRS-Urges-People-to-Take-Advantage-of-Voluntary-Disclosure-Programs. In this, you see exactly what the IRS is looking for and you can either comply or change how you are allocating you money.
How to learn, how the tax system works?
Here again, the IRS is the Source you should start with first. On their website, they have various classes and seminars that help you understand what they are looking for. For the new changes, you only have to click to see what can be of benefit or a pitfall to avoid. https://www.irs.gov/uac/Newsroom/Online-Seminars-from-the-2015-IRS-Nationwide-Tax-Forums-are-Now-Available
The IRS also has general, nice to know, information or answers to questions you might have on other areas of the tax code. https://www.irs.gov/uac/Facts-&-Figures
You should also have a copy of the US Code and the Tax code of the United States. It is slow learning at first. But, using document search you can extract valuable information that can help you pay less or find information about you particular situation.
So, you see by doing a little homework and using some online tools you can pay your fair share of federal taxes and avoid overpaying the government their due. You now have the tools and where to find the information you need to make sure you pay, just what you owe and not a penny more.