Arizona has done it again. Currently, anyone who is being paid in Arizona must select from several percentages on the A-4. Arizona withholding is based on a percentage of federal withholding. The percentage you pick will be multiplied times the federal withholding number on your paycheck to arrive at Arizona withholding. If you selected 24.5%, [...]
Q. I am having a difficult time trying to figure how much I owe in state tax. I lived and worked in California from 1/1/2009 through 8/7/2009. I began living in Colorado on 8/8/2009 through the end of the year and worked from home for the same company I worked for back in California. State [...]
Q. How do I know which 1040 I’m allowed to use? Does it really make a difference? A. Yes! Each form has specific requirements that a taxpayer must meet in order to use it. IRS Tax Tip 2010-05 contains instructions on which form you should select. Your options are: 1040EZ Requirements Your taxable income must [...]
We’ve all heard quotes from famous people about the U.S. tax system. Here are a few more that may serve to lighten the mood on this Monday morning. “No one understands the Income Tax Law except persons who have not sufficient intelligence to understand the questions that arise under it.” New York State Senator Elihu [...]
Pardon the baseball analogy. The season is almost over and I just couldn’t help myself. There is statistical evidence that taxpayers in high tax states are leaving those states and setting up residence elsewhere at the rate of 1100 per day. By increasing taxes to cover shortfall, states and the federal government to an extent [...]
Q. How do I know what tax bracket I’m in? Where does that number come from? A. This question probably ranks right up at the top of the list of most frequent questions. First of all, you probably meant to ask what is your marginal tax rate. Let me explain. Federal income tax is calculated [...]
Q. I followed your advice and had my payroll department withhold based on W4 stuff instead of a flat percent. How do I know if I’m on track? A. That’s a rather amusing question actually. Publication 15 and the W-4 both require that you use only marital status and number of allowances on the form. [...]
Q. I recently got married in April. My wife is starting her job next week. In the past I have claimed 4 witholdings and usually get around $1,500 -$2,000 back each year. Need some help in determining if I need to adjust my withholdings… if so … how much. Also… how many withholding should my [...]
The IRS just released it’s taxpayer statistics for the 2006 tax year. With all the press dedicated to analyzing the new administration’s tax proposals, I thought it would be good to look at just who is paying taxes these days. First, the average tax rate paid on all returns was 13.8%, which is slightly higher [...]
Q. How can I determine whether or not I am eligible/qualify for the child or dependent care expenses deduction? I have a child that I claim –18 yrs old live at home— I receive support from his mother – we are divorced. A. The IRS has very specific requirements regarding to gets to claim the [...]
