All of the answers (except for D), involve investing the child's assets in tax-free or tax-deferred investments. Buying high yield bonds and dividend paying stocks in a brokerage account would create even more taxable income.
Medical expenses and charitable contributions are itemized deductions that are considered "below-the-line" deductions. Adjustments are "above-the-line" deductions taken from gross income to calculate AGI.
Tax credits are a dollar-for-dollar offset from the actual tax liability incurred, so they provide more reduced tax liability benefits than itemized deductions or adjustments to gross income.
For tax year 2013 and beyond, the total Social Security and Medicare tax for self-employed individuals is 15.3%.
A child can earn up to $950 and have no tax liability. The 25% tax rate for married filing jointly couples is taxable income of $72,501 to $146,400. All statements above are true.
Sally would qualify as Head of Household and be entitled to two personal exemptions at $3,900 each. Income phase outs could disqualify her of the child tax credit. Her standard deduction would be limited to $8,950.
TaxesThis strategy of moving your tax deductable payments and donations to the following year could mean hundreds more on your return.
TaxesNot taking the standard deduction this year could save you hundreds of dollars.
RetirementFiling your taxes during retirement can be just as time consuming as when you were employed. We have some tips to help you out.
TaxesIf you want to pay as little as possible in taxes, it's important to learn about all the different credits and deductions available. Here's a primer.
TaxesMost U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
TaxesFind out about these deductions and how you can use them to lower your tax bill.
TaxesThe amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction.
TaxesTaxable income is the net of gross income and allowable deductions.
TaxesTaxes are difficult to avoid, but there are many strategies you can find to help ward them off a bit. Here are a handful of ways to protect your income.
TaxesMany people pay more taxes than they have to simply because they don’t know better. Here are a few suggestions for getting the most out of your tax return.