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☆ The 10 U.S. states where people earning $75,000 owe the most in taxes—none are New York or California
▼ + stars: | 2023-02-27 | by ( Mike Winters | ) www.cnbc.com time to read: +3 min

Like most states, Oregon uses a progressive or marginal income tax, which collects at an increasing rate the more income you earn. Additionally, every dollar is taxed, unlike some marginal tax states where low earners are exempt from paying taxes. Here's a look at the 10 states where people earning $75,000 owe the most in state income taxes, based on Tax Foundation calculations. That's why effective tax rates are a better measure of a taxpayer's overall bill, according to the Tax Foundation. Every dollar above $10,200 is taxed 8.75% in Oregon, while many other states tax income under $75,000 around 5%.

☆ Do you owe federal taxes on relief checks? Not if you live in these 16 states
▼ + stars: | 2023-02-13 | by ( Mike Winters | ) www.cnbc.com time to read: +3 min

You probably don't need to pay federal taxes if you received state-issued inflation or tax surplus rebates this year, the Internal Revenue Service has concluded. On Friday, the IRS provided guidance that confirms most filers won't have to pay federal taxes, although there are some exceptions. For five other states it's a bit more nuanced — but again, the majority of filers in these states likely won't need to pay federal taxes on their rebates. In Alaska, tax filers won't pay federal taxes on 2022's extra energy-relief payment. If a filer's SALT deduction is larger than it would normally be because of a state's rebate, federal taxes would have to be paid on the difference created by the state's rebate.

☆ IRS says many 2022 special state payments are not subject to federal tax
▼ + stars: | 2023-02-13 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +3 min

New York CNN —The Internal Revenue Service has good news for millions of taxpayers in 17 states who received a one-time special state payment last year to offset inflation and other negative economic impacts: Those payments won’t be subject to federal income tax. Prior to the conclusion of its review of state special payments, the agency had suggested recipients hold off on filing their 2022 returns until it made its determination. The IRS decision regarding the federal taxability of special state payments for residents of other states is a little more nuanced. On your 2021 federal tax return, you either claimed the standard deduction, or you itemized. So the amounts that potentially are subject to federal income tax may not be large.

☆ IRS suggests waiting to file your taxes if you got a special payment from your state in 2022
▼ + stars: | 2023-02-07 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +2 min

Millions of taxpayers in other states got different types of special payments from their state governments as well — such as income or property tax rebates. In the meantime, the agency advises filers who received special state payments to hold off on filing their returns until guidance is issued. “The best course of action is to wait for additional clarification on state payments rather than calling the IRS,” the agency said. Keep in mind, each state issued special payments for different reasons (e.g., inflation relief, surplus revenue rebates, disaster relief, etc.). So the amounts that potentially are subject to federal income tax may not be large,

☆ Roth IRA 'five-year rule' can trigger an unexpected tax bill: Here's what you need to know
▼ + stars: | 2023-02-06 | by ( Greg Iacurci | ) www.cnbc.com time to read: +4 min

Taxes on investment earnings are at "ordinary income" tax rates, not the preferential tax rates for capital gains. Roth IRA owners must have their account for at least five years to avoid paying income tax on any withdrawn investment earnings. Here's a simple example: Let's say a 60-year-old contributed $6,000 to a Roth IRA in January 2020. It's the saver's only Roth IRA and the first time they've contributed money to such an account. Who will 'never need to know the 5-year rule'Of course, not everyone is eligible to contribute to a Roth IRA.

☆ Tax credits vs. tax deductions: How they differ, and what to know before you file
▼ + stars: | 2023-01-31 | by ( Greg Iacurci | ) www.cnbc.com time to read: +5 min

Tax credits offer a dollar-for-dollar reduction in liabilityA tax credit offers a dollar-for-dollar reduction of your taxes. For example, let's say you get a $1,000 tax credit and have a $5,000 tax liability. It's therefore a more indirect way of cutting your taxes relative to tax credits, which directly lower your actual tax liability. On the other hand, a $1,000 tax credit would shave $1,000 off their actual tax bill total. Tax deductions are a lot more valuable [for people] in the 37% tax bracket than someone in the 10% tax bracket.

☆ Filing your 2022 taxes: Why your refund may be smaller
▼ + stars: | 2023-01-22 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +8 min

Child tax credit: For tax year 2022, parents may claim a maximum child tax credit of $2,000 for each child through age 16 if your modified adjusted gross income is below $200,000 ($400,000 if filing jointly). This year, if you have one child or dependent, you can only get a maximum credit of $1,050 ($2,100 for two or more). So if it happened late in the year, that may bump your 2022 income into a higher bracket, much the way a big one-time bonus might. Ways to potentially increase your refund or reduce your 2022 tax billTax year 2022 is over, but there still may be a few things you can do now to increase the money the IRS sends you or reduces the amount you will owe. Make an IRA contribution: You still may make 2022 contributions to an IRA up until April 18, 2023.

That's why I reached out to my accountant, Katie Gallo, and asked if there's anything I can do now to help reduce my 2022 tax bill. Pros Check mark icon A check mark. Low annual fee for investment accounts; crypto trust investments available Check mark icon A check mark. Tax-loss harvesting Check mark icon A check mark. Mobile app and investing and retirement tools Check mark icon A check mark.

☆ The 8 best states to win the $1.1 billion Mega Millions jackpot
▼ + stars: | 2023-01-10 | by ( Mike Winters | ) www.cnbc.com time to read: +2 min

After weeks without a winner, the Mega Millions jackpot is now $1.1 billion — the third largest in the lottery's 27-year history and the fifth-largest ever in the U.S. But depending on where you bought your ticket, those winnings can vary by as much as $120 million due to state taxes. State taxes are charged, too, but unlike federal taxes, they vary widely by state. The cash payout is much less than the annuity, but it's often chosen since it can be reinvested right away. The cash payout is nearly $63 million more in tax-free states than in New York, the most-taxed state.

Important: The standard deduction is just one of many tax deductions for which you may be eligible. Standard deduction: 2022 and 2023The amount of the standard deduction is adjusted every year to account for inflation. How the standard deduction worksWhen you file your federal tax return, you can choose to use either the standard deduction or itemize your deductions, whichever amount is highest. Quick tip: If you're not sure whether to take the standard deduction or itemize deductions, talk to a tax professional. If your income is less than the standard deduction then you do not have to file a federal tax return.

☆ If you buy an electric vehicle by March, you'll have a better chance of getting the maximum $7,500 tax credit
▼ + stars: | 2022-12-28 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Biden's Inflation Reduction Act included an up-to $7,500 tax credit for electric vehicle purchases. Here's what Americans looking to buy an electric vehicle need to know about the credit. One notable part of that was an incentive for Americans to purchase electric vehicles and play a part in saving the environment. Who qualifies for the tax credit on a new electric vehicle? Can I qualify for a tax credit on a used electric vehicle purchase?

☆ Grenada's 'golden passport' comes with tax benefits and makes travel easier — but only if you invest $150,000 in the country first
▼ + stars: | 2022-12-08 | by ( Zoe Rosenberg | ) www.businessinsider.com time to read: +7 min

Grenada's citizenship-by-investment, or CBI, program has accepted 1,500 residents yearly since 2013. Gaining Grenada citizenship takes about three months and is less costly than other CBI programs. To be a Grenadian tax resident, the country requires 183 days of residence on the island a year. Jafri added that with a Grenadian passport, a traveler doesn't need a visa to travel to China. The investment in hotel and resort projects costs less than other kinds of real-estate development to help drive tourism to the country, Hallam explained.

☆ Retirement savings changes are on the horizon. Here's what it means for you
▼ + stars: | 2022-12-07 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +6 min

The House already passed its own version of retirement plan rule changes, and two key Senate committees passed their own versions. Secure 2.0 could let employers make a matching contribution to an employee’s retirement plan based on their student loan payments. That way, it would ensure that the employee is building retirement savings no matter what. Enhance and simplify the Saver’s CreditAn underutilized federal match exists for low-income earners’ retirement contributions up to $2,000 a year. The new retirement package might enhance and simplify the so-called Saver’s Credit so more people could use it.

☆ A man disparaging Jews and someone pretending to be H.R. McMaster just created federal campaign committees. It may be weeks before regulators do anything about it.
▼ + stars: | 2022-11-15 | by ( Madison Hall | ) www.businessinsider.com time to read: +6 min

Two recently established political committees appear to violate FEC regulations. McMaster at the Richmond Forum in Virginia, a man says he found himself so inspired that he formed a political committee to support McMaster for president in 2024. Federal regulations generally prohibit committees from using the name of a prospective candidate in their committee's name. Then, two days after the McMaster filing, another man filed paperwork with the Federal Election Commission to form a committee with completely different — and hostile — intentions. As for Liu's antisemitic committee name, the FEC has a process for dealing with that — but it's a protracted one.

☆ How to Apply for Student Loan Forgiveness
▼ + stars: | 2022-10-22 | by ( ) www.wsj.com time to read: +15 min

The official student loan forgiveness application is available on the Federal Student Aid website. What you can do now to prepare for student loan repayment and reliefFirst and foremost, you can fill out the application for up to $20,000 in student loan forgiveness on the Federal Student Aid website. “January will almost certainly be a chaotic time for the [student loan] servicers,” says Michael Lux, attorney and founder of The Student Loan Sherpa. You might also check out alternative options for student loan forgiveness, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness. If your state charges a tax rate of 5%, for example, expect to pay about $500 in taxes on $10,000 in loan forgiveness or $1,000 on $20,000 in loan forgiveness.

☆ The IRS adjusted its income tax brackets for 2023—you might owe less in taxes next year
▼ + stars: | 2022-10-20 | by ( Mike Winters | ) www.cnbc.com time to read: +1 min

As part of its annual adjustments based on inflation, the IRS increased the income thresholds for its tax brackets by thousands of dollars. These changes are effective for the 2023 tax year. However, since the income floors for tax brackets have increased for 2023, you will pay less in taxes if your total income doesn't change between 2022 and 2023. Here's a simplified example: If your taxable income is $75,000 in 2022, you'll owe $12,117 in taxes. Here's a look at the updated tax bracket floors, compared to the 2022 tax year, for a single tax filer:

☆ Which Charitable Contributions Are Tax Deductible?
▼ + stars: | 2022-10-18 | by ( ) www.wsj.com time to read: +11 min

As a result, the number of people who can claim charitable donations fell from about 1 in 3 before the law to 1 in 10 today. The upshot is that charitable donations are still a valuable potential deduction—but only for the right kind of taxpayer. Who qualifies for charitable tax deductionsEvery taxpayer has a choice between itemizing their deductions and claiming the standard deduction. Note that for tax years 2020 and 2021, the IRS let people claim a $300 charitable deduction even if they didn’t itemize, but that allowance has expiredWhat kind of giving qualifies for the charitable tax deductionContributions to officially registered charities, which are designated with a special tax code like 501(c) (3), may be deductible on your federal tax return (and possibly your state tax return). But in typical IRS fashion, there are special rules that determine whether and how much of your charitable donations are deductible.

☆ Here's how to pay 0% capital gains taxes with a six-figure income
▼ + stars: | 2022-10-09 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

Let's say the same retired couple had $30,000 in tax-exempt interest, $25,000 of regular income and $100,000 in long-term capital gains and dividends. watch nowIn this case, their gross income is $125,000 and taxable income is $97,700. Since the $27,300 standard deduction exceeds the $25,000 of regular income, the $97,700 is entirely long-term capital gains and dividends. This means $83,350 is taxed at the 0% rate and the couple owes 15% long-term capital gains taxes on the remaining $14,350. "The benefit is there are zero taxes, whether it's dividends or capital gains" as long as you're below the taxable income threshold, he said.

☆ Millions more people without children are now eligible for a tax credit that could save them thousands
▼ + stars: | 2022-04-08 | by ( Jason Lalljee | ) www.businessinsider.com time to read: +4 min

The Earned Income Tax Credit is now available to people who are at least 19 years old. The EITC is a rare break for low-income childless adults, who are often shut out of assistance programs. Tax credit targets benefits gap for low-income people without kidsThe EITC has historically existed as a tax break for low- to moderate-income workers, with credits ranging between $560 and $6,935 for 2022. Because it's a refundable tax credit, lower-income taxpayers who have little (or no) income-tax liability can receive the total amount of the credit as a tax refund anyway. Its money goes to general assistance programs, which support a broader population including non-parents, in just 25 states.

2022 and 2023 federal income tax brackets by filing statusBelow are the federal income tax brackets for single filers, heads of household, and married people who file either jointly and separately for 2021 and 2022. Your marginal tax rate is the highest tax rate your taxable income falls into. For one thing, it's because you can only determine your effective tax rate by going through the machinations of figuring out your marginal tax rate and the resulting total tax liability. Once you know your marginal tax bracket, you know how much tax you'll pay on each dollar of income. You can then calculate your effective tax rate based on your total tax liability for the year.

Quick tip: Even if you aren't required to file a tax return, you'll need to if you want to get a refund of overpaid taxes or claim refundable credits such as the earned income tax credit (EITC) or child tax credit (CTC). Requirements to file if you're a dependentPeople who are claimed as an adult or child dependent have to file a tax return in some situations. Also, if you qualify for any of the following tax credits, you should file to get your refund:Earned income tax creditChild tax credit or additional child tax creditChild and dependent care creditAmerican opportunity tax credit (partially refundable)Credit for federal tax on fuelsPremium tax creditHealth coverage tax creditRecovery rebate credit (aka economic impact payments)Credits for sick and family leaveNotes: The IRS begins issuing refunds for the child tax credit and the earned income tax credit in mid-February. Millions of Americans don't owe taxes on their income and aren't required to file a tax return because they don't earn enough money. And some taxes are certain for everyone, regardless of income, including sales taxes, excise taxes, and property taxes.

2021 and 2022 federal income tax brackets by filing statusBelow are the federal income tax brackets for single filers, heads of household, and married people who file either jointly and separately for 2021 and 2022. Your marginal tax rate is the highest tax rate your taxable income falls into. For one thing, it's because you can only determine your effective tax rate by going through the machinations of figuring out your marginal tax rate and the resulting total tax liability. Once you know your marginal tax bracket, you know how much tax you'll pay on each dollar of income. You can then calculate your effective tax rate based on your total tax liability for the year.

But failing to file a tax return can result in additional costs in the form of penalties, and interest. But how do you even know if you need to file a tax return? First, determine whether you need to file taxesFirst things first: Do you even need to file a tax return? A Tax Policy Center analysis finds about 40% of US households will pay no federal income tax for 2022. Taxable income $ 0 Effective tax rate 0 % Estimated federal taxes $ 0 Federal taxes withheld $ 0What happens if I don't file taxes?

Long-term capital gains are usually taxed at 0%, 15%, or 20%, but can get as high as 25% or 28%. Long-term capital gains rates range from 0% to 20% for 2021 and 2022, except in special circumstances. The capital gains tax rates apply to your net capital gains. Since both assets were held long-term, you can net them against each other: $3,000 gain - $2,000 loss = $1,000 net gain taxed at long-term capital gains rates. You can complete a short questionnaire on the IRS website to figure out how to pay your capital gains tax.

☆ New York Rep. Sean Patrick Maloney hit with congressional ethics complaint over stock sale disclosures
▼ + stars: | 2021-04-13 | by ( Dave Levinthal | ) www.businessinsider.com time to read: +5 min

The Foundation for Accountability and Civic Trust is asking for an ethics probe of Rep. Sean Maloney. Insider first reported Maloney was months late in publicly disclosing the sale of eight stocks in potential violation of federal law. The New York Democratic congressman's office said the late filing was an "oversight" and promised to pay any fines. They include former Republican Sen. David Perdue of Georgia, former Republican Sen. Kelly Loeffler, former Democratic Rep. Donna Shalala of Florida, and Democratic Sen. Dianne Feinstein of California. Former Rep. Chris Collins, a New York Republican, briefly served time in federal prison following an insider-trading scandal that ended his political career.

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