Personal Taxes

If you use a dwelling as a home and rent it out for fewer than 15 days during the year, you should not include the rental income or deduct the rental expenses on your tax return. You may deduct the residence's mortgage interest and real estate taxes as a itemized deduction on IRS Schedule A.

Costs incurred while entertaining customers, prospective customers, clients, suppliers, employees and other business associates are valid business expenses that are subject to conditions and restrictions. For entertainment costs to be deductible, the following must be documented: the time, place and the nature of the entertainment, a description of the business purpose involved, the amount of each separate expense, the business relationship and identification of the persons entertained. A calender diary is recommended to maintain this information.

On Form W-2, box 15 will have an X in the box "retirement plan". You are an active participant in a retirement plan if contributions are made or allocated to your account for the plan year that ends within your tax year.

A Roth IRA is a special, nondeductible IRA. Earnings are tax-deferred and tax-free upon withdrawal if certain requirements are met. (If requirements are not met, taxes and penalties may apply). Contributions are not tax-deductible. You may continue making Roth IRA contributions after age 70 1/2 if you have earned income. Your modified adjusted gross income must be below certain limits depending on your tax filing status and you or your spouse must have earned income. You are not required to take mandatory distributions at any age during your lifetime. Non-spouse beneficiaries are subject to minimum distributions rules.

A retirement plan that covers self-employed persons (sole proprietors or partners)is referred to as a Keogh or H.R. 10 plan. With partnerships, the Keogh must be set up by the partnership, not the partner. Employees who are at least 21 and have at least one year of service must be allowed to participate. Employer contributions are tax deductible subject to certain income limitations. Employees may be permitted to make nondeductible voluntary contributions. There are two types of Keogh plans. Different rules apply to both types of the plan. A Keogh plan can be set up as a defined benefit plan or a defined contribution plan which includes 3 types: a Money Purchase plan, Profit Sharing and a Combination of the two.

The jury duty pay you receive is taxable and reportable on IRS Form 1040, line 21 as other income.
Any pay you gave to your employer during your jury duty period is deductible from Adjusted Gross Income on IRS Form 1040, line 21.

Your tax bracket is dependent on your filing status and your Taxable Income. Taxable Income is equal to your Gross Income, minus your itemized or standard deductions, minus your exemption amounts.
The tax bracket reflects the highest range of taxable income that your taxable income falls into and is taxed at that bracket rate. It does not mean that your "total" taxable income is taxed at that (10%, 15%, 25%, 28%, 33%, 35%,) bracket rate.
Therefore your tax liability on your taxable income is a graduated calculation.
The bottom layer of income is taxed at the 10% rate and the next layer is taxed at the 15% rate and the next layer is taxed at the 28% rate and the next layer is taxed at the 33% rate and the last layer is taxed at the 35% rate. This yields an "effective" blended rate at which your total income liability is calculated.
The current year consisits of 6 tax brackets and 6 tax rates. Income tax rates for individuals for the current year are 10%, 15%, 25%, 28%, 33%, and 35%.
The higher bracket and rates start at $8,701, $35,351, $85,651, $177,651, and $388,351 for a single person;
$17,401, $70,700, $142,701, $217,451 and $388,351 for married filing jointly and Qualifying Widower; $12,401, $47,351, $122,301, $198,0501 and $388,351
for head of household: $8,701, $35,351, $71,351, $108,726, and $194,175 for married filing separately.

Community property is property acquired after marriage in the states that follow the community property laws. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The basis of the law is that both spouses form a partnership, and all property acquired during the marriage by the labor or skill of either spouse belongs to both spouses.

ER0 is the acronym for Electronic Return Originator. EROs have passed suitability and background checks by the IRS and are accepted into the Electronic Filing Program. This means that they can transmit tax returns via computer.