-
1 week ago | 
bankrate.com | Anna-Louise Jackson |Andrea Coombes
You won’t see the term “OASDI tax” mentioned as frequently as the many other types of taxes you regularly pay — but whether or not you realize it, you’re paying this tax with every single paycheck you receive. OASDI, short for Old-Age, Survivors, and Disability Insurance, is more commonly known as Social Security. OASDI tax is collected from workers’ paychecks to fund the Social Security program run by the Social Security Administration. Self-employed people also must pay this tax.
-
1 week ago | 
bankrate.com | Mallika Mitra |Andrea Coombes
When you think of tax rates, your mind may jump to the progressive income tax system the U.S. government uses, in which your income tax rate varies based on tax brackets and how much money you earn. In contrast, in a flat-rate income tax system everyone pays the same tax rate no matter their income.
-
1 week ago | 
bankrate.com | Anna-Louise Jackson |Andrea Coombes
If you own rental property, you’ll need to file a Schedule E tax form with the IRS to report rental income income or losses. Schedule E is filed along with your Form 1040 individual income tax return.
-
1 week ago | 
bankrate.com | Rebecca Rosenberg |Andrea Coombes
Modified adjusted gross income, or MAGI, might sound like just more tax jargon, but knowing how to calculate your MAGI is key to determining your eligibility for several valuable tax benefits, including whether you can make Roth IRA contributions, claim education tax credits and more. The MAGI calculation starts with your adjusted gross income (AGI), and then you add back certain deductions or exclusions. Here’s how MAGI works and how to calculate it. What is modified adjusted gross income (MAGI)?
-
3 weeks ago | 
bankrate.com | Kemberley Washington |Andrea Coombes
A boost to the child tax credit could increase tax refunds for millions of taxpayers this coming tax season, with parents who have children under 17 potentially enjoying a credit worth up to $2,500 per child, up from $2,000 currently, if a proposed Republican bill becomes law. But the increase would be temporary, starting this year and ending in 2028, at which point the tax credit would revert back to a maximum of $2,000 (that amount would increase with inflation each year).
-
3 weeks ago | 
bankrate.com | Rebecca Rosenberg |Andrea Coombes
When someone dies, everything they own — such as homes, bank accounts, investments and personal belongings — becomes part of their estate for the purposes of the U.S. federal estate tax. But only if the estate’s value surpasses a certain threshold will it be subject to the estate tax, sometimes called the “death tax.” The tax rate for estates currently ranges from 18 to 40 percent, depending on how much of the estate exceeds the exemption amount.
-
1 month ago | 
bankrate.com | Rebecca Rosenberg |Andrea Coombes
Form 5498 isn’t as well-known as the W-2 or 1099, but it’s essential for your tax record-keeping if you have an individual retirement account (IRA). This form arrives after tax day, generally in May or June, which leaves many people wondering what to do with it. Form 5498 reports any IRA contributions you made throughout the tax year, but it’s not something you file with your tax return. Read on for more about what Form 5498 is, who receives it, who files it and what to do when you get one.
-
1 month ago | 
bankrate.com | Anna-Louise Jackson |Andrea Coombes
Retirement plans such as 401(k)s and IRAs are powerhouse savings accounts, giving you a tax break either when you contribute to the account or when you withdraw your money — plus taxes are deferred while the money grows. But if you dip into your retirement savings early — which generally means anytime before you reach age 59 ½ — you may be required to pay tax on those distributions, plus a possible penalty of 10 percent or more of your withdrawal amount.
-
1 month ago | 
bankrate.com | Mallika Mitra |Andrea Coombes
Self-employed people have some extra work at tax time compared to their counterparts who receive a W-2 — and that often includes filling out Schedule C. This form is for reporting a profit or loss that you made as a freelancer or sole proprietor, and it should be attached to your Form 1040 when you file your taxes. What is Schedule C? Schedule C is where you report income and expenses for your small business as a freelancer or self-employed person, or as someone with a side hustle.
-
1 month ago | 
bankrate.com | Mallika Mitra |Andrea Coombes
If you’re self-employed, you’re not going to receive a W-2 from an employer like some of your peers. Instead, you’ll receive 1099 forms from the businesses, organizations or individuals you do business with. That said, there are many types of Form 1099 — and that means many taxpayers, not only self-employed people, can expect to receive this paperwork.
