The Tax Preparation Blog

Posts Tagged ‘estimator’

Question: Tax Question?

I was trying to do an online tax return estimator, and all I have is my last pay stub. When it asks for Federal Income Tax Withheld, do I count my SS and MED deductions also?

Answer: Social Security and Medicare taxes, while collected from your pay, are not really part of the Income Tax itself. Although the IRS does collect these taxes from the employers and from self-employeds, it does so because it is the only arm of the government designed for widespread funds collection and it does so for the Social Security Administration.

Therefore, when you are trying to estimate your tax liabilty when you have all or a majority of your income from wages, the FWH (Federal Withholding) is the only number that counts toward paying your tax liability.

Also, if you are using a paystub, you should use either Total Taxable Wages (if you have such a number), or Total Wages MINUS any amount you put into a 401k or 403b as a rough estimate for your taxable amount.

If you are a single wage earner without children, your refund or amount owing the IRS should be +/- $300.

TaxWatch: Tax moves to make in January

The tax laws are still in flux. We’re waiting for the estate-tax law to be written, and Form 5405 for the home-buyer’s credit isn’t ready yet. To top it off, IRS started the year by announcing a major step-up in enforcement of tax preparers. This is going to be an interesting tax season. Are you ready?

Late Tax Returns

Question: Has anyone ever written off their state taxes on their federal return?

I always use H&R Block to file my federal return (online) and file my state via mail (by paper forms). I was trying to estimate my taxes for filing in 2009 (since I’m in a new income bracket this year), and all the H&R Block website had was the old calculator and it said you could write off your state income taxes… Here is a quote from the website:

“State and local taxes

Include any state and local tax you paid during 2007, including:

State and local income tax withheld from 2007 paychecks.

2006 state and local income tax you paid in 2007. For example, if you filed your 2006 state return in April 2007 and paid $500 in state tax when you filed the return, include the $500 here.

Estimated 2006 or 2007 state and local income taxes that you paid during 2007.

Real estate property tax.

Personal property tax, such as a vehicle tax or fee that is based on the value of your personal property.

Do not include estate tax.”

Answer: Yes, you can.
Of course, you must have enough deductions to be able to itemize.
The tax program should automatically pick up your withholding taxes, but you can add what you paid in as a balance due for the 2007 tax plus any estimated tax payments you made in 2008,
Good luck.

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Reader mailbag: Golf

I spent a good chunk of yesterday attempting to teach my children (four and two years old) the fundamentals of golf. The results were interesting. The younger one, my daughter, thought the best way to get the ball in the hole was to pick up the ball and put it in the hole.

How to get your NZ Tax Refunds www.nztaxrefunds.co.nz

Question: Is my tax return really gonna be this big?

I have claimed 0 all year and am a student supporting myself so now i am going to claim one at tax time.

according to H & R’s tax estimator http://www.hrblock.com/taxes/tax_calculators/index.html i will get like 4000 dollars.

is that even possible?

ps ive only had maybe 1500 held and made like 13000
ps i am claiming myself as a dependent student, which equals a 1, is that legal?
i am a dependent student SUPPORTING MYSELF i dont live with mommy and daddy i have beeen working all year and have money owed to me by the government. question is if their estimate is right

Answer: You’ve fat-fingered something. I come up with $1,075 using the numbers you gave.

When you are on the site, the number of dependents is 0, not 1. If you put 1 in on the calculator it probably thinks that you are claiming a child and are eligible for the EIC. This isn’t true in your case. Re-run the numbers with 0 dependents and see what you come up with. The site automatically gives you your personal exemption, you don’t list yourself as a “dependent.”

Addendum: If you cannot be claimed as a dependent by your parents you get your personal exemption. Unless you have a child that lived with you for more than half of the year or are supporting someone else who lived in your household all year (among other requirements) you have NO dependents. Your personal exemption is NOT a “dependent” on your tax return!

You are NOT a “dependent student” from what you say. If you were, your parents would be claiming you and you would lose your personal exemption as a result.

Online federal benefits calculators

– Federal retirement: http://www.opm.gov/retire/tools/calculators/ballpark/menu.asp United States – Units of Measurement – Employment – Calculator – Government