How to Calculate Your Federal Income Tax Liability | Personal Finance Series 

aren't we all?

@@manuelj.oliveros6486 no. Some of us aren't wanted by anybody 😂

@@jjjlove2260 😂🤣😂😅

Right on!

Awesome! Keep up the good work!

Thanks!

As soon as he said $925, I knew. thanks for confirming. I thought I was wrong.

It is 952

oh lol you guys are right - this is called "intentional typos" - if you could point out where the instructor is wrong, you understand the problem very well ;)

Glad I could help!

Myrlande Charles Google H&R Block tax calculator

I got help from expeditetools,com financiallly .They helped with a transfer of $30,000 to my bank account .

Lol I think if you make $190k in total, you should be able to afford either a software or a tax consultant! I am pretty sure you withheld too little tax compared to your income and you will end up with tax payable rather than tax refund.

Great suggestion! Child tax credits reduce your tax liability, so you would still calculate your tax liability using the tax schedule, and then factor out your child tax credit. I believe this is $2,000 per eligible child, so if your tax liability was $8,000 and you had two children, your actual tax responsibility would be $4,000. I'll try to work in a video on this in my schedule. Thanks again for the suggestion.

Your total gross income is $61,000 Minus standard deduction $12,000 Your taxable income is now $49,000 the $49,000 is taxed at 22%. The 22% tax bracket starts at $ 38,700 So... $49,000 minus $38,700 is $10,300 ...and 22% of $10,300 is $2,266

Hi Viswananuth. This particular video pertains more to federal income taxes in the U.S. Self employment taxes, which are around 15.3% in the U.S. don’t follow a comprehensive schedule like the one in the video. Instead, the profit from the business is taxed at the self-employment rate and then added to any tax liability from federal income taxes to determine your total tax liability. .

There is no 30% tax bracket, so I'm not sure what you are talking about. When you were married, did you make all the money?

Yo bro am from Iraq hook a brother up

That is not a question that has a universal answer. It depends on a lot of factors. For the simplest of tax returns - and probably 70% of taxpayers fall into this category, you just have a W-2 with wages and withholding, etc. and that's about it. Most people do not itemize, so you would take the standard deduction - which for single taxpayers in 2019 is $12,200. So, you would basically subtract that from your wages (box 1 of W-2) and that would be your taxable income. Again - this is bare-bones stuff making a lot of assumptions. I would talk to someone or at least use some software or online service because there are credits that could be available that you might miss if you try to do your taxes on your own.

Seems a bit high. That would mean you have an effective tax rate of around 26%.

Are you actually withholding? Generally speaking, there isn't withholding on 1099 income. Instead, you make quarterly estimated tax payments. Someone would likely need a little more information than just your annual pay. 35% would almost certainly be enough at first glance. In fact, I'd say it's overkill. Depending on your situation, and assuming you file single and take the standard deduction and your net income is $45,000, it all qualifies for the QBI deduction, and it is all 1099 income, your SE tax would be $6,358. Your federal income tax would be $2,647 for a total tax liability of $9,005, so right at 20%. This would be paid in quarterly estimated tax payments rather than withheld, so you would make 4 quarterly payments of $2,251.25 or just make it $2,300 a quarter to be safe. Estimated taxes are also generally based on the prior year.

@@willoughbykrenzteinburg thank you for your information it very helpful. I have been researching and reading a lot more. I'm starting to understand it better but you helped even more. Thx

Regarding tax rules and practice, I do not have the expertise to share. But mathematically, someone like me in the 24% marginal tax bracket would have an effective tax rate of about 18% (head of household, 2 dependents, homeowners, a lot of retirement contributions, etc.) so, I would absolutely agree that for withholding, 35% is overkill, and 20% is enough even for most of the lower six-figure earners. For making $35K a year (before deduction), I would withhold between 12-15%. Less withholding now, more tax payable later. More withholding now, more tax refund later. My personal preference would be some tax refund but not too excessively much (money blocked unused, uninvested throughout the year).

Welcome to the U.S. tax code. Where confusion is high and disappointment is frequent.

It would be absurd to allow you to have both the standard deduction AND take itemized deductions. Everyone gets to take "x" amount unless they actually have expenses that add up to more than that - in which case, they can use actual expenses. This sort of thing is all over the tax code, and it makes sense. If you own a business and use a car, you can either deduct an amount based on the miles you drove - which is just a figure the IRS calculates to be a placeholder for expenses. It makes it easy for people to still take a deduction without having to add up each oil change, and other maintenance costs. However, if they wish to add up all those things and that amount is higher than the placeholder the IRS allows everyone, then take that higher amount. The same thing exists for sales tax. The IRS has a table where you can just look up your income, and it gives an "estimate" for how much you spent in sales tax based on your income. You can take that amount OR you can take hundreds of receipts and add up all the sales tax, and if it is higher than the placeholder amount everyone gets, then take that higher amount. The exact same thing applies to the standard deduction. It's a placeholder that everyone gets. You don't have to add up all your expenses and things like that, but if you do and they add up to a higher amount, take that higher amount. It would be patently absurd to allow you to have both the amount the IRS estimates the average person to have in expenses PLUS the ACTUAL expenses. You'd essentially take the deduction twice, and that's nonsense. The standard deduction is a calculated estimate for the amount of deductible expenses you will have based on your filing status. If your ACTUAL expenses add up to more than that calculated amount, then you get to take the amount that is based on your ACTUAL expenses. You don't get to have both!!! Geez..

I think at least it is great you have the option to choose which one is higher AFTER THE FACT. Imagine you have to lock yourself into one, just to figure out later the other option turned out to be better...

Great question, Dave. Contributing to your 403b does reduce your taxable income and can be a good alternative to changing your filing status or decreasing your tax allowances. The other benefit is 403b deductions are pre-tax, so a $250 contribution to your 403b may end up only costing you $200 (depending upon your tax bracket) in real income.

Max out your 403b if you could! That is why it is called tax-advantaged account ;) The biggest impact of that is when it brings someone down from 28% to 24% bracket for example, that is only on the top dollars, however, any short-term capital gain from stock sale is now paying 24% instead of 28% and that is where it matters more than the earned income itself, in my opinion.

Max out your 403b if you could! That is why it is called tax-advantaged account ;) The biggest impact of that is when it brings someone down from 28% to 24% bracket for example, that is only on the top dollars, however, any short-term capital gain from stock sale is now paying 24% instead of 28% and that is where it matters more than the earned income itself, in my opinion.

You rental income and expenses is a separate thing. Yes, you can still take the standard deduction - because the loss from the rental is associated with a rental business.

Heck yeah!!!

@@strokerace4765 Not to burst your bubble, but you should probably talk to a professional because there could and probably likely be some passive activity loss limitations for your rental. Generally, you cannot take a loss for a rental property because it is considered passive income. You can only deduct the loss to the extent that you have passive income. If you have no other passive income, then you would carry forward the loss from your rental and offset it against future rental income. This can get a bit tedious which is why I recommend talking to a professional. I was only answering the question of whether you could still take the standard deduction if you have rental losses. The answer is tentatively yes - because they don't really have anything to do with each other. Theoretically speaking, if you had $30,000 of rental income and then $10,000 of rental expenses, you would have net income from rental of $20,000. If you also made $50,000 from a regular job, you would have total income of $70,000. You would then take a standard deduction depending on your status. I'll use $12,200 for a single filer in 2019, so taxable income would be $57,800. Say you had $40,000 of expenses on your rental, so on paper, you had a $10,000 loss. You wouldn't be able to take that loss - you would just have no net income from the rental - and the $10,000 would carry forward to the next year. So, you would have just the $50,000 from your job - minus the $12,200 standard deduction for taxable income of $37,800. The first $10,000 of rental income you have in the following year wouldn't be taxed since you have the $10,000 to wipe it out. It all evens out over time. The bottom line is that rental deductions don't have anything to do with the standard deduction.

I have a CPA but still like to know the best way to do things

@@strokerace4765 I have probably edited that last comment since you last read it.

This is just federal 😮state is different state to state

You have to file if your income is above a certain amount

If you make less than $12,000 gross income, you pay zero tax. Above that, if you make less than $9,525, yes you pay 10% on the incremental income above $12,000.

@@tripletvn so are you saying if you make above 12,000 they charge 10 percent taxes.I don't understand the second sentence

@@tripletvn so they charge you tax if you make under 10,000

@@savesoulsnotgold7867 if someone makes $12k or less, they pay zero tax (single filer). If they make $18k for example, they pay 10% on the $6k only ($18k - $12k) so, $600 in tax. Until they make more than $21, 525, then the top dollars above that will be taxed more than10%!

You aren’t giving enough information, but using the 2020 tax brackets for a single unmarried filer, and assuming that is after any standard deduction taken, your tax would be $3258.50. Your first $9875 is taxed at 10% =$987.50, your next $18,925 is taxed at 12%= $2,271. So, $987.50 + $2,271= $3258.50 total tax. If you aren’t a single unmarried filer, or if you haven’t taken the standard deduction or itemized deductions, or if you are asking for a tax year other than 2020, this answer won’t apply…

Thanks @Maxpwell. Good reminder not to rush through calculations.

That would make things much simpler for sure.

You only wish so if you are on the higher end of the income levels :) "Progressive" means "progressive", if you know what I mean...

You will see the unfairness right around the break points. For example, someone making $49K would rather NOT having a $1K raise because that now brings them to a higher tax bracket and they would end up with much smaller disposable income (you seem richer but you are actually poorer). Thus - the progressive system :)

Check ✍️ math ✍️ more ✍️ often ✍️

In academia there is a teaching method that is called intentional typos. Students who could point out the typos obviously understand the problem pretty well. The principles are presented very well and that is more important because the tax brackets keep changing anyway.