When you file your federal taxes, you have to choose between claiming the standard deduction vs itemized deduction. While the itemized deduction could potentially allow you to save more on taxes, your itemized expenses must exceed the standard deduction.
“effective” tax rateis the result of dividing the total amount of tax they owe by their adjusted gross income (AGI)—what’s left after making certain above-the-line adjustments to income on your tax return. Your effective tax rate is the share of your income you actually pay in taxes...
What is a traditional IRA? A traditional IRA provides an upfront tax break on contributions. Withdrawals from the account in retirement are taxed as income.The money you contribute to a traditional IRA may be deductible from the amount of income the IRS taxes. (We say “may be,” because,...
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Explain the distinction between an above-the-line deduction (i.e., for AGI) and a below-the-line deduction (i.e., from AGI). Which one is more valuable? How do they relate to the difference between tax expense and taxes payable? Define and explain...
There is no limitation on itemized deductions based on youradjusted gross income. However, there are other limitations that may affect the contents of your Schedule A, such as state and local taxes (SALT) which is limited to $10,000. ...
What is her gross tax liability using the tax rate schedules? What is adjusted gross income (AGI)? a) The taxable income after deductions b) The taxable income before deductions c) The taxpayer's after-tax income d) The amount tha...
Protected from creditors:Another advantage most people don’t know about, is that 401(k) plans are generally protected from creditors. Yearly tax break:When contributing to an employer-sponsored plan you could also receive a tax credit on your personal taxes. Since the funds you contribute to ...
Permanent disabilities and certain levels of unreimbursedmedical expensesmay also be exempt from the penalty, but you’ll still pay taxes on the distribution. Roth IRAs You don’t get a tax deduction when you make a contribution to a Roth IRA. This means it doesn't lower your AGI that yea...
To qualify, you must: File your 2020 taxes by October 15, 2021. Have aCalifornia Adjusted Gross Income (CA AGI) of $1 to $75,000for the 2020 tax year. Can I get a stimulus check if I didn't file taxes? If you didn't get the full Economic Impact Payment, youmay be eligible to...