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Personal Taxes

Although it is not a pleasant experience to have to pay taxes, we must recognize that taxes are necessary to pay for the country’s expenses, and pay for necessities like national security, infrastructure, education, food and drug safety, Social Security, Medicare, etc.  As an individual, you're responsible for paying taxes on any income that you earn. In most cases, your employer will deduct income taxes from your paychecks to contribute towards your personal income tax liability due at the end of the year.  It is vital to file a return on time and pay the taxes you owe by the deadline or request a payment plan from the IRS if it is not possible.

Find out more information about personal taxes by contacting a retirement professional. Find local tax professionals in your area.

Tax Brackets were created to impose a higher tax on individuals with higher incomes.  Marginal tax rates vary from 10% to 35% and are adjusted from time to time, depending on legislation.  The amounts of the Federal income tax standard deduction and personal exemptions are adjusted annually to account for inflation. This produces yearly changes to the personal income tax brackets, even if Federal income tax rates remain unchanged.

 The following are topics associated with personal taxes:

  • Tax Brackets and Minimizing Taxation
  • Income and Adjustments to Income
  • Standard and Itemized Deductions
  • Tax Credits
  • Taxing on Assets
  • Education Tax Exclusion
A personal income tax is due on the income of the individual after allowable deductions are subtracted from the income.  Income tax returns will often have deductions available that lessen the total tax liability by reducing total taxable income. They may allow losses from one type of income to be counted against another. For example, a loss on the stock market may be deducted against taxes paid on wages.  Self-employment tax is a social security and Medicare tax for individuals who work for themselves and counts towards future coverage in the social security system.  

A tax credit is a sum deducted from the total amount a taxpayer owes to the state. According to IRS Publications, some of the most popular tax credits include Earned Income Credit, Child Care Credits, First Time Homebuyer Credits, Credits for the Retired or Disabled, Credit for Retirement Savings, Mortgage Interest Credits, Student Loan Interest Credits, Adoption Credits, credits for Energy Efficient Home Appliances, Hybrid Car Credits, and much more.  

To maximize your tax credits and minimize your tax burden, contact a financial planner in your area.