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| Written by Administrator |
| Tuesday, 14 December 2010 01:07 |
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6 Things You Must Know About Tax Preparation if you Live in San Jose
#1 Unemployment Benefits are Taxable: A lot of Santa Clara County’s 200,000 unemployed don’t realize that their unemployment benefits are actually taxable. However, a new rule this year applies to San Jose and the rest of the country: If you are filing a tax preparation with unemployment benefits, you don’t have to pay taxes on the first $2,400 you receive. You will receive a 1099-G when it’s time for tax preparation and that will show you what income tax you have elected to withhold. If you didn’t withhold any, you may owe come April.
#2 Early Retirement Withdrawals Don’t Come Without a Price: With the recession, some San Jose residents needed to withdraw retirement money. Unless you’re under 59 and a half years old when you withdrawn money from a retirement plan, you may owe 12.5% in penalties to the IRS and the State of California. There are some exceptions to this rule. If you are in the midst of tax preparation and wish to know the exceptions click here. #3: Self-employment is a Double-Edged Sword: San Jose and the Silicon Valley is full of garage start-ups; folks who go at it on their own. However, tax preparation as a self proprietor can be a whole web of complications. Though it’s true you get to deduct almost everything...you will need to worry about a specialized set of taxes that targets the self-employed. Even short-term gigs such as contracting, make you temporarily self-employed which means you not only owe income tax, but also self-employment tax (including Medicare). To learn the taxes your employer used to shoulder but now you owe yourself, click here. #4 Making Less Money Might Actually Help You: Traditionally, whether doing tax preparation in San Jose or out-of-state, a drop in income did you no good. However, you may qualify for certain credits that the wealthy just don’t have access to. For example, the earned income tax credit is available to low income and working class tax payers. #5 Having Kids is Expensive...and The Government Acknowledges That: There are a number of credits that a parent can access- Including the child tax credit, the child and dependent-care credit, and the additional child tax credit. You can reduce your bill tremendously with these opportunities! #6 Health Care is Also Deductible! Do you pay high premiums? Have you been charged more than you thought your insurance would cover? Well a lot of medical expenses can be deducted if you receive COBRA coverage and exceed certain amounts in medical expenses, including medical insurance and prescriptions.
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| Last Updated on Tuesday, 14 December 2010 01:12 |
