Income Taxes

The Revenue Act of 1861 levied the first personal income tax in the United States in order to help fund the Civil War.The first income tax to be levied in a time of peace was in 1894, when Congress passed a tariff at the rate of 2% on any income over $4,000 which, at the time, was less than 10% of U.S. households. Income taxation received permanent status in 1913, with the ratification of the 16th Amendment.

• TABOR – Taxpayer Bill of Rights as passed by Congress
• Your Rights as a Taxpayer – IRS Publication 1
• Fact Sheet on Protecting Taxpayer Rights
• General Income Tax Law Questions
• General Income Tax Extension Questions

 

Individual Income Tax

Individual income tax is usually collected on a pay-as-you-go basis for both state and federal taxes. It is deducted directly from your paycheck. At the end of the tax year adjustments are made and you might owe the government more money. It is also possible that the IRS may owe you a refund. You are allowed deductions, which effectively reduce the total amount of your taxable income, and if the amount you are allowed for deductions lessens it enough so that you over-paid during the tax year, you will be issued a refund. When you fill out a W-2 for employment, you claim exemptions. Each exemption you claim will lessen the amount of tax withheld from your check. The U.S. tax system allows exemptions for dependents, for example, so you may claim exemptions for your children or other dependents and, as a result, a smaller percentage of income tax (both state and federal) is withheld. To put it very simply: if, at the end of the tax year, it is found that your deductions don’t make up for your exemptions, then you will owe the state and/or federal governments more money.

Federal Income Tax

• IRS Forms and Publications with instructions
• Versions of IRS publications from Prior Years
• FAQ for Taxes – filing and returns
• Tax Information for Students from the IRS
• Information about 1099 Forms for the self-employed and independent contractor
• 1099 Form Example and Instructions
• Withholding Calculator from the IRS – avoid having too much or too little federal income tax withheld
• W-4 Form Assistant
• Publication 505 – an IRS publication explaining all aspects of tax withholding and estimated tax
• Taxpayer Advocate Service – “Your Voice at the IRS”
• Low Income Taxpayer Clinic List
• Compliance & Enforcement – six links provided by the IRS including Tax Fraud Alerts
• 1040, 1040A or 1040EZ – deciding which to file from a non-IRS source

State Income Tax

• Income Tax Rates by state, with tax brackets for each state from the Tax Foundation
• Corporate Income Tax Rates by state
• State Taxation of Social Security Benefits and Pensions
• AARP Public Policy Institute – Federal and State Income Tax Incentives for Private Long-Term Care Insurance
• Interactive Map – click on your state to get tax rate information
• Retirement Living Information Center – tax information by state that could effect where yo plan to retire
• States Without Income Tax – a quick view of the 9 states that do not tax income.
• Non-Resident State Tax filing information
• Moving to Another State – how to file

Federal Tax Information for Small Business and Self-Employment

It works a little differently for the self-employed and independent contractors. If this is you, no one is taking money out of your paycheck for taxes so you are responsible for paying your state and local taxes. Many do this based on an estimate of what they expect to owe. In fact, if you are a sole proprietor and expect to owe more than $1,000 for the year, then you have to pay an estimated tax. If you do this, then you will be paying a standard quarterly amount. At the end of the tax year, much like with taxes paid based on a W-2 form, adjustments will be made and you may owe a further amount, or you may be owed a refund. If you underpay, there are penalties. The actual percentage of the penalty ranges, as it is set each year by the IRS, but it should be between 6% and 8%. There are those who prefer to keep the money available to their business or earning interest and then pay the penalty since it is not an overwhelming amount, but be absolutely sure, if you do this, that you make your April 15th payment on time, or you will incur additional penalties and fines.

• IRS Forms and Publications
• Employment Taxes
• Tax Calendar
• Small Business Federal Tax Responsibilities – an IRS publication
• Tax Year Information – what is a tax year?
• Taxable vs Non-Taxable Income
• Estimated Income Tax – information for the pay-as-you-go method
• Independent Contractor vs Employee – Determine how you should pay for services
• W-2 and W-4 Form Definitions

Non-Profit Organizations

• Affordable Care Act Tax Provisions
• Resources and tools for exempt organizations
• Form 990 Resources from the IRS
• Form 990 – Reading and understanding Form 990 from the Non-profit Coordinating Committee of New York
• Tax Information for Non-profits from the Free Management Library
• FAQ on exempt organizations

News and Other Information

• New York Times – News, commentary and archived articles about Income Tax
• IRS – Latest tax news
• Business Exchange – Articles and information from the U.S. and around the world on Income Tax
• Wall Street Journal – topic section on taxes and personal finance