Tax Information

• Colorado – 4.63% (2016)
• Illinois – 4.95% (July 2017)
• Indiana – 3.3% (2016) (until 2017, when the rate will fall to 3.23%.
• Note also that counties may impose an additional income tax). 
• Massachusetts – 5.1% (2016)
• (most types of income)
• Michigan – 4.25% (2016)
•  (22 cities in Michigan may levy an income tax, with non-residents paying half the rate of residents)
• North Carolina – (2025) 4.5% after 2025 3.99%
• Pennsylvania – 3.07% (many municipalities in Pennsylvania assess a tax on wages: most are 1%, but can be as high as 3.9004% in Philadelphia)
• Utah – 5.0% (2016)
• As of 2016 records

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

Tennessee - No tax on wages

New Hampshire - No tax on wages

Tax Payer Advocates Can Be Found Here

https://www.taxpayeradvocate.irs.gov/taxpayer-resources/

•  Alabama 
•  Alaska 
•  Florida 
•  Hawaii 
•  Illinois 
•  Mississippi 
•  Nevada 
•  New Hampshire 
•  New York 
•  Pennsylvania 
•  South Dakota 
•  Tennessee 
•  Texas 
•  Washington 
•  Wyoming 

Certain restrictions apply to some states, such as age, how much income can be excluded, and other factors.

I will update this page as we get closer to the filing year. 

 The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:  

The tax year 2024 adjustments described below generally apply to income tax returns filed in 2025. The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023. For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
   
• Marginal rates: For tax year 2024, the top tax rate remains 37% for individual single taxpayers with incomes greater than $609,350 ($731,200 for married couples filing jointly).The other rates are:
  35% for incomes over $243,725 ($487,450 for married couples filing jointly)
  32% for incomes over $191,950 ($383,900 for married couples filing jointly)
  24% for incomes over $100,525 ($201,050 for married couples filing jointly)
  22% for incomes over $47,150 ($94,300 for married couples filing jointly)
  12% for incomes over $11,600 ($23,200 for married couples filing jointly)
  The lowest rate is 10% for incomes of single individuals with incomes of $11,600 or less ($23,200 for married couples filing jointly).

• The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700). For comparison, the 2023 exemption amount was $81,300 and began to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption began to phase out at $1,156,300).
   
• The tax year 2024 maximum Earned Income Tax Credit amount is $7,830 for qualifying taxpayers who have three or more qualifying children, an increase of from $7,430 for tax year 2023. The revenue procedure contains a table providing maximum EITC amount for other categories, income thresholds and phase-outs.
   
• For tax year 2024, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $315, an increase of $15 from the limit for 2023.
   
• For the taxable years beginning in 2024, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements increases to $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $640, an increase of $30 from taxable years beginning in 2023.
   
• For tax year 2024, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,800, an increase of $150 from tax year 2023, but not more than $4,150, an increase of $200 from tax year 2023. For self-only coverage, the maximum out-of-pocket expense amount is $5,550, an increase of $250 from 2023. For tax year 2024, for family coverage, the annual deductible is not less than $5,550, an increase of $200 from tax year 2023; however, the deductible cannot be more than $8,350, an increase of $450 versus the limit for tax year 2023. For family coverage, the out-of-pocket expense limit is $10,200 for tax year 2024, an increase of $550 from tax year 2023.
   
• For tax year 2024, the foreign earned income exclusion is $126,500, increased from $120,000 for tax year 2023.
   
• Estates of decedents who die during 2024 have a basic exclusion amount of $13,610,000, increased from $12,920,000 for estates of decedents who died in 2023.
   
• The annual exclusion for gifts increases to $18,000 for calendar year 2024, increased from $17,000 for calendar year 2023.
   
• The maximum credit allowed for adoptions for tax year 2024 is the amount of qualified adoption expenses up to $16,810, increased from $15,950 for 2023.

 To avoid falling victim to scams, it is important for taxpayers to be aware of how and when the IRS contacts them. 

The IRS primarily reaches out to taxpayers through regular mail delivered by the United States Postal Service. Most initial contacts from the IRS will be in the form of letters, referred to as "notices." These letters serve as a means of communication and provide information regarding various tax-related matters.

It is important to note that there are certain circumstances in which the IRS may call or physically visit a taxpayer's home or business. These situations include cases where a taxpayer has an outstanding tax bill, needs to submit a delinquent tax return or employment tax payment, or when a business is subject to an audit or involved in criminal investigations. However, even in such cases, taxpayers will typically receive multiple notices through mail before any phone calls or visits.

The IRS emphasizes that taxpayers should exercise caution and verify the authenticity of any contact claiming to be from the IRS.

 Even then, taxpayers will generally first receive several letters (called “notices”) from the IRS in the mail. 

 The IRS does not:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
  
  
• Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
  
  
• Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.

Awesome Tax Tool - Click here

Withholding Calculator

The IRS may be able to remove or reduce some penalties due to reasonable cause, but only if you tried to comply with the tax law but were unable to due to facts and circumstances beyond your control. If this applies to you and you have the necessary documentation to support your claim, you can call the toll-free number on your IRS notice or write a letter to request penalty relief due to reasonable cause.

The IRS may also provide administrative relief from a penalty that would otherwise be applicable under its First time penalty abatement policy. In this instance, the IRS may provide relief if:

• You didn’t previously have to file a tax return or you have no penalties for the 3 tax years prior to the tax year in which you received a penalty;
• You filed all currently required returns or filed an extension of time to file; and
• You have paid, or arranged to pay, any tax due.

The IRS may also be able to waive penalties if a Statutory Exception exists. Tax legislation may provide an exception to a penalty. Specific statutory exceptions can be found in the penalty-related Internal Revenue Code (IRC) sections. These would include situations like receiving erroneous written advice from the IRS.

See the Penalty Relief page or the Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver page for more details about when penalties can be abated or reversed.

#1. Contribute to an IRA, 401K,  403B, 457 plan before you do any other kind of after tax savings for retirement! then contribute to a HSA or FSA for your health expenses

HSA -  The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. For 2016, if you have self-only HDHP coverage, you can contribute up to $3,350. If you have family HDHP coverage, you can contribute up to $6,750 

 FSA-You don’t pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. However, contributions made by your employer to provide coverage for long-term care insurance must be included in income

Now that you understand the benefits and potential limitations of a Roth IRA conversion, you may be wondering if this strategy is right for you. In general, you may be a good candidate for a Roth IRA conversion if:

• You don't need access to the funds for five years;
• AND You can pay any related taxes from sources other than their conversion; and
• You meet one or more of the following:
  • You hold a sizable amount of assets in traditional retirement accounts but want access to tax-free assets or to reduce RMDs in the future.
  • You expect your future tax bracket to be higher than it currently is.
  • You expect your taxable income to be high in retirement (in one of the top four federal tax brackets).

If you fit these criteria, you may be able to benefit from a Roth IRA conversion. 

Five Tax Credits that Can Reduce Your Taxes 

Tax credit reduces the amount of tax you must pay. A refundable tax credit not only reduces the federal tax you owe, but also could result in a refund. Here are five credits the IRS wants you to consider before filing your 2012 federal income tax return: 

1. The Earned Income Tax Credit is a refundable credit for people who work and don’t earn a lot of money. The maximum credit for 2012 returns is $5,891 for workers with three or more children. Eligibility is determined based on earnings, filing status and eligible children. Workers without children may be eligible for a smaller credit. If you worked and earned less than $50,270, use the EITC Assistant tool on IRS.gov to see if you qualify. For more information, see Publication 596, Earned Income Credit.
   
   
2. The Child and Dependent Care Credit is for expenses you paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent. The care must enable you to work or look for work. For more information, see Publication 503, Child and Dependent Care Expenses.
   
   
3. The Child Tax Credit may apply to you if you have a qualifying child under age 17. The credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return. You may be required to file the new Schedule 8812, Child Tax Credit, with your tax return to claim the credit. See Publication 972, Child Tax Credit, for more information.
   
   
4. The Retirement Savings Contributions Credit (Saver’s Credit) helps low-to-moderate income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or a retirement plan at work. The credit is in addition to any other tax savings that apply to retirement plans. For more information, see Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
   
   
5. The American Opportunity Tax Credit helps offset some of the costs that you pay for higher education. The AOTC applies to the first four years of post-secondary education. The maximum credit is $2,500 per eligible student. Forty percent of the credit, up to $1,000, is refundable. You must file Form 8863, Education Credits, to claim it if you qualify. For more information, see Publication 970, Tax Benefits for Education.