The Small Business Tax Help Blog

Posts Tagged ‘estimator’

Question: First time home buyer: how to get interest payments back monthly instead of once a year?

Hello:

Just about to buy my first home which is very exciting!
Since I’ll be be paying close to $3,000 in interest/$1,000 in real estate taxes a month and I would like to keep my monthly income as high as possible I would like to tweak the W-4 withholding allowance so less taxes are being withheld. There are a number of calculators on the internet, but none of them seem to be applicable specially for mortgage interest (and real estate taxes).

How can I go about this?

Thanks!

Answer: see your personal director where you work and fill out a new W-4 withholding form. There is a worksheet to help you figure out how much to withhold.

If I remember, each one is worth $25 less withheld and you can claim up to 99. However, remember, if you underestimate your Tax Withholding, the IRS can fine you.

Questions and Answers – 23 June 2010

Budget 2010—Grant to Pacific Economic Development Agency; Rest Homes—Standard of Care; Economic Position—Current Account Deficit; State-owned Enterprises—Requests for Additional Capital

Question: Is the amount taken out of my paycheck for FICA considered federal taxes?

I’m trying to guesstimate how much my federal income tax return might be. When using a tax estimator, it asks for the federal income tax amount withheld. Is FICA included in that?

Answer: FICA is a combination of the social security tax and medicare tax and totals about 7.65% of your gross pay.

FICA has absolutely nothing to do with your federal income tax rate. Your federal income tax rate is dependent on which tax bracket you fall into.

The following tax calculator may help.

Federal Tax Withholding Estimate for 2009, 2010

Question: Can my dad expect a tax refund on Social Security/disability?

My dad had a stroke 2 years ago and finally got approved for disability last year. Now that it’s tax time, should he anticipate a refund when he files? No tax was withheld from his Social Security benefits, so it seems obvious he won’t get a refund. But the IRS calculator (“should I file a return?”) still indicates that he should file a return.

What about things like mortgage interest paid on his home, and his out of pocket medical costs–are they simply deductions he could take if he had paid taxes?

Thanks in advance…

Answer: Unless he had other taxable income, it is pointless taking deductions for medical and interest expenses, since there is no tax to refund.

According to the IRS:

You may qualify for a minimum payment of $300 ($600 if filing a joint return) if your tax return reflects $3,000 or more in qualifying income - which includes non-taxable Social Security disability.

BUT YOU MUST FILE TO RECEIVE THE REBATE, even if you are not required to do so.

See the sample Form 1040A at the link below:

http://www.irs.gov/pub/newsroom/1040a.pdf

Alternatively, the IRS has announced an electronic free file option for people who have no legal requirement to file a tax return but must file a return this year in order to receive a 2008 economic stimulus payment. Click on this link to file for your rebate electronically:

http://www.irs.gov/efile/lists/0,,id=179739,00.html

Reporting Your Interest Income

Find out how your accounts are taxed and which forms you need.