1040

April 15 th unless that date falls on a weekend or holiday 1040 EZ OR 1040 A OR 1040 Your Total Income is $9,350 (this amount changes) or more Earned Income Unearned Income OR Self-Employed & Earned More Than $400

Wages or salaries Commissions Tips Fringe benefits and stock options Paid Sick, Holiday & Vacation Days Bonuses Health & Life Insurance Retirement Contributions Workman’s Compensation Earned Income is Generally Shown on a Form W-2 or 1099

Interest from a Savings Account Interest from Bonds Dividends from Stock Gains from Selling Investments Income from Rental Property Money from Retirement Fund Gifts & Inheritance Royalties In-Kind & In-Cash Transfers Prizes Unearned Income is Generally Shown on a Form 1099

Must File Schedule C to Figure Income

Unreimbursed Business Expenses Mileage Hotel Stays & Meals Moving Expenses if Related to Your Present Job or Starting a New Job Retirement Account Investments Money Spent/Invested That Lowers a Tax Payers Total Income

Total Income – Income Adjustments

What’s a Dependent? Someone Who Lives with You the Entire Year & Had Gross Income of Less Than $3,650 (this amount changes) & For Whom You, the Tax Payer, Provided Over Half the Individual’s Support

Tax Payer Dependent Over 65 Blind NOTE: Exemptions Lower AGI (Adjusted Gross Income) Exemptions Worth $3,650 (this amount changes) For Each:

Standard Deduction (amounts change) $5,700 for Single $11,400 for Married Filing Jointly OR Itemized Deductions—Schedule A NOTE: Use whichever is Larger

Medical & Dental Expenses (Limited) Real Estate Taxes Paid Vehicle Taxes from Registration Donations of Money or Goods Unreimbursed Job Expenses ? Safe Deposit Box Fees Union Dues Losses Due to Theft, Vandalism, Fire, Storm (Limited) Cost of Special Tools, Uniforms, or Protective Clothing (Limited) Business Use of Home (Home Office) (Limited)

Lower Tax Amount If Tax Amount is Zero, Can Give a Refund More Valuable Than Deductions You owe $1,003 in tax. You are eligible for either a $1,000 tax deduction or a $1,000 tax credit. Which would you choose?

More Valuable Than Deductions- How? Deduction—Your Original Income was $9,480 $9,480 - $1,000=$8,480 You now owe $853 which is a savings of $150 Credit—Your tax is $1003 $1,003 - $1,000=$3 You now owe Which is a savings of $1,000

Child Care Expenses American Opportunity Credit for College Children Under 18 Who Live With You Home Energy Savings First-Time Homebuyer Having a Job Lower Income Families

Filing Status-Married, Single, Etc. AND Taxable Income

Married Filing Jointly 2010 Tax Brackets Taxable Income:Income Tax: $0-$16,75010% of the amount over $0 $16,750-$68,000 $1,675 plus 15% of the amount over $16,750 $68,000-$137,300 $9, plus 25% of the amount over $68,000 $137,300- $209,250 $26, plus 28% of the amount over $137,300 $209,250- $373,650 $46, plus 33% of the amount over $209,250 $373,650+ $101, plus 35% of the amount over $373,650

Samantha’s 2010 taxable income is $40,000. This puts her in the 25% tax bracket. If that meant that all of her income was taxed at 25%, she would be paying $10,000 in income taxes. Instead, she’ll be paying much less.

Samantha will actually end up paying $6, calculated as follows: 1) Her first $8,375 of taxable income is taxed at 10%. So $8,375 X 10% = $ in tax 2) $34,000 - $8,375 = $25,625 is taxed at 15%. So $25,625 X 15% = $3, in tax 3) $40,000 - $34,000 = $6,000 is taxed at 25%. So $6,000 X 25% = $1,500 in tax 4) $ $3, $1,500 = $6,181.25

Single 2010 Tax Brackets Taxable Income: Income Tax: $0-$8,37510% of the amount over $0 $8,375- $34,000 $ plus 15% of the amount over $8,375 $34,000- $82,400 $4, plus 25% of the amount over $34,000 $82,400- $171,850 $16, plus 28% of the amount over $82,400 $171,850- $373,650 $41, plus 33% of the amount over $171,850 $373,650+ $108, plus 35% of the amount over $373,650

National Defense (Wars) Social Security Medicare/Medicaid Interest on the National Debt President, Senators and House Representatives All White House Workers Agriculture Foreign Affairs Veteran Benefits Environmental and Natural Resources

Education Public Transportation Fire Fighters & Police Officers Road & Traffic Light Repair Capitol & Government Building Maintenance Congress, Governors, Mayors, State Representatives All Government Workers Garbage Collecting Healthy Drinking Water

How Tax Money is Used Vote

Created in th Amendment Gave Congress the Power to Tax

In 1916, Congress changed the text of the income tax law, removing the word "lawful" from "lawful business" Now ALL income, whether attained by legal means or not, was taxable. Because of this, many criminals who were guilty of other infractions were sent to prison for tax evasion.

Income Payroll Unemployment State & Federal ½ of Medicare & Social Security Sales Real Estate Personal Property

Certified Public Accountant (CPA) H & R Block IRS Tax Programs If you have a professional complete taxes, make sure they sign off on the return. If they make a mistake, the will at least cover your penalty and interest.