tax | Online Savings Blog

Taxes and Your Love Life: Why it Matters
04.25.08 | Taxes | 2 Comments | by Fred Siegmund

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The federal income tax used to have what came to be known as the marriage tax. If two single people earned $25,000 each and then got married, they paid more tax on $50,000 of combined income than they paid as two single people.

Quite a few years ago, Congress began tinkering with the tax rate schedules to eliminate the marriage tax. In 2007, a couple with two $25,000 incomes and the standard deduction will pay $4,092.50 in tax by filing jointly as a married couple with $50,000 of joint income. If they file separately as a married couple, they will each pay $2,046.25, which combined also equals $4,092.25. If they were both single they still pay the same combined tax.

The numbers tell the story. Congress decided that two single people who get married should pay the same tax on their combined income. But should a single person pay the same tax as a married couple with the same income?

If a single person earns the same $50,000 dollars as the couple above, he or she pays $6,736.25. The single person pays $2,643.75 more tax than the married couple with the same income.

Congress seems to be telling us that it is right that married couples keep more income since they have more expenses for food, medicine and so on. One difference of the tax comes with the personal exemption and the size of the standard deduction. The single person gets $3,400 exemption and $5,350 deduction for $8,750, but a married couple gets double that at $17,500. The single person has taxable income of $41,250 compared to $32,500 for the couple.

However, if we eliminate the difference in exemptions and deductions for the single person so that both have taxable incomes of $32,500, the single person still pays more: $456.25 more. The single person pays additional tax because they encounter the 25% tax rate much sooner than the married couple.

The difference gets more important at more modest incomes. A single person earning $25,000 pays $2,046.25 in federal tax while a couple filing jointly would pay only $750.00.

Those are critical dollars that might take the rent money, especially when both have $1,912.50 social security taxes on top of their income taxes. Now Congress seems to be telling us that people of modest incomes must scrimp and save: maybe double up and share living quarters.

Maybe now there is a single person tax? You be the judge.

Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
Economic Stimulus Payment Schedule
04.09.08 | Money | 0 Comments | by junger

If you're eligible for the economic stimulus package signed earlier this year, you've probably wondered when your money will be coming.

Here's the schedule, assuming you had your tax returns processed by April 15.

DIRECT DEPOSIT

Last two SSN digits: Payment will be transmitted:
00 through 20 May 2
21 through 75 May 9
76 through 99 May 16

PAPER CHECK

Last two SSN digits: Payments will be mailed by:
00 through 09 May 16
10 through 18 May 23

19 through 25 May 30
26 through 38 June 6
39 through 51 June 13
52 through 63 June 20
64 through 75 June 27
76 through 87 July 4
88 through 99 July 11

If you file after April 15, expect your payment two weeks later than the schedule says, according to the IRS. Not sure if you'll be getting a payment? Check your eligibility now.

(via Blogging Away Debt)
Our Taxes Are Going to Be Confusing. Crap.
02.25.08 | Money | 3 Comments | by junger

As I was hanging out in Best Buy last week while my car speakers were getting replaced, I wandered over to the software section to check out the tax programs.

For the past couple of years, I've used H&R Block TaxCut to file our taxes (how do you file yours?) with little problem.

This year, however, it's going to be a bit more confusing.

Since we moved in the middle of 2007 (well, November), we'll have to pay state taxes in both Massachusetts (where we moved from) and Maryland (where we now live).

Perusing the TaxCut software, I noticed that every version only comes with one state. So I'll only be able to use the software to file in either Maryland or Massachusetts.

Thankfully, Maryland lets individual taxpayers file online for free with their "iFile" system. Check out the demo online.

Chances are, I'll probably use TaxCut for federal and Massachusetts and iFile with Maryland.

Do you have a confusing tax situation? Let us know about it.
File Your Taxes Online: What's the Best Option?
02.12.08 | Money, Online Finances | 0 Comments | by Tom Valenti
It seems everywhere I go I'm inundated with solicitations from H&R Block, Liberty, and a slew of local accountants.

It's tax time, they all want my business, and most seem to want me to come into their physical establishments.

Maybe a coupon or promo item would at least make me to consider moving from the online tax filing service I've been using the last few years. Until that happens, I'll stick with H&R's online TaxCut service.

Before starting with TaxCut, I filed using one of the free services the IRS promotes on their site. I must say, TaxCut (and its competitors I quickly researched) are far superior to the couple of free services I had used in the past.

But I do now see that TaxCut and some other higher profile services are now available for free, as well. For those who qualify, that's a nice deal.

How do you file your taxes? Also, let us know what your experiences have been with online tax services.
How do you file your taxes?

Accountant

Franchise (H&R, Liberty, etc.)

File by myself online

File by myself paper

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Tom Valenti is a marketer and project manager who currently works for a financial institution in New Jersey. For more info, visit him at http://tomvalenti.com.

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