Tax Tips and Savings

 

 

Tax Tips

 

 

 

Congress has agreed upon and President Obama has signed the 2012 federal tax tables.

2012 tax rates

 

 

Tax rate

 

 

 

 

Single filers

 

 

 

 

Married filing jointly or qualifying widow/widower

 

 

 

 

Married filing separately

 

 

 

 

Head of household

 

 

 

 

10%

 

 

 

 

Up to $8,700

 

 

 

 

Up to $17,400

 

 

 

 

Up to $8,700

 

 

 

 

Up to $12,400

 

 

 

 

15%

 

 

 

 

$8,701 -  $35,350

 

 

 

 

$17,401 - $70,700

 

 

 

 

$8,701- $35,350

 

 

 

 

$12,401 - $47,350

 

 

 

 

25%

 

 

 

 

$35,351 - $85,650

 

 

 

 

$70,701 - $142,700

 

 

 

 

$35,351 - $71,350

 

 

 

 

$47,351 - $122,300

 

 

 

 

28%

 

 

 

 

$85,651 - $178,650

 

 

 

 

$142,701 - $217,450

 

 

 

 

$71,351 - $108,725

 

 

 

 

$122,301 - $198,050

 

 

 

 

33%

 

 

 

 

$178,651 - $388,350

 

 

 

 

$217,451 - $388,350

 

 

 

 

$108,726 - $194,175

 

 

 

 

$198,051 - $388,350

 

 

 

 

35%

 

 

 

 

$388,351 or more

 

 

 

 

$388,351 or more

 

 

 

 

$194,176 or more

 

 

 

 

$388,351 or more

 

 

*chart from bankrate.com (http://www.bankrate.com/finance/taxes/2012-tax-bracket-rates.aspx)

 As a single filer you are taxed at the 10% rate up to $8,700 and then 15% for each dollar above $8,701 up to $35,350. Of the four filing statuses, be mindful of the pitfalls of married filing separately. In most instances it’s more advantageous to file in any of the other three filing statuses.

When completing your taxes limit all distractions like the TV or other people. Nothing makes a mistake faster than viewing the NCAA basketball tournament, eating lunch, watching your kids play and trying to remember if this 1099 is qualified dividend income or taxable dividend income. Another easy way to make a mistake is to not organize your current tax statements. This includes W2s, 1099s, interest statements, mortgage statements, student loan interest paid statements, property and state tax receipts. If you are still feeling overwhelmed please consult with a reputable tax professional.

Savings

 Here are some of the best HR forms are the authorization for direct deposit

 https://uwservice.wisc.edu/docs/forms/pay-direct-deposit.pdf

 and the 403(b) salary reduction agreement:

 http://uwservice.wisc.edu/docs/forms/sraform.pdf

The new direct deposit form allows up to three bank accounts (one primary, two secondary) to automate your savings. The 403(b) salary reduction agreement helps you save for retirement, but since these are pre-tax withdrawals you are lowering your taxable income. If you have maxed out your 403(b) contribution consider a Roth IRA which allows post tax income to be invested but can be withdrawn tax free if you meet certain requirements.

 

 

 

 


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