income

2016-2017 Federal Tax Filing Gross Income Requirements – How Much You Have to Make or Earn to File Taxes

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Every year I get asked about income requirements for filing taxes when publishing tax filing due dates for the upcoming tax season.  While there are other factors that also drive if you have to file taxes or not, how much you earn (gross income) is a primary driver. Gross income covers monies from goods, property, and […]

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2017, 2016 and 2015 Earned Income Tax Credit (EIC) Qualification Income Limits

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[Updated] Below are the final IRS published 2016 and 2017 Earned Income Tax credit (EITC) figures. You can reference IRS publication 596 or use online tax providers like TurboTax or H&R Block to get a free estimate of the specific credit amount you would get. How to read the EITC tables: The maximum amount of the earned income credit allowed/payable is shown in line […]

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You Actually Are Poorer Now Than You Were in 2008

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According to an analysis conducted by two former census bureau officials median income for the average American is still around 6 percent lower (after adjusting for inflation) than when the recession began in early 2008.  So if you feel poorer today than you did a few years ago you are not alone. The drop in […]

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3 Years of Economic Growth – Are You Feeling The Prosperity?

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The chart below shows that the American economy, based on the latest GDP data, has been growing consistently higher for the last three years. Coupled with the stock market reaching new highs one may argue that America has found its groove again and that we are back on the yellow brick road to prosperity. Sadly, […]

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The 10 Largest Tax Breaks In The Income Tax system

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The Congressional Budget Office (CBO) has published an interesting report titled, The Distribution of Major Tax Expenditures in the Individual Income Tax System, that shows how 10 of the largest tax breaks, credits and deductions are distributed across household with different income levels. These tax breaks (or tax expenditures as they are referred to) include, […]

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Figuring Your IRS Taxable Income – Adjustable Gross Income (AGI) vs. Modified Adjustable Gross Income (MAGI)

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You would think that figuring your income that is subject to taxes would be easy. Unfortunately with our overly complex federal tax system the IRS has multiple definitions of income and it’s important to understand the difference between these because not only can it affect how much you pay in taxes, but also determines what […]

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Tax Planning for 2013 – Dealing with The Uncertainty and Making Smart Money Moves

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Being the finance wonk that I am, I rather enjoy reading some of the tax advice that the big accounting firms put out for their clients. While their target audience (based on their $250 to $500 hourly fee) is clearly higher net worth individuals, you can glean some pretty useful advice from their reports. Take […]

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The Rich Get Richer and The Poor Get Poorer – An End to The American Dream?

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The graphic and data below from Bloomberg provide a stark reminder of how divergent income growth in America has been. A particularly timely topic during an election year where income inequality has had such a significant focus. The underlying data, showing a fall off in average family income, challenges the very notion of the American dream where each generation does […]

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How Rich Am I Relative To Others

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The table to the right shows where your household stands, relative to others, based on how much income is earned per year. For example, if your household makes $50,000 a year you would be making more than 56% of American households. At $100,000, you make more than 81% of Americans. To be in the 99% percentile, or in the […]

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Federal Taxes as a Percentage of Household Income

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An interesting study by the Congressional Budget Office (CBO) provided some very telling graphics around income distribution changes relative to which groups paid the most in taxes. Amazing how politicians can both take the same data and spin it in different ways. The first graphic shows the cumulative growth in average income after federal taxes […]

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