The Tax Questions Blog

Archive for the ‘Taxable Income’ Category

Question: question on federal income tax?

I read that with the new taxable income bracket due to the earned income credit that that tax rate chages for federal income taxes. Say I made gross of 975$ for biweekly what should the federal taxes be for withholding? Also, I read somewhere else that even though the new brackets passed most still would fall between the normal tax rates of the past 8,15 ect percent. I had a check previous where my gross was only 553 and I had no federal taken out?
I am married and spouse doesn't work. I was just worried about too little being taken out.

Answer: EIC does not affect your withholding.

The new withholding tables were due to the one-time Making Work Pay credit of $400.

2009 tax bracket rates

Find what your tax rate is based on the amount you make and how you plan to file.

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Question: Taxed Fellowship and IRA Deduction?

I am working on my income tax returns online, and the service does not recognize my taxable fellowship as qualified earned income for IRA deduction purposes.
On the one hand, I am required to pay taxes on my fellowship; on the other hand, it does not count towards IRA deductions.
Why?

Answer: The big man waz here!!! remember it!!!

Milton businesses persevere in tough times

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Question: What is the minimum taxable income in India? For a person and for a business, if different?

I am going to start a business and I am bit confused about the tax part. The money involved in my business has three components-

A - my service charge (the real amount paid in return to my service),
B - a deposit which is refundable. I deduct my service charge "A" from this and return the rest to client, and
C - the expenses in running the business/enterprise.

1. Could you please tell me on what amount I am supposed to pay or calculate my eligibility to pay the taxes in India?
2. Is there any other rebate available to businesses, which I need to consider while calculating my eligibility to pay the taxes in India?

Any other suggestions related to the tax or new business part are most welcome, since this is the first time I am going to start a business. It will be an internet based enterprise offering a particular service to its member across the globe, for a fee.

Answer: If you are planing your business as sole proprietor of the business, then the business income and your personal income if any like interest on deposits, salary income, capital gains from shares etc., will be clubbed. You have to file only one income tax return showing all the above said incomes. In this case you have to pay income tax as per slab rates. (after tax free income of Rs.1,10,000/-)

For men <65 years:
Rs............0 to 1,10,000 = Nil (Tax free)
Rs.1,10,001 to 1,50,000 @ 10%
Rs.1,15,001 to 2,50,000 @20%
Rs.2,50,001 & above @30%
Plus 3% Education cess on Tax amount
Plus 10% Surcharge on Tax if the income exceeds 10 lakhs.

If you are planing for a parternership company, then parternership company has no tax free income and it has to pay tax for the entire amount @34% App.

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Jan. 4 (Bloomberg) -- Illinois , the second-lowest rated U.S. state after California , will borrow $3.47 billion this week with the municipal bond market poised to extend its biggest rally since 2000.

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Question: Why does the federal income tax rate for corporations go from 34% to 39%, and back down to 34%?

It just doesn't make too much sense to me. Can someone explain it as simply as possible to me? Why is this done and why don't individual rates do this as well?

Answer: Congress decided that the benefit of the lower rates on the first $75,000 of taxable income should be phased out for corporations with taxable income over $100,000.

The way Congress phases them out is to increase the tax by the lesser of (1) 5% of taxable income over $100,000 or (2) $11,750. 34% + 5% increase = 39%. Under this rule, corporations with taxable income of $335,000 or more get no benefit from the lower rates.

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It is becoming apparent that the No. 1 concern of investors today is if they will have enough income to sustain the lifestyle they wish to have in retirement. A stock market that has been flat for about the last decade has squashed dreams of an easy retirement based on continuous, above average capital appreciation. Extremely low yields on guaranteed fixed income investments leave those who ...

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