The Tax Questions Blog

Posts Tagged ‘taxes’

Question: How do I figure out the total taxes to be taken out of a given salary?

In Colorado Springs, I am trying to figure out the percent that will be taken out of a given salary, including Fed, state, s.s, Medicare, and FIT (don't know what that is). This does not include benefits or retirement plans.

Answer: Go here for some handy estimators: http://www.paycheckcity.com

FIT - Federal Income Tax

Child Tax Credit Deduction Calculator 2010, 2011

Question: I have to pay taxes on a short sale. Does it help if I start contributing to my 401k to reduce taxable income?

I short-sale my property in 2008. I'll receive a 1099 from lender with "gains" for $60,000. I don't know what to do to minimize my tax exposure. I was thinking about start contributing as much as possible to my 401k plan during this year to reduce my taxable income. Is this a good idea? What else can I do?

Answer: What you need to do is develop a relationship with a tax consultant or financial planner who is savvy in tax matters. Buy some face time and avoid these bad tax surprises. Get control of your financial life

A 401(k) is always a good idea. But it won't help you for last year.

Will the proposed FBT change reduce your take home pay? - 14 July 2009

Question: How long must I keep credit card statements, utility bills, & other financial papers?

I am cleaning out documents I have had for years & am wondering, for tax purposes, how long I have to keep some of them. I have prescription forms (the ones the pharmacy attaches to the script itself,) insurance E.O.B.s, and other papers just taking space from years ago & want to DOWNSIZE & SIMPLIFY! I am scared to get rid of financial papers, though. What is a safe time period for keeping these?

Answer: Any normal bills, you can throw away once you are satisfied that they are right. Credit card statements and bank receipts should probably be kept for 3 months (you never know when you may need to go to the bank and get a loan or something). Any financial papers (i.e. receipts, forms, etc...) dealing with taxes should be kept for 3 years. Any collection attempts, steps you have taken to rememdy them, and correspondences that you have made or received should be kept for the entire statue of limitations...15 years.

Rock'n'Roll Lifestyle

NEW CREDIT FILE: info from the Credit Secrets Bible

Question: Do I have to pay withholding tax on capital gain?

Hi,

I am a Canadian citizen living in Canada, and I own shares of an American company listed in NYSE. The price of my shares have gone up recently and I am planning to sell them at profit. My question is, do I have to pay any withholding tax on the resulting capital gain? I know that I pay 15% tax on dividends from the U.S., but I am not sure about the treatment on capital gain.

Plus, if I must pay withholding tax, what would be the rate and what will it be based on? Will it be XX% on the entire capital gain or XX% on the taxable capital gain (e.g. 50% of the capital gain in Canada)?

Thank you

Answer: There is no withholding tax on capital gains.