What States Have No State Income Tax?

States with no individual income tax as of 2014 are:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Texas
  • Wyoming

States with no corporate income tax as of 2014 are:

  • Nevada
  • South Dakota
  • Wyoming

Can I Claim the Foreign Earned Income Exclusion?

What is the Foreign Earned INcome Exclusion?

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income some or all of your foreign earnings.  The amount allowed to be excluded is adjusted annually for inflation.

How do I qualify for the Exclusion?

Requirements to claim the foreign earned income exclusion are; 1) Your tax home must be in a foreign country.  2) You must have foreign earned income.  3)  a)You must be a US citizen who is a Bona Fide Residence for an uninterrupted period that includes an entire tax year, b) or a US resident alien who is a citizen or national of a country which the United States has an income tax treaty and who is a Bona Fide Resident uninterrupted for an entire year, c) or US citizen or US resident alient who is physically present for at least 330 full days during any period of 12 consecutive months and pass the Physical Presence Test.

Your tax home is your regular or principal place of business, employment, or post of duty, regardless of where you maintain your family residence. If you do not have a regular or principal place of business because of the nature of your trade or business, your tax home is your regular place of abode (the place where you regularly live). You are not considered to have a tax home in a foreign country for any period during which your abode is in the United States. However, if you are temporarily present in the United States, or you maintain a dwelling in the United States (whether or not that dwelling is used by your spouse and dependents), it does not necessarily mean that your abode is in the United States during that time. There are special rules, so be sure to speak to your tax professional or CPA.

HOW MUCH IS THE EXCLUSION?

The amount is adjusted annually for inflation. The most recent tax years are listed below:

For the Tax Year Max Exclusion
2016 $101,300
2015 $100,800
2014 $99,200
2013 $97,600
2012 $95,100
2011 $92,900
2010 $91,500

Does it Exclude Self Employment

No, you must still figure and pay self employment taxes on earned income from 1099’s, K-1’s, partnership’s, self employment, etc. .

Do the Exclusions apply for state taxes

Obviously for states where there is no state income tax no state tax is due. Each state has there own set of rules and some have harder standards to meet the exclusion. Be sure to speak to your tax professional or CPA.

Source:  IRS Publication 54

2014 Traditional & Roth IRA Contribution Limits

2014 Traditional & Roth IRA Contribution Limits

  Standard Limit Catch-up Limit (Age 50 and older)
Traditional $5,500 $6,500
Roth $5,500 $6,500

2014 SEP Contribution Limits

Simplified Employee Pension (SEP) Contribution Limits

Max Dollar Allocation Max Considered Compensation
$52,000 $260,000

The maximum amount that can be contributed to a simplified pension plan (SEP) plan is 25% of an employee’s compensation, which is capped at a maximum as indicated above.

2014 SIMPLE IRA Contribution Limits

Savings Incentive Match Plan for Employees (SIMPLE) IRA Contributions and Catch Up Provisions

Standard Limit Catch-up Limit (Age 50 and older)
$12,000 $14,500

Employers are generally required to match each employee’s salary reduction contributions, on a dollar-for-dollar basis, up to 3% of the employee’s compensation.

2014 401(k) and Contribution Limits

401(k) Plans: Employee Salary Deferral Limits

Standard Limit Catch-up Limit (Age 50 and older)
$17,500 $23,000

Employers can contribute up to $33,500.

What is the IRS Estimated Tax | Quarterly Tax?

Who must pay Estimated Taxes?

If you have Taxable Income and you have not paid any taxes or you did not have enough taxes taken out of your pay check from your employer, you are required to estimate and pay your taxes to the IRS quarterly. You may be subject to a penalty if you do not pay quarterly tax payments. Generally, most taxpayers will avoid a penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if you have paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules, so be sure to speak to your tax professional or CPA.

Estimated Taxes

Estimated taxes are a method to pay income tax and self-employment tax, as well as other taxes during the year in addition to any withholding you have taken out of your paycheck from your employer. If you do not have an employer, you must pay tax four times a year called Quarterly Estimated Tax Payments

Estimated quarterly tax payments may be due if you have taxable income from:

  • Self-employment
  • Investments
  • Interest
  • Dividends
  • Alimony
  • Rent
  • Lottery winnings
  • Gambling winnings
  • Gains from the sale of assets
  • Other income

When should I pay my Quarterly estimated taxes?

The tax year is divided into four payment periods:

For the Period Due Date:
January 1 to March 31 April 15
April 1 to May 31 June 15
June 1 to August 31 September 15
September 1 to December 31 January 15 of next year

Saturday, Sunday, Holiday Rule

If the due date for an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or a holiday.

What if my company has a fiscal tax year?

If your tax year does not start on January 1, your payment due dates are:

  • The 15th day of the 4th month of your fiscal year
  • The 15th day of the 6th month of your fiscal year
  • The 15th day of the 9th month of your fiscal year
  • The 15th day of the 1st month after the end of your fiscal year

You do not have to make the last payment listed above if you file your income tax return by the last day of the first month after the end of your fiscal year and pay all the tax you owe with your return.

How do I Pay my Estimated Taxes?

  1. If you have a credit from last years tax return, that counts as a payment.
  2. Send in your payment with a payment voucher Form 1040-ES
  3. Make an online electronic payment. To pay your taxes online or for more information, click HERE.

What are the IRS 2014 Personal Income Tax Rates?

2014 IRS Income Tax Rate Table and IRS Filing Status

Tax Rate Single Head of Household Married Filing Jointly or Qualified Widow(er) Married Filing Separately
10% $0 – $9,075 $0 – $12,950 $0 – $18,150 $0 – $9,075
15% $9,075 – $36,900 $12,950 – $49,400 $18,150 – $73,800 $9,075 – $36,900
25% $36,900 – $89,350 $49,400 – $127,550 $73,800 – $148,850 $36,900 – $74,425
28% $89,350 – $186,350 $127,550 – $206,600 $148,850 – $226,850 $74,425 – $113,425
33% $186,350 – $405,100 $206,600 – $405,100 $226,850 – $405,100 $113,425 – $202,550
35% $405,100 – $406,750 $405,100 – $432,200 $405,100 – $457,600 $202,550 – $228,800
39.6% over $406,750 over $432,200 over $457,600 over $228,800

2014 IRS Standard Deduction by IRS Filing Status

Single Head of Household Married Filing Jointly or Qualified Widow(er) Married Filing Separately
$6,200 $9,100 $12,400 $6,200