Category: Tax Tips and Tricks

Taxes are confusing and cause many taxpayers stress come tax season but PriorTax is here to help. Learn the tax tips and tricks to get you through the preparation process. You could be missing out on more money from the IRS which is why we want to help. We’ll let you know about hidden deductions and rare credits to report on your tax return to maximize your refund. Don’t hesitate to leave a comment on our blog if you have a question about your tax situation. Also, check back here for new tips and tricks throughout the tax season because our team is on the lookout!

Archive for the ‘Tax Tips and Tricks’ Category

eFile Taxes and Tax Extension

Posted by admin on November 25, 2022
Last modified: November 25, 2022

You can eFile federal and state income taxes return electronically using PriorTax. Taxpayers can eFile taxes either through an online tax preparer that is an approved electronic return originator (ERO) such as PriorTax with free support from our Tax Service Professionals.

eFile taxes with PriorTax for your return, and choosing to have the refund directly deposited in your bank account is the fastest and easiest way to receive a tax refund. eFiling taxes will get you your tax refund far quicker than traditional mail. eFiling taxes online also speeds up the time that it takes to receive your tax refund.

PriorTax is an authorized IRS e-Filing provider. PriorTax eFiling software will automatically verify that the returns are completed, correct errors, produce relevant schedules, and transfer your returns from your computer to IRS systems and if requested, to the local state tax systems. To help assure that your eFiled tax return is accurate, only proven, top-quality, PriorTax eFiling service will support all customers along with our free Tax Service Professionals to walk you through to eFile taxes.

efile taxes
efile taxes

You may select to have a PriorTax Tax Service Professional help eFile taxes your return for you electronically, or you may choose to do it yourself.

However, note that some states accept electronic filing of tax returns directly, while others send returns directly to the IRS, then those returns are forwarded to state tax agencies. In addition, some states will not let you file a state-only e-Filed return; they will ask that you e-File your state and federal taxes together.

You do not need to worry that data will end up in the wrong hands or misused, as the IRS, the state, and tax preparers all follow the same privacy rules for electronic returns that they do for paper returns. While you may gather all of the necessary documents for your tax return as you go through the e-Filing process, gathering that information sooner may save time later.

How Can I eFile Taxes with a Tax Extension?

Filing an extension for your taxes is easy with PriorTax. Just submit Form 4868, and we’ll take care of the rest. This will give you extra time to prepare for your return, no matter the reason.

An extension only gives you little bit more time to finish tax filing, but no extra time to pay your taxes. Your tax payments are due on the tax filing deadline, which typically falls on April 15 or if the deadline falls on a holiday or weekend, the next business day.

Not filing your taxes on time can result in some pretty hefty penalties. The IRS will charge you monthly interest on the unpaid balance until you pay the full tax amount you owe. Additionally, failing to pay at least 90% of what you owe can result in a late payment penalty, which is usually half of 1% of the amount owed each month, up to 25%. Finally, not filing your return or Form 4868 by the tax filing deadline comes with a late filing penalty of 5% of the amount you owe for each month, again up to a maximum of 25%. So while eFiling a tax extension may not be penalized, it’s still important to make sure you file and pay your taxes on time to avoid some costly fees.

It’s important to get your taxes filed on time, but sometimes life gets in the way. For example, maybe you’ve been busy with work or taking care of your family, and you just need to get a chance to get your taxes done. That’s okay! The IRS offers a six-month extension for individuals who need a little extra time.

Child Tax Credit 2022

Posted by admin on November 7, 2022
Last modified: November 7, 2022

Individuals and businesses must pay different taxes, but credits can help offset some burdens. For example, Tax Credit are often given for activities that benefit the economy or further important goals. In most cases, child tax credit 2022 cover expenses paid during the year and have certain requirements that must be met before claiming them. By taking advantage of available tax credits, taxpayers can save money and reduce their overall liability.

Child Tax Credit 2022

The Child Tax Credit in 2022 is a powerful tax tool that can help you save on your taxes. The Child Tax Credit 2022 is now worth up to $2,000 per qualifying child and can be used to reduce the amount of tax you owe. A tax credit is a bit different from a tax deduction. Tax credit effectively reduces your total taxable income by the dollar for each dollar of deduction. The 2022 Child Tax Credit if qualified, is a great way to preserve money on your tax, so take advantage of it!

You may get a refund on your Child Tax Credit by using the Additional Child Tax Credit (ACTC). However, your adjusted gross income needs to stay below a specific amount based on your tax filing status, not to limit your Child Tax Credit. Remember, you can claim these tax credits when filing your taxes!

Contact our PriorTax Tax Service Professionals to guide your through this process to maximize your tax refund in 2022!

child tax credit 2022
child tax credit 2022

Qualifying for the Child Tax Credit in 2022

For your dependent or children to be eligible for the Child Tax Credit in 2022, you must provide their name(s) and Social Security Number(s) on your tax return. In addition, you and any joint filers must provide your taxpayer-identification numbers or TIN.

To qualify as a dependent for tax purposes, your child must meet the following criteria:

You may claim your son, daughter, stepchild, foster child that are eligible, brother, sister, half-brother, half-sister, or their descendant as a dependent on your tax return as long as they meet the following criteria:

– They lived with you greater than half of the tax year while some exceptions exist.

– They must not have provided them with more than 50% of their financial needs to support them during the tax year

– To be eligible, they must not have filed a joint tax return for the year

– They must have an official Social Security Number.

Determining the Child Tax Credit 2022 amount

To calculate the amount of the Child Tax Credit in 2022, you will need to gather a few key pieces of information. First, you will need to determine the number of children that qualify for the child tax credit. Then, multiply that number by $2,000 to calculate the total potential child tax credit once you have that number.

However, keep in mind that the potential Child Tax Credit amount may be reduced depending on your adjusted gross income. For those who are married and filing jointly, the maximum adjusted gross income is $400,000. For all other tax filing statuses, the maximum is $200,000.

Additionally, any remaining 2022 Child Tax Credit amount will be further reduced after considering federal income tax. Specifically, if your federal income tax somehow is less than the anticipated total Child Tax Credit amount, the tax credit is limited to the amount of your total tax obligation. However, those who owe more taxes than their potential credit can claim the full credit by filling out Tax Form 8812.

Determining the Additional Refundable Child Tax Credit amount

The Child Tax Credit is a great way to help offset the costs of raising a family. However, sometimes families need more tax liability to take advantage of the full credit. In these cases, the Additional Child Tax Credit can greatly help.

This tax credit is refundable up to $1,400 per qualifying child for the unused amount of your Child Tax Credit. The tax credit is calculated by taking 15% of your total earned income above $2,500. Even though the traditional earned income requirements must usually be met to qualify for a refundable credit, there are some cases where filers with three or more qualifying children may still be able to receive the tax credit. To calculate the credit using this method, net Social Security and Medicare taxes are subtracted from the earned income credit claimed. Claiming the child tax credit in 22′ using this method is only possible when the number from this calculation is greater than the standard calculation that uses earned income. When it’s not, filers have to use the number that results from taking 15% of their earned income above $2,500.

Tax Write Offs

Posted by admin on October 30, 2022
Last modified: October 29, 2022

Easy Guide on Tax Write Offs

While people typically think of business expenses when thinking about tax write offs, these may also be tax deductions, credits, or expenses you are entitled to claim against your personal taxes, also reducing your individual taxable income. By taking advantage of business tax write offs, expenses you incur while running your company can be deducted against income, which eventually reduces your tax liability.

Tax deductions help you lower the amount of income subject to federal income taxes, which may help reduce the amount of taxes you owe. Tax credits and deductions can modify how much you owe in taxes so that you owe less. Tax credits may also be called a kind of refund since the tax credits are applied against taxes you owe, reducing your total tax bill directly. Taxpayers can qualify for a number of tax breaks and credits on their taxes every year, which may help them pay lower taxes – or get refunds from the IRS.

If you are self employed, you can take many of the same business tax write offs that corporations do, which lowers the amount of taxable self-employment income. In addition, self-employed individuals, such as independent contractors and small business owners, may be able to deduct their business expenses as a sole proprietorship from their gross income in order to reduce their tax bill. Businesses and individuals alike have opportunities to claim some deductions that lower their taxable income.

tax write offs
tax write offs

Be sure to check your local government’s tax write offs guidelines since certain states allow several unique income deductions or require certain conditions to be eligible for lowering your tax liability. For example, You can claim this deduction on your Virginia state return only if you are eligible to claim a credit for childcare expenses and child support payments on your federal return. In addition, the Virginia deduction for long-term care premiums is fully disallowed if you claimed any Federal income tax credit for long-term care insurance premiums paid in a taxable year.

Before tax write offs, any expenses on your federal income tax return, it is important to understand what you can deduct and the rules for filing the deduction. Well, tax write offs on any legitimate expense you are allowed to deduct against your taxable income on your tax return. It is allowed by deducting certain expenses when you are ready to file your federal income tax return.

The IRS lets you choose whether you want to deduct either state taxes and local sales taxes, your income taxes, and certain taxes paid overseas. Under the Tax Cuts and Jobs Act (TCJA), all state and local income taxes (SALT), including estate taxes, are limited to $10,000 deductions. If you are a homeowner, you may also be able to deduct your property taxes from your tax bill.

You can deduct mortgage insurance premiums, home mortgage interest, and real estate taxes you paid for your home throughout the year. In addition, you can deduct regular transportation expenses, including fees and taxes, taken from your paycheck by Uber and Lyft. With Multiply, you can deduct a percentage of the real costs for gas, repairs, car depreciation, insurance, and other car-related expenses. There maybe two ways to tax deduct car expenses, and you can choose the direction that gives you the most significant tax write offs. If an expense is also beneficial to you personally, only the part attributable to your business is deductible.

Home Office Tax Write Offs and Tax Deduction

As long as your income is greater than your business expenses subject to tax write offs, and you have a home office you only use for work, you may deduct expenses related to the work-related use of your home. The home office deduction was once an expense that would have been unpopular with self-employed business owners. Still, you have a dedicated space in your home to conduct your work. In that case, you should not be afraid to take advantage of the office expense and home office tax write off and tax deduction, which is a percentage of home expenses such as rent or mortgage interest, property taxes, and utilities, depending on how much square footage you use for your home office.

Standard tax deduction 2021 for Tax Write Off

Suppose your filing status has a standard deduction greater than your total deductible expenses for the tax year. In that case, it could be better off to take the standard tax deduction rather than trying to itemize for tax write offs. The Internal Revenue Service (IRS) allows individuals to claim a standard deduction on their income tax returns and itemize their deductions if they exceed this level. When you file your income taxes, the IRS uses your reported income, less your deductions (or itemized deductions) and credits, to determine which tax bracket you are in and what tax rate you will pay for taxable income.

Tax Write Offs Tax Calculator

To figure out how much you are saving by taking your tax write offs, Use our free PriorTax Tax Calculator and take the expense amount and multiply it by your tax rate. Each tax write off scenario will vary, but the expense will typically show up in the income report, subtracted from whatever income was already reported. These tax write offs are not exhaustive, but they provide a sense of what various businesses might be able to deduct from their taxes. Even the legitimate write-off categories can eliminate some expenses from being tax-deductible.

In other words, any expense deductible from business or personal income taxes can count as a tax write off. There is just one tax principle, outlined in Section 62 of the Internal Revenue Code, that says that any expense that is made to produce revenue is a valid tax write off. The deductions mentioned above may be claimed on Schedule C or Form 1065, but there are several other tax breaks that small-business owners often claim on their individual returns.

As a sole proprietor, you could qualify for a 20% deduction for qualified business income under the tax law, which would combine with lower personal tax rates under tax reform. The deduction is valid whether you own a sole proprietorship or LLC, and there is no requirement that you have a specific kind of business entity in order to deduct expenses.

Self Employment Tax

Posted by admin on October 20, 2022
Last modified: October 20, 2022

A Quick Guide for Self Employment Tax

Self employment tax is a tax that comprises two taxes: Social Security and Medicare. All working Americans pay self employment taxes. The IRS enforces it rigidly. It is the golden child of the tax code: untouchable by all and a real pain in the butt. There are only a few exceptions to the requirement to pay this tax to date. So yes, we all pay for it.

Let’s Dive Deeper into Self Employment Tax

Self employment tax is a tax that is paid by those who are self-employed. This tax is also known as FICA (Federal Insurance Contributions Act). Self employment tax is made up of two taxes: Social Security and Medicare.

All working Americans pay FICA. The IRS strictly enforces this tax. It’s a very important tax that all Americans must pay.

There are a few exceptions to the requirement to pay self-employment tax. One of these exceptions is church employees who take a literal vow of poverty.

Self Employment Tax
Self Employment Tax

How Much Does Self Employment Tax Sum Up To?

Are you self-employed and wondering about your FICA taxes? Here’s what you need to know.

As a self-employed individual, you are required to pay FICA taxes. This is because when you pay taxes as a self-employed person, it is known as “self employment tax” or SE tax.

All earned income is subject to Medicare and Social Security taxes. So what exactly is earned income? Earned income is anything you receive in exchange for a product or service.

Due to the lack of a middleman, the IRS requires freelance workers to pay the employer and the employee portions of FICA. In total, the combined self-employment rate for FICA is 15.3%.

For example, an employee’s wage is considered earned income because they receive it in exchange for their time and labor. However, self-employed individuals do not have an employer and instead receive their earnings directly from the customers they serve or sell products to.

Who Applies to file Self Employment Taxes?

As a self-employed individual, you are required to pay self employment taxes, regardless of whether you are a freelancer, independent contractor, or small business owner. This also applies to W-2 employees who have side hustles. So, even if you only drive for Uber on weekends or sell occasional items on Etsy, you are still responsible for the full 15.3% self employment tax.

There may be instances where you end up paying more Social Security tax than you actually owe. In these cases, the IRS will refund the overpaid amount when you file your 1040 tax return.

Quick Guide To Lowering Your Self Employment Taxes

No one likes paying taxes; self employment taxes can be especially difficult to stomach. Luckily, there are some things you can do to minimize the amount you owe.

Our self employment tax calculator can help you estimate how much you will owe in taxes. Using our self employment tax calculator is the best way to estimate how much you will end up paying. Just enter your net income, and the PriorTax Calculator will give you an idea of what you can expect to owe. Simply enter your net income, and the calculator will do the rest.

There are also some deductions you may be eligible for that can reduce your tax bill. These include student loan interest, retirement contributions, and the standard deduction. Be sure to explore all of your options so that you can keep more of your hard-earned money.

Quick Guide to Deduction on Self Employment Tax

Self employment tax can be a deduction against your income taxes. In addition, the employer portion of your SE tax can be used to reduce your income taxes. For example, you might deduct half when you fill out Schedule SE.

As a freelancer, you are used to being your boss. But did you know that comes with a few perks – like being able to write off half of your self employment tax?

That’s right, the additional 7.65% you pay to be your own boss is an eligible write-off against your income taxes. And since employers are permitted to write off their portion of FICA (7.65%), it’s essentially like getting a deduction for being self-employed.

This deduction can have a significant impact on your tax liability. For example, say you are in the 10% income tax bracket and have $10,000 in freelance income. Your total tax liability would be $2,530 ($1,000 + $253), which is just over 25% of your income. However, with the self-employment deduction, your total tax liability would be reduced to $2,265 ($1,000 + $226), which is still a significant amount but less than what you would otherwise owe.

You may not have realized that your business income is subject to income and SE tax. Just remember that the employer portion of your SE tax can be used to reduce your income taxes. You can deduct half of it when you fill out Schedule SE. So when you are filling out your taxes this year, take advantage of this deduction by including it on Schedule SE.

Deduction on Self Employment Tax from Business Expenses

Are you thinking of becoming your own boss? There are many things to consider before taking the leap into entrepreneurship, including taxes. As a business owner, you will be responsible for paying taxes on your business income.

One way to lower your tax bill is to deduct eligible business expenses from your income. This will lower your net income and, therefore the amount of taxes you owe. Anyone self-employed can deduct business expenses – you don’t need to set up an LLC to claim these write-offs. You will report these expenses on your Schedule C, which is used by those who are self-employed to document their income and expenses.

Some common deductible business expenses for freelancers and gig workers include home office expenses, cell phone bills, internet costs, computers and software, continuing education courses, and auto expenses. A general rule of thumb is that any necessary cost for running your business can probably be claimed as a deduction.

So, How To File Self Employment Taxes?

Self employment tax can be a big burden, but with PriorTax’s self employment tax calculator, you can get a good estimate of your tax bill. In addition, there are a few different ways to pay the IRS: you can mail them a check or Efile with the help of our tax service professionals

Remember, you don’t have to pay all at once! Most people make estimated quarterly tax payments to spread the cost over the year. In fact, the IRS will penalize you for not paying quarterly if you’re on track to owe more than $1,000 in taxes.

1099 NEC

Posted by admin on October 13, 2022
Last modified: October 12, 2022

Deep Dive into 1099 NEC

Are you self-employed? Do you work as an independent contractor, gig worker, or small business owner? Then you may need to file a Form 1099-NEC.

Depending on what is happened to your financial life over a year, you may receive one or more types of tax forms for your 1099 Form or even more than one 1099s from the same type. Your 1099 form is a kind of income information return; if you received any kind of payments or income during the past year other than wages, salaries, or tips, you would get a 1099 form in the mail. Tax Form 1099 is one type of IRS tax form used to report income that is not wage income for federal tax purposes. Just because you get a tax form with 1099 Form does not necessarily mean you owe taxes on this money. You should always report your accurate business income to the IRS if you get your 1099-K form through PriorTax.

1099 NEC
1099 NEC

Because the IRS treats every 1099 Form payment as taxable income, you are required to report 1099 Form payments on your tax returns, meaning that even if you do not get a 1099 Form, you should still report your 1099 payments. Reporting your 1099 Form is easy with the PriorTax E File Tax filing with the help of our Tax Service Professionals. Continue reading below for examples of the types of income for which you might receive 1099-NEC Tax Form, as well as how you can report taxes using this tax form. No matter what type of 1099 income you receive, you almost always have to report it when filing taxes. Since taxes are not a part of your 1099 income, it is important to track all your reported income.

Tax Form 1099 is one type of IRS tax form commonly used to report various types of income a taxpayer receives each year from organizations, financial institutions, and other sources unrelated to work. An IRS 1099 form is a set of tax forms documenting various types of payments made by an individual or a business, which is generally not your employer.

Complete Guide to 1099 NEC

There’re various types of 1099 tax forms, but one of the most common is the Tax Form 1099-NEC. This form is typically sent to self-employed individuals, such as independent contractors, gig workers, and small business owners. As an independent contractor, gig worker, or small business owner, you may receive a Form 1099-NEC. This form reports income earned from work such as driving for DoorDash, freelancing on Upwork, or renting a room out on Airbnb.

As an independent contractor or small business owner, you may receive a 1099-NEC tax form from your clients or customers. This form reports money paid to you for services rendered. The “NEC” in the form’s name stands for “Non-employee Compensation.”

Before 2022, payments made to contractors and freelancers were reported on a 1099-MISC form instead. That form still exists but is now used for reporting different types of non-wage income.

Payers should send you Forms 1099-NECs earlier in the tax season so that you have time to get a tax return prepared and so that the IRS has proof of how much income you earned throughout the tax year. If you were using online tax services such as PriorTax and assisted by a Tax Service Professional, you will be asked to input the information from any Form 1099s when you fill out your return. When you hire a contractor, be sure that he fills out the W-9 Tax Form so that you will have his information when it is time to send him (and the IRS) your 1099-NEC. To get that information on every non-employee, you will have them fill out W-9 forms as soon as they begin working with you.

The Difference Between 1099 vs W2

Posted by admin on October 7, 2022
Last modified: October 7, 2022

Laying Out the 1099 vs W2 Tax Filing

If you are working both as a W2 salary employee and a freelancer, you will need to file Tax Form 1099 along with your regular W2 tax return. Because the IRS treats every 1099 payment as taxable income, you are required to report your 1099 payments on your tax return. Whether or not you received all your 1099 Tax forms, taxpayers are required to report income when filing taxes. If the taxpayer did not receive 1099 Tax Form which is required for the income earned – even if the business did not file 1099 Tax Forms – the taxpayer might be able to report it as non-business income. Let’s get into 1099 vs W2 right away.

W2 vs 1099: The Difference Between W2 and 1099

As someone who earns income from both regular employment and independent contracting, you may be wondering what the difference is between 1099 vs W-2. Most people are already familiar with W-2s, which is the form that employers use to report annual wages earned by employees, as well as any withholdings from income.

Employers are required to send a copy of the employee’s W-2 to both the IRS And the employee. The employer is also obligated to withhold taxes from the employee’s wage payments. However, things work a bit differently for those who receive income as independent contractors.

If you earn $600 or more in a year from a single client as an independent contractor, you will receive a 1099 form. This can either be a 1099-NEC (if you were paid directly) or a 1099-K (if you were paid through a credit card or other payment methods).

So at tax time, those who earn money in both ways will end up with two different types of forms.

1099 vs w2
1099 vs w2

1099 vs W2: How Do you Know Which One is Which?

Do you know whether you are classified as a W-2 employee or a 1099 employee? Here are some things to remember as you work to determine your employment status and to be aware of your tax liability.

If your employer controls when you work, what tasks you perform, and what equipment you use, you are likely a W-2 employee. On the other hand, if you can set your own schedule and work independently, you may be classified as a 1099 employee.

1099 vs W2: What to Expect When Filing Tax for Each One?

W-2 workers and 1099 workers face different tax liabilities. The key distinction is that W-2 workers have taxes withheld from their paychecks, while 1099 workers do not. In addition, W-2 workers pay less in FICA taxes. FICA taxes refer to the Federal Insurance Contributions Act.

Taxes for W-2 vs. 1099 workers differ mainly because the former have taxes automatically withheld from their paychecks and pay less in FICA taxes. FICA taxes, amounting to 15.3% of taxable income, include the 12.4% Social Security tax and the 2.9% Medicare tax and apply to all earners regardless of employment status.

If you’re a W-2 employee, your employer covers half of the FICA tax, which is 7.65%. But if you’re a 1099 contractor, you are responsible for the entire 15.3% FICA tax on your net income. This is often referred by the IRS as self-employment tax.

If you earn both W-2 and 1099 income, then you’ll only pay the self-employment tax on the money earned through self-employment.

Take a Deeper Dive into W2 vs 1099 MISC vs 1099 NEC

If the 1099 form is not received, taxpayers are still liable to pay taxes on any income earned throughout the tax year. Businesses are required to send out a 1099 form to a taxpayer (other than a business) that received at least $600 or more in non-employment income during the tax year. The 1099 form is used to report non-employment income to the Internal Revenue Service (IRS). For example, Form 1099 is used to report certain types of non-employment income to the IRS, such as dividends on a stock or payments received by an independent contractor.

The 1099-MISC tax form is used by businesses to report payments made to independent contractors in the last year. When a taxpayer files both a Form W-2 and a Form 1099-MISC for the same worker in a single year, and payments reported on each return were made over a single period of time, the taxpayer can assert that the employee performed two separate, different services – one as an employee, and one as an independent contractor. When a taxpayer files both a Form W-2 and a Form 1099-MISC for a worker for the same year, and payments reported on the Form 1099-MISC can be explicitly identified as Supplemental Compensation (such as taxable fringe benefits), examining whether Supplemental Compensation is subject to the employment tax is a Wage Earnings Issue. When the taxpayer does not treat a worker as a dependent, the examination of whether compensation is subject to employment taxes is considered to be a question of employee classification.

The employer also would deduct taxes from wage payments received by the worker. An office employee will receive a tax 1099 reporting the painting earnings on top of a W-2 reporting his or her regular salary. If you work at more than one company, you will receive a 1099 form for each. If you own your business or are working as a freelancer, you are more than likely to get a 1099-NEC form for every project that you do.

Self-employed taxpayers who do freelance work or who have side gigs that generate income of over $600 can get a 1099-NEC form. Although self-employed taxpayers earning less than $600 may not receive a 1099-NEC, they must report all income on their taxes. Taxes are not subtracted from your paychecks, except under certain circumstances, so the 1099-NEC is necessary to file your taxes accurately. That is unless a particular Form 1099 includes a return of federal income taxes that were withheld from a payment of related income on behalf of the payer.

This means the Internal Revenue Service (IRS) shares some information on income record forms, automatically satisfying taxpayers reporting requirements with Treasury. A taxpayer, recipient, or payee receives a 1099 form, either on paper or, occasionally, as an email copy, from the issuer or payee, on or before Jan. 31 of the next tax year for which the income was paid. Your 1099 form is a kind of informational return; you receive a 1099 form in the mail if you receive specific types of income or payments during the year (other than wages, salaries, or tips).

At the end of the year, you will get two types of tax documents: your employer’s Form W-2 and your employer’s Form 1099-MISC, which is from whatever companies you are freelancing or contracting with. These next two types of 1099 forms ask you to report income either on a Schedule C, which is generally taxable as self-employment or a Schedule E. Outside of Form 1099-MISC, you might have to report estimated taxes quarterly if you are going to be paying more than $1,000 in taxes during the fiscal year.

However, in some cases, if you are a 1099 employee, you will be responsible under the federal insurance contribution law. For individuals who make both W-2 and 1099 income, you will only pay self-employment taxes on money earned via self-employment, while FICA taxes on regular wages stay the same.

Updates on EV Tax Credit

Posted by admin on September 22, 2022
Last modified: September 28, 2022

Like to Save Money on Your Taxes with EV Tax Credit?

The EV tax credit may be just what you need. For the tax year 2022, the credit amount is $2,500 to $7,500, depending on the battery capacity in your electric or alternative motor vehicle. So if you are thinking of going clean and green, this could be a great way to save some money.

Let’s look at the federal EV Tax Credit (or Electric Vehicle Tax Credit), which vehicles qualify, and additional tax credits or incentives that may be available to you.

How do EV Tax Credits Work?

The electric vehicle tax credit applies to all-electric and plug-in vehicles, but the exact amount of the credit can be found on the DOE website fueleconomy.org. This incentive is not a mail-in check you receive after purchasing the car but a $7,500 tax credit you are eligible for. To encourage sales of plug-in electric vehicles, the federal government began providing a federal income tax credit in 2010 for eligible electric vehicles purchased after December 31, 2009.

Until now, buyers of EV electric vehicles and plug-in hybrid vehicles could receive up to $7,500 in federal tax credit if the manufacturer did not sell more than 200,000 qualifying vehicles. However, the federal tax credit begins phasing out for manufacturer vehicles at the start of the 2nd calendar quarter after the automaker has sold 200,000 eligible vehicles since January 1, 2010. So it’s important to check if the car you are about to purchase is suitable for a loan.

ev tax credit
ev tax credit

Updates on the New Clean Vehicle Tax Credit.

However, starting in 2024, taxpayers will have the option to pass credit to the car dealer at the time of buying to directly lower the purchase price of the car by the corresponding loan amount – great news for people who might want to invest in an electric vehicle — but dissuaded by high sticker prices. Under the new tax treaty terms, you can get this credit upfront at the point of sale of your electric vehicle.

The Clean Vehicle Tax Credit is a new tax credit available for purchasing qualifying electric vehicles. The EV tax credit is worth up to $7,500 and can be used to purchase a new EV. However, there are some new eligibility requirements under the Inflation Reduction Act, so be sure to check to confirm if you qualify before applying for the EV tax credit.

How Much is the New Clean Vehicle Tax Credit?

The Clean Vehicle Tax Credit is a great way to save money on purchasing a new or used EV. Depending on your vehicle, the credit could be worth up to $7,500 for a new car, or $4,000 for a used car. Not all EVs and not all taxpayers will qualify for the credit, so be sure to check the requirements carefully before making your purchase.

Electric vehicle tax credits are non-refundable tax credits that result from purchasing a vehicle with a battery-powered propulsion system capable of being powered by an external power source. Please note that this credit is non-refundable, which means you will not receive more credit than you owe in taxes. If your account is less than credited, you will receive the balance as a refund. You cannot carry this loan or balance into the next fiscal year. For example, if your total annual tax bill is $5,500, you can’t claim an EV tax credit over $5,500, even if your car qualifies. Instead, it’s a government policy that allows you to claim a federal income tax credit of up to $7,500 in the year you buy the car. The reward is a fixed credit, which means you only pay the total of $7,500 if your tax bill is at least $7,500.

So are you thinking of buying a new electric vehicle? Then, you may be eligible for a new tax credit!

To claim the new Clean Vehicle Credit, your vehicle must be an “EV” or “clean vehicle” – this includes hydrogen fuel cell cars and plug-in hybrid vehicles with four to seven-kilowatt hours of battery capacity. The credit applies to cars that cost less than $55,000 and vans, SUVs, or pickup trucks that cost less than $80,000.

Your EV must receive final assembly in North America if purchased after August 17, 2022. An eligible manufacturer must also make it. Finally, the modified AGI cannot exceed $300,000 if you are married filing jointly, $225,000 if you are head of household, or $150,000 if you file as single.

Eligibility on a Used Clean Car for Tax Credits?

To qualify for the new Clean Vehicle Credit on a used car, the following criteria must be met:

If you’re looking to get the new Clean Vehicle Credit for a used car, there are a few things you need to know. First, the vehicle can’t cost more than $25,000. Secondly, the modified AGI (adjusted gross income) can’t exceed $150,000 if you are married filing jointly, $112,500 if you are head of household, or $75,000 if you file as a single. And finally, whether you signed a purchase agreement for an electric vehicle manufactured outside the U.S.

Reach out to our Tax Service Professionals to verify your eligibility for the EV tax credit. Then, let us walk you through maximizing your return with an easy and simple online tax filing.

Filing Freelance Taxes for Fiverr or Upwork Gig Workers

Posted by admin on September 14, 2022
Last modified: September 15, 2022

The Gig Workers Guide to 1099 Taxes

As a freelancer taxes or filing 1099 online can feel like an impossible challenge. But with the proper guidance from our Tax Service Professionals, it doesn’t have to be so daunting. This freelancer taxes guide outlines everything you need to know to file your 1099 freelancer income taxes quickly and minimize your tax bill as much as possible.

How to file your Fiverr or Upwork taxes or other freelance taxes as 1099 income?

As a freelancer, it is important to know that you are responsible for your taxes. This means that you will need to pay federal and state income taxes and self-employment taxes. Your exact amount will depend on your income and tax bracket. You can use our PriorTax.com income tax calculator to get an estimate of what you will owe. Alternatively, you can use the IRS Schedule SE Self Employment Tax form to calculate your freelance taxes.

There are a few things to keep in mind when it comes to paying your taxes as a freelancer. First and foremost, gig platforms such as Fiverr or Upwork do not withhold any taxes for you. This means that you have the responsibility to pay your taxes to the Internal Revenue Service (IRS).

You, as a freelancer, are responsible for three main types of taxes: federal and state income taxes and self-employment tax. The exact rate you have to pay for each of these taxes depends on your income and which state you live in. For example, federal income tax rates range from 10% to 37%, while state income tax rates can be anywhere from 0% to 13.3%.

Again, you can use our free income tax calculator to figure out the exact percentages you need to save for all of your taxes. Alternatively, if you want to do the calculations, you can use the IRS Schedule SE Self Employment Tax form.

When working as a freelancer, you are also responsible for paying your self-employment taxes. This includes Medicare and Social Security taxes, known as FICA taxes. The Medicare tax rate is 1.45%, while the Social Security tax rate is 6.2%. Together, these two taxes total 7.65%.

Since you are clearly classified as an independent contractor by the IRS, you are considered both the business and the employee. This means that you must pay a total of 15.5% in self-employment taxes. However, you may be able to write off the employer portion of FICA taxes as a business expense.

freelance taxes
freelance taxes

Tax Deduction on your Freelance Taxes from Business Expenses

As a freelancer, it’s important to keep track of all your business expenses in order to lower your tax bill. One way to do this is using a 1099 expense tracking with PriorTax, which can automatically categorize your transactions. In addition, PriorTax.com makes it easier to focus on getting more tax deductions from freelance gigs.

Another helpful way to keep track of deductible expenses is by using a separate business credit card and bank account. This can be a bit more hassle, but it may be worth it come tax time.

Once you have organized all your tax deductible expenses in one place, you can begin filling out your tax form Schedule C Profit or Loss from Business. This tax form will include all your income information and expenses, so you can get the most deductions possible. Although filing freelancer 1099 tax forms online can be time-consuming, they’re worth it if it means saving money on taxes.

Filing Freelance Taxes Online

No one likes doing their taxes, especially if you’re self-employed. It can feel like an impossible task, but this guide will help make it as easy as possible. From understanding exactly what you need to do, to file your taxes with ease, this guide has everything you need. Lowering your tax bill as much as humanly possible is the goal here, and by the end of this article, you’ll know exactly how to do that.

PriorTax step-by-step systems can help you file your taxes quickly and efficiently.

As a sole proprietor, small business owner, or self-employed freelancer, you might think that doing your taxes is daunting. After all, keeping track of all the paperwork can be a hassle, and mailing in your taxes can take forever. But it doesn’t have to be that way! Reach out to our Tax Service Professionals for free. Simple, The best way to file freelance taxes online for maximum return and simple tax filing is with PriorTax.com.

Updates on Student Loan Forgiveness

Posted by admin on September 9, 2022
Last modified: September 15, 2022

As higher education costs continue rising, many students struggle to repay their loans. The Biden-Harris administration proposes a new income-based repayment and Student Loan Forgiveness plan to make the lending process more manageable for future borrowers.

The Biden-Harris Administration recently has committed to providing relief for student debtors. Under the new Student Loan Forgiveness plan, borrowers can receive up to $20,000 in debt forgiveness, depending on some factors regarding their loans, income, and other financial aid they’ve received.

student loan forgiveness
student loan forgiveness

The government’s moves to “cancel” the debt and extend the student loans pause are just two parts of a larger Student Loan Forgiveness plan that could turn out to be the most costly executive plan in the history of higher education. The Biden-Harris administration and the U.S. Department of Education (DOE) have developed a three-part plan to help federal student loan borrowers return to regular repayment schedules and prevent unnecessary delinquencies or defaults. The updates also complement previously announced changes, including ending the amnesty for government service loans and the Fresh Start program for insolvent borrowers.

Here’s a look at the various initiatives involved with the plan, who qualifies, and how to go about claiming the relief. With this new plan in place, students can focus on their education without the burden of oppressive debt weighing them down.

Student Loan Forgiveness: When Do Student Loans Resume?

As of December 31st, 2022, the automatic pause on student loans repayments has been extended once again. This means you will not have to make any loan payments until later. Don’t hesitate to get in touch with your lender for more information if you have any questions about your loan or repayment status.

The Department of Education proposes a new income-based repayment plan to protect more low-income borrowers from repayment and cap monthly college loan repayments to 5% of borrowers’ discretionary income, which is half the rate borrowers currently have to pay in most cases.

In addition, there are plans to write off up to $10,000 of federal student loans debt for borrowers making less than $125,000 with relief of up to $20,000 for those who received a Pell Scholarship and qualify for borrowers.

How to Apply for Student Loan Forgiveness in 2022?

There are a few things to consider if you want to have your student loans forgiven. The first is whether or not you qualify for relief. The relief is most heavily targeted to low and middle-income families, so if you come from a family that falls into either of those categories, you may be eligible for more forgiveness than others.

Individuals with income under $125,000 or households with under $250,000 in total annual income are eligible as follows:

Pell Grant recipients with loans held by the U.S. Department of Education will have up to $20,000 in student debt canceled. Non-Pell Grant recipients with loans held by the U.S.

The Department of Education (DOE) is still working out the details of how to forgive debt for students who took out loans from private lenders. We will continue to provide updates here as they are announced. In the meantime, it is encouraged to apply for relief as soon as possible to receive it before the repayment pause expiration (end of the year).

What do you need to know about Public Service Loan Forgiveness Program (PSLF)?

Are you struggling to pay off your student loans? Then, you may be eligible for the Public Service Loan Forgiveness (PSLF) program.

The Public Service Loan Forgiveness (PSLF) program may forgive the remaining loan balance on your Direct Loans after you make 120 monthly qualifying payments while working full-time for a qualifying employer.

To qualify, you must be employed by a government organization, non-profit organization, or another qualifying employer when you apply for student loan forgiveness and during loan repayment.

Overall, according to an analysis provided by the Department of Education, student loan forgiveness will eliminate student debt for about 20 million people and cut monthly payments by an average of $250 for borrowers with residual balances who have payment plans.

E-file Hawaii Tax Online for a Simple and Easy Tax Filing

Posted by admin on August 30, 2022
Last modified: August 30, 2022

PriorTax is committed to providing the latest tax forms and schedules in conjunction with the Hawaii Department of Revenue. Our Hawaii tax online experts work diligently year-round to stay up-to-date on the latest Hawaii Tax Laws so that we can help lower your state tax burden. In addition, filing your taxes online has never been easier – when you prepare your federal return with PriorTax, we make it quick and easy to complete any resident or non-resident state tax returns for Hawaii. Plus, we’re proud to offer efile and direct deposit for all states with these capabilities.

Reach out to our Tax Service Professionals for Hawaii Tax Online Return

Contact our Tax Service Professionals to check if you need to file a Hawaii tax return for the current or prior year with the State of Hawaii. If you are not eligible for auto-renewal, ensure you get your Hawaii tax return as soon as possible to avoid excessive penalties. This article reviews the most important current state reporting and Hawaii tax return requirements from Single filers in Hawaii to Hawaii LLC Enterprise.

Hawaii tax online
Hawaii Tax Onlinne

Hawaii Tax Rate

The state of Hawaii imposes different tax rates for residents and non-residents.

For single filers, the Hawaii tax rate is

  • 1.4% on the first $2,400 of taxable Hawaii income
  • 3.2% on Hawaii income between $2,401 and $4,800
  • 5.5% on Hawaii income between $4,801 and $9,600,
  • 6.4% on Hawaii income between $9,601 and $14,400
  • 6.8% on Hawaii income between $14,401 and $19,200
  • 7.2% on Hawaii income between $19,201 and $24,000

Different tax rates apply to different income levels in Hawaii. For example,

  • Hawaii income between $24,001 to $36,000 are taxed at 7.6%
  • Hawaii income of $36,001 to $48,000 are taxed at 7.9%
  • Hawaii income that fall between $48,001 to $150,000 are taxed at 8.25%
  • Hawaii income that range from $150,001 to $175,000 are taxed at 9%
  • Hawaii income that range from $175,001 to $200,000 are taxed at 10%
  • Hawaii income move than $200,000 are taxed at the rate of 11%

These Hawaii tax rates remain the same for people filing jointly as married; however the income levels are doubled for those individuals.

Filing a Hawaii Tax Extension

Instead of the traditional April 15 deadline, taxpayers in Hawaii have until April 20 to file their returns. The state of Hawaii has different income tax rates for different income levels.

Generally, your tax refunds are issued within 8 weeks of filing your tax return with the Hawaii Department of Taxation. However, suppose you make the wrong choice and are better suited to file more frequently than indicated on your GE tax license application. In that case, the Hawaii Department of Taxes will adjust your filing frequency accordingly and send you written notice. If your adjusted gross income in Hawaii for the tax year was less than $30,000 and you paid more than $1,000 in rent, you may be eligible for a $50 tax credit for each qualifying tax exemption in your household.

Registration in Hawaii may remain in a “Pending” state for a little longer than registration in other states because we also need to request third party access to your Hawaii tax online account to automatically archive your returns. For Hawaii, we may not automatically archive returns until we have third-party access to your Hawaii Tax Online account. Reconciliation can be done online if you have an online account registered for your GE tax license (registration on the Hawaii E-File website is available here), or simply reach out to our PriorTax Tax Service Professionals for Live Tax Support.

How often you need to file GE Hawaii tax forms generally depends on the amount of GE tax you owe during the year. For example, if you pay a total of more than $4,000 in GE tax in Hawaii during the year, you may need to file Form G-45 monthly. Generally, only real estate valued over $5,490,000 is required to file a tax return in the State of Hawaii. The State of Hawaii requires taxes if you are a resident or non-resident and receive income from a Hawaiian source. Anyone doing business in Hawaii must file a state tax return, regardless of whether the individual earns taxable income from the business.

Business Tax and LLC Online Tax filing in Hawaii

Companies in Hawaii usually impose an excise tax on their customers, but this may not be mandatory. Hawaii requires companies to levy an excise tax on the sale of digital goods or services. Out-of-State Sales Hawaiian companies only have to pay out-of-state sales tax if they have connections in other states. If your LLC is going to sell goods to customers in Hawaii, you will need to collect and pay a General Excise Duty (GET; essentially a sales tax).

Now that you have signed up for a Hawaii sales permit and know how to collect the correct sales tax amount from all of your customers, you are ready to file your tax return. But, first, submit your Hawaiian General Excise Tax Return. This can be done with the help of the PriorTax Tax Service Professionals; in addition to Form G-45, Hawaiian general excise taxpayers must complete Form G-49 (Annual Report and Reconciliation of General Excise/Use Tax Declaration) annually.

How to File Hawaii Tax for Businesses?

Business online tax filing in Hawaii requires companies to file general excise returns and file excise payments online. Suppose you subscribe to certain payment services (POS), such as Square or Clover in Hawaii. In that case, you must be registered with the Hawaii Department of Taxes and the Hawaii Department of Labor and Industrial Relations for us to pay and file Hawaii state taxes.

Tax Filing Deadlines for all Hawaii Excise tax filing are on the 20th day of the month unless it is a weekend or federal holiday, in which case the deadline is moved to the next business day.

At PriorTax, we understand how important it is to stay up-to-date on the latest tax laws. So we work with the Hawaii Department of Revenue to ensure our clients access the most recent forms and schedules. As a result, filing taxes online in Hawaii doesn’t have to be complicated or time-consuming – our team of experts can help you every step of the way. Plus, we offer efile and direct deposit for all states that provide these services. So why wait? Let PriorTax help you today!