Did you know that the average American making more than $40,078 pays 15.57% of their income to Federal Income Tax?
If you received that income as a salary, Medicare & Social Security take an additional 7.65% (or if you are pay self-employment tax, that doubles to $15.3%).
Totaling that up, an Pennsylvania resident may pay up to 27.87% in taxes (we didn't bother including local taxes, sales tax, inheritance tax, ...). That means if you make $40,078 as an employee, you will likely pay more than $11,169.73 of that in taxes. By our estimate, if you make $200,000, you will end up paying $71,580.
That should be an incentive to stay informed and find a CPA with expertise. With federal income tax holding the largest portion of those taxes, you want to beat the average.
At Butrica Ployd, ensuring that our clients are well-informed and well-equipped to take control of their tax strategy is among our highest priorities. The Tax Tools will help you consider new possibilities and better understand the tax landscape.
As an individual, you want to ensure that your charity, college costs, retirement, and even health care follows a strategy to minimize your taxes. Learn more about the rules that impact your taxes.
As a business owner, you face even more considerations that can help you get ahead. How to you characterize your home office? Should you file as a Schedule C or should you weigh other entity options? As business taxes can quickly grow complex, informing yourself is what we call a "best practice" to ensure you can implement your tax strategy well.
Finally, understanding how taxes interact with the world of finance is the last critical piece to taking control of your tax strategy. From here, the limits are endless. But, we believe you can consider yourself well informed if you understand these last tax tips.
Understand more about the Federal Income Taxes you pay based on how much you make. When it comes to tax season, make sure to focus in more on your total tax burden than just your amount owed or refund to compare.
Stay informed as to when your taxes are due this year. And remember, filing an extension gives you more time to submit your return, but your payment is still due on time if you owe. That's why it is critical to develop a strategy so you know what you will owe in advance.
Now, if you want to go into even greater depth and understand what financial strategy looks like based on your situation, we recommend starting with these tools. If any of these cause concern, consider reaching out.
How long should you keep your tax documents? Well, that depends on what you are storing. Learn more to ensure you have a sound retention plan.
Whether you need a Schedule C or Form 5405, you can find this year's forms here. Generally, this is our area of expertise. But, we want to make sure that you have this resource when you need it.
And if you got confused by any of that, we have a glossary to help you figure it out. It's pretty extensive, so this is best used when you are looking for a specific term.