It’s the Most Wonderful Time of the Year…How to prepare to file your individual tax return

It’s the Most Wonderful Time of the Year…How to prepare to file your individual tax return

The passing of Prop 30 left Californians with income tax rates at 13.3% (that’s the highest in America!). Tax rates increased from 1% to 3% for all individuals and families who make over $250,000 annually. Households who make more were hit hard with a 10.8% to 29.1% increase overall.

 

What will tax rates be looking like for you this year?

If you are single…

10% on taxable income from $0 to $9,075, plus

15% on taxable income over $9,075 to $36,900, plus

25% on taxable income over $36,900 to $89,350, plus

28% on taxable income over $89,350 to $186,350, plus

33% on taxable income over $186,350 to $405,100, plus

35% on taxable income over $405,100 to $406,750, plus

39.6% on taxable income over $406,750.

 

…Married…

10% on taxable income from $0 to $18,150, plus

15% on taxable income over $18,150 to $73,800, plus

25% on taxable income over $73,800 to $148,850, plus

28% on taxable income over $148,850 to $226,850, plus

33% on taxable income over $226,850 to $405,100, plus

35% on taxable income over $405,100 to $457,600, plus

39.6% on taxable income over $457,600.

 

…or Head of House…

10% on taxable income from $0 to $12,950, plus

15% on taxable income over $12,950 to $49,400, plus

25% on taxable income over $49,400 to $127,550, plus

28% on taxable income over $127,550 to $206,600, plus

33% on taxable income over $206,600 to $405,100, plus

35% on taxable income over $405,100 to $432,200, plus

39.6% on taxable income over $432,200.

 

To get an idea of how much you’ll have to pay, check your:

 recent payments applied to a balance due,

your total account balance,

individual tax years with a balance due,

California wage and withholding information,

1099-G and 1099-INT info issued to you by the Franchise Tax Board.

Basically…what you still owe from last year + what you owe this year = what your payment will be.

Usually you don’t have to make estimated tax payments if your California withholding in each payment period totals 90 % of your required annual payment. You also do not have to make estimated tax payments if you will pay enough through withholding to keep the amount you owe with your return under $500 ($250 if married filing separate). Be careful though, if you do not pay enough tax through withholding or by making estimated tax payments, you may have an underpayment penalty.

 

Paperwork you’ll want handy:

State and Federal tax returns filed from last year, vehicle registration, as well as donation and medical receipts. Also, be on the lookout for your W-2s and 1099s.

 

Mark Your Calendars…

A couple of due dates to keep you in check…

January 15: Personal Income Tax Estimated Tax Payment for 4th Quarter of 2013

April 15: Personal Income Tax, Partnership and Fiduciary Tax Returns for Calendar Year Filers

                Personal Income Tax Estimated Tax Payment

June 16: Personal Income Tax Estimated Tax Payments

September 15: Personal Income Tax Estimated Tax Payments


Questions?

Don’t forget that Paragon can help you with all of your tax filing needs! We’re here for you.