Tax Calculator
Obviously, this very simple calculator can only give you an unofficial estimate - please don't try to file your taxes by mailing the IRS a screen shot of this thing stapled to a check.
(Although it makes you think that Congress could probably simplify the heck out of the tax code if they really felt like it.
They probably just don't feel like it, is all.)
(Adjusted gross income determines whether you are eligible to contribute to a Roth IRA.
And don't forget to pay Social Security.)
How to Pay Less Taxes
As complicated as the tax code is, it's built around a philosophy that actually makes sense:
the government will reward intelligent behavior with a tax break.
A few obvious suggestions:
| (1) |
Don't Churn Your Portfolio
You want to pay the long term capital gains rate, and pay that as infrequently as possible.
(Many index funds are low-churn and tax efficient.)
|
| (2) |
Open a Retirement Account
A deductible IRA gives you a negative adjustment, lowering your taxable income.
(A Roth version gives you a tax break later.)
|
| (3) |
Have "Good" Debt
Credit card debt is bad debt, but a long-term mortgage is very good debt - a fixed, low interest rate, plus a tax break that shows up as an itemized deduction.
|
| (3a) |
Give to Charity
Another deduction, plus you'll make people think you're nice.
|
Tax Diagram: Which Rates Apply, and Where?
|
