Tax Brackets Explained for 2020 The IRS revealed the 2020 tax brackets, and it's never too early to start planning to reduce money owed for taxes. You can start thinking ahead about how to handle your 2020 finances in the most cost-effective way. In this week's episode, Angela Sticca Snyder explains tax brackets for 2020 and why they are important. If you had the choice between a 0%, 12%, or 37% tax bracket, which one would you choose? Some of you might respond with, "I'm going to pick the highest tax bracket there is. I'm going to pick 37%. What's 0%?” The 0% tax bracket means unemployed. You want to be at the highest tax bracket you can be at. I'm going to use simple and easy to understand numbers. They're not going to be real tax brackets. For instance, let's say you made $100,000, the tax bracket from zero to $50,000 was 0%. Then, from $50,001 to $100,000, it was 15%. Then from $101,000 on up, on to 90%. Let's say I earned $100,001. I'm in the 90% tax bracket. It sounds horrible, doesn't it? But in the 90% tax bracket, my $1 is getting taxed at 90%. My zero to $50,000 has no tax on it. My $50,001 to my hundred thousand has the 15% bracket. You always want to be in the higher tax bucket because it's only the incremental amount above that is being charged. It's your taxable income that is important, not your gross income. We've got our wages, we've got our 1099, and our interest, dividends, or capital gains. We've got adjustments that come off. Maybe we have self-employed health insurance, or we contribute to our retirement account and the standard deduction. We itemize our deductions. We have our gross income, then our deductions, and that gives us our taxable income. That is the number that you look at to determine what tax bracket you're in, not what's on your W2 or your 1099. I hope this helps you achieve the highest tax bracket possible. How to Get Involved Taxanista is a leading certified public accountant who offers reliable professional tax and accounting services. She is a consummate strategist. She loves listening, analyzing and developing strategic plans. Do you have bigger issues? Taxanista can help you fight off the IRS. Angela knows how unsettling some of your struggles are, that’s why she offers private consultations for your business and tax matters. Increase your profit by knowing your numbers. Reach out to her now. https://www.taxanista.com/

How Do Taxes Work For Small Business? How do taxes work in America? Let's break it down simply. Taxes might not seem like an exciting subject, but most people don't know how taxes work. Financial advisors are most guilty of this. It's about time for the facts on different investing you can do. We’ll learn about savings, various tax brackets, and all that cool stuff. In this week's episode, Angela Sticca Synder talks about Tax Brackets & Income Buckets, together with her special guest, Eric Elam. Part One of ‘How Taxes Work’ There's a thing called a progressive tax system. When you break into the next tax bracket, if you go $5 over, that means only five of your dollars are tapped at that next tax bracket. That's why there's also an effective tax. When it comes to savings, there are ways the IRS allows us to save money. You may refer to these savings as buckets. The first bucket that will enable us to save is called the taxable bucket. It just takes it straight out of your checks now. They allow you to put it somewhere. And when you put it somewhere, any growth you get on it, it's taxable. Then you invest in stocks, mutual funds, bond brokerage accounts, or any market investments that aren't tax-protected. You get multiple 1099s. It sounds like a tax document. It's like a love note from the financial institution. They’re sending you the best greetings for making money. You know that someone else is investing with you when you are in this bucket. Financial advisors all disagree about a lot of different things, but one thing they could all agree on is the correct amount to keep in this taxable bucket. But at the same time, you can have little in this bucket. The tax-deferred bucket is the most well-known bucket in the American populace right now. If you have a job, a traditional job, or you're with the government or school system you’re used to a 401k. If you're the owner of a company, highly compensated and making a lot of money, it might be something to look at. At least in place of a 401k. Those are some great things that are out there. Now, all of these accounts have very different IRS tax codes, but they have three areas in which they overlap. First, when you put money into these accounts, you get a deduction. It's a deduction, so you don't have to pay the income tax on the amount you're putting in. Let's count your IRA, 401k, whatever it is. You're then able to pay taxes on $90,000. So, it reduces the reportable income. Work with your tax professional when putting away money. You want to make sure that you stay on that straight and narrow path. You're going to want to pay attention to that. It's going to be relevant to how you save money in these buckets. The IRS has a particular word for the money you take out of these accounts. It's treated as ordinary income because you originally earned it working. You didn't pay income tax on it. Now, you are going to pay income tax on it. You're still receiving that money as income just at a later date. What this means is that you enter a business partnership. The problem with this business partnership is the fact that someone can vote every year on the percentage of your business profits he gets to keep. Unless you accurately predict your future taxes, you don't know how much money you have. You've saved 1 million bucks, with 30% taxes you've only got $700,000. If taxes go up higher, you have less available to you. The last thing all of these accounts overlap on is that eventually, you will be taxed. That means you have a little bit longer before you have to pull money out of your taxable investments. Do you think taxes will be higher for you in the future or lower for you in the future? Now, if we did know the day taxes were going to be higher, would that be an essential thing to remember? Tune in to the full episode for more information. How to Get Involved Every investment firm has principles and a mission statement, and they usually sound exactly the same. CalChoice Financial is different in almost every way, understanding different isn’t always better but being better is very different. Their principles were deliberately created with you in mind. At CalChoice Financial, they utilize relevant and modern solutions to create personalized plans for our clients which are as unique as they are. http://www.calchoicefinancial.com/ Taxanista is a leading certified public accountant who offers reliable, professional tax and accounting services. She is a consummate strategist. She loves listening, analyzing, and developing strategic plans. Do you have more significant issues? Taxanista can help you fight off the IRS. Angela knows how unsettling some of your struggles may be; that's why she offers private consultations for your business and tax matters. Increase your profit by knowing your numbers. Reach out to her now. https://www.taxanista.com/