In this episode, I discuss how to lower your tax liability using qualified dividends and capital gains (which includes capital gains and losses and capital gain distributions).

In the today’s discussion on lowering your tax liability, I discussed:

1. Tax Liability may not be based on total taxable income when using the Qualified Dividend and Capital Gain Worksheet.

2. Qualified dividends and capital gains have income limits and exemptions

3. If total total qualified dividends and capital gains are greater than your other taxable income, then your tax liability will be calculated using the qualified dividend and capital gain worksheet.

4. There are possible tax rates (15%, 20%, and 28%) when calculating your tax liability using the qualified dividends and capital gain worksheet compared to the tax tables.

In the example, I used $50,000 of capital gains and losses, capital gain distributions, and qualified dividends with an additional other income of $10,000 for a total taxable income of $60,000. The $50,000 is below the income limitations and exemptions.

Tax is calculated using the tax tables (normal) and using the qualified dividends and capital gain worksheet. The smaller of the two tax calculations will be your tax.

The 2014 qualified dividends and capital gain income limitations are:

$36,900 if Single or Married Filing Separately
$73,800 if Married Filing Jointly or Qualifying Widow(er)
$49,400 if Head of Household

The 2014 taxable income limitations were:

$406,750 if Single
$228,800 if Married Filing Separately
$457,600 if Married Filing Jointly or Qualifying Widow(er)
$432,200 if Head of Household

To complete the Qualified Dividend and Capital Gain Worksheet, you will need

Taxable Income
Investment Expense (if any)
Tax from Tax Tables
Qualified Dividends Amount
Capital Gain and Losses
Capital Gain Distribution

With all the discussion on increasing the minimum wage to $15/hour, what will it do to your taxable liability.

5 Things Increases in Minimum Wage Will Do To Your Taxes

1. Increase your taxable income
2. Increase your income taxes
3. Increase your employment taxes (Social Security and Medicare)
4. Earned Income Credit is affected
5. Increases the government's tax base

In this week's episode, I complete the discussion on the Form 1040 with the additional taxes and payments/

Additional Taxes are:

Self-employed taxes (Schedule SE)

Under reported social security and medicare tax

Additional Taxes on IRAs and other additional retirement plans

Household employment taxes (Schedule H)

First time home owner buyers credit repayment (Form 5405)

Healthcare (Shared) Responsibility Fee (Tax)

Additional Taxes

Payments are

Tax Withheld from W-2 and 1099-Misc

Estimated Tax Payments

Earned Income Tax Credit (EIC)

Additional Child Credit

American Opportunity Credit

Net Premium Tax Credit

Extension Tax Payment

Excess Social Security and Tier 1 RRTA tax withheld

Credit for Federal Taxes on Fuels

Additional Tax Payments (Credits) (Medicare)

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In this week’s episode, I discuss Form 1040 tax credits. To find the tax form on the IRS website, click on the tax credit.

1. Foreign Tax Credit
2. Child & Dependent Care Tax Credit
3. Educational Tax Credits
4. Child Tax Credit
5. Retirement Savings Tax Credit
6. Energy Credit
7. Other Credits
Form 3800

Foreign Tax Credit Form
Foreign Tax Credit Instructions

Child and Dependent Care Form
Child and Dependent Care Instructions

Education Tax Credit Form
Education Tax Credit Instructions

Child Tax Credit Information

Retirement Savings Tax Credit Information

Residential Energy Tax Credit Form
Residential Energy Tax Credit Instructions

Other Tax Credits
Form 3800 Tax Credit Form
Form 3800 Tax Credit Instructions

match each employee's salary reduction contribution on a dollar-for-dollar basis up to 3% of the employee's compensation (not limited by the annual compensation limit), or make non-elective contributions of 2% of the employee's compensation up to the annual limit of $265,000 for 2015 and 2016, subject to cost-of-living adjustments in later years. If you choose to make nonelective contributions, you must make them for all eligible employees whether or not they make salary reduction contributions.