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Taxes And Simplify Your Life

Introduction: What taxes do and how can you simplify your life?

Taxes can be complicated and time-consuming, but there are ways to simplify your life and make tax preparation easier. In this article, we’ll discuss the different taxes you may encounter, how to file them, and what simplifying techniques you can use.

If you’re self-employed, you may have to pay taxes on your income both from business activities and from personal activities. You may also have to pay taxes on dividends and capital gains from stocks and other investments. If you’re a wage earner, you may have to pay income taxes on your wages, tips, commissions, or other compensation. You may also have to pay Social Security (FICA) taxes on your wages.

Many people find it helpful to gather all of their tax documents in one place, so they can easily review them and keep track of what needs to be filed when.

What are the biggest expenses for most people?

Most people have expenses that are the biggest financial drain on their budgets. The following are the top five most common expenses for most people, according to a study by MoneyCrashers.com.

1. Rent or mortgage: This is the biggest expense for 34 percent of people, followed by food at home (30 percent), transportation costs (27 percent), utilities (26 percent) and health care costs (25 percent).

2. Credit card payments: This is the second-biggest expense for 29 percent of people, followed by bills and other debt payments (28 percent), student loan payments (26 percent) and housing expenses (25 percent).

3. Taxes: Taxes are the third-biggest expense for 23 percent of people, followed by groceries (22 percent), housing expenses (21percent) and child care costs (20percent).

The three types of tax deductions: Itemized deductions, Standard Deduction, and Personal Exemption.

When it comes to taxes, most people are familiar with the two main types of deductions: itemized deductions and the standard deduction. But what about personal exemptions?

Personal exemptions are a type of deduction that you can take on your federal income tax return. They allow you to reduce your taxable income by $4,050 for each exemption you claim, up to a total of $13,000 for the year. This means that if you have three children and claim all three personal exemptions on your 2013 tax return, your taxable income would be reduced by $18,250 ($13,000 x 3).

Since personal exemptions are taken as a percentage of your Adjusted Gross Income (AGI), they can have a big impact on how much money you end up paying in taxes.

How to use the IRS Tax Tables to find what you owe.

If you need to find out what you owe in federal income taxes, the IRS provides helpful tax tables that can help. The tables provide a summary of your income and deductions, and tell you how much tax you owe. There are separate tables for individuals, married couples filing joint returns, heads of household, and qualifying widow(er)s and widowers.

To use the IRS tax tables, first figure out your taxable income. This is your gross income minus any allowable deductions. You may have to file a return if your taxable income is more than $100,000 ($50,000 if you are single).

Next, figure out which table to use. If you are an individual, use Table 1 (individuals). If you are married filing a joint return with another person, use Table 2 (married couples filing jointly).

Three simple steps to reduce your taxes.

1. Start by completing your income taxes. This includes filing your returns, paying any taxes you may owe, and claiming any credits and deductions that you qualify for.

2. Save money through deductions and exemptions. These can include items like mortgage interest, child support, retirement savings contributions, and charitable donations.

3. Claim foreign earned income exclusion. This allows you to exclude up to $100,000 of income from being taxed in the U.S.

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