I am very lucky to both A. have a brother who is an accountant, and B. have a copy of the tax book I gave you guys a discount on the other day…but what I don’t have is an affinity for doing my own taxes. Sure, I used to do them back in the day, when I filled out out all that paperwork, sent it in, and hoped for the best. But if I didn’t have my brother to do them now, I would be filing them online somehow, and I just saw that TurboTax now has free federal tax return filing for those of you who use the 1040EZ form. You fill out all the info, print out a copy for yourself, and push the “e-file” button – done. If you have deductions or investments, you would need to use one their other paid versions, but those come with free “e-file” as well, which is pretty cool. State returns do cost money, but many times people can do those on their own as they are much simpler than Federal returns.
I think the best purchase I made in the last couple of months in terms of my self-employed career has been June Walker’s book “Self Employed Tax Solutions“. If you call yourself a 1099 Worker, a Sole Proprietor, a Freelancer, a Subcontractor, a Free Agent or are just Self-employed, you definitely need this book asap, especially with tax time coming up soon. Since all of my salary is now from 1099′s, I need to take good care to make sure I keep very thorough records of my income and my expenses, and this book could not have come at a better time for me. 2008 was the first year when I was not on payroll for someone else, and I needed to learn how to start thinking like a small-business owner. What could I write off on my taxes? What kind of taxes would I owe? How should I keep my records? Well, this book covers all this and much, much more. For example, did you know that as a self-employed individual you have to pay self-employed taxes that pay for Social Security and Medicare which is normally paid for by your employer?
Although I don’t live in California or ever get a refund anymore, I would not be too thrilled with this:
California’s budget meltdown is about to hit home for millions of taxpayers awaiting their refunds and people who depend on the social safety net to survive, a top state finance official warned Friday. Controller John Chiang, who is responsible for managing the state’s cash flow, plans to delay $3.7 billion in payments starting next month in response to lawmakers’ failure to fix a projected $40 billion deficit through mid-2010. Among those who won’t get paid on time: taxpayers who file their returns early and are awaiting refunds; families who depend on welfare and aid for the aged, blind and disabled; and programs that serve developmentally disabled and mentally ill patients.
So what changes do we have in store for the 2009 tax year? Each and every year there are small changes to the ridiculously large and wordy tax code, but most of them will not effect the average taxpayer. (Good thing, really – who wants to know all of that stuff!) However, there are some that definitely will, so I went looking to see what they are…and here is what I found out:
The Income Tax Brackets Have Changed.
- 10% Tax Bracket – $0-$8,350
- 15% Tax Bracket – $8,350-$33,950
- 25% Tax Bracket – $33,950-$82,250