When is tax season?

If you’re wondering, “When can you file taxes?”, tax season generally falls at the beginning of the calendar year—between January and April. It starts when the Internal Revenue Service (IRS) announces you can file and ends with the tax deadline on tax day. This year, April 15, 2024, is tax day, which signifies the deadline for filing a 2023 federal income tax return.

When can you file taxes?

You can file your taxes at any time between when the IRS opens and the annual due date. Some taxpayers may get a jump on taxes and start their tax preparation before the IRS opens, but it’s important to note that you can only truly file them when the IRS is open.

When can I file my taxes for 2023?

Each year, the IRS issues a statement in early January with the first day to file taxes. It’s a good idea to check back in mid-January to know when you can start to file taxes this year– or any other year. For this tax year 2023, you can start to file your taxes on January 29, 2024.

When will the IRS accept 2023 tax returns?

Generally, the IRS will accept 2023 returns as soon as e-file is open. For this year, e-file opens on January 29, 2024. You’ll have until the annual tax filing deadline to file your federal tax return on time. If you need more time, you can file a tax extension, and the IRS will not assess a late filing penalty as long as the return is filed by the extension deadline, which is generally Oct. 15. For 2023 returns the extension deadline is Oct. 15, 2024.

Even if you file an extension, generally at least 90% of the taxes you owe for the year must be paid by the original due date of the return to avoid the failure to pay penalty.

When will I get my tax return?

Technically, you don’t get your tax return… You get forms that help you fill out a tax return. And if you have overpaid, you will get a tax refund from the IRS.

How can I easily file my taxes?

The Internal Revenue Service (IRS) accepts tax returns filed one of two ways:

1. Through the mail
2. Electronically through e-file

Any tax return filed by a tax professional in an H&R Block tax office, using the H&R Block tax software, or through the H&R Block online filing program is usually e-filed. What’s more, certain taxpayers could qualify to free file their taxes with Block!

E-file is the quickest filing method — and typically helps you receive a tax refund faster.

When do I get my tax refund?

Generally, the IRS has said that about 90% of refunds are issued within 21 days of when the return was received.

You can check on the status of your refund on the IRS website or at our Where’s My Refund page. Live updates will appear the same day e-file opens. Using this tool, you can easily track the progress of your return as it is processed.

What could cause a refund delay?

There are many reasons your tax refund could be delayed. We’ve outlined some common instances where a delay could occur if:

• You file a paper return, the IRS says you should allow about six weeks to receive your refund.
• The IRS mails you a physical check, you will receive a mailed check.
• You file Tax Form 8379: Injured Spouse Allocation, it could take up to 14 weeks to process your tax return.
• Your identity has been stolen and another return was filed with your Social Security number, it could take longer for the IRS to sort out the situation.
• You owe a debt, like unpaid child support, your refund could be offset to pay part or all of it.

Each of the possibilities above could cause a delay or prevent receiving the refund altogether. It’s important to note that everyone’s tax scenario is unique, and no two filings are handled exactly the same.

How can I make sure I get my refund as fast as possible?

Each tax filing is as unique as the individual it represents. To help expedite the tax refund process, first make sure to complete a tax return free of any errors or miscalculations. This means carefully reviewing personal information such as your name, Social Security number, home address and bank information, if applicable. E-filing versus paper filing can help expedite your tax return, too. Learn about the ways to file with Block.

Can I file taxes before e-file opens?

You can use one of H&R Block’s digital products or come into an H&R Block office before the time that e-file opens to have your return prepared.

H&R Block will hold your prepared return until the IRS begins accepting tax returns.

Help with filing your taxes

Hopefully, we helped you answer, “When can you start filing taxes?” Remember: the first day to file taxes varies from year to year, but generally falls in the same period in January.

Whether you choose to file with a tax pro or file with H&R Block Online, you can rest assured that we’ll get you the biggest refund possible.

The post When can you file taxes 2023? appeared first on H&R Block.

For example, if you’re a teen, you’re still considered a minor in almost every respect, but the government will treat you like full-fledged adult when it comes to federal income taxes.

Take a minute to check out these tips and find out what you need to do to tackle this major adulting milestone like a champ.

5 Tax tips for first-time tax filers

If you’re a first-time filer, it may seem intimidating to take on this responsibility. Don’t worry. We’re here to help and break it all down for you. Let’s go step by step for your first-time filing taxes.

1 – Know if you’ll need to file

If you can be claimed as a dependent on another taxpayer’s return and you’ve had a job — even a part-time one — and earned more than $13,850 in the tax year—you’ll need to file. Alternatively, if you didn’t have a job but made more than $1,250 on unearned income (e.g., interest from investments), you will also be required to file. If you don’t fall into either category and area dependent, you are likely not required to file a federal tax return.

However, if you did work and had taxes withheld, filing a return is the only way to get a tax refund. Plus, it’ll serve as a lesson for filing taxes in the future. We recommend doing it.

2 – Start the process ASAP

The sooner you get started on your tax return, the sooner you can receive your refund check. If nothing else, at least begin the process now so you can figure out how much time you’ll need to devote to filing taxes. This means gathering all the necessary documents, perhaps talking to a tax professional, using an online tax filing program, or even just researching answers to any questions you might have. This will relieve some of the pressure when it comes to actually filing!

3 – Gather the necessary documents

Aside from personal information, which you should already know or have easy access to, you’ll need a W-2 form from each of your employers or a 1099 Form if you were a contractor. These summarize the amounts paid to you over the past year and the taxes being withheld from you. The W-2 form is for employees and must be issued by your employer no later than January 31. The 1099-NEC form is for independent contractors and will also be sent to you by the January 31 deadline.

You should also gather any additional forms that showed you spent money on a big expense (ex. education), as that should be noted in your return. Take a look at your tax preparation checklist for more details about the tax forms and other documents you need to file taxes.

4 – Be organized

This is a handy tip no matter what you’re doing, but it’s essential when dealing with government agencies, such as the Internal Revenue Service, that may not be quick to address your concerns. Translation: Store any and every document that is related to your job, your money, and your taxes in one secure place. It’ll save you time and headaches so you don’t accidentally misplace your W-2 and need to request a new one.

5 – Take control of your money

There is a way to know if you’ll owe money or get a tax refund. In the simplest terms possible, if you paid more taxes than the government requires, then you’ll get a refund check in the mail or via direct deposit. On the other hand, if you come up short on what you’re required to pay, then you’ll owe taxes. To determine how much you’re paying in taxes on each paycheck, look at your paystub.

That thing called “withholding” is directly related to your money and the amount taken out of your paycheck. The more you withhold, the more money taken out of your paycheck. It’ll result in less money on your paychecks, but a better chance of receiving a refund.

Withhold less and your paychecks will be heftier — but your chances of owing money come tax season will also rise. You can use our W-4 paycheck tax calculator to estimate your refund or tax due based on your current W-4 form; this can give you a better idea of whether you are claiming the right number of exemptions for your tax situation.

If you’re an independent contractor, you’ll be the one responsible for taking care of self-employment taxes and income taxes — no one will withhold those taxes or send them to the IRS for you.

Getting tax help from H&R Block

If this is your first time filing a tax return, it’s a good idea to consult an experienced adult or even a tax professional to make sure you’re doing everything correctly. If you file electronically and sign up for direct deposit, there’s a chance you’ll get your refund quicker. Digitally savvy young adults are probably also happy to know that online tax filing can be easy with H&R Block, and could even be free if your tax situation is simple.

There you have it — you’re now one step closer to adulthood. I guess that means you’ll also be cooking dinner tonight, or is that moving a little too fast?

The post How to do taxes for the first time: 5 Tips for teens and young adults appeared first on H&R Block.

You’ll need to account for all jobs you have and for your spouse if applicable and desired. Plus, you should factor in any additional income, credits, and tax deductions available to you.

This article will address the main steps in how to fill out a W-4 form and how you might fill it out for specific situations. To learn more about the form itself, read our post: “What is a W-4 Tax Form?”

Want to make it easy? Skip the manual process and use our W-4 paycheck tax calculator to get a completed W-4 tax form. You don’t need to know how to fill out a W-4, because we do it for you with the details you provide.

What is a W-4?

Internal Revenue Service (IRS) Form W-4, Employee’s Withholding Certificate, is generally completed at the start of any new job. This form tells your employer how much federal income tax withholding to keep from each paycheck. This form is crucial in determining your balance due or refund each tax season.

How to fill out Internal Revenue Service (IRS) Form W-4 for a job

There are a few nuances when it comes to filling out IRS Form W-4 for a new job. For instance, if you withhold too much, you can end up with a large refund. If you withhold too little, you can create a balance due and potentially an underpayment penalty. Check out our step-by-step process below, which will walk you through how to fill out a W-4 form.

How to fill out W-4s: Step-by-step

Ready to dive into how to fill out your W-4? We’ve got the steps here; plus, important considerations for each step.

Step 1: Enter your personal information

First, you’ll fill out your personal information including your name, address, social security number, and tax filing status. You can choose from Single, Married Filing Separately, Married Filing Jointly, Qualifying Surviving Spouse, or Head of Household.

While you can stop here and allow your employer to simply withhold at default levels, the easiest path may not be the best. To get the right balance between paycheck and your refund, you might need to complete one or more additional steps – especially if you want to avoid additional withholding or surprises when you file.

Step 2: Account for all jobs you and your spouse have

Unlike when you filled out W-4 forms in the past, you’ll have to fill out your W-4 with your combined income in mind, including self-employment. Otherwise, you may set up your withholding at too low a rate.

To fill out this part correctly, you have three choices. You can:

1. Use an online estimator to determine a specific amount to have your employer withhold each pay period. This method works the best if you have income from self-employment, because it helps allow for self-employment taxes in addition to income taxes.
2. Use a worksheet attached to the W-4 form if there are multiple jobs in your household (either you have multiple jobs or you and your spouse each work). Both the online estimator method and worksheet method work well if you’d prefer not to give your employer information about other income you might have. Or,
3. Check a box and have your employer withhold at a default rate. Checking the box works best if all the jobs have a similar amount of pay.

Checking the box for the default method may seem like the easiest choice. But this will sometimes result in a refund check and much smaller paychecks throughout the year. If you are in a good enough financial situation, this may not seem like a big deal. But for some taxpayers, they’d like to maximize their paycheck amount while making sure their tax liability is covered for the year.

Step 3: Claim your children and other dependents

You want to make sure only one of you allows for child-related tax credits through withholding. Generally, it’s best to allow for child-related tax credits on the Form W-4 of the highest paying job. If you and your spouse each allow for child-related tax credits on your W-4, it will likely result in not enough withholding, and having to pay an additional amount to the IRS at the end of the year.

Step 3 of the W-4 form will ask you how many qualifying children you have under age 17, and how many other dependents you have. After you complete Step 3, your employer will know exactly how much to decrease withholding to allow for your children.

This is also where you can reflect any other tax credits as well if you want the amount withheld from your paycheck. See the Internal Revenue Service (IRS) W-4 Form instructions for details.

Step 4: Make other adjustments

Here you can account for other income you receive, deductions you might qualify for and any extra withholding amounts you’d like your employer to take.

• Other income – Amounts added here will increase your withholding
• Deductions – Amounts added here will decrease your withholding
• Extra withholding – Amounts added here will increase your withholding

Just like it’s important for only one spouse to allow for child-related tax credits on their W-4, it’s important that you only allow for other income or deductions on one W-4.

If you expect to itemize deductions instead of claiming the standard deduction, you can also use a deductions worksheet attached to the W-4 form to ask your employer to decrease withholding by a specific amount each pay period.

If you need to claim an exemption from withholding, you can still do that on the new W-4 form. You are exempt from withholding if you owed no federal tax the prior year and you expect to owe no federal tax for the current year. To claim you are exempt, you write “Exempt” on the new W-4 form in the space below Step 4(c).

Step 5: Sign and date your form

The hard part is now done. All that’s left to do is sign and date your form and hand it off to your employer.

How to fill out your W-4 to get more money

As mentioned at the top of this post, your W-4 withholdings affect what’s taken out of your paycheck each period and your potential refund. In fact, they are related in that taking more taxes out of your pay can mean a larger refund—and the inverse can be true.

If you’d like to know how to fill out your W-4 form to get more money, you’ll want to pay close attention to Steps 3 and 4. This can work two ways.

• How to fill out your W-4 to get more money in your paycheck: The easiest way to do this is to add an amount to Step 4c.
• How to fill out your W-4 to get more money back as a refund (or reduce what you might owe): You could reduce the amounts on 4a (other income) or 4c, or increase the number on line 4b (deductions).

When to fill out a new W-4

Additionally, any time you have a major life event you should consider updating your W-4. A marriage, divorce, a new baby, or a child turning 17 will have an effect on your taxes and should be taken into consideration in filling out your W-4.

Let’s take a look at a few real-life situations to outline considerations regarding how to fill out W-4 if those situations apply.

How to fill out a W-4 if you’re married and you both work

As mentioned in the steps above, couples should account for all jobs in their household when they fill out their W-4s. In fact, we recommend that married couples do this at the same time if they are both employed.

Coordination is the key when considering how to fill out your W-4 if you’re married and both of you work. This is because certain factors should only be accounted for on one spouse’s W-4, such as deductions and dependents.

If you try to account for them on both spouse’s forms, you’ll end up withholding too little and could face a hefty tax bill if not penalties at tax time.

What if you’re married, filing jointly and completing your W-4 form? If you file as Married Filing Jointly — and you both earn around the same amount, there’s a box you can check to indicate that (it’s part of line 2c). This can help you not withhold too much in taxes.

How to fill out a W-4 form if you’re a student

Students may wonder how to fill out their W-4, especially if they’re eligible to be claimed by their parents. In general, this comes down to your age and whether you earn enough to file a tax return in the first place. In many cases, you can just fill out step 1 and sign on step 5. Check out our post on summer jobs and withholding, which covers some of these concepts.

How to claim 1 on W-4; How to fill out W-4 claiming 0

Although the Tax Cuts and Jobs Acts of 2017 is a few years behind us, we often still hear clients ask about how to claim 1 on a W-4 or how to fill out their W-4 claiming 0. These concepts have to do with allowances, which no longer apply to W-4s after tax reform. 

Starting with the 2020 Form W-4, you can no longer request an adjustment to your withholding by increasing or decreasing allowances. Instead of using allowances, you will use other parts of the W-4 to tell your employer how much to withhold from your paycheck (as described above).

How to fill out a W-4 form: Getting help

Filling out W-4 Forms can be tricky for some. That’s why we’re here. H&R Block tax professionals can be a great help in this area. In fact, you can get your return reviewed and determine if you over-withheld or under-withheld during the year.

If you determine that a change should be made, you can provide a new W-4 to your employer. You should be able to make these changes at any point during the year; and the sooner the better if a change needs to be made!

Find a tax office near you today!

The post Form W-4: How to fill out a W-4 in 2023 appeared first on H&R Block.

The difference between the standard deduction vs. itemized deduction comes down to simple math. The standard deduction lowers your income by one fixed amount. On the other hand, itemized deductions are made up of a list of eligible expenses. You can claim whichever deduction reduces your tax bill the most. You are not allowed to claim both.

Read on to better understand the difference between the two terms.

Standard deduction

What is a standard deduction? While we covered the basics above, let’s get more specific. The standard tax deduction is a fixed dollar amount that reduces the income you’re taxed on and is the most common type of deduction taxpayers take. The standard deduction:

• Allows you to take a tax deduction even if you have no expenses that qualify for claiming itemized deductions
• Eliminates the need for itemizing deductions
• Allows you to avoid keeping records and receipts of your expenses in case of a tax audit

The standard deduction amount varies according to your filing status. Here are the amounts for tax year 2023:

• For single or married filing separately — $13,850
• For married filing jointly or qualifying widow(er) — $27,700
• For head of household — $20,800

You’ll have a higher standard deduction if you’re blind or 65 or older:

• For Single – $15,700
• For Head of Household – $22,650
• For Married Filing Jointly or Qualifying Widowers – $29,200

What is an itemized deduction and how does it work?

Itemized deductions also reduce your Adjusted Gross Income (AGI), but work differently than the standard deduction. As the name implies, the standard deduction is a standard (or fixed) amount. In contrast, the itemized deduction is a dollar-for-dollar deduction that differs from taxpayer to taxpayer. The itemized deduction amount is determined by adding all applicable deductions and subtracting the sum from your taxable income. Common itemized deductions include:

• Casualty and theft losses from a federally declared disaster
• Charitable donations
• Deduction for state and local taxes
• Gambling loss deduction (only to extent of gambling winnings reported on your tax return)
• Home mortgage interest
• Unreimbursed medical and dental expenses (AGI threshold is 7.5%), including health insurance premiums paid with after-tax income

How do you decide which deduction to claim?

So, which one’s best for you? Really it comes down to the amount that is the most. First, calculate your itemized deductions. You might be able to claim some itemized deductions on your state return even if you can’t claim them on your federal return. You will need IRS Form 1040 – Schedule A: Itemized Deductions to determine the amount of your itemized deduction.

Then, compare the itemized deduction amount to the standard deduction (based on your filing status). If the amount of your itemized deduction exceeds the standard deduction, then you will claim itemized deductions on your tax return.

Standard vs. itemized deduction example using 2023 amounts

If you’re a taxpayer filing as Single and your AGI is $40,000 with itemized deductions of $14,000, then your taxable income is reduced to $26,000. If you elected to use the standard deduction, you would only reduce your AGI by $13,850, making your taxable income $26,150. In this example, you should opt to take itemized deductions.

When to itemize vs. take the standard deduction?

In some situations, itemizing makes more sense. Here are some common situations:

• You have itemized deductions totaling more than the standard deduction you would receive.
• You incurred significant out-of-pocket unreimbursed medical and dental expenses within the tax year.
• You paid real estate taxes and home mortgage interest on your home (See more about deducted mortgage interest and Form 1098).
• You had large, uninsured casualty (fire, flood, wind) or theft losses from a federally declared disaster.
• You have large gambling losses (and enough gambling winnings to offset those losses)
• You made substantial charitable contributions.
• You had other allowable deductions such as impairment-related work expenses of a disabled person or repayment of amounts subject to a claim of right over $3,000.

Standard deduction vs. itemized deductions – state tax considerations

There’s another situation where you may want to itemize deductions even if your total itemized deductions are less than your standard deduction: If you’d pay less tax overall between your federal and state taxes.

This can happen if you itemize on your federal and state returns and get a larger tax benefit than you would if you claimed the standard deduction on your federal and state returns. Residents of some states, like Michigan (which does not allow a standard deduction for most taxpayers) or Massachusetts (which doesn’t allow standard deductions) should consider this.

Get help claiming itemized or standard deductions

Need help deciding whether claim itemized vs. standard deduction this tax season? Whether you choose to file with a tax pro or file with H&R Block Online, we can help you navigate your taxes. Plus, you can rest assured that we’ll get you the biggest refund possible by finding potential tax breaks and credits..

The post What’s the difference between the standard deduction and itemized deduction? appeared first on H&R Block.

Not sure which one? Don’t worry! We’ll outline the types of tax rates and the situations when you’ll encounter them in this post.

The basics on federal income tax rates

Federal income tax rates are divided into seven segments (commonly known as income tax brackets). You pay increasing income tax rates as your income rises. If you’re trying to determine your marginal tax rate or your highest federal tax bracket, you’ll need to know two things:

• Your filing status: The filing status options are to file as Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualified Surviving Spouse.
• Your taxable income: Believe it or not, your taxable income doesn’t equal your wages. Rather, it’s the total of your taxable income sources (like wages, investment interest, and retirement distributions) minus any adjustments and tax deductions. Most income is taxed using these seven tax brackets, except for certain capital gains and dividends.

Need help determining this number? Find out how to calculate your taxable income.

Tax brackets 2023 (Taxes due in 2024)

If you’re wondering, “What tax bracket am I in?” The tax bracket-specific income ranges can shift slightly each tax year due to inflation adjustments, so you’ll want to reference the year when you review income tax brackets. Here we outline the 2023 tax brackets and corresponding 2023 tax rates.

For each bracket, the second number is the maximum for that tax rate and the first number in the next bracket is over the highest amount for the previous rate. For instance, the 10% rate for a single filer is up to and including $11,000. The 12% rate starts at $11,001.

Tax brackets in 2024

It’s never too early to start thinking about next year’s taxes. If tax planning is your thing, you’ll want to know what the 2024 tax brackets look like. In fact, you may be able to tell if you’ll be in a higher tax bracket next year and make some financial moves to take advantage of tax credits and deductions to lower your tax bill.

Tax brackets in 2022

What happens if you didn’t file your taxes for 2022 yet? The rates are a bit different. Take note.

Understanding how federal income tax brackets work

The nuances of federal income tax brackets can seem complex on first glance. So, if you’re asking yourself, “how do tax brackets work?”, here’s more detail.

Once you know your filing status and amount of taxable income, you can find your tax bracket. However, you should know that not all your income is taxed at that rate. For example, if you fall in the 22% tax bracket, not all your income is taxed at 22%. Why is that? The reason is that the United States income tax system uses a graduated tax system, designed so that individual taxpayers pay an increasing rate as their income rises as outlined in the tax brackets above.

Let’s look at Sarah, whose filing status is “Single” and who has a taxable income of $50,000 (her total income is $63,850 ($50,000 + $13,850 standard deduction).

Using the 2023 information above, we can determine Sarah’s total tax in the following steps:

1. Figure out the amount of tax for each segment of taxable income. Sarah will pay:
   • 10% on the first $11,000 of taxable income
   • 12% on the next $33,725 ($44,725-$11,000)
   • 22% on the remaining $5,275 ($50,000-$44,725)
2. Add the taxable amounts for each segment ($1,100 + $4,047 + $1,160.50) = $6,307.50

For her 2023 tax return, Sarah will pay $6,307.50 in tax. But that’s not the only way to describe Sarah’s taxes. We could also talk about her average tax rate and marginal tax rate.

So, what’s the difference between all these different percentages and rates?  Read on and we’ll explain, continuing to use Sarah as an example.  

Income Tax Rate Terms

The terminology around income tax brackets and tax rates can be confusing at times. To clarify what’s meant, let’s review a few relevant terms that relate to this topic.

• Income tax rate: The various percentages at which taxes are applied
• Income tax brackets: The ranges of income to which a tax rate applies (currently there are seven as shown above).
• Marginal tax rate: The rate at which the last dollar of income is taxed. Sarah’s marginal tax rate is 22%.
• Effective tax rate: The total tax paid as a percentage of total income taxed.
• Average tax rate: This is the same as the effective tax rate.  For Sarah, we can think about her average tax rate in two ways. For the $50,000 of taxable income, her tax rate is 12.6%. If we think about the average based on all of her income, it would be 9.9%.

There is another way to think about average tax rate: If you’re looking for the average federal income tax rate that most taxpayers pay, that’s a harder number to pin down as it changes every year.  You can also review average tax rate details in this chart.

In addition to these definitions, it’s helpful to understand that the table above shows ordinary tax rates. However, ordinary tax rates don’t apply to every type of income. For other types of income, they follow a different rate structure than the table above. We’ll outline those next.

Other types of tax rates

Now, let’s get to the other tax rates. There are a few places where you might find these categories, like on your investment or broker statements.

Capital gains tax rates and dividend tax rates

When you receive a quarterly investment statement, it may show that you were paid capital gain distributions and dividends. The statement will also show if you sold stock or mutual funds, which would result in capital gain or loss. To know what dividend or capital gain tax rate applies here, you should also look at the timeframes involved.

• Long-term capital gains refer to assets sold for a profit that were held for more than one year. The specific rates depend on your taxable income, but it’s not the same as the percentages listed above. Use the table lower in this section to determine your rate.
• Short-term capital gains refer to assets sold for a profit that were held for one year or less. These gains are taxed just the same as ordinary income, so you can refer to the federal income tax rates above.
• Qualified dividend income refers to dividend income on assets held for a certain period. For a dividend to be a qualified dividend, you must have held the asset for more than 60 days during the 121-day period starting 60 days before the ex-dividend date. Qualified dividend income is taxed the same rate as long-term capital gains, so it will also follow the rates shown in the table below.
• Ordinary dividend income refers to income that doesn’t meet the qualified dividend income criteria above. These dividends, just like short-term capital gains, are taxed as ordinary income. Refer back to the federal income tax rates above.
• Capital gain distributions from mutual funds are generally taxed similarly to qualified dividends.

2023 tax rates: Long-term capital gains (LTCG) and Qualified dividend income (QDI)

*Married Filing Separately: Rates for married individuals filing separate returns are one half of the Married Filing Jointly brackets.

Note: Gains on the sale of collectibles (e.g., antiques, works of art and stamps) are taxed at a maximum rate of 28%.

Social Security tax rate and FICA tax rates

When you look at your paycheck, you can see taxes that are taken out of your take-home pay for various reasons. We’ll cover those in this section.

Social Security and Medicare taxes fall under the Federal Insurance Contributions Act (FICA) taxes. When you want to know the FICA tax rate, you should refer to the two categories below.

Currently, the:

• Social Security tax rate is 6.2%. This is for the employee portion of these taxes. Employers also pay half of these taxes, so you can add another 6.2% to get the total Social Security tax rate of 12.4%.
• Medicare tax rate is 1.45%. This is for the employee portion of the taxes. Employers also pay half these taxes, so you can add another 1.45% to get the total rate of 2.9%.

There are some limits and exceptions to Social Security and Medicare tax rates. Get the details in our payroll tax article.

Bonus tax rate (bonus tax withholding rate)

The last category of taxes you might see on your paycheck stub is for any bonus or supplemental wages you received. What most people think of the bonus tax rate is actually a percentage of tax withheld from pay in certain circumstances: prizes and awards, certain commissions, overtime pay, back pay, and reported tips.

The bonus tax withholding rate is a flat 22% as long as the amount paid is under $1 million. If it’s over that amount, the bonus tax rate jumps to 37%. Keep in mind, the Social Security portion of the FICA taxes mentioned above will also apply to a portion of your bonus payment. Medicare taxes apply to all wages.

What if the bonus tax withholding rate is higher than your income tax bracket? You’ll be able to account for that on your tax return and possibly receive money back as a refund if too much was withheld.

Tax rates and help filing your return

If you’re looking to understand how various federal tax rates will affect your tax filing outcome, check out H&R Block’s income tax calculator so you can plan ahead.

Knowing your tax bracket is just the beginning. Ready to start filing your return? You don’t have to go it alone. Rely on the expertise of H&R Block to get your maximum refund. Whether you choose to file online or want to file your taxes with a tax professional, we’re here for you.

The post What are the 2023-2024 tax brackets? appeared first on H&R Block.

One quick clarification as we talk about status: This post covers your filing status. If you’re looking for details about estimated tax or withholding tax because of your backup withholding status, check out our post on estimated tax payments and backup tax withholding.

Tax filing status meaning — and why it’s important

Taxes can be confusing, especially when it comes to jargon. “So, what is tax filing status?“ you ask?  Let’s dive right in. Your income tax filing status informs the Internal Revenue Service (IRS) about you and your tax situation.

Typically, your tax return filing status depends on if you’re unmarried or married by the end of each calendar year – December 31.  Whatever your status is on that date applies for the entire tax year.

Your filing status may be more important than you think! In fact, it determines:

• If you’re required to file a federal tax return
• If you should file a return to receive a refund
• Your standard deduction amount
• If you can claim certain tax credits
• The amount of tax you owe

If you’re unsure about your status, don’t worry. Whether you’re filing single or married, jointly or separately, making sure you have the correct filing status is easy!

Tax return status determines how you’re taxed

You may have heard about tax brackets or tables when it comes to income taxes. These tables show how taxes are applied based on your filing status. All the tax brackets for the various income tax statuses range from 10% to 37%, but the points at which you move from one rate to the next change based on your filing status. -If you choose the wrong filing status, you very likely won’t be taxed accurately. Also, because the amount of the standard deduction is different for each filing status, choosing the wrong one could result in paying more taxes than you have to.

Five tax filing status options

Choosing the correct filing status is very important as you complete your personal income tax return. If you’re wondering “What’s my filing status?”, read on to learn more about the United States IRS filing tax status with some information about each one.

When you complete your tax return, you are required to select a filing status:

• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Qualifying Widow(er) with Dependent Child

While some might sound more straightforward than others, we’ll break down each one so you can be sure you select the right status.

1. Single

The IRS doesn’t care if you have a significant other, only if you’re married. Unless you are legally married, you are considered single by the federal government. This includes individuals who never married, divorced or legally separated individuals, and widows and widowers.. Make sure to check with your state’s specific laws for state filing purposes.

In addition, your tax filing status is determined by your situation on December 31st of the year for which you are filing. In other words, it doesn’t matter if you were married earlier in the year. If you’re single by New Year’s Eve, your correct status is Single.

2. Married Filing Jointly

If you’re wondering “What is marital status and what does it have to do with taxes?” Believe it or not, a lot. One decision you and your spouse will have to make is how you’ll file your taxes. For most couples, filing jointly is usually the way to go because it often decreases what you and your spouse both owe. Also, some tax benefits such as education credits and the earned income credit are not available to married taxpayers who file separately.

If you marry at any point before the end of the taxable year, you have the option to file jointly. Married Filing Jointly is generally the best way to file your return because it often means lower taxes.

Also, if your spouse died in the tax year you’re filing for, you can likely file joint returns.

3. Married Filing Separately

If your marital status is “married”, you still have the option to file separately from your spouse. This often occurs when you live apart from your spouse for an extended period of time, but you are still legally married. In other cases of Married Filing Separately, it’s because one spouse may have a financial situation that would result in a bigger refund if they file separately. For example, if one spouse has low income and high medical bills, it could work in their favor to file a separate return to claim these expenses as itemized deductions. This is because their spouse’s income could make it difficult to reach the threshold for claiming medical expenses. These expenses must be more than 10% of your adjusted gross income (AGI) for you to claim them. In this example, you can only claim the amount that’s more than 10% of your AGI.

Also, some married filers just prefer to keep their tax and finances separate from each other.

Using this filing status doesn’t mean that instead of one joint filing, you’ll wind up with two identical single filings.

4. Head of Household with a Qualifying Person

This one is a little tricky. While it’s a little trickier, there are a number of benefits to filing Head of Household, including a larger standard deduction and more favorable tax brackets than single filers have.

To use the head of household filing status, these must be true:

• You must be either single or considered unmarried on the last day of the year.
  • Married taxpayers count as single for tax purposes if they haven’t lived in the same home as their spouse for at least the last six months of the year.
• You must have paid more than half of the cost of having a home for yourself and your qualifying children or other qualifying dependents. This may include children, grandchildren, stepchildren, nieces and nephews, or younger siblings under 19 (24 if a full-time student) who live with you for over half the year. Dependents can also include adults supported by you, such as your parents and adult children.
  • If you maintain a home for your dependent parent, you might qualify to use the head of household filing status even if your parent doesn’t live with you.

Divorced taxpayers who don’t qualify to use the head of household status should file as single. Learn more about filing taxes after a divorce.

5. Qualifying Widow(er) with a Dependent Child

Just as with filing Head of Household, filing as a Qualifying Widow or Widower with a Dependent Child has specific requirements.

For up to two years after a spouse’s death, the widow(er) can continue to use the Married Filing Jointly tax rate by filing as a Qualified Widow(er) with a Dependent Child. If you remarry, you can’t claim this filing status anymore.

Filing statuses can get complicated

No, “It’s complicated” isn’t a filing status, but certain big life changes can make it hard to determine your correct tax filing status. In fact, some people find themselves eligible for more than one status. In this case, you can choose the filing status that allows you to owe the least amount of tax.

• An example that could make you question your own filing status is determining whether your child is still your dependent as your child gets older.
• Another example is divorce or separation. Depending on the specifics of their situation, parents who are in the process of divorcing or separated might be able to file under three filing statuses: married filing jointly, married filing separately, or head of household with a qualifying person.
• A time you might qualify for multiple tax filing statuses is if you’re single with a child or other qualifying relative. In this case, you might be able to file as either single or head of household.

More tax filing requirement help

Guessing what your filing status is or assuming it’s the same as last year could cost you, especially if your marital status has changed.

The experts at H&R Block can look at your personal situation and help you decide on the filing status right for you. If you have any tax questions about your filing status, taxable income, tax credits and deductions, amended returns, tax identity theft concerns, or otherwise, connect with one of our tax pros to get the help you need.

And if you’d rather file taxes online, know you are still backed by our 100% accuracy and maximum refund guarantees.

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What do W-2 box codes show?

The W-2 boxes and W-2 codes show the taxable wages, you’ve earned and any taxes paid through withholding.

Employers submit Form W-4 to the Internal Revenue Service to report information such as marital status, number of dependents, and tax exemptions; while Form W-2 are distributed at the end of every tax year to report an employees’ income and wages for federal tax purposes. An employer fills out the forms, and includes information like wages earned, Social Security wages earned, sick leave wages, tips, and recurring taxes taken out of the employee’s paychecks throughout the year. Other compensation that is reported on a W-2 includes taxable wage benefits.

To help you understand your Form W-2, we’ve outlined each of the W-2 boxes and the corresponding W-2 codes below.

W-2 boxes explained, box by box

When viewing your W-2, you could easily get overwhelmed with the number of W-2 boxes – there are more than 14 of them! So, let’s get into the details… Here are the W-2 boxes explained:

• Box 1 — Shows your employee wages, tips, prizes, and other compensation for the year. You should include this amount on the wages line of your return. If you have more than one Form W-2, or you are married and your spouse also has one or more W-2s, the total of all forms’ Box 1 will be shown on Form 1040, line 1.
• Box 2 — Shows the total federal income tax withheld from your paycheck for the tax year. Include this amount on the federal income tax withheld line of your return (Form 1040, line 25a). 
• Box 3 — Shows your employee wages subject to Social Security tax, which could be different from what’s reported on Box 1. 
• Box 4 — Shows the amount of Social Security tax withheld from your pay.
• Box 5 — Shows your wages subject to Medicare tax. The amount, which also may not be the same as the amount reported in W-2 Box 1, might be required on Form 8959, Additional Medicare Tax, if your income is high enough. See Form 1040  instructions to determine if you’re required to complete Form 8959.
• Box 6 — Shows the amount of Medicare tax withheld. The amount includes:

• 1.45% Medicare tax withheld on all Medicare wages and tips shown in Box 5
• 0.9% Additional Medicare tax on any Medicare wages and tips above $200,000 ($250,000 for married filing joint)

• Box 7 — Shows any social security tip income you reported to your employer.
• Box 8 — Shows tip income allocated to you by your employer. This amount isn’t included in W-2 boxes 1, 3, 5, or 7.

For information on how to report tips on your return, see your Form 1040 instructions or Internal Revenue Service Pub. 531, Reporting Tip Income. You should file Form 4137: Social Security and Medicare Tax on Unreported Tip Income with your return if you collect unreported tip income. At minimum, you should report your allocated tip amount unless you can prove a smaller amount with adequate records. You should report your recorded amount even if it’s more or less than the allocated tips reported in box 8. On Form 4137, you’ll figure the Social Security and Medicare tax owed on the allocated tips shown on your W-2(s). By filing Form 4137, your Social Security tips will be credited to your Social Security record (used to figure your benefits).

• Box 10 — This amount reports dependent care benefits provided under a dependent care assistance program. Any amount in this W-2 box over $5,000 is also included in Box 1. Complete Form 2441, Child and Dependent Care Expenses, to compute any taxable and nontaxable amounts.
• Box 11 — This section shows the total amount distributed to you from your employer’s non-qualified (taxable) deferred compensation plan.
• Box 12 — Various Form W-2 codes on box 12 reflect different types of compensation or benefits. This is one of the more complex W-2 boxes, with codes ranging from A to HH. Gain more insight into W-2 box 12 codes.
• Box 13 — If the “Retirement plan” box is checked, special limits can apply to the amount of traditional IRA contributions you can deduct. If the “Statutory Employee” box is checked, Box 1 will be carried to Schedule C line 1.
• Box 14 — Employers can use  W-2 box 14  to report information like:

• A member of the clergy’s parsonage allowance and utilities
• Any charitable contribution made through payroll deductions
• Educational assistance payments
• Health insurance premium deductions
• Nontaxable income
• State disability insurance taxes withheld
• Uniform payments
• Union dues

Railroad employers use this W-2 box to report:

• RRTA compensation
• Tier I tax
• Tier II tax
• Medicare tax
• Additional Medicare tax

Since there’s no standard list of W-2 codes for box 14, employers can list any description they choose. If the code is unclear, contact your employer and ask what the internal revenue code represents.

Related read: Employers — refer to the W-2 form guidance.

More help with Form W-2 codes

Completing income tax forms can be tricky. And while information like that found in W-2 boxes seem simple to complete at first, Form W-2 codes could be hard to interpret on your own.

Let H&R Block help. View H&R Block’s tax filing options to fit with your unique tax situation.

Whether you make an appointment with one of our knowledgeable tax pros or choose one of our online tax filing products, you can count on H&R Block to help you complete your federal or state income tax forms or find deductions – on time and accurately.

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Let’s review some Frequently Asked Questions (FAQs) about tax deadlines:

What is tax day?

While not a federally recognized holiday, tax day is when individual federal taxes are due to the Internal Revenue Service (IRS). Most years, the answer to “what day is tax day?” is April 15, unless there is an exception. We’ll go over all those nuances in this article.

When are taxes due?

So, when is tax day this year? For For 2023 returns filed in 2024, tax day is April 15.

When is tax day normally?

Tax day normally is April 15. Keep in mind, if a filing or payment deadline falls on a Saturday, Sunday, or legal holiday, the tax due date will be the next business day. And, when natural disasters or pandemics happen — the tax filing deadline is subject to shift as well.

Standard tax deadlines

The date you need to pay your taxes happens in mid-April for most taxpayers. If you make estimated payments, there are a few more estimated tax due dates you’ll want to remember.

Federal tax due date

April 15 — This is the due date for filing your 2023 federal forms and paying your taxes if you owe. Your 2023 return covers your taxes for the tax year ending on Dec. 31, 2023. This is perhaps the biggest date on the tax calendar, so don’t miss it if you can help it!

Federal tax extension deadline

Need an extension? You can get an automatic six-month extension of your tax due date. You can submit IRS Form 4868: Application for Automatic Extension of Time to File. This form must be postmarked on or before the tax deadline mentioned above. With the extension, the tax extension deadline for filing your return will be Oct. 15. However, the IRS will charge you interest. The IRS may also charge you a late payment penalty unless you make a payment that’s close to your tax liability and the remaining amount is paid with your return. Submit your initial payment with Form 4868.

Quarterly payment due dates for estimated taxes

If you aren’t paying your income tax for the year through withholding or won’t pay enough tax that way, you’ll need to make estimated tax payments by certain due dates using Form 1040-ES. If the due date falls on a weekend or holiday, the due date is the next business day.

• Jan. 15 — Pay your fourth payment of your estimated tax by this due date. You won’t need to make the fourth payment if you file your tax return and pay the entire balance due by Jan. 31. 
• April 15 — Make the first payment of your estimated tax.
• June 15 — Make the second payment of your estimated tax.
• Sept. 15 — Make the third payment of your estimated tax.

Tax filing deadlines for expats

June 15 — File tax Form 1040 and pay any tax, interest, and penalties due if you’re a U.S. citizen, resident alien or member of the military (on military duty) living and working outside the U.S. and Puerto Rico.

If you want to add some additional time to file your return onto your tax calendar, file Form 4868 to obtain four additional months to file. If you’re a member of the armed forces serving in a combat zone, you might be able to further extend your tax due date.

What is the tax due date for filing taxes with extensions?

Oct. 15 — If you filed Form 4868 extending the due date of your return, this is the last day to file your tax return and pay any tax, interest, or penalties due. It’s also the last day for making many elections the IRS required you to make by the due date of your 2020 return if you had filed it on time.

Retirement-related tax filing deadlines

April 15 — It’s the last day to set up an IRA or make IRA contributions for the tax year — even if you get an extension.

October 1 — It’s the deadline for establishing a SIMPLE IRA.

October 15 — For those who have filed an extension, it’s the last day for recharacterizing an IRA contribution for the year if you filed your return on time. Note that Roth IRA conversions for tax years 2018 through 2025 can’t be recharacterized as Traditional IRAs.

Additional tax-related dates and reminders

Jan. 31 — W-2s are due from your employer. Forms 1099 are due from payers of interest, dividends, and other specified types of income. If this date falls on a weekend, file the Monday after. 

Feb. 15 — If you were exempt from income tax withholding for 2020, you must file a new Form W-4 to continue your exemption for the next tax year.

Tip earners — By the 10th day of each month, report the amount of tips of $20 or more you made during the previous month. You must report the amount in writing to your employers. This includes tips paid with cash, checks, and credit cards.

You can use Form 4070A in Publication 1244 or any other daily record to record your tip income for the month. If the 10th falls on a weekend or holiday, the due date is the next business day.

Farmers and fishermen — If at least 2/3 of your total gross income comes from farming or fishing, you should pay your required estimated tax using Form 1040-ES on or before Jan. 15. Then, you have until May 17 to file your return. You might need to file your return and pay your taxes on or before March 1 to avoid a penalty. Make sure to file by March 1 to avoid the penalty of estimated tax if both of these apply:

• You farm or fish and at least 2/3 of your total gross income comes from these activities.
• You make no estimated tax payments.

If you miss the March 1 tax deadline for filing due to severe weather or resulting power outages, you can request a waiver of any estimated tax penalties. You don’t have to be in a state or federally declared disaster area to receive the tax relief. To request the waiver, complete Form 2210-F: Underpayment of Estimated Tax by Farmers and Fishermen. You can file it with your return.

Where to go for more help with taxes, deadlines, forms and more

If you’re looking for more hands-on tax guidance, H&R Block can help. Whether you make an appointment with one of our knowledgeable tax pros or choose one of our online tax filing products, you can count on H&R Block to help you.

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First, let’s define capital gains. Then, we’ll cover the difference between the two terms and how each of them are taxed. Believe it or not, short- and long-term capital gains are taxed at different rates!

Capital gain

If you earned money on an investment and later sell it, you received a capital gain. It’s the difference between what you paid for an asset, and what you sold it for. On contrast, if you lost money on an investment you’ve sold, you endured a capital loss.

Capital gain or loss can come multiple sources, including:

• Bonds
• Mutual funds
• Real property
• Stocks

If you’ve received capital gain (sometimes called “realized” a capital gain), it’s considered taxable income. Learn more about capital gain taxes here. Both short- and long-term capital gains are subject to taxation.

Short-term capital gains

A short-term capital gain or loss occurs when you sell assets that you owned for one year or less. Short-term capital gains are taxed at an ordinary income tax brackets.

Long-term capital gains

A long-term capital gain or loss involves assets you’ve held for longer than one year. Long-term capital gains are taxed at the following rates, depending on your taxable income:

• 0% – If your taxable income is less than:
  • $40,000 for single or married filing separately
  • $80,000 for married filing jointly / qualifying widower
  • $53,600 for head of household
• 15% – If your taxable income is more than the amount listed above, but less than:
  • $441,450 for single
  • $496,600 for married filing jointly / qualifying widower
  • $469,050 for head of household
  • $248,300 for married filing separately
• 20% – If your taxable income is more than the thresholds set at the previous tax rate (15%)

Most capital gains are taxed at the 0% or 15%. There are exceptions to the rule, however. The taxable capital gains from section 1202 qualified small business stock and net capital gains from selling collectibles is taxed at 28%. Unrecaptured section 1250 gains from selling real property is taxed at 25%.

Where is capital gain income reported?

Your financial institution will issue you Form 1099-B showing the sale of the stock and the taxes withheld. Use this form to calculate and report short- and long-term capital gain or loss on Form 8949, Sales and Other Dispositions of Capital Assets. Then, you should summarize capital gains and deductible capital losses on Schedule D (Form 1040), Capital Gains and Losses.

A scenario – Capital gains tax on home sale

Many people will encounter capital gain on the sale of their home. So, what is the capital gains tax on a home sale?

If you meet the conditions for the sale of home capital gains tax exemption, you can exclude up to $250,000 (or $500,000 for a married couple filing together) of gain on the sale of your main home. Learn more about the capital gain home sale exemption. If the sale exceeds a $250,000 profit, you will have to pay taxes on it. Learn more about how to calculate capital gains tax.

Where to go for more tax help for short- and long-term capital gains

Our tax pros know the ins and outs of taxes and are dedicated to helping you better understand taxes – including how investments and capital gain can impact them.

Make an appointment with one of our tax pros today.

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For taxpayers in a majority of the states in the U.S., tax time means filing a return for federal and state income taxes. However, that’s not the case for everyone across the country. If you’re a taxpayer in one of the seven states without an individual income tax, you are not required to prepare and file a state income tax return.

Tax-free states

The following are tax-free states (don’t have income tax):

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

Tax-free states in USA (excluding dividends and interest income)

Additionally, the following are tax-free states in the USA that don’t have income taxes for earned income, but they do tax dividend and interest income. This will phase out in future years, however, making the states both income tax free by 2025.

• New Hampshire
• Tennessee

States without income taxes: Additional considerations

If you live in a state without individual income taxes, you won’t need to pay taxes on your wages or income from Social Security, pensions, or retirement plans, such as 401(k)s or an individual retirement account (IRA). However, taxpayers in these states are still subject to other types of taxes, including local taxes, property taxes, or sales taxes.

So, what are the best states for taxes?

While Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don’t impose state income taxes, are they really the best states for taxes?

Because there are a number of additional state taxes imposed outside of income tax, the best states for taxes are really on a case by case basis. You must consider all taxes imposed, plus the cost of living in each state.

But, every state is different. Learn more about the lowest and highest taxed states.

More help with state taxes

Whether you need help with state or federal tax help, we can help! If you want to tackle taxes yourself, use our state edition tax software. Or you can opt for virtual tax preparation with tax pros with state-specific tax expertise. Simply upload your tax documents and a tax pro will do the rest!

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