#Married Filing Separately vs. Jointly

[devotedlymydestiny]

When Should You Consult a Professional Tax Consultant? Key Milestones to Consider

Tax planning can be a daunting task, especially when you’re faced with life’s significant changes. It’s not just about filing forms; it’s about making strategic decisions to minimize your tax liability and make the most of your financial opportunities. At certain points in your life, consulting a professional tax consultant becomes crucial to ensure you optimize your tax savings and stay compliant with tax laws.

Let’s explore the key life milestones where hiring a tax professional can help you make informed financial decisions.

Marriage and Relationship Changes

Does getting married affect your taxes? 

Absolutely. When you get married, your tax situation changes in many ways, from your filing status to the deductions and credits available.

Here’s how marriage can alter your taxes:

New tax filing status — After marriage, you and your spouse will need to decide whether to file jointly or separately. Most couples file jointly to benefit from lower tax rates, but sometimes, filing separately may save money.

Higher-income tax brackets — Depending on your combined income, you may move into a different tax bracket. However, this could work to your advantage when deductions and credits are calculated.

For families, understanding the tax benefits related to children is crucial:

Child Tax Credit — If you have kids, you may qualify for the Child Tax Credit, which can reduce your tax bill by up to $2,000 per child.

Dependent care expenses — Working parents may also claim the Child and Dependent Care Credit to deduct a portion of childcare costs.

These changes can be complex, which is why it’s wise to consult a professional tax consultant. They can help ensure you claim all the deductions and credits available after getting married.

Buying a Home

What are the tax benefits of buying a home? 

Owning a home comes with various tax advantages that renters don’t get. If you’re buying your first house or selling a property, understanding these benefits can save you money.

Here’s what you need to know:

Mortgage interest deduction — As a homeowner, you can deduct the interest paid on your mortgage, which can significantly reduce your taxable income. This is especially helpful in the early years of the mortgage when most of your payment goes toward interest.

Property tax deduction — In addition to mortgage interest, you can also deduct the property taxes you pay on your home. This is another big saving that homeowners enjoy.

If you’re selling your home, capital gains taxes may come into play. However, you can exclude up to $250,000 ($500,000 for married couples) from the gain from the sale of your primary residence from taxable income, provided you meet certain criteria.

Starting a Business

Launching a business comes with exciting opportunities, but it also introduces new tax obligations. Understanding the deductions and credits available to you as a business owner can reduce your tax burden significantly.

Key deductions for business owners:

Startup costs — You can deduct a portion of your startup expenses in the first year of operation.

Small business deduction: If your business qualifies, you may be able to deduct up to 20% of your qualified business income under the Section 199A deduction.

Research and development credits: If your business invests in innovation, you may qualify for R&D tax credits, even if you’re a small business.

Self-employment tax: If you’re self-employed, you’ll be responsible for paying both the employer and employee portions of Social Security and Medicare taxes.

Retirement

As you plan for retirement, it’s essential to understand how taxes will impact your savings. If you’re withdrawing from an IRA, 401(k), or another retirement account, the way you manage these funds can significantly affect your tax bill.

Retirement tax considerations:

Traditional vs. Roth IRAs — Withdrawals from a traditional IRA are taxed as ordinary income, while Roth IRA withdrawals are typically tax-free. Knowing when and how to withdraw can save you money in the long run.

401(k) and pension withdrawals — Withdrawals from a 401(k) are taxed similarly to traditional IRAs. However, early withdrawals (before age 59½) often incur a 10% penalty in addition to regular income taxes.

Social Security benefits can also be taxable, depending on your total income. A tax expert can help you strategize how to withdraw from your retirement accounts in the most tax-efficient way possible.

Inheritance and Estate Planning

Do you have to pay taxes on inheritance? 

Inheritance and estate taxes can significantly affect the value of assets passed down to heirs. While federal estate taxes only apply to estates valued over a certain threshold, the rules around inheritance can be complicated.

Key considerations include:

Estate tax exemptions — In 2024, estates valued at less than $12.92 million are exempt from federal estate taxes. Anything above that is taxed.

Gift tax — If you plan to gift assets during your lifetime, there are annual exclusion limits (currently $17,000 per recipient) that can help you reduce the taxable value of your estate.

Key Moments to Seek Tax Guidance

There are pivotal moments throughout life when consulting a professional tax consultant becomes essential. For residents of Venice, FL, White Sands Tax is a trusted partner that can provide expert tax advice tailored to your unique needs.

Don’t wait for tax season—start planning today to ensure you’re prepared for every stage of life and can maximize your tax savings.

[mitchellwilliam912]

How Marriage Affects Your Taxes: Filing Jointly vs. Separately

When Sarah and Michael got married, they knew they were signing up for a lifetime of partnership. They had talked about everything—finances, future kids, even where they wanted to retire someday. But as their first tax season approached as a married couple, they found themselves facing an unexpected dilemma: Should they file their taxes jointly or separately? Like many newlyweds, they had assumed that filing jointly was the obvious choice, but a few conversations with friends and some online research left them more confused than ever. What would give them the best financial outcome? They weren’t sure if filing separately might actually save them money or if they were better off sticking together in their tax filing, just as they had vowed to do in life.

Filing Jointly: The Standard Option for Married Couples

The vast majority of married couples in the United States choose to file their taxes jointly—and for good reason. Filing jointly offers several advantages, particularly for those with a significant income disparity between spouses. When filing jointly, the IRS treats both spouses as a single taxable entity, combining their incomes and applying a unified tax bracket. This often results in a lower overall tax rate compared to filing separately.

For example, in 2024, married couples filing jointly are eligible for a standard deduction of $27,700. This is double the standard deduction for single filers, which is $13,850. The larger deduction reduces the couple's taxable income, often leading to a lower tax bill.

Additionally, many tax credits and deductions are only available to couples who file jointly. These include the Earned Income Tax Credit (EITC), the Child and Dependent Care Credit, and education credits like the American Opportunity Tax Credit (AOTC). For Sarah and Michael, who were hoping to take advantage of these credits, filing jointly seemed like the clear choice.

The Benefits of Filing Separately

Despite the advantages of filing jointly, there are situations where it might make sense for a couple to file separately. While less common, filing separately can be beneficial if one spouse has significant medical expenses, high miscellaneous itemized deductions, or large unreimbursed business expenses.

The IRS allows taxpayers to deduct medical expenses that exceed 7.5% of their adjusted gross income (AGI). If Sarah had significant medical bills, filing separately could lower her AGI, making it easier to meet the threshold for deducting these expenses. For instance, if Sarah's AGI were $50,000 when filing jointly, she could only deduct medical expenses above $3,750. However, if her individual AGI was $25,000 when filing separately, she could deduct expenses above $1,875—potentially resulting in more substantial deductions.

Filing separately can also be advantageous if one spouse has a much higher income and the other has significant deductible expenses. This scenario might apply if one spouse is a business owner with considerable deductions for things like home office expenses, travel, and equipment.

The Marriage Penalty and Marriage Bonus

One of the key factors that influence the decision to file jointly or separately is the so-called "marriage penalty" or "marriage bonus." The marriage penalty occurs when a couple’s combined income pushes them into a higher tax bracket than they would have been in if they had filed as single individuals. This typically happens when both spouses have relatively high and similar incomes.

For example, in 2024, the 24% tax bracket for single filers applies to income between $95,376 and $182,100. For married couples filing jointly, the same bracket covers income from $190,751 to $364,200. If Sarah and Michael each earned $150,000, their combined income of $300,000 would be taxed at a higher rate than if they were single.

On the other hand, a marriage bonus occurs when one spouse earns significantly more than the other. The lower-earning spouse’s income essentially "fills up" the lower tax brackets, reducing the overall tax rate for the couple. This is one of the reasons why most married couples benefit from filing jointly.

Considerations Beyond Taxes

While taxes are an important consideration, they are not the only factor to weigh when deciding whether to file jointly or separately. Filing separately can complicate the tax filing process, potentially leading to higher preparation costs and increased likelihood of errors. Additionally, when filing separately, both spouses must take the standard deduction or both must itemize their deductions—they cannot choose different options.

Moreover, some tax benefits are completely off the table if you file separately. For instance, if Sarah and Michael were hoping to deduct student loan interest or claim education credits, they would need to file jointly, as these benefits are not available to those who file separately.

The Importance of Professional Advice

As Sarah and Michael discovered, the decision to file jointly or separately is not always straightforward. Their financial situation, income disparity, and potential deductions all needed to be carefully considered. They decided to consult a tax professional to analyze their options and determine the best approach for their specific circumstances. This decision proved wise, as their advisor was able to help them navigate the complexities of the tax code and make an informed choice.

Conclusion

Deciding whether to file jointly or separately is a crucial decision for married couples that can have significant financial implications. While most couples benefit from filing jointly, there are scenarios where filing separately might be advantageous. Understanding your financial situation and the potential impact on your tax liability is essential in making the right choice. For couples who also run a business, seeking a tax service for small business can provide additional insights and ensure that all tax benefits are maximized. Whether you choose to file jointly or separately, the key is to make an informed decision that aligns with your financial goals.

[paolawdiary]

EXECUTIVE ORDER NO. 209

THE FAMILY CODE OF THE PHILIPPINES

TITLE IV

PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

Chapter 5. Separation of Property of the Spouses and Administration of Common Property by One Spouse During the Marriage

Art. 136. The spouses may jointly file a verified petition with the court for the voluntary dissolution of the absolute community or the conjugal partnership of gains, and for the separation of their common properties. All creditors of the absolute community or of the conjugal partnership of gains, as well as the personal creditors of the spouse, shall be listed in the petition and notified of the filing thereof. The court shall take measures to protect the creditors and other persons with pecuniary interest. 

CASE DIGEST: Alfonso Lacson vs. Carmen San Juan-Lacson I G.R. No. L-23482  | August 30, 1968 | CASTRO, J.

FACTS:

Carmen San Jose-Lacson and Alfonso Lacson married on February 14, 1953. Four live children were born to them. The respondent spouse moved to Manila on January 9, 1963, leaving the marital residence in Santa Clara Subdivision, Bacolod City. She filed a lawsuit for custody of all of their children as well as support for herself and them in the Juvenile and Domestic Relations Court of Manila on March 12, 1963, with the case docketed as civil case E-00030. Nonetheless, with the help of their own attorneys, the couple was able to come to a friendly agreement over child custody, child support, and property division. They filed a joint petition on April 27, 1963, with the date of April 21, 1963. It was docketed as special proceeding 6978 of the Negros Occidental Court of First Instance. The CFI issued an order on April 27, 1963, finding the aforementioned joint petition to be "conformable to law," giving judgment and approving and implementing in toto their compromise agreement. As stipulated in paragraph 4 of their mutual agreement (par. 3 of the compromise judgment), the petitioner spouse gave the respondent spouse full custody of all four children and sent financial support for their education. Respondent spouse claimed to have "entered into and signed the  Joint Petition as the only means by which she could have immediate custody of the… minor children who are all below the age of seven" in a move filed before the JDRC.

ISSUE:

Whether or not the compromise agreement and the judgement of the CFI grounded on said agreement conformable to law

RULING:

Yes, In accordance with article 191 of the Civil Code, as stated in the Article 136 of the Family code, as far as the separation of the property of the spouses and the dissolution of the conjugal partnership are concerned. In the absence of an express declaration in the marriage settlements, the separation of property between spouses during the marriage shall not take place save in virtue of a judicial order. The husband and the wife may agree upon the dissolution of the conjugal partnership during the marriage, subject to judicial approval. All the creditors of the husband and of the wife, as well as of the conjugal partnership, shall be notified of any petition for judicial approval of the voluntary dissolution of the conjugal partnership, so that any such creditors may appear at the hearing to safeguard his interests. Upon approval of the petition for dissolution of the conjugal partnership, the court shall take such measures as may protect the creditors and other third persons.

Source:

Family Code of the Philippines (2022); Judge Ed Vincent S. Albano , Ed Vincent A. Albano, Jr.

https://www.officialgazette.gov.ph/1987/07/06/executive-order-no-209-s-1987/

https://chanrobles.com/cralaw/1956julydecisions.php?id=269

[legisservitaepax]

Article 90 of Family Code

Article 90. The provisions on co-ownership shall apply to the absolute community of property between the spouses in all matters not provided for in this Chapter. (n)

Agapay vs. CA, G.R. No. 116668, July 28, 1997,

Facts

Miguel Palang contracted his first marriage on July 16, 1949 when he took private respondent Carlina (or Cornelia) Vallesterol as a wife at the Pozorrubio Roman Catholic Church in Pangasinan.

A few months after the wedding, in October 1949, he left to work in Hawaii. Miguel and

Carlina's only child, Herminia Palang, was born on May 12, 1950.

Miguel returned in 1954 for a year. His next visit to the Philippines was in 1964 and during the entire duration of his year-long sojourn he stayed in Zambales with his brother, not in Pangasinan with his wife and child. The trial court found evidence that as early as 1957,... Miguel had attempted to divorce Carlina in Hawaii

When he returned for good in 1972, he refused to live with private respondents, but stayed alone in a house in Pozorrubio, Pangasinan.

On July 15, 1973, the then sixty-three-year-old Miguel contracted his second marriage with nineteen-year-old Erlinda Agapay, herein petitioner.

Two months earlier, on May 17, 1973, Miguel and Erlinda, as evidenced by the Deed of Sale, jointly purchased a... parcel of agricultural land located at San Felipe, Binalonan, Pangasinan with an area of 10,080 square meters.

said rice land was issued in their names.

A house and lot in Binalonan, Pangasinan was likewise purchased on September 23, 1975, allegedly by Erlinda as the sole vendee. TCT No. 143120 covering said property was later issued in her name.

On October 30, 1975, Miguel and Cornelia Palang executed a Deed of Donation as a form of compromise agreement to settle and end a case filed by the latter.[3] The parties therein agreed to donate their conjugal property consisting of six parcels of land to... their only child, Herminia Palang.

Miguel and Erlinda's cohabitation produced a son, Kristopher A. Palang, born on December 6, 1977. In 1979, Miguel and Erlinda were convicted of Concubinage upon Carlina's complaint

On July 11, 1981, Carlina Palang and her daughter Herminia Palang de la Cruz, herein private respondents, instituted the case at bar, an action for recovery of ownership and possession with damages against petitioner before the Regional Trial Court in Urdaneta, Pangasinan

Private respondents sought to get back the riceland and the house and lot both located at Binalonan, Pangasinan allegedly purchased by Miguel during his cohabitation with petitioner.

Issue

WON first and principal issue is the ownership of the two pieces of property subject of this action.

Ruling:

he sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda. The provision of law applicable here is Article 148 of the Family Code providing for cases of cohabitation when a man and a woman who are not capacitated to marry each other live exclusively with... each other as husband and wife without the benefit of marriage or under a void marriage.

While Miguel and Erlinda contracted marriage on July 15, 1973, said union was patently void because the earlier marriage of Miguel and Carlina was still susbsisting and unaffected by the... latter's de facto separation.

Under Article 148, only the properties acquired by both of the parties through their actual joint contribution of money, property or industry shall be owned by them in common in proportion to their respective contributions.

If the actual... contribution of the party is not proved, there will be no co-ownership and no presumption of equal shares

In the case at bar, Erlinda tried to establish by her testimony that she is engaged in the business of buy and sell and had a sari-sari store... but failed to persuade us that she actually contributed money to buy the subject riceland. Worth noting is the... fact that on the date of conveyance, May 17, 1973, petitioner was only around twenty years of age and Miguel Palang was already sixty-four and a pensioner of the U.S. Government. Considering her youthfulness, it is unrealistic to conclude that in 1973 she contributed P3,750.00... as her share in the purchase price of subject property,... there being no proof of the same.

Petitioner now claims that the riceland was bought two months before Miguel and Erlinda actually cohabited. In the nature of an afterthought, said added assertion was intended to exclude their case from the operation of Article 148 of the Family Code.

In any case, even assuming that the subject property was bought before cohabitation, the rules of... co-ownership would still apply and proof of actual contribution would still be essential.

Since petitioner failed to prove that she contributed money to the purchase price of the riceland in Binalonan, Pangasinan, we find no basis to justify her co-ownership with Miguel over the same. Consequently, the riceland should, as correctly held by the Court of Appeals,. revert to the conjugal partnership property of the deceased Miguel and private respondent Carlina Palang.

With respect to the house and lot, Erlinda allegedly bought the same for P20,000.00 on September 23, 1975 when she was only 22 years old. The testimony of the notary public who prepared the deed of conveyance for the property reveals the falsehood of this claim. Atty.

Constantino Sagun testified that Miguel Palang provided the money for the purchase price and directed that Erlinda's name alone be placed as the vendee.

The transaction was properly a donation made by Miguel to Erlinda, but one which was clearly void and inexistent by express provision of law because it was made between persons guilty of adultery or concubinage at the time of the donation, under Article 739 of the Civil Code.

Moreover, Article 87 of the Family Code expressly provides that the prohibition against donations between spouses now applies to donations between persons living together as husband and wife without a valid marriage,. for otherwise, the condition of. those who incurred guilt would turn out to be better than those in legal union.

[supremojohndee]

Article 138: Family Code of the Philippines

Article 138. After dissolution of the absolute community or of the conjugal partnership, the provisions on complete separation of property shall apply.

Case from Article 148: Juaniza Vs. Jose

Facts:

Eugenio Jose was the registered owner and operator of the passenger jeepney involved in an accident of collision with a freight train of the Philippine National Railways which resulted in the death and physical injuries to five of its passengers. At the time of the accident, Eugenio Jose was legally married to Socorro Ramos but had been cohabiting with defendant-appellant, Rosalia Arroyo, for sixteen years in a relationship akin to that of husband and wife. Motion for reconsideration was filed by Rosalia praying that the decision be reconsidered insofar as it condemns her to pay damages jointly and severally with her co-defendant, but was denied. The lower court erred in holding defendant-appellant Rosalia liable 'for damages resulting from the death and physical injuries suffered by the passengers' of the jeepney registered in the name of Eugenio Jose, on the erroneous theory that Eugenio and Rosalia, having lived together as husband and wife, without the benefit of marriage, are co- owners of said jeepney.

Issue:

Can the petitioner be held liable for the obligations arising from the accident to which the respondent’s property was involved?

Held:

No, since Eugenio Jose is legally married to Socorro Ramos, there is an impediment for him to contract marriage with Rosalia Arroyo. Under the aforecited provision of the Civil Code, Arroyo cannot be a co-owner of the jeepney. The jeepney belongs to the conjugal partnership of Jose and his legal wife. There is therefore no basis for the liability of Arroyo for damages arising from the death of, and physical injuries suffered by, the passengers of the jeepney which figured in the collision.

[alaizaloretizo]

ENJOYMENT AND DISPOSITION OF THE COMMUNITY PROPERTY

Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors.

Melania A. Roxas vs. The hon. Court of appeals and antonio M. Cayetano G.R. No. 92245, 26 June 1991.

Facts: Petitioner Melania Roxas is married to Antonio Roxas, although they are already estranged and living separately. Melania discovered that Antonio leased to respondent Antonio Cayetano their conjugal lot in Novaliches without her knowledge and consent. 

Thus, Melanie filed a case before the RTC praying for the annulment of the contract of lease between Antonio and Mr. Cayetano. Mr. Cayetano moved to dismiss the complaint on the sole ground that the complaint states no cause of action.The RTC Judge resolved said Motion by dismissing Melania's complaint.

Issue:

Whether or not a husband, may legally enter into a long-term contract of lease involving conjugal real property without the consent of the wife. Ruling:

No. Even if the husband is administrator of the conjugal partnership, administration does not include acts of ownership. The lease is not only an obstruction but also a qualified alienation, with the lessee becoming, for al legal intent and purposes, and subject to its terms, the owner of the thing affected by the lease.

Thus, in case the wife’s consent is not secure by the husband as required by law, the wife has the remedy of filing an action for annulment of the contract.

[lostinlex]

JOEY D. BRIONES vs. MARICEL P. MIGUEL, FRANCISCA P. MIGUEL and LORETA P. MIGUEL

G.R. No. 156343, October 18, 2004

FAMILY CODE - ARTICLE 213

Parental responsibility will be exerted by the parent the court names in the event of a separation. Unless the chosen parent is unfit, the court must take into account all pertinent factors, notably the child's preference if they are older than seven.

CASE DIGEST

FACTS:

On March 5, 2002, petitioner Joey D. Briones filed a Petition for Habeas Corpus to obtain custody of his minor child Michael Kevin Pineda. The petitioner alleges that the minor Michael Kevin Pineda is his illegitimate son with respondent Loreta P. Miguel. He was born in Japan on September 17, 1996 as evidenced by his Birth Certificate. The respondent Loreta P. Miguel is now married to a Japanese national and is presently residing in Japan. The petitioner prays that the custody of his son Michael Kevin Pineda be given to him as his biological father and has demonstrated his capability to support and educate him.

ISSUE:

Whether or not the natural father may be denied the custody and parental care of his own child in the absence of the mother who is away.

RULING:

Having been born outside a valid marriage, the minor is deemed an illegitimate child of petitioner and Respondent Loreta. Article 176 of the Family Code of the Philippines explicitly provides that "illegitimate children shall use the surname and shall be under the parental authority of their mother and shall be entitled to support in conformity with this Code." This is the rule regardless of whether the father admits paternity. Parental authority over recognized natural children who were under the age of majority was vested in the father or the mother recognizing them. If both acknowledge the child, authority was to be exercised by the one to whom it was awarded by the courts; if it was awarded to both, the rule as to legitimate children applied. In other words, in the latter case, parental authority resided jointly in the father and the mother.

[lawinformation]

How you can be reimbursed for past purchases during your Texas Divorce

On the off chance that you have require a best reasonable Texas Divorce Law encounter, How you can be reimbursed for past purchases during your Texas Divorce with the immense procedure!

Divorce Attorney Houston: Part of any divorcein Texas is figuring out how to characterize the property owned by the two spouses. If you are considering a divorce or have just been served with a petition by divorce filed by your spouse then you are probably wondering how all the “stuff” that you and your spouse own will be divided in the divorce.

Today’s blog from the Law Office of Bryan Fagan, PLLC is designed with you in mind if that is the case.

Separate property vs. Community property

Property in the context of a divorce is typically divided up into three categories. Most everyone going through a divorce is aware that Texas is a community property state. This represents the first of the three categories.

Community Property

Community property is basically any property that is acquired by either you or your spouse during the course of your marriage with a few exceptions for inherited property and things of that nature.

Separate Property

Both you and your spouse have your own separate estates as well, meaning that each of you are able to own property separately from one another. Essentially any property that you owned prior to your marriage is categorized as separate property belonging to either of you.

When we think about separate property the theory in Texas is that because you or your spouse owned the property before you ever got married the other spouse has no claim to whatever property is being discussed.

Can you contribute money to the separate property of your spouse and be reimbursed?

Houston Divorce Lawyers: It can happen that you contribute money and resources that benefit the separate property of your spouse. For example, if your spouse owns a home that is in actuality her separate property but your income has been used to pay for a renovation of the kitchen or towards the mortgage itself you are in a position where the community estate has been used to benefit the separate estate of your spouse.

A reimbursement claim is one that can allow you to be recouped for that expenditure.

Not all money spent by the community estate on one of your or your spouse’s separate estates can be reimbursed, however. Let’s review those expenditures that are reimbursable.

> If your community estate has been used to pay for an improvement to the separate estate of your spouse then you may be able to be reimbursed in your divorce for that expenditure. An example of this situation would be your having paid to build a tennis court on the property owned by your spouse that is his separate property.

> The community estate pays towards the separate debt (a mortgage or a credit card, for example) of your spouse’s separate estate.

> The other big area that I have seen reimbursement occur is if you work for your spouse’s business which is later determined to be his separate property and you were not paid for that work or were paid an insufficient amount. In this scenario you can push to be reimbursed during the course of your divorce.

In the event that a judge does order a reimbursement payment be made from the separate estate of your spouse, that payment will go towards whichever estate- your separate estate or the community estate- actually contributed to the separate property of your spouse.

If it was the community estate, that payment would need to be divided up in a just and right manner like all other property included in the community estate.

The State of Texas sees reimbursement as a means to make to even out the contributions that one spouse’s separate property or their jointly held property made to the other’s separate property. These contributions can take the form of money or the form of labor as we have previously discussed.

Presenting a claim for reimbursement in your divorce case at large

It is one thing to believe that you have case for reimbursement and another to actually prove that reimbursement case. To win a reimbursement case you must be able to show a court that a contribution was made- either from your separate estate or from the community estate- towards the benefit of your spouse’s separate estate.

One you are able to establish that a contribution was made and that it falls into one of the aforementioned categories you will need to prove the value of that contribution.

Having documentary evidence to help prove a claim for reimbursement can be incredibly helpful.

Documents related to the closing on a house or piece of property, bank transaction records and other financial instruments can assist you and your attorney in determining if you have a leg to stand on when it comes to presenting a reimbursement claim before a judge.

These are issues that are extremely complex and often times require the assistance of an outside expert to help determine what property belongs in what estate. With that said, you should always hire an attorney to represent you and assist you in making these sort of determinations.

Family lawattorneys have experience in helping people like you make difficult decisions regarding their divorce and I cannot emphasize enough how critical it is to have an attorney advocating for you in a reimbursement situation.

Your attorney can assist you in stating to the court and to your spouse the nature of your reimbursement claim which should be made in your original petition for divorce.

Questions on divorce or reimbursement claims? Contact the Law Office of Bryan Fagan, PLLC today

Family Law Attorney Houston: If you have any questions related to this article or any other subject in family law please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. One of our licensed family law attorneys is available six days a week to answer your questions in a free of charge consultation.

Divorce is not an easy process to go through and you need an experienced advocate on your side. Our office proudly represents clients across southeast Texas and we would be proud to do the same for you and your family ... Continue Reading

[brainfuzz]

The way I explained it to conservative family members who were bitching about marriage equality and The Gays vs. the Sanctity of Marriage is there are two different kinds of "marriage."

A marriage is essentially a consensual merging of two adult households, whether those households are same sex is irrelevant. Once you define it as a household merge, you can see there are merges in the eyes of Your Deity and a merge in the eyes of the law. Technically, you can be married in the eyes of Your Deity without the law recognizing it (which many many same sex couples did prior to legal marriage equality) and you can most certainly get married in the eyes of the law with no religion involved at all (which many many many people do daily by getting married by a Justice of the Peace). The confusion happened because religious leaders report their marriages to the government which makes them legal. If they don't (and I know someone this happened to, it was an accident) then the law/government doesn't recognize them as married, and they do not have the benefits nor rights of being married.

If you are married in the eyes of Your Deity, you and your partner file your Fed taxes separately. If you are married in the eyes of The Law, you and your partner can file your taxes jointly. If you are married in the eyes of both, Your Deity is happy and you can file your Fed taxes jointly.

this might be because I’m a family law lawyer and also an old crone who remembers when marriage equality wasn’t a thing (as in, marriage equality only became nation-wide two months before I went to law school), but I have Strong Feelings about the right to marry and all the legal benefits that come with it

like I’m all for living in sin until someone says they don’t want to get married because it’s ~too permanent~ and in the same breath start talking about having kids or buying a house with their significant other. then I turn into a 90-year-old passive-aggressive church grandma who keeps pointedly asking when the wedding is. “yes, a divorce is very sad and stressful, but so is BEING HOMELESS BECAUSE YOU’RE NOT ENTITLED TO EQUITABLE DISTRIBUTION OF MARITAL PROPERTY, CAROLINE!”

[hildagarcia3656]

Article 136 Family Code of the Philippines

E.O. No. 209 s. 1987

Student # 7

by : Hilda D. Garcia

Article 136.

The spouse may jointly file a verified petition with the court for the voluntary dissolution of the absolute community or the conjugal partnership of gains, and for the separation of their common properties. All creditors of the absolute community or of the conjugal partnership of gains, as well as the personal creditors of the spouse, shall be listed in the petition and notified of the filing thereof. The court shall take measures to protect the creditors and other persons with pecuniary interest. (191a)

Case Digest:

GUILLERMA TUMLOS,, Petitioner, vs.

SPOUSES MARIO FERNANDEZ and LOURDES FERNANDEZ, Respondents.

G.R. No. 137650. April 12, 2000

Ponente: PANGANIBAN,J:

FACTS:

Mario and Lourdes Fernandez was the plaintiff for this civil case. Guillerma, Toto and Gina Tumlos were being the petitioners. The spouses are the said owner of an apartment located in Valenzuela, Metro Manila. That through their tolerance they allowed the defendants to occupy the apartment building without payment of rent for seven years. That Guillierma and others promise to pay monthly rentals of 1,600 php and 1000 php respectively as agreed upon but not complied. The couple demanded the payment and prayed that the defendants be ordered to vacate the place. Only Guillierma Tumlos filed an answer to the complaint. She averred that the Fernandez Spouses has no cause of action against her. Since she claimed that she was a CO-OWNER of the subject premises as evidenced by a contract to sell it was stated that she is co-vendee of the property in question with the one of the spouses Mario. It was allegedly that Mario and Guillierma had an affair that during their co-habitation of almost 10 years they got 2 children and acquired the apartment-builiding and for those time Guillierma stands as a administrator and collects all the rentals from all tenants.

ISSUE:

Whether or not Guillierma’s claimed as a co-owner in the said property and her capacity to act as administrator correct.

RULING:

NO. The court states that the Guillierma as being a co-owner and as administrator are erred because the article that govern is article 148 not 144 which states that “in cases of cohabitation not falling under the preceding Artilce, only the properties acquires by both of the parties through, their actual joint contribution of money,property or industry shall be owned by them in common in proportion to their respective contributions, in absence of proofs to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit.

If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad faith is not validly married to another, his or her shall be forfeited in the manner provided in the last paragraph of the preceding article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.”

[phillipmedina]

FAMILY CODE OF THE PHILIPPINES Title XI: SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW Chapter 2: Separation in Fact Between Husband and Wife ARTICLE 248

ARTICLE 248

The petition for judicial authority to administer or encumber specific separate property of the abandoning spouse and to use the fruits or proceeds thereof for the support of the family shall also be governed by these rules.

   ILLUSTRATION 

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.

THE HONORABLE COURT OF APPEALS and the SPOUSES JAMES ANTHONY HUGHES and LENITA MABUNAY HUGHES, respondents.

  FACTS:

James Anthony Hughes, a natural born citizen of the United States of America, married LenitaMabunay Hughes, a Filipino Citizen, who herself was later naturalized as a citizen of thatcountry. On 29 June 1990, the spouses jointly filed a petition with the RTC of Angeles City toadopt Ma. Cecilia, Neil and Maria, all surnamed Mabunay, minor niece and nephews of Lenita,who had been living with the couple even prior to the filing of the petition. The minors, as well astheir parents, gave consent to the adoption.   On 29 November 1990, the RTC rendered adecision granting the petition. A petition for Review onCertiorariwas filed with this Court,assailing the trial court's decision. This Court referred the case to the Court of Appeals which,on 09 July 1991, affirmed the trial court's decision.

 ISSUE:

W/N the spouses Anthony and Lenita Hughes are qualified to adopt the minor niece andnephews of Lenita under Philippine law.

 HELD:

 No, it is clear that James Anthony Hughes is not qualified to adopt under Article 184 of the Family Code because he does not fall under any of the following exceptions enumerated inparagraph (3): (a) A former Filipino citizen who seeks to adopt a relative by consanguinity; (b)One who seeks to adopt the legitimate child of his or her Filipino spouse; or (c) One who ismarried to a Filipino citizen and seeks to adopt jointly with his or her Filipino spouse a relativeby consanguinity of the latter.  While James Anthony unquestionably is not permitted to adopt,Lenita, however, can qualify pursuant to paragraph (3)(a). The problem in her case lies, instead,with Article 185 of the Code, expressing as follows:Art. 185. Husband and wife must jointly adopt, except in the following cases:(1) When one spouse seeks to adopt his own illegitimate child; or(2) When one spouse seeks to adopt the legitimate child of the other.Lenita may not thus adopt alone since Article 185 requires a joint adoption by thehusband and the wife, a condition that must be read along together with Article 184.Executive Order No. 91, dated 17 December 1986, of President Corazon C. Aquino amendedArticle 29 of PD 603 and is expressed as follows —Art. 29. Husband and wife may jointly adopt. In such case, parental authority shall be exercised as if the child were their own by nature.If one of the spouses is an alien, both husband and wife shall jointly adopt.Otherwise, the adoption shall not be allowed.

[omnihome]

What New Orleans Home Sellers Need to Know About Capital Gains Taxes

Did you know that you must pay taxes on the profit from the sale of your home or investment property? Considering the highly high toll taxes can take from profits, this is one surprise it is better to avoid when you have made such a considerable investment of time and money. When the value of an investment in capital assets, such as real estate, experiences growth and subsequently sold, there is a tax on the capital gain at that time. When the acquisition sells, the capital gains are said to be realized by the investor.

The IRS approaches taxes on these gains in differing ways, depending on whether the investor held the assets, either short or long term. Investors can deduct your cost basis or original purchase price to determine the capital gains. You can subtract the cost basis and any costs of improvements from the profit from the capital gains.

Planning your investments, from acquisition to resale, should be completed before you ever close on your first real estate investment. A significant part of this overall business plan should include avoiding capital gains taxes when it is time to exit a property. We will explore more about what New Orleans home sellers need to know about capital gains taxes.

Limits

These taxes are capped at a specific limit to restrict the growth of government revenue. New Orleans home sellers need to understand how these rate limits on capital gains taxes will affect their investment. A capital gain rate of 15% will apply should your taxable income be at least $80,000 but less than $441,450 for single filers, $496,600 for married filing jointly or qualifying widow(er), $469,050 if you plan to file as head of household, and $248,3000 if you are married filing separately. A rate of 20% will apply to any gain over the top threshold of the 15% rate, with some exceptions. Individuals with significant income may be subject to a Net Investment Income Tax (NIIT). If your capital gains are in the red because of capital losses, the amount of excess loss you can claim is limited as well.

Married vs. Single

In many cases, there is an exclusion available every two years for New Orleans home sellers on capital gains taxes of up to $500,000 over cost basis for married couples filing jointly for single investors. The exclusion is $250,000 over cost basis. One of the qualifying requirements for this exclusion is that the real estate will have been lived in for a total of two of the last five years as your primary residence, though they need not be consecutive.

You may be required to make estimated payments on your capital gains. It is wise to consult with a tax advisor to ensure you are making the right moves for your investments. Deferrals of capital gains are allowed under a 1031 exchange of like properties. There are strategies that you can put into place to offset these taxes with capital losses.  Ensuring you have covered all of your bases means it is essential to have built a strong team of professionals to help guide you because you want to keep as much of your money as possible.

Omni Home Buyers understands just what New Orleans home sellers need to know about capital gains taxes and what you can do to avoid them – sell to Omni Home Buyers or buy a “like-kind” investment from our inventory of great investment properties! At Omni Home Buyers, we make it easy to keep your hard-earned investment profits at work, earning wealth and long-term passive income for you! Call Omni Home Buyers at (504) 399-3155 or send us a message today!

[matttaschner]

What Twin Cities Home Sellers Need to Know About Capital Gains Ta

Did you know that you must pay taxes on the profit from the sale of your home or investment property? Considering the highly high toll taxes can take from profits, this is one surprise it is better to avoid when you have made such a considerable investment of time and money. When the value of an investment in capital assets, such as real estate, experiences growth and subsequently sold, there is a tax on the capital gain at that time. When the acquisition sells, the capital gains are said to be realized by the investor.

The IRS approaches taxes on these gains in differing ways, depending on whether the investor held the assets, either short or long term. Investors can deduct your cost basis or original purchase price to determine the capital gains. You can subtract the cost basis and any costs of improvements from the profit from the capital gains.

Planning your investments, from acquisition to resale, should be completed before you ever close on your first real estate investment. A significant part of this overall business plan should include avoiding capital gains taxes when it is time to exit a property. We will explore more about what Twin Cities home sellers need to know about capital gains taxes.

Limits

These taxes are capped at a specific limit to restrict the growth of government revenue. Twin Cities home sellers need to understand how these rate limits on capital gains taxes will affect their investment. A capital gain rate of 15% will apply should your taxable income be at least $80,000 but less than $441,450 for single filers, $496,600 for married filing jointly or qualifying widow(er), $469,050 if you plan to file as head of household, and $248,3000 if you are married filing separately. A rate of 20% will apply to any gain over the top threshold of the 15% rate, with some exceptions. Individuals with significant income may be subject to a Net Investment Income Tax (NIIT). If your capital gains are in the red because of capital losses, the amount of excess loss you can claim is limited as well.

Married vs. Single

In many cases, there is an exclusion available every two years for Twin Cities home sellers on capital gains taxes of up to $500,000 over cost basis for married couples filing jointly for single investors. The exclusion is $250,000 over cost basis. One of the qualifying requirements for this exclusion is that the real estate will have been lived in for a total of two of the last five years as your primary residence, though they need not be consecutive.

You may be required to make estimated payments on your capital gains. It is wise to consult with a tax advisor to ensure you are making the right moves for your investments. Deferrals of capital gains are allowed under a 1031 exchange of like properties. There are strategies that you can put into place to offset these taxes with capital losses.  Ensuring you have covered all of your bases means it is essential to have built a strong team of professionals to help guide you because you want to keep as much of your money as possible.

Matt Buys Houses MN understands just what Twin Cities home sellers need to know about capital gains taxes and what you can do to avoid them – sell to Matt Buys Houses MN or buy a “like-kind” investment from our inventory of great investment properties! At Matt Buys Houses MN, we make it easy to keep your hard-earned investment profits at work, earning wealth and long-term passive income for you! Call Matt Buys Houses MN at 612-293-3532 or send us a message today!

[houstontexaslawinfo]

How you can be reimbursed for past purchases during your Texas Divorce

If you want to related guideline confidentiality Texas Child Law experience, So you can better suggestions in How you can be reimbursed for past purchases during your Texas Divorce

Houston Divorce Attorneys: Part of any divorcein Texas is figuring out how to characterize the property owned by the two spouses. If you are considering a divorce or have just been served with a petition by divorce filed by your spouse then you are probably wondering how all the “stuff” that you and your spouse own will be divided in the divorce.

Today’s blog from the Law Office of Bryan Fagan, PLLC is designed with you in mind if that is the case.

Separate property vs. Community property

Property in the context of a divorce is typically divided up into three categories. Most everyone going through a divorce is aware that Texas is a community property state. This represents the first of the three categories.

Community Property

Community property is basically any property that is acquired by either you or your spouse during the course of your marriage with a few exceptions for inherited property and things of that nature.

Separate Property

Both you and your spouse have your own separate estates as well, meaning that each of you are able to own property separately from one another. Essentially any property that you owned prior to your marriage is categorized as separate property belonging to either of you.

When we think about separate property the theory in Texas is that because you or your spouse owned the property before you ever got married the other spouse has no claim to whatever property is being discussed.

Can you contribute money to the separate property of your spouse and be reimbursed?

It can happen that you contribute money and resources that benefit the separate property of your spouse. For example, if your spouse owns a home that is in actuality her separate property but your income has been used to pay for a renovation of the kitchen or towards the mortgage itself you are in a position where the community estate has been used to benefit the separate estate of your spouse.

A reimbursement claim is one that can allow you to be recouped for that expenditure.

Divorce Attorneys Houston: Not all money spent by the community estate on one of your or your spouse’s separate estates can be reimbursed, however. Let’s review those expenditures that are reimbursable.

> If your community estate has been used to pay for an improvement to the separate estate of your spouse then you may be able to be reimbursed in your divorce for that expenditure. An example of this situation would be your having paid to build a tennis court on the property owned by your spouse that is his separate property.

> The community estate pays towards the separate debt (a mortgage or a credit card, for example) of your spouse’s separate estate.

> The other big area that I have seen reimbursement occur is if you work for your spouse’s business which is later determined to be his separate property and you were not paid for that work or were paid an insufficient amount. In this scenario you can push to be reimbursed during the course of your divorce.

In the event that a judge does order a reimbursement payment be made from the separate estate of your spouse, that payment will go towards whichever estate- your separate estate or the community estate- actually contributed to the separate property of your spouse.

If it was the community estate, that payment would need to be divided up in a just and right manner like all other property included in the community estate.

The State of Texas sees reimbursement as a means to make to even out the contributions that one spouse’s separate property or their jointly held property made to the other’s separate property. These contributions can take the form of money or the form of labor as we have previously discussed.

Presenting a claim for reimbursement in your divorce case at large

It is one thing to believe that you have case for reimbursement and another to actually prove that reimbursement case. To win a reimbursement case you must be able to show a court that a contribution was made- either from your separate estate or from the community estate- towards the benefit of your spouse’s separate estate.

One you are able to establish that a contribution was made and that it falls into one of the aforementioned categories you will need to prove the value of that contribution.

Having documentary evidence to help prove a claim for reimbursement can be incredibly helpful.

Documents related to the closing on a house or piece of property, bank transaction records and other financial instruments can assist you and your attorney in determining if you have a leg to stand on when it comes to presenting a reimbursement claim before a judge.

These are issues that are extremely complex and often times require the assistance of an outside expert to help determine what property belongs in what estate. With that said, you should always hire an attorney to represent you and assist you in making these sort of determinations.

Family lawattorneys have experience in helping people like you make difficult decisions regarding their divorce and I cannot emphasize enough how critical it is to have an attorney advocating for you in a reimbursement situation.

Your attorney can assist you in stating to the court and to your spouse the nature of your reimbursement claim which should be made in your original petition for divorce.

Questions on divorce or reimbursement claims? Contact the Law Office of Bryan Fagan, PLLC today

Divorce Attorney in Houston: If you have any questions related to this article or any other subject in family law please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. One of our licensed family law attorneys is available six days a week to answer your questions in a free of charge consultation.

Divorce is not an easy process to go through and you need an experienced advocate on your side. Our office proudly represents clients across southeast Texas and we would be proud to do the same for you and your family ... Continue Reading

[onlinemarketinghelp]

What Is Schedule SE? The Tax Form For The Self-Employed https://ift.tt/32oPac0

If you're self-employed, you get the wonderful joy of filling out extra forms at tax time. That's no surprise - and these forms aren't that hard.

But if you're seeing these forms for the first time, you may have some questions about how they work, what you need to do, and more.

With today's tax software, it's rare you even look at these forms. But, nevertheless, we're here to help answer any questions you might have.

Let's dive into Schedule SE and what it means for your taxes.

Quick Navigation

The Basics of Schedule SE

Short Schedule SE vs. Long Schedule SE

Who Should File Schedule SE?

Additional Medicare Tax

Get Help With Your Taxes

The Basics of Schedule SE

Schedule SE is for capturing taxes due from self-employment income. It is filed with Form 1040.

Specifically, Schedule SE is used to calculate the amount of Social Security and Medicare taxes due. The Social Security Administration uses the information from Schedule SE to calculate your Social Security benefits. Additionally, Medicare taxes are included.

As an employee, you pay Social Security and Medicare taxes. However, your employer pays half of these taxes, effectively matching your contribution. As a self-employed person, you don’t have an employer to match your tax contribution. This means you’ll have to pay the entire Social Security and Medicare tax bill.

How much are these taxes? Up to $128,400 in SE income is taxed at 15.3% for Social Security and Medicare. Anything over that amount is 2.9% plus $15,772.80. Your final SE tax calculation then goes into Form 1040.

Social Security taxes are taxed at a rate of 6.2% for employees and 6.2% for the employer for a total of 12.4%. Medicare works the same way. The employee pays 1.45% and the employer pays 1.45% for a total of 2.90%. The 15.3% number mentioned above comes from adding 12.4% and 2.9%. Remember the self-employed individual must cover both sides since the employer is no longer present to match.

The Social Security Administration provides some great examples of what happens to thresholds when you have employee wages and self-employed income. Taxes on wages are paid first, but only if total income exceeds $132,900.

Example 1: You have $30,000 in wages and $45,000 in net self-employment income for a total of $75,000. You’ll owe taxes on both incomes.

Example 2: You have $87,700 in wages and $45,500 in net self-employment income for a total of $133,200, leaving $300 in self-employed income over the threshold. Your employer will pay 7.65% (6.2% + 1.45%) in taxes on $87,700. You’ll pay 15.3% in taxes on $45,200 and 2.9% on $300.

Note that you can deduct 50% of your SE taxes due. The IRS considers the employer part of the SE tax to be a deductible expense.

Schedule C for business deductions should also be filed as well.

If you are employed and run your own business, you’ll receive W-2s. Social Security and Medicare taxes will automatically be deducted on your W-2. Its income will go into your Form 1040 along with any SE income. Income from any 1099s for contract work will factor into your SE income as well.

The latest version of Schedule SE (2019) can be downloaded here: https://www.irs.gov/pub/irs-pdf/f1040sse.pdf.

Short Schedule SE vs. Long Schedule SE

Schedule SE includes two sections: Short and Long. At the top of Schedule SE is a flow chart that helps you decide if you should fill out the Long section.

Most self-employed people who are not employees will complete the Short section. The Long section relates to church employee income and those who earned wages plus self-employed income. The Long section allows for more elaboration on sources of income.

Source (May Have Changed): https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

Who Should File Schedule SE?

Self-employed individuals should file Schedule SE. If you make over $400 from self-employment activities, Schedule SE should be filed. If you had multiple businesses, it is not necessary to fill out multiple Schedule SEs. Instead, combine income from your businesses and enter it into a single Schedule SE.

Additional Medicare Tax

An Additional Medicare Tax of 0.9% may be applied if your SE income (line 4 or 6) exceeds the following thresholds:

Married filing jointly: $250,000

Married filing separately: $125,000

Single, head of household, or qualifying widow(er): $200,000

If you are still working as an employee as well and have wages to report, the Additional Medicare Tax will be reduced by the amount of wages subject to Additional Medicare Tax.

Having a tax preparer help you work through Schedule SE is certainly worth the cost. Depending on your business, tax filings can get fairly complex. Don’t forget that Schedule C must also be filed. Both Schedule SE and Schedule C must be filed with your Form 1040.

Get Help With Your Taxes

If you're not planning on doing this yourself, you may be looking for the best tax software to help. We break down the best tax software every year, including the best small business tax software and the best side hustler tax software. Check out our full guide to the best tax software here >>

The post What Is Schedule SE? The Tax Form For The Self-Employed appeared first on The College Investor.

from The College Investor

If you're self-employed, you get the wonderful joy of filling out extra forms at tax time. That's no surprise - and these forms aren't that hard.

But if you're seeing these forms for the first time, you may have some questions about how they work, what you need to do, and more.

With today's tax software, it's rare you even look at these forms. But, nevertheless, we're here to help answer any questions you might have.

Let's dive into Schedule SE and what it means for your taxes.

Quick Navigation

The Basics of Schedule SE

Short Schedule SE vs. Long Schedule SE

Who Should File Schedule SE?

Additional Medicare Tax

Get Help With Your Taxes

The Basics of Schedule SE

Schedule SE is for capturing taxes due from self-employment income. It is filed with Form 1040.

Specifically, Schedule SE is used to calculate the amount of Social Security and Medicare taxes due. The Social Security Administration uses the information from Schedule SE to calculate your Social Security benefits. Additionally, Medicare taxes are included.

As an employee, you pay Social Security and Medicare taxes. However, your employer pays half of these taxes, effectively matching your contribution. As a self-employed person, you don’t have an employer to match your tax contribution. This means you’ll have to pay the entire Social Security and Medicare tax bill.

How much are these taxes? Up to $128,400 in SE income is taxed at 15.3% for Social Security and Medicare. Anything over that amount is 2.9% plus $15,772.80. Your final SE tax calculation then goes into Form 1040.

Social Security taxes are taxed at a rate of 6.2% for employees and 6.2% for the employer for a total of 12.4%. Medicare works the same way. The employee pays 1.45% and the employer pays 1.45% for a total of 2.90%. The 15.3% number mentioned above comes from adding 12.4% and 2.9%. Remember the self-employed individual must cover both sides since the employer is no longer present to match.

The Social Security Administration provides some great examples of what happens to thresholds when you have employee wages and self-employed income. Taxes on wages are paid first, but only if total income exceeds $132,900.

Example 1: You have $30,000 in wages and $45,000 in net self-employment income for a total of $75,000. You’ll owe taxes on both incomes.

Example 2: You have $87,700 in wages and $45,500 in net self-employment income for a total of $133,200, leaving $300 in self-employed income over the threshold. Your employer will pay 7.65% (6.2% + 1.45%) in taxes on $87,700. You’ll pay 15.3% in taxes on $45,200 and 2.9% on $300.

Note that you can deduct 50% of your SE taxes due. The IRS considers the employer part of the SE tax to be a deductible expense.

Schedule C for business deductions should also be filed as well.

If you are employed and run your own business, you’ll receive W-2s. Social Security and Medicare taxes will automatically be deducted on your W-2. Its income will go into your Form 1040 along with any SE income. Income from any 1099s for contract work will factor into your SE income as well.

The latest version of Schedule SE (2019) can be downloaded here: https://www.irs.gov/pub/irs-pdf/f1040sse.pdf.

Short Schedule SE vs. Long Schedule SE

Schedule SE includes two sections: Short and Long. At the top of Schedule SE is a flow chart that helps you decide if you should fill out the Long section.

Most self-employed people who are not employees will complete the Short section. The Long section relates to church employee income and those who earned wages plus self-employed income. The Long section allows for more elaboration on sources of income.

Source (May Have Changed): https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

Who Should File Schedule SE?

Self-employed individuals should file Schedule SE. If you make over $400 from self-employment activities, Schedule SE should be filed. If you had multiple businesses, it is not necessary to fill out multiple Schedule SEs. Instead, combine income from your businesses and enter it into a single Schedule SE.

Additional Medicare Tax

An Additional Medicare Tax of 0.9% may be applied if your SE income (line 4 or 6) exceeds the following thresholds:

Married filing jointly: $250,000

Married filing separately: $125,000

Single, head of household, or qualifying widow(er): $200,000

If you are still working as an employee as well and have wages to report, the Additional Medicare Tax will be reduced by the amount of wages subject to Additional Medicare Tax.

Having a tax preparer help you work through Schedule SE is certainly worth the cost. Depending on your business, tax filings can get fairly complex. Don’t forget that Schedule C must also be filed. Both Schedule SE and Schedule C must be filed with your Form 1040.

Get Help With Your Taxes

If you're not planning on doing this yourself, you may be looking for the best tax software to help. We break down the best tax software every year, including the best small business tax software and the best side hustler tax software. Check out our full guide to the best tax software here >>

The post What Is Schedule SE? The Tax Form For The Self-Employed appeared first on The College Investor.

https://ift.tt/32qCvVV October 18, 2019 at 10:15AM https://ift.tt/31reP2r