vania-janet/multiturn-rag-retrieval-data huggingface dataset:
If my salary slip says that I will be paying x INR tax this financial year. Then how much minimum investment I need to do to avoid any tax? This rebate is not directly linked to investments. If your total Gross is less than Rs 5 lacs, from the total tax computed, you can claim a rebate of upto Rs 5000. Does salary slip considers this rebate amount? This depends on the company policy. Companies may already factor in the rebate and deduct less tax. However it is important to claim this when you file the Returns, else it would show up as excess tax. There is no provision in the company form 16 to show this. Further if your taxable income becomes more than Rs 5 lacs, due to say other income, you will not be eligible for this rebate and have to pay tax. Do I have to explicitly specify this claim under 87A in my ITR? Yes you have to. If you company has already factored this while deducting tax you will not get any refunds. If the company has not factored this, you will have to claim refund. If above is true, and x is not calculated by considering this rebate amount, As indicated, this is not directly linked to investments. Will this increment of tax rebate from 2000INR to 5000INR will be applicable immediately  This is applicable for financial year 2016-2017 for which you would be filing returns in 2017. Edit: If you say Gross salary is say Rs 6 lacs. If you invest 1.5 lacs in 80C. Your Net taxable income is Rs 4.5 lacs. The tax on 4.5 lacs Normal individual less than 60 years will be 10% of 2 lacs. i.e. Rs 20,000. You can then claim Rs 5000 as deduction under 87A and pay only Rs 15,000 [20000-15000]. If your Gross salary is say Rs 2.8 lacs. You don't do any investments, your Net taxable income is Rs 2.8 lacs. The tax would be Rs 3000. You can claim rebate under 87A and not pay any tax.
Having a large state return also means that there is a potential income tax liability created at the federal level for the following year, as the situation resulted from the deduction of more on one's federal return than should have been deducted. The state refund is treated as federal income in the year it is refunded. http://blog.turbotax.intuit.com/tax-tips/is-my-state-tax-refund-taxable-and-why-90/
Yes, if you can split your income up over multiple years it will be to your advantage over earning it all in one year. The reasons are as you mentioned, you get to apply multiple deductions/credits/exemptions to the same income. Rather than just 1 standard deduction, you get to deduct 2 standard deductions, you can double the max saved in an IRA, you benefit more from any non-refundable credits etc. This is partly due to the fact that when you are filing your taxes in Year 1, you can't include anything from Year 2 since it hasn't happened yet. It doesn't make sense for the Government to take into account actions that may or may not happen when calculating your tax bill. There are factors where other year profit/loss can affect your tax liability, however as far as I know these are limited to businesses. Look into Loss Carry Forwarded/Back if you want to know more. Regarding the '30% simple rate', I think you are confusing something that is simple to say with something that is simple to implement. Are we going to go change the rules on people who expected their mortgage deduction to continue? There are few ways I can think of that are more sure to cause home prices to plummet than to eliminate the Mortgage Interest Deduction. What about removing Student Loan Interest? Under a 30% 'simple' rate, what tools would the government use to encourage trade in specific areas? Will state income tax deduction also be removed? This is going to punish those in a state with a high income tax more than those in states without income tax. Those are all just 'common' deductions that affect a lot of people, you could easily say 'no' to all of them and just piss off a bunch of people, but what about selling stock though? I paid $100 for the stock and I sold it for $120, do I need to pay $36 tax on that because it is a 'simple' 30% tax rate or are we allowing the cost of goods sold deduction (it's called something else I believe when talking about stocks but it's the same idea?) What about if I travel for work to tutor individuals, can I deduct my mileage expenses?
"Free hint - If you're using some non-traditional definition of a common English word in a public forum then you should choose another word.   But whatever.  Please explain what exactly you were referring to.   I mean ""rather"" isn't even that important.  The real important phrase is this:  ""in most cases, people end up paying more in taxes""  There aren't multiple ways to interpret that.  ""People end up paying more in taxes"" means there are two scenarios - one with more taxes and one with less.  You've claimed that the first of those is tax-deferred accounts and gave a reason why.  But what is the second scenario?    &gt;NOWHERE  Exactly.  You're totally wrong.  That's all I needed to hear.  Have a nice evening."
"Similar, but actually quite different. A negative income tax on the first $20,000/year has a couple of problems this scheme doesn't: 1) Administration costs and legal complexity. Are we ""prebating"" or ""rebating"" the stipend? How is someone supposed to get along if they lose their job unexpectedly in a rebate-based system, can they get their income-tax withholdings back up to $20,000/year? How does the government register changes in income to know when to write someone a check? 2) With a negative tax up to a certain *fixed* level, there's effectively a changing level of subsidy depending how much of the per-capita income is the break-even tax level. If the per-capita income is $45,000/year (our current GDP per capita), then the subsidy level is almost 50%, and if it goes up to $60,000/year (our current mean household income), the subsidy level is then 33%. The system I described and steepk (IIRC) invented fixes the subsidy percentage in relation to the mean reported income (effectively fixing a *relative class level* as minimum) rather than a particular monetary amount (whose relative buying power versus inflation or other incomes can fluctuate wildly). We pick a subsidy level, say 1/3 (33.33333%). We then impose a flat income tax of that level plus a little bit more for administration costs (say, 35%). At the end of the year, everyone is taxed at that flat level, and the government scrapes its administration costs off the top and now has a big pot with 1/3 of everyone's income in it. This is divided into one portion for each taxpayer, and those portions into monthly or biweekly pieces. These pieces are sent out regularly as checks to the taxpayer, and *these checks are not taxed as income*. That last bit is what makes this so nice: it turns the tax progressive, in fact more progressive than our current system. After taxes and *after stipend*, only the rich will pay an *effective* tax rate asymptotically close to the real 35%.
Much of this inequality would be reduced if we moved from income taxation to a wealth/asset tax. We could exempt a person's main residence and retirement savings (similar to the way we do now with the home mortgage deduction and capital gains exemption and with IRAs). This would also obviate the need for a separate capital gains tax.
So I am trying to puzzle out this claim about tax cuts paying for themselves through growth.  This means that for every $1 in revenue they forsake in cuts, they expect to get $1 back in revenue elsewhere (like other taxes). So with a high tax burden on something, say 25%, that $1 cut in revenue would need to generate $4 in additional value to pay for itself.  I can't think of *anything* where the federal tax burden is actually 25% of the total value. This looks like a pretty clear case of diminishing returns, because the *lower* the tax burden the *higher* the growth needs to be in order to get the money back. If we look at something on the order of sales tax, say 5%, that $1 cut needs to generate $20 in growth.  If we flip this around and look at it as an investment, these are the kinds of returns that are reserved for miraculous right-time right-place bets. They are not the kind of returns you can expect to get from groceries and mortgages.  Can somebody sanity check me on this?
&gt;Tax benefit of debt  The interest on repayments for debt (eg bonds, loans) is tax deductible (as interest expense). The way you figure out the after tax cost of debt is repayment*(1-tax rate).    &gt;Marginal tax benefit  Just as marginal benefit, this is asking for every ADDITIONAL (ie marginal) dollar of debt, what is my additional tax benefit (tax deduction).    Pretty rough explanation, let me know if there is something in particular that doesn't make sense.
"the state of New Mexico provides guidance in this exact situation. On page 4: Gross receipts DOES NOT include: Example: When the seller passes tax to the buyer, the seller should   separate, or “back out”, that tax from the total income to arrive at   ""Gross Receipts,"" the amount reported in Column D of the CRS-1 Form.   (Please see the example on page 48.) and on page 48: How do I separate (“back out”) gross receipts tax from total gross receipts?  See the following examples of how to separate the gross   receipts tax:  1) To separate (back out) tax from total receipts at the   end of the report period, first subtract deductible and exempt   receipts, and then divide total receipts including the tax for the   report period by one plus the applicable gross receipts tax rate.  For example, if your tax rate is 5.5% and your total receipts    including tax are $1,055.00 with no deductions or exemptions, divide   $1,055.00 by 1.055. The result is your gross receipts excluding tax   (to enter in Column D of the CRS-1 Form) or $1,000.  2) If your tax   rate is 5.5%, and your total gross receipts including tax are   $1,055.00, and included in that figure are $60 in deductions and   another $45 in exemptions:  a) Subtract $105 (the sum of your   deductions and exemptions) from $1,055. The remainder is $950. This   figure still includes the tax you have recovered from your buyers.  b) Divide $950 by 1.055 (1 plus the 5.5% tax rate). The result is   $900.47.  c) In Column D enter the sum of $900.47 plus $60 (the amount   of deductible receipts)*, or $960.47. This figure is your gross   receipts excluding tax."
"Situation #1: I keep playing, and eventually earn 1000 PED. I withdraw   this. Will I get taxed? If so, by how much? This is probably considered an ""award"", so whatever your country taxes for lottery/gambling winnings would be applicable. If there's no specific taxation on this kinds of income - then it is ordinary income. Situation #2: I deposit $5000, play the game, lose some money and   withdraw PED equal to $4000. Will I get taxed? If so, by how much? Since it is a game, it is unlikely that deducting losses from your income would be allowed.  However, the $4000 would probably not be taxed as income (since you are getting your own money back). Situation #3: I deposit $5000 and use this to buy in-game items. I   later sell these items for massive profits (200%+, this can happen   over the course of 2 years for sure). I withdraw $10000. Will I get   taxed? If so, by how much? Either the same as #1 (i.e.: ordinary income) or as capital gains (although tax authority may argue that this was not a for-profit investment, and capital gains treatment shouldn't be applicable). Will I get taxed on withdrawals from Real Cash Economy games? And do   the taxes apply to the full withdrawal, or only on the profits? Or   only on the profits above a certain amount? Generally income taxes only apply on income. So if you paid $10000 and got back $12000 - only the $2000 is considered income. However some countries may tax full amounts under certain conditions. Such taxes are called ""franchise taxes"". For a proper tax advice consult with the locally licensed tax adviser."
"The piece is a little misguided at best and poor journalism at worst. The problem lies in the difference between what's deductible for individuals and what's deductible for corporations. The short version of the story is that corporations can deduct a hell of a lot more things than individuals can. Individual deductions are spelled out in the Internal Revenue Code. Stuff like medical expenses (above 7.5% of your AGI), certain educational things, etc.  For corporations, the basic rule is that they can deduct any ""ordinary and necessary"" business expenses. That includes operating, travel, interest, employee, etc.  I wish that the article had cited specific sections of the Code if this was some kind of loophole or something, but alas, it appears that they didn't. That leads me to believe that these companies are deducting the portion not paid to the government as a business expense.   ~~For what it's worth, I don't believe that a company can deduct those expenses for tax purposes unless it's to ""protect their business interests."" My assumption (I don't have the time or desire to search case law right now) is that settlements with the US Government are considered to fall under that definition.~~  **EDIT** - See my comment [here](http://www.reddit.com/r/business/comments/11dbzu/federal_regulators_have_lauded_a_series_of/c6ll7ez) for the relevant Treasury Regulation dealing with this."
Taxes and exemptions &amp; credits from tax exist is to encourage behavior that the government wants to promote. National and international corporate taxation is this case encourages putting capital under a mattress. By setting up a system encouraging hoarding of capital, the national and international taxing regimes fail us.
&gt;OK, great, where do I apply for my refund?  An odd question, but I'll answer it if you really don't know.  Tax credits will only likely be a refund if you pay too much tax during the year, otherwise they will be reductions in your yearly tax bill.  In most countries, tax credits are awarded when paying taxes.  Assuming you are from the United States, that would likely be in April on your individual income tax form.  Tax credits can be earned for doing anything the government deems desirable or worthy of exception.  Examples include buying a first house, having children, starting or running a business, paying tuition, adopting a child,  caring for an elderly or disabled person, earning money overseas, paying certain types of medical insurance, and being married in addition to purchasing a zero emission or low emission vehicle.
[Evidence?](http://governmentisgood.com/articles.php?aid=17)  What you are asking for is evidence based on theoreticals.  You can’t have that evidence unless it has actually been tried.  So what you get instead is the same thing we see in Congress: a discussion of theoreticals.  The biggest problem is the way we react to taxes changed based on the current circumstances we are in.  Our circumstances have yet to repeat themselves.  We are s relatively young country.  Good luck finding evidence to support either side.  Instead, look for and debate good arguments from each side.
It's rare that you'd start to itemize before you have a house and the property tax and mortgage interest that brings. If your state has an income tax, that's first, but then you'll usually need far more in deductions to be over that standard deduction.
Where does your image show the following entry:  * Massive fees paid to parent corporation in tax-free state, to avoid local income tax  This is much like the way Microsoft siphons off ALL its revenue to some tax-free haven with similar deals.  If I were benevolent dictator, there would be no income tax, and no tac on profit of any kind. There would only be Sales Tax.  Corporations can't avoid or evade sales taxes, because they are leveraged at the point of sale, and the vendor send the government the money.  Income tax is retarded.
If you get 1099-G for state tax refund, you need to declare it as income only if you took deduction on state taxes in the prior year. I.e.: if you took standard deductions - you don't need to declare the refund as income. If you did itemize, you have to declare the refund as income, and deduct the taxes paid last year on your schedule A. If this year you're not itemizing - you lost the tax benefit. If it was not clear from my answer - the taxes paid and the refund received are unrelated. The fact that you paid tax and received refund in the same year doesn't make them in any way related, even if both refer to the same taxable year.
This doesn't explain the methodology used, but it appears to only include national taxes on wage income for the middle class. Do these European countries have the equivalent of state and local taxes? Do they have sales tax or VAT? Property taxes?  The American tax system is uniquely cumbersome and complicated to the point where even tax experts don't understand all of it. I highly doubt whichever method was used in this study accurately represents the tax burden on Americans, but I can't say for sure since that article doesn't share its methodology.
Okay. The goal should be to avoid taxing those at the lower bracket. So no taxes for those making 30,000 and under. A lower bracket for those making $31,000 to $80,000. Leave in deductions for taxes paid to states. These can be very high and many are taxed twice. Trump's plan removes many deductions used for double taxes.  Leave in mortgage interest deduction. It benefits mostly small rental companies and home owner.  Get rid of many business deductions. Lower corporate taxes, especially on new businesses.   There is a start.  You want to have a discussion regarding this.
It's going to depend entirely on your tax situation, its complexity, and your willingness/interest in dealing with tax filings.  Personally I find that not only do I not enjoy dealing with figuring out my taxes, but I don't know even a fraction of the possible deductions available and all the clever ways to leverage them.  Plus the tax code is changing constantly and staying on top of that is not something I'm ever going to attempt. I am of the philosophy that it is my duty to pay only the absolute minimum tax legally required, and to utilize every possible exemption, deduction, credit, etc. that is available to me.  Plus my business activities are a bit on the non-traditional side so it requires some unorthodox thinking at times.  For me, a trained professional is the only way to go.  What it costs me, I way more than make up in savings on my tax bill.  I also go out of my way to never get a refund because if I get one, it just means I gave the government a free loan. The last time I computed my own taxes (used TurboTax if memory serves) was I think in the late 90s.
"VAT = Value Added Tax (as an Aussie think ""GST"") This is applicable in Britain. Basically, if you were in Britain, and if you could claim VAT as a deduction, that invoice is not sufficient proof to make the claim. But you're in Oz so it doesn't apply to you in any case. For work-related deductions like book purchases, see http://www.ato.gov.au/individuals/content.asp?doc=/content/00216829.htm&pc=001/002/068/001/002&mnu=&mfp=&st=&cy=1  Issues such as the books being second hand or purchased online are not cited in the instructions as relevant/limiting factors. In fact, if you really want to get into the nitty gritty, you could claim the work-related proportion of your internet access fees as a deduction (question D5 instructions, above, cover that as well)."
"As ApplePie discusses, ""tax bracket"" without any modifiers refers to a single jurisdiction's marginal tax rate. In your case, this is either your California's ""tax bracket"" or your Federal ""tax bracket"" (not including marginal Social Security and Medicare taxes). But if someone says ""combined state and federal tax bracket"", they probably mean the combination of your state and federal income tax brackets (again, lot including sales taxes, business and occupational taxes, social security taxes, and medicare taxes). The math to combine the state and federal marginal tax rates is a bit tricky, because most people can deduct either their state and local income taxes, or their state and local general sales taxes when computing their income for federal income tax purposes. (The federal ""alternative minimum tax"" restricts this deduction for some people.) For a single person earning $ 100,000 of salaries and wages in California, whose state income taxes are close to their standard deduction, the calculations for the combined marginal income tax rate look something like this: As mentioned above, this understates the tax bite on marginal ""earned income"". To find the true marginal rate, we need to add in Social Security taxes, Medicare taxes, sales taxes, and business & occupation taxes. The Social Security and Medicare taxes are sometimes called ""self employment taxes"". This math omits unemployment insurance and workers' compensation insurance, because those taxes are typically capped well below $ 100,000 per year of income. This math also omits B & O taxes, because this question is California specific. If an employer wishes to increase an employee's pay by $ 1,076.50, the first $ 76.50 will go to the employer's share of Social Security and Medicare taxes. The remaining $ 1,000.00 will be subject to the combined marginal income tax rate discussed above, plus will have $ 76.50 go to the employee's share of Social Security and Medicare taxes. The employee might buy some extra things with some of their extra money, and pay sales tax on them. In 2016, a 9 % sales tax rate was common in California's largest cities.
Tax regulations vary from country to country - some permitting more deductions, some less - but here are a few guidelines. As regards the home-office: As regards the deductions: Think of it like this: in order to have space for a home-office you needed a bigger home.  That leads to increased rates, heating, insurance and so on.  Many tax regulators recognise that these are genuine expenses.  The alternative is to rent a separate office and incur greater expenses, leading to increased deductions and less overall tax paid (which won't finance the deficit). The usual test for deductions is: was the expense legitimately incurred in the pursuit of revenue?  The flexibility permitted will vary by tax authority but you can frequently deduct more than you expected.
Isn't that a deduction mostly used by the top 1%? There seem to be mostly 2 types of people, those who own many homes, And those that rent them...  I always thought the mortgage interest deduction was used substantially more by the wealthy than the middle class... (Luxury homes also offer higher deductions right?)
"Call me rude, but I would be less concerned with taxes and more concerned with increasing your income. Double your income and say ""fuck you"" to the taxes!  Also, I'm no expert on taxes, but a corporation would not prevent you from having income so you would likely be passing the profits through and still paying the same income tax rate."
It's true that the standard deduction makes the numbers less impressive. I ran your scenario through my favorite, most complete rent vs buy calculator, and your math isn't far off. However, there are a lot of deductions only available if you itemize. Medical expenses, moving expenses, job expenses, charitable contributions, local income/sales taxes, property tax, private mortgage insurance, etc. Property tax on that house alone is going to be nearly equal to the standard deduction, so the point is nearly moot. Anyways, the above linked calculator handles all of those, and more.