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    California Business Journal
    • Front Page
    • Business
      • Insurance
      • Real Estate
    • Finance
      bitcoin of america

      The power of Bitcoin of America intensifies

      venture-capital-investment

      Silicon Valley and Tel Aviv Firm NextLeap Ventures Rising To The Next Level

      stock-market-3

      How the Inflow of Retail Traders is Changing Stock Market Dynamics

      Bitcoin

      Big Changes May Be Coming For Cryptocurrency

    • People
    • Featured
      Dr. Chris Harts4

      Oventus Medical Is Revolutionizing the Treatment of Sleep Apnea

      blockchain2

      Blockchain.com Value Reaches $5.2 Billion

      bitcoin of america

      The power of Bitcoin of America intensifies

      alone at beach

      One Fine Outlook

      Graham-Michael-Byers No. 4

      The Prince of Puerto Rico

    • Technology
      Higher Education Adapts to Covid Using IT

      How Higher Education Has Adapted to Covid-19 Using IT Tools

      NEC X Figure 3_Shige Ihara

      Fast Tracking Technologies … To The World

      Welcome to the construction industry’s automated augment

      Tech Future Healthcare1

      Technology and the Future of Health Care

    • Law
      Doctor getting second opinion on patients x-ray

      What To Do If You’ve Received Improper Medical Treatment

      Mediation-For-Couples (1)

      What is Mediation and How It Can Help?

      What are the legal obligations of businesses and what happens when these duties are breached?

      Nicole Kuklok-Waldman Headshot

      Commentary: How to Bounce Back from a Canceled Career 

    • News
      blockchain2

      Blockchain.com Value Reaches $5.2 Billion

      Negative Google reviews1

      How to Handle Negative Google Reviews

      SleepScore Labs

      The Final Score

      Passports on a map of the world

      If Your Employees with U.S. Passports are Traveling in 2021, Start Planning Now

    • Human Interest
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      Charles Smith

      Commentary: Executive Team Alignment is More Essential Now Than Ever

      payroll expenditure or revenue

      How Can a Business Carry Out Payroll Effectively?

      Jean-Paul Gravel, founder of ThroughConversation3

      5 Relationship Challenges That High-Achievers Face (and How to Fix Them)

      self hypnotic2

      The UpNow Self-Hypnosis App: Making Mental Health Affordable and Accessible

    • Health & Fitness
      Woman climber on a Klettersteig (Via Ferrata)

      6 Unique Ways to Stay Fit Outdoors This Summer

      WOMAN WORKING OUT

      Taking the Gym Home: Hot Selling Items During the Pandemic

      silhouette-of-man-and-woman-running

      3 Reasons to Start Working Out … This Month

      The Surprising Link between Gut Health and Mental Health

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      California Business Journal

      Say, How Do Taxes Really Work?

      What you need to know about taxes.

      by California Business Journal Editorial Staff
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      From The California Business Journal Financial Newswires.

      If you’re wondering “How do taxes work?”, you’re not alone. Almost half of Americans don’t know which tax bracket they’re in. Understanding taxes isn’t as hard as it seems. With our handy guide, you can learn more about taxes before you have to file in April.

      How Do Taxes Work?

      Taxes are determined by your total income. If you are traditionally employed, your employer will give you a W-2. This tells you how much money you earned during the tax year, as well as how much money you’ve already paid into state and federal taxes.

      If you are self-employed or a contractor, you will receive a 1099 tax form. Unlike conventional jobs, the entities who pay you do not send money to the IRS per paycheck.

      The United States has a pay-as-you-go tax system. Self-employed people should make estimated payments to the IRS as the year goes on so they do not have to make a large payment in April.

      Tax Brackets

      The amount of taxes you pay is determined by your tax bracket. The more money you make, the higher your tax rate is.

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      Only the portion of your income that falls within a tax bracket will be taxed at that rate.

      For example, a single person who makes $50,000 per year will pay the following taxes in 2020:

      • The first $9,875 taxed at 10%
      • The amount between $9,875 and $40,125 ($30,250) taxed at 22%
      • The remaining balance of $9,875 at 24%

      Tax brackets are the most complicated part of understanding taxes. There are plenty of online calculators out there if you don’t want to do the math yourself.

      Deductions and Tax Credits

      Deductions affect the income you claim, while credits affect the money you owe.

      If you donated money to charity, for example, you can receive a deduction on your taxes. You can either fill out an itemized deduction or do a standard deduction.

      Or, if you are a student, you can receive a tax credit, even if you didn’t earn enough money to file taxes that year.

      An accountant or an online service will help you maximize your deductions and credits.

      File on Time

      Once it’s time to file taxes, you will fill out a 1040 tax form. You can either fill it out yourself, use an online service, or hire an accountant.

      If you are unsure about the best option, PayStubCreator has an excellent reference guide.

      Even if you can’t pay your tax liability in full, it’s important to file on time to avoid penalties. You can set up a payment plan if needed.

      If you owe money, you’ll either send a check to the appropriate agency or send the payment electronically. If you are receiving a refund, you can choose to receive a check or a direct bank deposit.

      After you’re done, be sure to keep your tax return copy. You might need it for the following years’ taxes or in case the IRS audits you.

      Have a Better Understanding of Taxes

      You no longer have to wonder, “How do taxes work?” every tax season. This year, you have the information needed to file your taxes with confidence.

      Do you have any tips and tricks for filing taxes? Let us know in the comments below!

      Tags: accountantCaliforniaConventionalHow Do Taxes Work?informationjobstaxtaxes
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      California Business Journal Editorial Staff

      California Business Journal Editorial Staff

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        California Business Journal | California Business News, California News Media, California business articles | Orange County, Los Angeles, San Diego, Inland Empire, Northern California, San Francisco | Huntington Beach CA 92649 | (949) 648-3815
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