As the presidential race heats up, one of the most contentious issues continues to be the economy. Whether the subject is the tax code, health care reform or unemployment, it's clear that November's battle will feature two very different visions of America -- and two very different ideas of how to cure the country's economic malaise. With that in mind, we've decided to look at some of America's biggest economic surprises.
Think you know the economy? Take our quiz and find out!
Quiz: The Economy and the Tax Gap in the United States
Pop Quiz! Who's Winning the Tax Game (and By How Much)?
Answer: C. Thanks in large part to the exceedingly generous 15% capital gains and dividend taxes, most of the super-rich pay a lower tax rate than middle-class filers making $69,001 per year.
C. $5.12 million
D. $10 million
Answer: C. In 2001, the estate tax exemption topped out at $675,000, and the top rate was 55%. Today, the exemption is $5.12 million, and the top rate is 35%. Side note: $5.12 million represents the average yearly earnings of over 103 households – none of whom would get a 100% exemption on their taxes.
Most real estate agents and brokers receive income in the form of commissions from sales transactions. You're generally not considered an employee under federal tax guidelines, but rather a self-employed sole proprietor, even if you're an agent or broker working for a real estate brokerage firm. This self-employed status allows you to deduct many of the expenses you incur in your real estate sales or property management activities. Careful record keeping and knowing your eligible write-offs are key to getting all of the tax deductions you're entitled to.
Going through the process of divorce or separation is a trying time for any couple. Between dividing up property, legal proceedings and handling child custody, many people can forget the tax implications as well. You can avoid missteps with the IRS —especially if there's a breakdown in communication between spouses — by keeping in mind a few tax tips.
If your kids are young enough to be your dependents, they may have to pay taxes. In some cases, you may be able to include their income on your tax return; in others, they'll have to file their own tax return or you will have to file a separate return on their behalf. Whether this is required depends on both the amount and source of the minor's income.
If you use vehicles in your small business, how and when you deduct for the business use of those vehicles can have significant tax implications. It pays to learn the nuances of mileage deductions, buying versus leasing and depreciation of vehicles. Special rules for business vehicles put in use in 2017 can deliver healthy tax savings.