Income tax brackets are the fundamental characteristic of a progressive taxing system. The United States of America taxes income based on an individual tax payer’s salary; those who earn more are taxed at higher rates while conversely, those who earn less are taxed at lower rates. Income tax brackets divide the taxpayer population by the salary earned; each bracket is attached with a corresponding tax rate or percentage.
The income tax brackets are the true rate the taxpayer pays on their “last dollar” earned. The income tax brackets and the corresponding rates attached are not set in stone, but instead, liable to fluctuate based on the financial policy of the party in office.
A federal tax id number is an essential organizational method employed by the Internal Revenue Service. A federal tax id number is crucial to streamline the tax levy of the Federal Government. The necessity stems from the number of taxpayers (both individuals and businesses) in the United States. A federal tax id is in essence a tax file number that categorizes and records each taxpayer’s application and status.
All individuals associated with running a small or big business utilizes tax id numbers or employer identification numbers. Each tax file number is registered with the Internal Revenue service through the employer’s identification system. A federal tax id consists of nine digit numbers. Each set of numbers is recorded by the IRS and the appropriate federal tax id is stored as the employer’s tax account.
How to File your Taxes for Free Online
Every fiscal year, the Internal Revenue Service will offer individuals (specifically taxpayers) a comprehensive list of websites that allow taxpayers to electronically prepare and file their income tax returns without any attached fees.
To file your income tax returns for free, you must first visit the Internal Revenue Service’s online page, located at www.irs.gov. Towards the top of the page, there is a link towards the top of the page that will denote free filing for all individuals who meet the eligibility requirements of the program. The program offered by the Internal Revenue Service, known as ‘Free File’ completes the filing processes for the taxpayer with brand-name software or by satisfying online Fillable Forms.
Free File is a complimentary federal income tax prep and electronic filing program made available to eligible taxpayers. Free File was developed through a partnership between the Internal Revenue Service and the Free File Alliance, an agglomeration of private sector tax software companies. All taxpayers can satisfy their federal income tax returns by accessing commercial software provided by any of the Free File Alliance companies. Those that wish to access Free File have until April 18, 2011 to file and pay their tax.
Who is eligible: The Free File program is only offered to taxpayers with a 2010 Adjusted Gross Income of $58,000 or less. That being said, each participating company sets their own eligibility requirements and not all taxpayers will meet the specific guidelines set by the underlying companies. Individual companies will offer their specific programs based on the taxpayer’s Adjusted Gross income, geographic location, and guidelines instituted by individual states. If a taxpayer is filing using the Married Filing Jointly status, the $58,000 AGI boundary applies to the adjusted gross income for both parties combined.
All of the necessary software will be available to the taxpayer; no downloads are required to participate in the Free Filing program. Additionally, all Free File company sites are equipped with the most updated encryption programs to ensure privacy protection.
Some participating Free File Alliance companies will offer Free State tax return preparation and e-file. When you participate in this program, you must electronically sign the federal income tax return with either the previous year’s Annual Gross Income or with an electronic personal identification number. The e-filing PIN, which is a five digit number, is easy to obtain and personalized—the individual taxpayer chooses their PIN.
To investigate your eligibility requirements for free electronic filing, you must go to IRS website, access their free filing offer. After you have chosen this option you will need to select which participating company you’d like to file status with. There are currently 17 companies that offer the E-filing free tax forms; each company (as stated before) possesses unique eligibility requirements for those that wish to file. Additionally, the companies will offer their free filing status based on the state in which the taxpayer resides.