at the end of the tax year and of course, you
must have compensation in order to do so.
You should not contribute more than the allowed
amount or the amount that can be deductible per year. If you are age 50 or
older, you may owe a penalty if your contributions to an IRA or Roth IRA
exceeds $5,500.
An excess IRA contribution occurs if you
contribute more than the contributions limit, if you are making regular IRA
contributions to a traditional IRA at age 70 1/2 or older. An excess IRA
contribution would also occur if you make an improper rollover contribution
to an IRA. If it is determined that you made an excess contribution, you
will be liable for an excess contribution of 6% per year as long as the
excess contributions remains in the IRA. You can avoid the excess
contribution penalty by withdrawing the excess contribution from your IRA
and any income earned by the due date of your tax return.
You can choose the Married
Filing Jointly filing status if you are
married and both you and your spouse agree to file together.
When you file Married Filing Jointly, you
report your combined income and deduct your combined allowable
expenses. You can file using the Married Filing Jointly filing status even if one of you had
no income or deductions.
Married taxpayers have a choice
to either file jointly or to file separately. The better choice always seems
to be to opt for Married Filing Jointly. The other options are the Married
Filing Separate and the Head of Household filing status. There a number of
worksheets and rules that you must follow to determine if you as a married
person can file a Head of Household. There are many credits and deductions
that you can qualify for by filing Married Filing Jointly or Head of
Household that you would not qualified or be allowed to be claimed when you
file as Married Filing Separately. One thing is for sure. If you have a
choice, choosing Married filing Jointly is much better than using Married
Filing Separately.
You must always determine your filing status before you
can determine your filing requirements, standard deduction and
thus your correct tax.
Your filing requirements are based on your filing
status. You can always file a tax return, but you are not always obligated
to do so. You want to file a tax return when you are due a refund for
example. For tax year 2014, you must file a tax return if you are single
(under age 65) and your income was at least $10,150. You must file a tax
return if you are Head of household (under age 65) and your income was at
least $13,050. You must file a tax return if you are married filing jointly
(at least one spouse was under age 65) and your income was at least
$21,500. Furthermore, once you determine if you are single, married filing
jointly or married filing separately, head of household, then you can look
up the amount that corresponds with your filing status. Based on all these,
again by looking in the correct tables or using the correct tax rates, you
can determine the correct tax to pay.
To qualify for head of
household you must be unmarried or be considered unmarried, you must have
paid more than half the cost of keeping up a home for the year and have a
qualifying person who lived with your for more than half of the year unless
this person is your parent. Add up the amounts contributed and if you
amount is more than half the
amount others paid, you meet the requirement of
