let said ur only income is from the bank interest. and the interests u earn is $50,000/year. do you still need to pay/file a tax return? and how much tax would that be? roughly 33%? how about $500,000/year or $1 million/year?
2007-02-22 13:24:52 · 11 answers · asked by seafood10 3 in Business & Finance ➔ Taxes ➔ United States
Interest income from banks, credit unions, money market funds, bonds and tax-exempt bonds are reported on your taxes.
Taxable interest is reported on Form 1040 Line 8a, and non-taxable interest is reported on Form 1040 Line 8b.
If you earned more than $1,500 in interest, the interest should be detailed on Schedule B, with the total carried to Form 1040 lines 8a and 8b.
As for the amount of tax you'll pay... it depends on your exemptions, etc...
2007-02-22 13:29:23 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You definitely need to file a tax return on this amount of income, no matter where it came from.
The tax rates are based on your filing status: Married, Single, Widow, Head of Houshold and also on your income level.
I suggest that if you haven't already done so, you absolutely need to have your interest subject to Federal Withholding on it. In that way, the approximate amount of tax owed will be already sent to the government through the year instead of having to cough it up at tax time and paying a huge penalty for not having made estimated tax payments throughout the year.
You need a tax professional to take a look at it and make suggestions so as to keep you from having to pay high penalties and interest on the tax on that kind of interest income.
2007-02-22 14:03:06 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I am assuming you are single and are not itemizing and you are under 65 and not blind. $50K is the only income you have. Your standard deduction is $5,150 for 2006, and your exemption is $3,300. This makes your taxable income $41,550. As a person who is filing single, your 2006 bill is $6,951. If you are married filing joint, your taxable income will be $33,100, and your tax will be $4,214. Different taxable income and tax depending on your filing status.
This also depends on the type of interest earned. For instance, if the interest is earned on private activity bonds or other instruments that have an AMT effect, taxable income and the amount of tax you owe may be increased.
2007-02-22 14:10:44 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Of course! That's ordinary income as far as the IRS is concerned.
The tax due would depend upon your filing status, exemptions, and deductions. If you were a single taxpayer with no itemized deductions, the tax bill would be around $7,000 or so with $50k in interest only income. At $500k, it would rise to about $153k and at $1 million, around $328k.
So, at $50k, about 14%, at $500k, about 31% and at $1 million, about 33%.
The "Certified CPA" at the top isn't a CPA. If he or she was, they'd know the difference between ordinary interest and capital gains! Unfortunately there are plenty of clowns like that who claim to be "experts" but obviously have no clue what they're talking about.
2007-02-22 13:39:40 · answer #4 · answered by Bostonian In MO 7 · 1⤊ 0⤋
2. yes you are required to file your returm if the income exceeds the maximum amount not chargeable to tax i.e 1.9L in this case. The refund process is no more time consuming, ministry has expedited the process & now all refunds are credited within 1 yr of filing - my advise is to e - file your return to save on any refund processing charge by your consultant. 3. here you have an obligation to pay additional tax. as above 5L you will be in the 20% bracket, you have to deposit the additional 10% tax on your income exceeding 5L. these details will be reflected in your return, so you have to file return in this case also.
2016-05-24 00:42:22 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yes, you will be taxed on it. It is called a Capital Gains Tax. Unless you have it in a tax shelter, you will have to pay a hefty tax.
I recommend getting a Financial Planner or an attorney that specializes in Tax law. There are ways to avoid taxes, If you really have a large sum of money, create a corporation or LLC. to protect it from Taxes (the government), Lawsuits (jealous greedy People), and Identity theft (criminals).
2007-02-22 13:27:19 · answer #6 · answered by Anonymous · 0⤊ 2⤋
Interest income counts as income... So you should file. Your bank reports your interest to the IRS.
2007-02-22 13:28:03 · answer #7 · answered by Dennis H 4 · 2⤊ 0⤋
Yes. But if you have that much money in the bank you would have an accountant to make sure that you didn't have too pay much, if anything at all to Uncle Sam.
2007-02-22 13:28:13 · answer #8 · answered by FaerieWhings 7 · 0⤊ 1⤋
It is taxable income for sure....yes u must file and pay taxes.
2007-02-22 13:36:06 · answer #9 · answered by Steelhead 5 · 1⤊ 0⤋
Yes you need to file but will not receive any refund instead you pay,
2007-02-22 13:31:08 · answer #10 · answered by jollyrancher 1 · 2⤊ 0⤋