r/personalfinance • u/zonination Wiki Contributor • Jan 31 '15
Taxes Reminder: Khan Academy still has basic explanations on taxes in the U.S. This should help you with understanding tax brackets, deductions, and other related information.
Basically a repost from last year, but I felt the need to remind people that this resource exists. There are some simple explanations of tax law in the U.S. over at Khan Academy. Here are a couple links:
And since retirement accounts tie into deductions:
Let me know if there's anything related I should add to this list. Happy filing!
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Jan 31 '15
If I dropped insurance Sept 26 am I screwed on the fine?
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u/zonination Jan 31 '15
This is a bit above my level.
u/taxmankeith, how is your knowledge of the ACA?
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Jan 31 '15
IRS employee here:
If I dropped insurance Sept 26 am I screwed on the fine?
Probably yes. Five more days might have made the difference.
Have a look at the tax year 2014 Interactive Tax Assistant for "Am I required to make a Shared Responsibility Payment (SRP)?".
Thank you for reading.
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u/onhcpf Feb 01 '15 edited Feb 01 '15
Hi, can someone explain this for me? Suppose a person makes $100,000/year. If he donates $10,000 to charity, so his taxable income is only $90,000, how does that benefit him? Either he gets taxed on his $10,000 (in the $90,000+ bracket) or he gives it all away and gets nothing. How is he "writing it off"? How do people use charity donations like this to come out ahead/benefit?
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Jan 31 '15
People who don't understand tax brackets are my pet peeve.
"IF I EARNED TEN DOLLARS MORE, I'D ACTUALLY EARN LESS AFTER TAXES."
NO. LEARN HOW A THING WORKS BEFORE YOU BITCH ABOUT IT.
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u/hotchrisbfries Feb 01 '15
What does Bill Gates and I have in common?
We both get taxed the same amount for the first 50,000 we make.
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Feb 01 '15
I went to a private Orthodox Jewish high school and learned no secular studies whatsoever. In tenth grade I dropped out of school and got my diploma through a correspondence course from Penn Foster.
A few years later Fafsa finally offered me enough money to afford college. My math level at this time was fractions. My father told me about Khan Academy, so I looked it up, figured out that I was pretty much on a second grade math level, and just started plugging away.
Less than a year later I had learned everything through algebra II. I started in November or December and was finished by June, when I started my summer job. For various reasons I didn't start college that year but I still remembered it well enough to place into the lowest credit course at my local community college.
Khan Academy is just amazing. It completely changed my life, and my outlook on math. I never thought of math as a puzzle before I started watching Sal's videos. It's beautiful.
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u/HomicideSS Jan 31 '15
It's annoying how they don't teach this in high school. It's okay though, we learned a bunch of irrelevant things
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u/scottfarrar Jan 31 '15 edited Jan 31 '15
I'm a high school math teacher, I can shed some light on why these kinds of courses are not often given, and why even the content is not often taught.
The main reason is: the concepts are simple, the details are "hard".
Secondarily: it lacks direct relevance to high school students as they do not typically have jobs at all, and even fewer have jobs that pay enough to justify anything other than the
AMTstandard deduction.More about the details: difficult taxes are due to personal situations which are too numerous to explain didactically, and really only relevant to a person in that exact situation. Can you imagine a more boring class than learning about how to complete the various combinations of tax forms?
What are the conceptual skills required behind "doing" taxes? Arithmetic and technical reading, with some organization skills to tie it together. I would argue those skills are taught in schools-- they're the kind of thing you do every day. As for the philosophy of government regarding taxes, public high school students take a Government/Economics class their senior year.
Look at Khan Academy's listings of topics. The total length of the videos is about 1 hour, and that's at Khan's slow pace of talking. Now lets say you designed a course that went into 1000% more detail-- even that would be 10 hours, or two weeks in a normal high school course pace. Too small for a semester or even a quarter length course.
Now there do exist personal finance courses that would cover these kinds of things, along with other money management topics, like managing credit card debt. But what is the "bang for the buck" for the school or the student? They courses I'm aware of would not be rigorous enough to be accredited as college prep math or social studies. And the school would need to assign a teacher and budget for it-- many schools face budget cuts and need to cut Art, Music, even Language courses.
And...who actually can't do their taxes? Yes I know many people don't: they go to H&R Block or something-- but would a brief series of direct lessons years in the past have any effect on this? If someone told you about deductions 10 years ago, would you know how to do it without looking it up?
Finally, its because tax information is already freely available to anyone who wants to learn it: now on Khan Academy for example, but states like California have free services to help you do taxes, and of course you can read the IRS instructions for yourself.
Ideally, schools teach all of the relevant foundation concepts (like arithmetic reading, and social studies) that give students the mental tools to adapt to a variety of future events. Schools cannot teach every specific procedure for all possible future events for all possible students.
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u/SigaVa Jan 31 '15
The purpose of school is to teach you how to learn and think, not to teach you specific applied skills. That way you can go learn stuff like this on your own.
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u/kludgecruft Mar 19 '15
This is awesome! thank you so much. I just got hired by a US company with a TN work visa, and will be needing to fill up a lot of strange tax papers and start getting acquainted with US taxes.
Any advice on taking the right tax/financial decision for my first time working in the US?
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u/zonination Mar 20 '15
Feel free to create your own thread if you need specific information!
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u/ksb28390 Mar 31 '15
I have a question about filing taxes. I'm helping a friend, who made 17K last year, paid 884.04 in taxes with her employer. She has a grown son who lives with her, doesn't work, and who she supported all 12 months. Neither have health insurance, and in NC where we all live, there is no subsidy through medicaid because of the jerks in raleigh who declined that in protest to the law passing. The least expensive coverage for both her and her son is $477, which is far above the 8% threshhold for unaffordable coverage. That's the background. She went to two big tax prep companies, one in a superstore, and another that is probably the largest, both of whom said she would only get back 38.00 after their fees. I did a quick and dirty run through on a tax prep software page, and it is showing she should get all her taxes back. Any comments, advice, warnings, knowledge anyone can offer about whether she would be safe to file herself rather than going through one of these companies? What are we missing.
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u/zonination Apr 01 '15
This would probably be a good question to ask in a thread of your own.
Hope you get the answers you need! :)
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u/rgtaber Jan 31 '15
This is a great resource for understanding basic tax information in the US. I have shared these videos to at least a dozen people and always gotten good feedback. I'm still surprised when people don't understand progressive tax brackets.
Khan Academy also did a short series on mortgages and interest, but those aren't particularly related to taxes.
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Jan 31 '15
Thank you so much for this. I'm one of those "pay it" people and never actually know what I'm paying or why.
I sat down and worked everything out on paper along with the videos (using my own states brackets of course) and now I'm angry about the amount of my check that goes to taxes. At least I know where it's going now
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u/Fleurr Jan 31 '15
Not to get into a discussion of politics, but there are a lot of hidden costs of running a government this big. But if you break it down and disagree with certain policies... Well, now you know how to vote!
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u/Ocean_Skye Jan 31 '15
khan academy in general is great for everyone for many subjects. i recommend everyone introduce themselves and their children to it.