Advertiser disclosure

Why you shouldn’t worry about entering a higher tax bracket

Different brackets of income are taxed at different percentages. Your marginal tax rate — the highest percentage of tax you’ll pay — only applies to the income that falls within your top tax bracket, not to the income in all your lower brackets. So you won’t take home less money after taxes if your salary increases.

What are the chances of being audited?

An audit happens when the IRS flags your tax return and reviews it for accuracy. In all, you have about a 0.6% chance of being audited. Things like high income and unusual deductions can increase your risk of getting flagged.

What documents do I need to file taxes?

Those with diverse income sources — like employment, freelancing, or rental property — will likely need to acquaint themselves with a variety of tax documents, including Forms 1040, W2, 1099, Schedule C, Schedule E, etc.

Should I Hire a Tax Preparer?

It’s generally a good idea to work with a tax professional if you’re self-employed or a small business owner, if you plan to itemize your deductions, or if you’ve sold/plan to sell significant capital assets.

Itemized deductions: a beginner’s guide

Just 1 in 10 Americans still choose to itemize their tax deductions. Itemized deductions require more paperwork and record-keeping – but if you had high medical bills, state and local taxes, and sizable interest payments last year, itemizing could save you big bucks on your taxes.