William D King: The New Tax Regime and Estimating Your Taxes Accurately
While many of the tax reform proposals have had their fair share of controversy, President Biden unveiled a scaled-back version of his “Build Back Better” framework. The House of Representatives passed the $2.2 trillion reconciliation package bill on November 19, 2021
Changes in Tax Laws
The “Build Back Better” Act includes a wide range of tax laws that may concern you if you meet any of the specified eligibility criteria. The highest rate of income tax is 37% when applied to incomes above certain limits for individuals, married couples filing joint returns, married couples filing separately, and those with the status of heads of household. The new Act does not envisage any change in the rate despite the previous proposals aiming to hike it to 39.6%. However, those with modified adjusted gross incomes exceeding $10 million or $5 million for individuals filing separately will pay a surcharge of 5%. An additional 3% will apply for those with MAGI over $25 million. The new Act also makes significant changes to contributions permitted in IRA and other retirement plans. It also expands wash sales rules, net investment income tax (NIIT), corporate profits minimum tax (CPMT), and more, observes William D King.
Top Tax Apps for Easy Calculation of Taxes
TaxAct Express: The highlight of this package is its robust architecture and reasonable price. It costs just $17.99 if the income tax refund is deposited directly. Its main advantages include easy importing of last year’s data even when the provider had been different. You can also pay the filing fee with your refund. However, you pay extra for state filing, and it does not provide expenses tracking. Its user interface is a little tacky. You can use the web version as well as Android and iOS versions. Your filing is free if you get a higher refund with any other product.
QuickBooks Self-Employed: A good app for business owners, it offers business expenses tracking on-the-go and tax filing. You can also authorize access to your tax advisor or accountant. The app allows you to estimate the tax amount and make quarterly payments. Available in both Android and iOS, the app integrates flawlessly with TurboTax. You can track both business and personal expenses and generate and track invoices. However, users report that it is easy to duplicate data accidentally between uploading and syncing transactions, and it does not offer payroll or inventory management functions, warns William D King.
H&R Block Tax Prep and File: The outstanding feature of this tax app is getting unlimited help 24/7 from tax experts and CPAs during the tax filing season. The app allows you to file returns yourself or have a tax professional do it for you, if you upload all the documents. However, as you may expect, it is somewhat expensive to use.
Given the background of sweeping changes in the tax laws, it can be difficult for individuals or business owners to correctly calculate their taxes and file returns to get the maximum amount of refund. It can be wise to use one of the several tax apps to do it smoothly and without making mistakes.