Annotated Source List

Botkin, Sandy. Lower Your Taxes - Big Time! 2017. 7th ed., McGraw-Hill Education, 2016.

In Sandy Botkins book Lower Your Taxes - Big Time! 2017 provides an abundance
of information about saving money. Sandy, who has taught hundred of thousands of
taxpayers how to save over $300,000 million on their taxes with his Tax Reduction Institute
seminars, shows you in his book how to legally and ethically take advantage of the tax
system. His book will teach you how to get a yearly subsidy of over $5,000 back from the
IRS and forever bulletproof your records. The book includes advice on properly
documenting any business deductions, expert guidance for getting big tax subsidies for
starting a home business, legitimate ways to turn tuition, entertainment, orthodontia,
vacations, and other expenses into huge deductions, important information on small-
business tax changes and extensions recently passed by the American Taxpayer Relief Law,
and latest tax law changes arising from the Protecting Americans From Tax Hikes Law.
This source is completely revised and updated for 2017, which ensures that the
information in the book isnt outdated. The author of the book is very reliable, being a CPA
and former Attorney for the IRS. The book seems promising, with lots of information on
how to reduce taxes. Overall, this book seems pretty reliable, informative, and helpful to
use.

Bronchetti, Erin Todd. "When a Nudge Isnt Enough: Defaults and Saving Among Low-
Income
Tax Filers." National Tax Journal, vol. 66, no. 3, Sept. 2013.

Throughout the article, ten basic strategies to lower taxes are listed can be
elaborated. First, earning a tax-free income can lower tax liability because some income is
not subject to income tax. By selling a primary home, investing in bonds, depositing money
for childrens education, opening health saving account, and taking advantage of certain
benefits offered by employers can aid in earning more in tax-free income. Also, paying into
a tax-free health flexible spending account can easily lower taxes. With the employers
participation, the employee can place a certain amount money in the beginning of the year.
The employee can use the money in the flexible spending account for reimbursements
during the coverage period, but the money must be used by the end of the year or the
employer will keep the money. Because tax deductions reduce taxable income, deduction
can be maximized by taking a standard deduction or itemize deductions. Maximizing tax
credits can lower taxes dollar for dollar. The government uses tax credits to encourage
taxpayers to engage in activities or to grant tax relief. Contribution to a 401K reduces
taxable income by being deposited directly into the 401k account and the growth is tax
deferred. By donating to charity, the IRS allows taxpayers to make itemized deductions.
Deductions to medical expenses can also lower taxes up to 7.5% of their adjusted gross
income. By selling losing investments, taxpayers can reduce tax liability from losses
sustained on an investment. Lowering taxes by reducing tax rate is also possible depending
on the taxpayers tax bracket and the holding period for the investments. Lastly, splitting
income or shifting income to a child in a lower tax bracket can reduce income taxes.
Unfortunately, new tax laws have made it more difficult to take advantage of the option.
The source provides helpful basic strategies can anybody can use to lower increase
their tax deductions and tax credit. I have learned how selling losing investments can help
reduce tax liability. I also learned that a flexible spending account are not subject to
employment or federal income taxes, so it can be used to lower tax. The ten suggestions in
the article were broad and have the potential to apply to all varieties of people in some way.
Long lists of specific ways to earn tax-free income and other ways to reduce tax allow me
to see many specific ways that tax can be reduced. Overall, the article has provided me with
a clearly outlined yet simple list of ways taxpayers can reduce their taxes by increasing tax
deductions and tax credit.

5 Ways to Reduce Your Taxes for Next Year. Tubotax, Inuit, turbotax.intuit.com/tax-
tools/tax-tips/General-Tax-Tips/5-Ways-to-Reduce-Your-Taxes-for-Next-
Year/INF17630.html. Accessed 29 Oct. 2016.

The article is from Turbotax and provides 5 helpful ways to reduce taxes for the
next year. One way to reduce taxes is by contributing to a retirement plan because most of
the plans are tax write-offs that do not require itemization. The money will lower taxable
income because traditional IRAs are pre-tax contribution, which means that less will be
owed in taxes. However, traditional IRAs are tax-deferred not tax-exempt which means that
the deferred taxes must be paid at retirement. Non-traditional IRAs, such as the Roth IRA,
do not reduce tax immediately, but after retirement, the taxes will decrease. Another way to
save money on tax bill is to spend the money in other places. Often times, employers offer
benefits that allow people to use their income for dependent care or medical expenses. The
employers deduct pre-determined, tax-free amounts from paychecks and place them in an
account that uses the funds when necessary. Since the contributions reduces gross income,
the taxable income lowers resulting in paying less for taxes. Once the money has been
saved, the money must be used or the pre-tax money set aside for the specific purpose will
be lost. Donating to charity by not only writing checks but also by donating with toys,
books, clothes, household items, and even time can be written off as deductibles for tax.
Time itself is not deductible, so the cost of travel can be used as deductibles. It is important
that total tax deductions must exceed the standard deduction before they can be applied.
Also, by bundling some contributions, taxpayers can incorporate two years worth of
deductions into a single year. For example, at the end of the year, someone who donates to
church on a weekly basis can take the amount donated for a year and match it with a lump-
sum amount of what would be the next years donation. Lastly, purchasing materials can be
a deduction if the expense has been spent on work related equipment and is primarily for
business.
Even though taxes are unavoidable, the tips from Turbotax have provided very
helpful suggestions to minimize the impact of tax. The tips have been sourced to Carol W.
Thompson who is a federally licensed tax professional in the Portland, Maine region, and
the article quotes him frequently contributing to the reliability of the suggestions. Unlike
some of my articles that provided tips, this site provided specific examples of how one may
be able to take advantage of the potential to deduct taxes. The examples provides specific
ways one can take advantage of the tips and clears ambiguity. They also specify which
scenarios will cause the methods to be not tax deductible. The article will be very useful for
me because of its coherent and reliable methods to reduce taxable income. Overall, the
specific details in the article have been very helpful in clarifying which scenarios tax
deductions will apply because for some suggestions such as buy stuff only apply if the
stuff are primarily for business.

Forbes, Steve. Free Trade Means More Jobs. Forbes, 15 June 2016.

The article revolves around the effect of the Trans-Pacific Partnership (TPP) and tax
rate cuts. The author argues that the TPP will not destroy jobs; in fact, it will mean more
jobs in the long run. Though the deal may eliminate some jobs and disrupt the economy, it
doesnt mean itll hurt America. For example the U.S. railroad industry has shed around a
million jobs since the went of WWII, but our standard of living today is drastically better
than it was then. The economic problems we face today isnt nefarious bankers of currency-
manipulating foreigner; its our own government and its horrific tax code, which prevents
us from focusing our energy on productive activities that would benefit us all. The author
also argues that tax rate cuts always work. He offers the example of Governor Sam
Brownback of Kansas: he enacted major tax reductions that supposedly blew holes in the
states budget; however, in just two years, the tax policy is beginning to yield some
prosperity. The private-sector job growth in Kansas is now outpacing that in most other
states, and the state unemployment ate is among the nations lowest. Simplifications of tax
code and major income tax reductions are proven to generate prosperity.
The source outlines tax policy, which is significantly different than most of my
other sources. The article offers a strong point of view that free trade and tax cuts results in
prosperity and economic growth. The article offers many examples supporting the authors
argument. However, the topic of the article isnt very relevant to my studies, as it doesnt
offer any substance to how taxpayers could reduce taxes; it only offers an argument as to
why tax cuts should be implemented. Overall, though this is a well-written article, it wont
be beneficial to me or my studies.

How Can I Reduce My Tax Bill? Time, time.com/money/2791943/reduce-tax-bill/.

Accessed 29 Oct. 2016.

This article focuses on claiming deductions and credits in order to lower the taxes
one has to pay. For example, working parents can claim a credit of up to $3,000 for
childcare costs for children who are either disable or are younger than 13 at the end of the
year. If filers pay eligible post-secondary education costs for college, the American
Opportunity Credit can cut up to $2,500 off your tax bill per year for four years. However,
the full credit is only available for joint filers with an adjusted gross income of $160,000
and single filers with an adjusted gross income of $80,000. Other credits, such as the
Lifetime Learning credit, can also help reduce taxes if you pay for college. Additionally, up
to $2,500 in interest can be deducted if you have student loans. Contributions made to a
401(k) removes money from your taxable income in the current year, which means less
taxes paid. Additionally, up to $5,500(if over 50, $6,500) in contributions to a tradition IRA
can be deducted. A Savers Credit can be claimed for up to $1000 for contributions to
qualified retirement plans if your income is less than $27,500. Up to $6,500 can be
deducted in contributions made to HSAs for families who a health savings account as part
of a high-deductible health insurance plan.
This article is extremely helpful to me because it provides many ways of reducing
the amount of taxes you pay by taking advantage of credit and deductions. These ways are
diverse and could potentially apply to the majority of adults. With such a wide audience,
these strategies will be very helpful to me. The article enlightened me about many topics
that I previously didnt know about, such as childcare, college, and health savings account
credits/deductions. With these topics in mind, I can delve into each in more detail. Overall,
this article provides in-depth information about using credits and deductions to lower your
taxes.

Jefferys, Scott. Tips: How the Smartest Individuals Reduce Their Taxes. Dog Ear
Publishing, 2013.

This book, written by Scott Jefferys, helps readers keep you hard-earned money and
not pay it all out in taxes. Throughout the book, there are hundreds of strategies, real-life
examples, and tips to lower your tax burden. It provides a variety of checklists to reference
through the year to maximize deductions, minimize the chances of being audited by the
IRS, and includes tax planning strategies to help you keep as much of your money as
possible. The book will help you become familiar with tax planning strategies, which will
make you become a proactive taxpayer and minimize your tax burden.
Scott Jefferys, who is a CPA and has a Masters Degree in Taxation, explains in his
book various ways of how to lower your tax burden. The book answers essential tax
questions and provides many tax planning strategies to help reduce taxes. Overall, this book
appears to be a reliable source, providing an abundance of information on how to reduce
your taxes; I think that this source will be very helpful to me.

Jiang, Sharon. Interview. 29 Oct. 2016.

Sharon Jiang, an employee at John Zheng & Associates, just join the company this
year. She and graduated from the University of Maryland, where she earned a masters
degree in accounting. She is 25 and recently got married. Her hobbies include knitting,
fishing, and reading books.

John Zheng & Associates. Jzhengtax, www.jzhengtax.com. Accessed 8 Oct. 2016.

The John Zheng & Associates website offers an overview of the wide range of
services the company provides, such as tax preparation, payroll, bookkeeping, and other
services. If someone is interested, he or she could also find more detailed information about
the services on the website. The website also offers a list of resources that clients and
potential clients could find to be useful, such as IRS and tax appointment forms. Contact
information and office hours can also be found on the website.
Even though this source is the website of the company I am interning at, it will not
be very helpful to me. The website appears to be relatively lacking in substance and doesnt
offer much information. It is directed mostly to potential clients, which means it only has
an overview of their offered services and a list of resources. It doesnt offer a database of
information nor any in-depth background of taxes, which will be my primary concern.
Thus, since this source is very cursory, it will not be relevant to my area of study and will
probably not be used at all.

Keenan, Audrey. Interview. 29 Oct. 2016.

Audrey Keenan, an employee at John Zheng & Associates, has been working for the
company for the past 4 years. She obtained a bachelors degree in accounting at Towson
University. She is 42 and has a 17-year-old daughter.

Lui Zheng, Ling. Interview. 29 Oct. 2016.

Ling Lui Zheng is the wife of John Zheng, the owner of John Zheng & Associates.
She was born in China and later moved to Hong Kong with her family. She attended Hong
Jong Shue Yan University, where she obtained a bachelors degree in accounting; later, she
attended MinJiang University in Fuzhou. She married John Zheng in 1998, became a
mother in 1999, and helped him start his business. In the company itself, she does little
accounting; shes also licensed real-estate broker and focuses on real-estate and food
certifications.

Module 8: Claiming Child Tax Credit. IRS,

apps.irs.gov/app/understandingTaxes/student/hows_mod08.jsp. Accessed 29 Oct.
2016.

This module revolves around child tax credits, which allow taxpayers to claim a tax
credit of up to $1,000 per qualifying child. However, in order to claim the tax credit, certain
requirements must be met. To claim the child tax credit, there are requirements for the
qualifying child, which can be found on the IRS website, requirements for the taxpayer, and
limits on the amount of credit. When a taxpayers child tax credit is more than their tax
liability, they may be eligible to claim an additional child tax credit as well as the original
child tax credit. The additional child tax credit also goes up to $1,000 per qualifying child,
which further reduces tax liability and may result in a refund. Additional requirements must
be met in order to claim the additional child tax credit. The tax credit depends on the
taxpayers tax liability; the tax credit cant be greater than the taxpayers tax liability. The
tax credit also depends on the taxpayers modified adjusted gross income and filing status;
the credit can be reduced if the taxpayers modified adjusted gross income is above a
certain amount for their filing status. For the additional child tax credit, taxpayers must
meet more requirements. They need to have met the requirements for the original child tax
credit, have a tax liability that is less than their allowable child tax credit, earn more than
$3,000 during the tax year, and use Form 8812 to determine the tax credit. This additional
tax credit is either 15% of the taxpayers taxable earned income or the amount of unused
child tax credit.
Since this module focuses specifically on the child tax credit, it is extremely
beneficial to me since the tax credit can directly lower the taxes taxpayers may have to pay.
This modules does a great job providing comprehensive information about the tax credit,
and it goes over the requirements a taxpayer must meet before claiming the tax credit. This
module also provided several examples as well as questions to guide me through the
information. Overall, this article clearly and concisely presents information about the child
tax credit, which is very relevant to my studies.

Module 11: Earned Income Credit. IRS,

apps.irs.gov/app/understandingTaxes/student/hows_mod11.jsp. Accessed 29 Oct.
2016.

This source outlines the earned income credit, which is a refundable tax credit for
specific people who work and whose earned income and adjusted gross income (AGI) is
below a certain limit. In general, this credit is determined by the taxpayers AGI, earned
income, filing status, and the number of qualifying children. Earned income credit reduces
the amount of tax taxpayers have to pay, and taxpayers can still receive the earned income
credit even if their tax is zero. In order to claim the tax credit, certain requirements need to
be met. For everyone in any circumstance, in order to be eligible for earned income credit,
they must have a valid Social Security number, have earned income, must be a U.S. citizen
or resident alien all year, cannot claim an exclusion for income earned in a foreign country,
cannot have more than $3,350 in investment income, and cannot be a qualifying child of
another person.
This module focuses on the earned income credit, which is a tax credit designed to
lower the amount of taxes qualified taxpayers have to pay. I dont think this module
explained the earned income credit very well. It only provides basic information without
many examples or substance. The majority of the module described extremely specific
requirements about qualifying children, which isnt particularly relevant to my studies nor
the earned income credit. Even thought the topic of earned income credit is relevant to my
studies, this module didnt help me very much nor provide comprehensive information.
Overall, I think this module is poorly written and should be updated with more specific
details and examples.

Module 9: Tax Credit for Child and Dependent Care Expenses. IRS,
apps.irs.gov/app/understandingTaxes/student/hows_mod09.jsp. Accessed 29 Oct.
2016.
 This module focuses on tax credits for child and dependent care expenses.Tax
credits are dollar-for-dollar reductions of taxes; this means that a $100 tax credit is equal to
paying $100 less in taxes. The tax credit for child and dependent care expenses allows
taxpayers to claim a credit for expenses paid for the care of children under the age of 13
and for a disabled spouse or dependent. The taxpayer, child or dependent, and expenses
must meet certain requirements in order to claim the tax credit. The taxpayer must incur
expenses in order to work or look for work, earn income for work performed during the
year, file a joint return if married, maintain a home that was also the home of a qualifying
person, and pay the expenses to someone other than the taxpayers child under the age of
19 or the taxpayers dependent claimed on the tax return. A qualifying person is either a
child, under the age of 13, for whom a dependency exemption is claimed, a dependent who
is physically or mentally incapable of self-care, or a spouse who is physically or mentally
incapable of self-care. The tax credit goes up to $3,000 for one qualifying person and
$6000 for two or more qualifying people, and the credit is between 20 and 35 percent of
qualifying expenses, which include household and care services.
This source provides an in-depth summary of tax credits for child and dependent
care expenses, which is a topic relevant to my studies. It provides with great detail the
various specific requirements that must be met in order to claim the tax credits for child and
dependent care expenses. With these requirements in mind, its very easy for me to display
the requirements for obtaining the tax credit as well as the specific steps as to how to get
the tax credit. This module also provided several examples as well as questions to guide me
through the information. Overall, this module does an excellent job presenting the
information about tax credits for child and dependent care expenses. This module will be
very useful for me because of its clear descriptions and explanations of tax credits for child
and dependent car expenses.

Module 7: Standard Deduction. IRS,

apps.irs.gov/app/understandingTaxes/student/hows_mod07.jsp. Accessed 29 Oct.
2016.

This module focuses on standard deductions, which reduce the income that is
subject to tax. Standard deduction can change depending on the a few factors: the filing
status, the age of the taxpayer and spouse, whether the taxpayer or spouse is blind, and
whether the taxpayer can be claimed as a dependent on another taxpayers tax return. The
standard deduction is increased for taxpayers and spouses who are age 65 or older or who
are blind. In 2014, taxpayers who were either single or married filing a separate return had
a standard deduction for 2014. Those who were the head of household had a standard
deduction of $9,100, and those who were either married filing a joint return or qualifying
widow with a dependent child had a standard deduction of $12,400.
This module is very beneficial to me as it provides information about standard
deductions, which is a topic I came briefly before. Its also a topic that is relevant to my
studies. The module concisely described what standard deductions are and how their
amounts can vary. Though one may not be able to actively change their standard deduction
amount, it is still relevant to me because it lowers the amount taxpayers may have to pay.
This module also provided several examples as well as questions to guide me through the
information. Overall, this module, which will be very helpful to me, effectively presents
standard deductions and how its value is determined

Module 6: Exemptions. IRS,

apps.irs.gov/app/understandingTaxes/student/hows_mod06.jsp. Accessed 29 Oct.
2016.

This module covers information about exemptions. There are two types of
exemptions: personal exemptions for taxpayers and spouses and dependency exemptions
for dependents. Exemptions reduce income that is subject to tax by the exemption amount.
The exemption amount was $3,900 in 2013 and $3,950 in 2014. To claim a personal
exemption for a spouse, the taxpayers must be married by the last day of the year, the
spouse must have did during the year and the taxpayer must not have remarried during the
year, or on a separate return, the spouse must have no gross income. Additionally, taxpayers
cant claim an exemption for a person claimed as a dependent on another tax return. On the
other hand, one dependency exemption is allowed for each person who is claimed as a
dependent. In order to claim a dependency exemption for a qualifying child or relative,
there are three test that must be met: dependent taxpayer test, joint return test, and citizen or
resident test.
This module was very helpful because it provides a very detailed summary about
exemptions, which are particularly relevant to my area of studies. It also offered a lot of
information about the various tests that must be met in order to claim a dependency
exemption for a qualifying child or relative, which I did not include in the summary
because there was an abundance of tedious details there and because its very accessible on
the internet. This module also provided several examples as well as questions to guide me
through the information. This module covered everything I needed to know about
exemptions in a very clear and concise manner, which makes this an excellent source.
Overall, this source was extremely beneficial to me because it effectively provided
information about exemptions.

Module 10: Education Credits. IRS,

apps.irs.gov/app/understandingTaxes/student/hows_mod10.jsp. Accessed 29 Oct.
2016.

Taxpayers have two credits, the American Opportunity Credit and Lifetime
Learning Credit, available to help counterbalance the costs of college by reducing their
income tax. However, like all other credits, there are certain requirements that need to be
met; these requirements are based on the taxpayers filing status and adjusted gross income
(AGI) or MAGI, whether the student and the educational institution are eligible, and what
the expenses were for (tuition, course-related books and materials, supplies and equipment,
and student activities all qualify). The American Opportunity Credit allows taxpayers to
claim a credit of up to $2,500 based on the requirements for each eligible. Students must be
enrolled in a program that leads to a degree or certificate, taking at least one-half of the
required workload for at least one academic period, enrolled in the first four years of post-
secondary education, and free of any felony conviction for possessing or distributing a
controlled substance. Its important to not that Taxpayers whose modified AGI is $90,000
or more are not eligible to take the credit, and those whose AGI is between $80,000 and
$90,000 will get a credit that is phased out. The Lifetime Learning Credit, which has no
limit on the number of years that it can be claimed, gives up to $2,000 based on qualified
tuition and related expenses paid for all eligible students enrolled in eligible educational
institutions. Education expenses that qualify for the Lifetime Learning Credit are for
courses taken as part of a post-secondary degree program or taken to improve of acquire
job skills. Those with modified AGI of $64,000 or more are not eligible to claim the credit;
those with a modified AGI of between $54,000 and $64,000 will claim a phased out tax
credit.
This module focuses on a specific tax credit, which is directly related to my studies,
focused on students. Though the audience is narrowed to students, the module is
nonetheless useful to me and informative. It outlines the different requirements the
educational tax credits may have as well as the exact amount of AGI where the credit either
phases out or is denied. This module also provided several examples as well as questions to
guide me through the information. With clear and concise information, this source is
undeniably effective at presenting the information and is very beneficial to me and my
studies.

Module 12: Refund, Amount Due, and Recordkeeping. IRS,

apps.irs.gov/app/understandingTaxes/student/hows_mod12.jsp. Accessed 29 Oct.
2016.

The module revolved around three topics: refunds, amount dues, and record-
keeping. Taxpayers receive refunds, which are from the government, when their total tax
payments are greater than the total tax. When total tax payments are greater than total tax,
taxpayers can receive the refund by direct deposit to their bank account, receive a split
refund dividing their refund, in any proportion they want, and direct the money in up to
three different bank accounts, receive the refund by check in the mail, or apply the refund
to the estimated tax for the following year. On the other hand, taxpayers must pay an
amount due to the government when the total tax is greater than their total tax payments.
When this happens, the taxpayer can either pay by check, credit card, or direct debit from
their bank account. Taxpayers need to keep good records to support all items on their tax
returns. Its important to keep good record to identify sources of income, keep track of
expenses, prepare tax returns quickly and accurately, and support items reported on tax
returns. Taxpayers should keep their tax-related documents for at least three years.
This source focuses on topics that arent particularly relevant to my topic;
nonetheless, the module offers clear and comprehensive information about refunds,
amounts due, and record keeping. It describes what options taxpayers have for refunds and
amounts due as well as why record-keeping is so important. The module offered various in-
depth examples to guide me through these topics. Overall, though the information the
source provides is very coherent and precise, the information that the module is about isnt
relevant to my studies, so this source isnt very helpful to me.

National Tax Association. National Tax Association, www.ntanet.org/. Accessed 8 Oct.

2016.

The National Tax Association website offers a wide range of resources about public
finance. It also features in-depth information about the association itself, past and future
events,and awards that it offers. Among the publications the association offers, the National
Tax Journal by far has the most information and resources. The website also offers an
abundance of information about the associations board members. Additionally, the website
offers companies to post job listings related to taxes on the website, where job-seekers can
see and apply for the job.
This website is not going to be helpful or informative for me. The website itself
doesnt offer much substance about taxes, and the National Tax Journal under the
Publications tab is not very beneficial for me. After skimming through many of the articles,
Ive concluded that little to none of the articles will be really helpful for my studies.
Though the articles are irrelevant to my studies, they are extremely professional and in-
depth.

Neumann, Jeannette, and Saabira Chaudhuri. How to Lower Your Property Taxes. The
Wall Street Journal [New York City], 20 Aug. 2011.

This article focuses on how a typical homeowners could lower their property taxes.
It claims that property taxes have been steadily increasing over recent years, but
homeowners can take multiple steps to attempt to reduce their property taxes. In fact, it
suggests that over 50% of homeowners are paying too much in property taxes. The local
government assigns values to houses in order to determine property taxes, which are
usually based on appraisals. The key to reducing your property tax is to double check your
assessors work. Since its hard to closely examine every house, house values are often
calculated by superficial means. Though errors tend to be insignificant when they do
appear, large-scale blunders are not unheard of. About a quarter of residential property
appeals result in a lower value assessment, so it cant hurt to file for an appeal. In order to
check your assessment, the source claims that reviewing the property record card is the
most important step to take. Assessors could overestimate the number of room in a house,
for example, and correcting simple facts could go a long way towards saving money from
property taxes.
This article is very helpful to me because it provides in-depth information and
analysis on lowering property taxes, which is one of the major taxes homeowners have to
pay. Not only did I gain a clear understanding and better background on property taxes, but
Ive also learned the specific steps one should take to appeal residential property
assessments. Furthermore, the source also suggests different ways of approaching the
process of appealing. For example, those who dont want to directly get involved can hire a
firm or consultant to file an appeal for them. Overall, this article does an excellent job
outlining the steps of lowering property taxes, and it will be very useful for me.

OBrien, Elizabeth. Your Tax-Cut Window. Money, Sept. 2016.

This magazine article details how to take advantage of your tax brackets. For more
retirees, their income is low, which results in a lower tax bracket; thus, they pay a lower
federal tax rate o their highest income. However, if they are patiently waiting to tap their
tax-deferred accounts and delaying Social Security, they may pop back up to a higher tax
bracket, resulting in more taxes due. This article provides a couple of strategies to take
advantage of tax brackets. One way is to switch to a Roth, which can significantly reduce
your future taxable income. Though youll owe ordinary income taxes on the amount
converted to a Roth, once youre in a lower tax bracket, your tax bill may become smaller
than it would have been a few years earlier or later. However, if youre under 65 and buying
subsidized health insurance, a Roth conversion is probably less effective; converting will
increase your income, ultimately decreasing your subsidy. Another option is to make earlier
withdrawals in a lower tax bracket from tax-deferred accounts (as long as youre over 59.5,
youll avoid the 10% penalty). Claiming withdrawals earlier could help you delay claiming
Social Security, ensuring a higher payout when you do file and giving you income to live
off before then; it also lowers your future tax liability on your retirement account by
reducing the balance. The last strategy is to sell some stocks. If youre on or below the 15%
federal tax bracket, you dont owe capital gains taxes on the sale of securities youve held
for more than one year.
This source provides a few effective ways to reduce the taxes taxpayers may have to
pay. The article was mainly directed towards retirees or soon to be retirees; even though its
a narrow audience, the article provides solid, clear strategies, which could drastically
benefit the audience. The article was also written extremely recently (September 2016), so
the information the article offers is definitely reliable and updated. Overall, the source will
be very helpful because of the clear, reliable information the article offers, despite the
limited audience.

Qin, Emily. Interview. 29 Oct. 2016.

Emily Qin, an employee at John Zheng & Associates, just joined the company this
year. She is 24 and obtained a masters degree in accounting at the University of Maryland.
She was born in China but moved to Maryland with her parents when she was 8.

7 Smart Ways to Lower Your Taxable Income. Kiplinger, Kiplinger Washington Editors,
www.kiplinger.com/slideshow/taxes/T055-S003-lower-your-taxable-
income/index.html. Accessed 29 Oct. 2016.
 The article provides seven helpful tips to lower taxable income. Since tax can be
based upon income, lowering income that is reported can lower the amount of tax paid. One
way to reduce taxable income is to contribute some income to employer-sponsored
retirement plans such as 401(k). With a side job, up to 20% of net self-employment income
can be contributed to Simplified Employee Pension. Also, donating to charity with valid
proof before December 31 will reduce taxable income. Donating appreciated securities that
have been owned more than one year to charity can prevent paying taxes on capital gains. If
donations or appreciated securities are not available, opening a donor-advised fund will sell
the securities and add proceeds to the account, allowing to decide where the money is going
to be donated. Another way to pay less on taxable income is by paying property tax bill
early. Property tax bill that may be due in January can be payed before December 31 to
allow deduction from taxable income. Selling stocks that is a loser before the end of the
year can offset capital-gains income. If the losses excess the gains, up to $3,000 can be
deducted from taxable income. Although investments should not be based on tax impact,
avoiding winning stocks until January 1 is advised. Once a new year starts, the gains will
not be a part of the previous years taxable income. While a bonus may seem great, an end
of the year bonus will increase the years taxable income. If the bonus is paid on January, it
will not contribute to the years tax; however, if the employer has announced that it will pay
the bonus in December, the bonus will contribute to the years tax even if the check does
not arrive until January. Lastly, getting any costy and necessary medical procedure can
prevent deduction from unreimbursed medical expenses that exceed 10% of adjusted gross
income. If the medical or dental work is scheduled before the end of the year, the 10% bar
can be cleared.
The source provides many different plausible and simple ways one can lower
taxable income. Since taxable income is one of the most effective ways to lower taxes,
taking advantage of the methods can substantially lower taxes. Though the article is
specific to 2015 tax return, the advices can be used for all years. Suggestions such as
delaying bonuses and buying winning stocks are specific to reducing taxes for the one year,
but donations and adding into retirement plans are helpful in deducting the tax. The article
is very useful for me because it provides specific, legal, and plausible ways one can
decrease their taxes. Overall, the article is applicable to everyone who earns a salary and
receive taxed income. They can utilize the tips to decrease what they pay in tax.

16 Legal Secrets to Reducing Your Taxes. U.S. News, U.S. News & World Report,
money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2014/03/11/17-
legal-secrets-to-reducing-your-taxes. Accessed 29 Oct. 2016.

The article from Usnews provides 16 helpful and plausible ways to reduce taxes.
The first suggestion provided articulates that retirement accounts contributions are a top
tax-reduction tool. Most contributions deduct money from taxable income into retirement
accounts, reducing total taxable income. The funds also increase without being taxed until
retirement, allowing a secure retirement fund. Also, contributions to a health savings
account for those with high-deductible medical plans can be rolled over indefinitely and
increase without tax set on them. Another way to decrease tax is by combining a vacation
with a business trip. This allows reduction in the vacation cost because of the deduction of
a percent of the unreimbursed expenses spent on business from the total costs. Also, taking
the home office deduction for side businesses or self-employers can deduct the percent of
the home that is used for the business. For example, if one-fifth of the house is being used
as a home office, then one-fifth of rent and utility fees for the home office are deductible.
When self-employed either full time or part time, the individuals are eligible for many tax
deductions for expenses that may have anything to do with the business. Self-employed
individuals who pay 100% of Social Security taxes can deduct 50% of the taxes paid. If a
vehicle is driven to satellite offices or for business, mileage costs can be deducted. The
American Opportunity Tax Credit can be utilized for tax credits that are deducted from the
tax owed. As long as certain income requirements regarding school courses that improve
job skills are met, certain percentages of an amount of money spent on qualifying colleges
can be received as tax credit. For up to $2,000 a year, the Lifetime Learning Credit can
used for adults receiving education and training to help pay for college and educational
expenses that improve job skills. State sales tax helps itemizers deduct state income or state
sales taxes paid especially for those who live in a state without income taxes. For investors,
adding in all of the reinvested dividends while calculating the cost basis after selling a
financial asset increases cost basis and lowers capital gain when selling the investment.
Donations of checks, cash, goods, and clothing are all deductible when made with payroll
deduction. Even the cash donations for Salvation Army and church can be included. If
parents have paid back the student loans, the IRS assumes that the money was given to the
student who is credited for paying the debt, causing the student to be able to deduct up to
$2,500 of student loan interest. Being part of the military reserves such as the National
Guard will allow deductions from lodging, half the cost of meals, and mileage costs.
This article by Barbara Friedberg provides many different ways one can understand
and increase tax deductions and credits. She emphasises the benefits of reductions by
depicting a scenario where $1,000 is owed in taxes. If a $150 tax credit is earned, the tax
owed decreases to $850, leaving $150 to keep in possession. Although all 16 tips may not
be applicable to all individuals looking for tax cuts, the variety of ways allow tax
deductions in many small areas that can slowly build up tax credit. For example, for adults
who are in college, the Lifetime Learning Credit can be used to store credit for up to $2,000
per year. The article is extremely helpful because it provides many ways tax can be
deducted and credit can be stored. It also gave me many useful information about what tax
deduction and credit are. Overall, the abundant amount of tips that apply to many varieties
of people is useful for when I research which tax cuts can be used for people in specific
situations.

Wang, Mancy. Interview. 29 Oct. 2016.

Mancy Wang, an employee at John Zheng & Associates, has been working for the
company for the past 3 years. She went to UMBC, where she obtained a bachelors degree
in financial economics. She is 29 and is a mother of two children, ages 1 and 3.
What Is My Tax Bracket? Time, time.com/money/2791931/what-is-my-tax-bracket/.
Accessed 29 Oct. 2016.

This article outlines information about tax brackets, which are marginal tax rates.
Tax brackets are the highest percentage of your income you may have to pay in federal
taxes. Tax brackets range from 10% all the way to 39.6% and are determined by your
income. Though these percentages may seem intimidating, youll likely pay federal taxes
much lower than your tax bracket. This is because different portions of your income fall
into different brackets, leading to a much lower amount of federal taxes you may have to
pay. Here is an example: Lets say it is 2014 and your income is $89,000. Having an
income of $89,000 puts you in the 25% bracket, but you wont have to pay 25% of your
income in federal taxes. The $9,075 is taxed at 15%, and everything in between $9,075 and
$36,900 is taxed at 15%. The remaining $43,025 is taxed at 25%. In addition to the
proportional rate at which your tax is calculated, youll likely qualify for tax credits or
deductions, which will further reduce the taxes you may have to pay.
This article is very beneficial to me because it offers clear information about tax
brackets and even provides a clear example as to how it works. Ive often seen the term
tax bracket used in my studies, and Ive had a general idea of what they were, but this
article helped me grasp a very solid understanding of tax brackets. Even though the article
is brief, I believe it details all the essential elements of tax brackets, since its a very simple
concept. Overall, this article provided clear and concise information about tax brackets and
how they work and is very helpful to my studies.

What is the Alternative Minimum Tax and What Can I Do to Avoid It. Time,
time.com/money/2791933/alternative-minimum-tax-amt-avoid/. Accessed 29 Oct.
2016.

This article outlines what AMT is and how one could avoid paying it. AMT, or
alternative minimum tax, was originally devised to prevent wealthy taxpayers from
avoiding paying their fair share of taxes using loopholes; however, the tax has extended its
way down to much of the middle-class. Simply put, it disallows taxpayers from obtaining
many deductions, including state, local, property as well as childcare credits. When
someone does their taxes, they also have to determine their AMT; if the AMT is higher than
the taxes they would otherwise have to pay, then they would have to pay the value of the
AMT instead. Most victims of AMT are those with high state and local real estate tax
deductions, more than 4 dependents, and profits from stock options. Those who are paying
AMT can look to avoid the tax; increasing your contributions to retirement accounts, such
as a 401(k), could change your adjusted-gross income enough to avoid the AMT. If the
AMT cant be avoided, you can try to minimize the damage by deferring deductible
expenses, such as state and property taxes, to the next year.
This article introduces a new concept to me, the AMT; thus, it is helpful to me. It
does a great job outlining what AMT is offers some advice as to how to avoid it. However,
the article is short and doesnt provide much in-depth information about AMT. Because the
article is so brief, I will look into a more detailed source about AMT. Nonetheless, the
article did a great job introducing the AMT, which will probably be helpful in my studies.

What Is the Difference between a Tax Deduction and a Tax Credit? Time,
time.com/money/2791935/tax-credit-deduction-difference/. Accessed 29 Oct. 2016.

This article differentiates the terms tax credit and tax deduction. While both save
money on taxes, they arent worth the same amount. Tax credits give you more bang for
your buck than deductions. Tax credits is a dollar-for dollar reduction of the taxes you
owe. For example, a $50 tax credit means you pay $50 less in taxes. A few categories for
credits include childcare, education, and energy efficiency. Tax deduction, however,
reduced the adjusted gross income on which you are taxed. The amount you save from a
deduction is the amount of the deduction times your marginal tax rate. For example, if
youre in the 25% tax bracket, a $200 deduction means youll pay $50 less in taxes. Though
deductions arent as effective as credits, there are more tax deductions than there are tax
credits. Which some deductions are available even if you take the standard deduction
(which anyone can take unless youre subject to the AMT), there are some deductions that
are only available to those who itemize. Deductions than are available even if you take the
standard deduction include student loan interest, contributions to a retirement account, and
job-related moving expenses.
This article is extremely helpful to me because it introduces the different between
two important tax terms: Tax credits and tax deductions. Ive seen these terms used a lot
before, and I thought they were synonymous; after reading the article, however, I now
know that they have a huge difference. Though they both serve the same purpose, which is
reducing taxes, they arent worth the same amount. In the article, however, tax deductions
are described as being in two different categories: one where its available even if you take
the standard deductions, and one that are only available to those who itemize. The article
doesnt give a clear, detailed explanation of what those are, so I will look into the topics
further. Overall, though this article is relatively brief, it was very informative for me and
gave me more topics to delve further into.

Wheres My Tax Refund? Time, time.com/money/4199696/wheres-my-tax-refund/.

Accessed 29 Oct. 2016.

This article outlines general information about tax refunds. According to the IRS,
over 70% of taxpayers (out of 150 million expected to file an individual tax return) will get
a refund. Around 90% of refunds are issued within 21 days, and the mean refund in 2014
was $2797. Taxpayers can review the status of their refunds by using the IRSs Wheres My
Refund tool or by downloading the IRS mobile app. Taxpayers should use IRS.gov to
obtain the most recent information about their refund.
This article provides a very introductory summary of tax refunds, so it is only
somewhat helpful. It details basic information about tax refunds and how to check them,
but it doesnt provide any information as to how taxpayers get tax refunds. Even so, the
article did introduce me to the topic of tax refunds, and thus, I will conduct more in-depth
research about the topic of tax refunds.

Yin, Jenny. Interview. 29 Oct. 2016.

Jenny Yin, an employee at John Zheng & Associates, has been working for the
company for the past 5 years. She went to Towson University, where she obtained a
Bachelors degree in accounting. She is 35 and has a 10-year-old son.

Yoder, Steve. 8 Smart Ways to Lower Your Taxes in Retirement. The Fiscal Times, 13
Mar. 2016, www.thefiscaltimes.com/Articles/2013/03/13/8-Smart-Ways-to-Lower-
Your-Taxes-in-Retirement. Accessed 8 Oct. 2016.

This article outlines several different ways one may save money and reduce taxes
after their retirement. One way is to strategically withdraw your money from the IRA.
When your taxable income is low a certain year, its typically better to withdraw money
that year to lower your taxes. For example, your taxable income will be lower during a year
in which you donate to charity or are paying high medical bills. Another way to save tax
money is to delay collecting Social Security checks. On average, a social security check
will be 6.25% larger for every year you delay collecting it, so delaying the check may be in
some peoples best interest. On the other hand, its a gamble; it might result in less overall
money if you die young. If someone is planning to pass down money to their children, it is
probably in his or her best interest to give them appreciated assets instead of cash. Even
though they will still have to pay capital gains tax when they sell stocks, it will be a lower
amount if they are in a lower tax bracket. If you expect your tax rates to be higher when
you retire, converting your IRA to a Roth IRA will be in your best interest. Withdrawing
money from a Roth IRA will protect you from future tax increase, so it makes an excellent
long-term contingency fund. Lastly, moving to a more tax-friendly state may significantly
decrease the amount of taxes someone may have to pay. Some tax-friendly states that may
be of interest to people who want to retire include Alaska, Nevada, and Wyoming.
This resource offers a wide-range of possibilities someone in retirement could use to
decrease the amount of taxes he or she has to pay, and thus, it is extremely helpful to my
studies. Because the article offer several diverse ways of reducing taxes, it may appeal to a
wide audience. Though the article is directed to only those who are retired or retiring soon,
it will probably appeal to most of them, since many different strategies to reduce taxes were
mentioned in the article. The article brought to my attention many topics that I didnt know
about, such as a Roth IRA, estimated taxes, and appreciated assets. Now that I know more
about these topics, I can further my research and delve into each of the topics in more
detail. Overall, this article provides excellent information about reducing taxes in
retirement and has expanded my knowledge in the world of taxes.
Zheng, John. Interview. 8 Oct. 2016.

John Zheng, my mentor, has been the owner of John Zheng & Associates for 16
years. In China, he completed a Bachelors degree in Business from Minjiang University,
located in Fuzhou. After moving to the United States, he completed a Bachelors degree for
Accounting at Towson University. Originally, when he first started his business in 2000, he
was working in the basement of his home. After 3 years, he moved his office to Catonsville,
where it still stands today. Ever since then, his company has rapidly expanded and is largely
successful.