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When preparing your taxes for the 2022 tax year, one thing you’ll need to know is your tax bracket. The IRS uses these tax brackets to identify your tax rate and determine how much you owe in taxes. This guide provides more information about these tax brackets and how they work. Keep in mind that this guide covers only general information. For more specific information regarding your personal taxes, it’s best to meet with a tax adviser.

“Closeup of a U.S. Tax Form with an emphasis on filing status — in this case, marked ‘single.’”

In This Piece

2022 Marginal Tax Brackets

To determine your tax bracket, you first need to know your filing status. There are currently five different IRS tax filing statuses: single, married filing jointly, married filing separately, qualified widow(er) and head of household. Additionally, the IRS divides these tax brackets into seven tiers that range from 10% to 37%, which are based on taxable income ranges.

2022 Tax Brackets for Married Filing Jointly and Qualifying Widow(er)s

Tax Bracket Taxable Income How Much You Might Owe (rounded to the nearest dollar)
10% $20,550 and under 10% of taxable income
12% $20,551 to $83,550 $2,055 plus 12% of taxable income over $20,550
22% $83,551 to $178,150 $9,615 plus 22% of taxable income over $83,550
24% $178,151 to $340,100 $30,427 plus 24% of taxable income over $178,150
32% $340,101 to $431,900 $69,295 plus 32% of taxable income over $340,100
35% $431,901 to $647,850 $98,671 plus 35% of taxable income over $431,900
37% $647,851 and over $174,253.50 plus 37% of taxable income over $647,850

2022 Tax Brackets for Individuals and Married Filing Separately

Tax Bracket Taxable Income How Much You Might Owe (rounded to the nearest dollar)
10% $10,275 and under 10% of taxable income
12% $10,276 to $41,775 $1,027.50 plus 12% of taxable income over $10,275
22% $41776 to $89,075 $15,213.50 plus 24% of taxable income over $89,075
24% $89,076 to $170,050 $29,502 plus 24% of taxable income over $172,750
32% $170,051 to $215,950 $34,647.50 plus 32% of taxable income over $170,050
35% $215,951 to $539,900 49,335.50 plus 35% of taxable income over $215,950
37% $539,901 or more $162,718 plus 37% of taxable income over $539,900

2022 Tax Brackets for Head of Household

Tax Bracket Taxable Income How Much You Might Owe (rounded to the nearest dollar)
10% $14,650 and under 10% of taxable income
12% $14,651 to $55,900 $1,465 plus 12% of taxable income over $14,650
22% $55,901 to $89,050 $6,415 plus 22% of taxable income over $55,900
24% $89,051 to $170,050 $13,708 plus 24% of taxable income over $89,050
32% $170,051 to $215,950 $33,148 plus 32% of taxable income over $170,050
35% $215,951 to $539,900 $47,836 plus 35% of taxable income over $215,950
37% $539,901 and over $161,218.50 plus 37% of taxable income over $539,900

How Tax Brackets Work

The United States uses a progressive tax system. In basic terms, this system increases a taxpayer’s tax liability as their taxable income rises. Simply put, the higher your taxable income, the higher the amount of taxes you can expect to pay.

There are four factors impacting these tax brackets: filing status, adjusted gross income, deductions and taxable income. Each of these factors is discussed below.

Filing Status

The IRS designates five different filing statuses:

  • Single: Taxpayers who aren’t married and weren’t married at any point in 2022.
  • Married Filing Jointly: Married couples who combine their income, deductions and credit by filing their tax return together.
  • Married Filing Separately: Married couples that choose to file their tax returns separately rather than jointly.
  • Qualified Widow(er): Widow(er)s who haven’t remarried and have a qualified dependent may be able to file as a qualified widow(er) for the two years following the year their spouse dies.
  • Head of Household: Unmarried taxpayers with a qualifying dependent.

You may qualify for more than one tax filing status. It’s important to evaluate your options and determine which status provides the greatest tax benefits.

Adjusted Gross Income

Your adjusted gross income is the difference between your total gross income and any qualifying adjustments. You can calculate your AGI by taking your total gross income for the year and subtracting any qualifying deductions. However, if you work with a tax preparer or use an online tax preparation service, these services will automatically calculate your AGI based on your answers to a series of questions regarding your finances.

It’s important to note that your AGI doesn’t determine your tax bracket. Instead, you can use your AGI to determine what tax deductions you may be eligible for. With this information, you can then calculate your taxable income, which is done by taking your AGI and subtracting all eligible deductions.

Deductions

Taxpayers have the option of taking either a standard deduction or itemizing their deductions. A standard deduction is a flat amount based on your specific filing status. Itemized deductions, on the other hand, require you to complete Schedule A and make a list of your qualifying deductions.

Using the standardized deduction is the easiest and most popular route. However, you may be able to decrease your tax liability by itemizing your deductions instead. It’s important to evaluate your specific situation to determine which option is best for you.

Here’s a look at the standard deduction amounts for the 2022 tax year.

  • Single: $12,950
  • Married Filing Jointly: $25,900
  • Married Filing Separately: $12,950
  • Qualifying Widow(er): $15,900
  • Head of Household: $19,400

Taxable Income

Once you calculate your AGI, you can subtract your standard or itemized deduction from your AGI to determine your taxable income. For instance, if you’re married and filing jointly with a combined income of $120,000 and you choose to take the standard deduction, your taxable income would be $94,100.

Examples of AGI and Federal Tax Brackets in Action

Now that you understand how to calculate your taxable income, let’s look at a few examples.

  • Jane has an AGI of $64,500 and is filing as head of household. She opts for the standard deduction of $19,400, bringing her taxable income to $45,100. Using the tables above
  • She owes 10% of the first $14,650, or $1,465.
  • Plus 12% on $30,450, the remainder of her income, or $3,654.
  • This brings her tax liability to $5,119 before any eligible credits.
  • Sarah and John have a combined income of $126,700 and their status is married filing jointly. They opt for the standard deduction of $25,900, which brings their taxable income to $100,800. Using the tables above:
  • They owe 10% of the first $20,550, or $2,055.
  • Plus 12% on $63,000, the amount of their income between $20,550 and $83,550, or $7,560,
  • Plus 22% on $17,250, which represents their income over $83,550, or $3,795.
  • This brings their total tax liability to $13,410.

Just because you have a big tax liability, it doesn’t necessarily mean you’ll owe a lot of money at the end of the year. In most cases, taxes are taken from every paycheck. You can deduct this amount from your total tax liability. For example, if Sarah and John, in the example above, paid $12,000 throughout the year from their wages, they’d only owe $1,410 when they file their taxes.

If, however, you do have a big tax liability, you may want to talk to a tax adviser, because how you pay your taxes could impact your credit score.

Tax Brackets and State Income Tax

States have the freedom to set their own personal income tax rules, which may or may not be similar to the federal tax system.

Of the 50 states, eight have no state personal tax:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

An additional nine states use a flat rate system, where all taxpayers pay the same percentage of their income. These states are:

  • Colorado
  • Illinois
  • Indiana
  • Kentucky
  • Massachusetts
  • Michigan
  • North Carolina
  • Pennsylvania
  • Utah

The remaining 33 states, along with the District of Columbia, use a progressive tax scale similar to the one the IRS uses.

Maximize Your Tax Return

Understanding how the tax brackets for 2022 work can help you maximize your tax return and minimize your overall tax liability. You can use tax preparation software now to enter your anticipated information to estimate your tax liability now. Additionally, there are several ways you can file your taxes for free to help save you even more money.

Learn more about preparing your taxes with this tax guide.

Source: credit.com

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The process of getting into college actually starts long before you fill out your first application. In fact, soon after you start high school, it can be a good idea to start laying the groundwork for college, from choosing the right classes to thinking about where you might like to go to figuring out how you’re going to cover the cost.

What follows is a simple five-step, pre-college plan that can help you find, get into, and pay for your dream school.

Preparing For College: A 5-Part Checklist

For many things in life, preparation is the key to success. And this is certainly true when it comes to getting into college. Here are five steps that can help you set yourself up for a successful college experience.

1. Research Your Dream School

One of the first parts of preparing for college is deciding which college or university is right for you. The good news is that there is a school out there for just about everyone. The bad news is that you have so many options that you might be overwhelmed with choices.

Some students know right away that they want to go to the same school their parents went to, while others may be limited to choosing between a few in-state campuses. Regardless of your position, there are some questions you can ask yourself to help narrow down your college search:

What Type of Career Do You Want to Pursue?

One of the first things you might consider is what you hope to do with your degree. If you already know that you want to be an urban planner, then you may want to focus your college search on schools with stellar urban planning programs. Think your dream is too niche?

Whether you want to study auctioneering or Egyptology, there’s likely a program for you. If, on the other hand, you aren’t sure what you want to major in, you may want to look at bigger schools with many different programs where you will be able to take a wide variety of classes.
💡 Quick Tip: When shopping for a private student loan lender, look for benefits that help lower your monthly payment.

Where Do You Want to be Located?

You may also want to consider what type of location you’re looking for in a college experience. Maybe you want to get as far away from home as possible, or maybe you would be more comfortable on a campus within driving distance of your family. Some students choose to live at home and attend a local college in order to save money on living costs. Once you narrow down a location, you can start searching for schools in that area.

Recommended: Should I Go to Community College?

How Many Schools Will You Apply To?

It’s not a bad idea to apply to multiple schools even if you have your heart set on just one. Your dreams and goals can change through the college application process, and a different school may be a better match when it comes time to make a final decision. Plus, the application process can be competitive, and applying to more schools may give you more chance of success in your application.

Recommended: College vs University: What’s the Difference?

2. Plan For the SAT and ACT

Once you know where you want to apply, it is time to get down to business and start preparing for college entrance exams. Some schools require the Scholastic Aptitude Test, known as the SAT, and some schools require American College Testing, known as the ACT. Many schools will accept either one.

The key to working towards a killer score on either test is preparation, preparation, preparation. Whether you’re taking an after-school prep class or studying by yourself, there are lots of resources available online to help you succeed. Both the SAT and the ACT offer free practice tests, and Khan Academy offers a free SAT practice program .

Taking practice tests can help you not only learn the material but can help you get comfortable with the format of the test. This can help you stay calm and confident when test day rolls around.

Recommended: Do Your SAT Scores Really Matter for College?

3. Get Involved In Extracurriculars

In between all that studying, you may want to consider taking some time to get to work in your community. One thing many colleges look for are multi-faceted students who are interested in more than just academics.

That means that getting involved in the community could potentially help you write a strong college application, and it may also help you decide what you want to do with your life. Sports obsessed? You might consider taking up a new sport to round out your classes or volunteering to coach a local youth team.

More into classic literature than shooting hoops? Many schools have programs where you can volunteer to tutor younger students, which can not only help sharpen your skills, but may look great on an application. Whatever you’re into, don’t be afraid to branch out and try something new — you might discover you have a passion for marine biology after organizing a beach clean up day with your classmates.

Recommended: College Planning Checklist for Parents

4. Consider Taking AP Courses

Many schools offer Advanced Placement or “AP” courses. Taking these classes may help you get one step ahead when it comes to college. AP courses allow you to tackle college-level material while you’re still in high school, and at the end of the class (if you pass the AP exam), you could be rewarded with college credits. Why try to rack up college credits in high school?

The more credits you earn from AP classes in high school, the more intro classes you may be able to skip in college. So if you take AP English in high school, you may qualify to skip out on the freshman level English class once you’re at school.

Depending on the school, that may mean that you have more opportunity to take specialized classes in your major, or it could even lead to the opportunity to graduate early.

5. Figure Out Your Finances

There’s no denying that college can be expensive. For the 2022-2023 academic year, the average tuition at a public college was $11,744 for state residents and $21,928 for out-of-state students. The average tuition and fees for a private college was $27,796. Keep in mind: These numbers don’t include the cost of housing, food, text books and supplies.

According to the Sallie Mae How America Pays for College 2023 , parent income and savings covered 50% of college costs. So, even if you’ll get some help from your family, you may need more funding to cover some of the cost of college. Fortunately, there are many ways to finance your education.

A good place to start is by filling out the Free Application for Federal Student Aid (FAFSA), which will let you know if you are eligible for financial aid, including grants, scholarships, work study, and federal student loans. If those do not cover your costs, you may also consider private student loans.

Private student loans are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans. But if you are looking for supplemental funding for your education, private student loans are an option.
💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

The college application process can be overwhelming. Breaking it down into smaller steps and goals can make it feel a little bit easier. Consider researching schools, making a plan for standardized testing, expanding your involvement in extracurriculars, and taking AP level courses. Getting into college is half the equation, however — the other half is paying for it.

When federal financial aid, scholarships, grants, and savings aren’t enough -– student loans may be one option to consider to help fill in the gaps.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Source: sofi.com

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Earning hotel elite status provides valuable benefits that enhance your stay while allowing you to earn bonus points and save money. While top-tier World of Hyatt status offers the best perks, most people don’t travel enough to earn it.

Mid-level elite status, like Hyatt Explorist, is more attainable for the average traveler. Here’s everything you need to know about Hyatt Explorist status, including how to earn it, the included benefits and if it’s worth it.

Hyatt Explorist benefits

The World of Hyatt hotel loyalty program has four levels of elite status — Member, Discoverist, Explorist and Globalist. Additionally, members can earn Lifetime Globalist status based on their cumulative spending at Hyatt properties.

When you reach this elite status level, numerous benefits improve your stay. The best Hyatt Explorist benefits are:

  • 20% bonus points: All World of Hyatt members earn five base points per dollar spent at Hyatt properties. With this 20% bonus, you’ll earn six points per dollar.

  • Complimentary upgrades: Explorist members are eligible for a free upgrade to the best available room when checking into their hotel and resort. However, suites and rooms with Club lounge access are excluded.

  • Late checkout: Enjoy your room longer with a 2 p.m. late checkout at no extra charge. This benefit is based on availability and may not be an option at some locations.

  • Guaranteed room availability: Explorist members receive guaranteed room availability when booking a paid reservation at least 72 hours in advance. This benefit ensures availability at a sold-out property when making advanced reservations.

  • Waived resort fees: Resort fees are hidden charges that many travelers don’t know about until finalizing their reservation or when checking into a hotel. These fees are waived for all members booking award reservations at Hyatt properties. Eligible reservations include rooms booked with points, credit card free nights and other free night certificates. Points and cash or paid stays do not include this benefit.

  • American Airlines bonus miles: Earn one World of Hyatt point for every dollar spent on qualifying American Airlines flights when you link your loyalty accounts. These miles are in addition to the miles earned from your flight.

How to earn Hyatt Explorist elite status

There are three primary ways that you can earn Hyatt Explorist status. The first two are based on the number of nights you stay or how many points you earn per year. A third option involves hosting meetings or events at Hyatt properties. Here’s how to get Hyatt Explorist status.

Staying at Hyatt properties

World of Hyatt members earn Explorist elite status by earning 30 qualifying nights per year. Qualifying nights include paid nights, award nights, and points and cash nights.

Limited-time promotions, such as staying four nights and getting a fifth night free would only count as four qualifying nights.

Holding a Hyatt credit card

Spending on your Hyatt card

Both Hyatt credit cards earn qualifying night credits based on your annual spending. You’ll receive two additional qualifying night credits for every $5,000 spent on the World of Hyatt Credit Card.

The World of Hyatt Business Credit Card earns five qualifying night credits for every $10,000 spent each year. Cardholders can combine nights earned from spending with their hotel stays to earn elite status.

Earning base points

Base points earned from hotel stays, on-site restaurants and other activities count toward the 50,000 points needed for Hyatt Explorist status. Members earn five base points per dollar on all eligible purchases at Hyatt hotels, Small Luxury Hotels of the World and other activities.

Bonus points earned from promotions, welcome bonuses and credit card purchases do not count as base points. They are “bonus points,” which can be used to book hotel rooms but don’t earn elite status.

Host meetings or events

Members who host ten or more meetings or events at an eligible Hyatt property earn Explorist elite status. To qualify, at least 10 paid guest rooms must be booked for the same night as the event. In some cases, there may be additional requirements for the events.

How much is Hyatt Explorist status worth?

Value of benefits

Cost to earn

Elite earning rate

Discoverist

With a cost to earn of $4,380, Explorist elite status provides members a 15% return in value. These benefits include complimentary upgrades, guaranteed room availability and waived resort fees on award reservations.

What else you need to know about Hyatt Explorist

Take advantage of Hyatt promotions

Throughout the year, Hyatt offers promotions that may accelerate your path to elite status. These promotions may include extra qualifying night credits or base points that count toward earning status. Even if you don’t have any hotel stays planned, register for every promotion in case your plans change. This will help you maximize every trip you take.

Status matches are available

Travelers that have elite status with other hotel or airline loyalty programs may qualify for a World of Hyatt status match correlating to your current status. Status matches provide elite status for a limited time. You’ll retain your elite status for the rest of the year if you meet the qualifying nights or points requirement during the promo.

How long does Hyatt Explorist status last?

The Hyatt program year runs through the end of February each year. You earn Hyatt elite status based on your activity during the calendar year. When you earn elite status, you’ll enjoy Hyatt Explorist benefits through the end of the following program year.

For example, if you achieved Hyatt Explorist status in September 2023, your elite status is good through February 28, 2025.

World of Hyatt lifetime elite status

Hyatt doesn’t offer lifetime Hyatt Explorist status, but you can earn Lifetime Globalist status based on your cumulative points earned. Ironically, you can qualify for Lifetime Globalist even if you’ve never earned Globalist status in any single year.

To qualify for Lifetime status, you need to earn 1,000,000 lifetime base points. At five base points per dollar spent at Hyatt properties, this equates to $200,000 in total spending.

Is Hyatt Explorist status worth it?

Hyatt Explorist status offers numerous benefits that make focusing your hotel reservations with one brand worthwhile. Benefits like complimentary upgrades, late checkout and waived resort fees on award nights improve your trip and save you money.

It takes 30 nights per year to earn Explorist elite status, which is an average of 2.5 nights per month. The World of Hyatt Credit Card makes it easier to earn status through additional night credits based on your annual spending.

(Top photo courtesy of Hyatt)

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

Source: nerdwallet.com

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NOTE: The tax deadline for the 2022 filing season is April 18th, 2023. Learn more about changes the IRS has made here.

Filing your taxes can be complex, time-consuming, and stressful. For these reasons, some individuals and business owners turn to professional tax preparers to handle the tax filing process for them. However, there are numerous online tax software options that allow many tax filers to file their own taxes.

You don’t want to trust your taxes to just anyone. Instead, you want to use an online tax software with a strong reputation and one that can handle all aspects of your tax return. With so many options, it can be hard to determine which online software tool is the best for your specific situation. This professional tax software comparison reviews the top four online options to help you choose the right one.

In This Piece

What Is the Best Online Tax Software?

While there are a number of professional tax software options available, there are a few with a long-standing reputation for providing effective and affordable services. It’s important to note that while this software handles most, if not all, of the tax calculations, you still need to prepare for tax season by gathering all of your tax documents.

Below is a tax software for tax professionals comparison to help you better compare your options.

TaxSlayer

With nearly 60 years of providing tax preparation services, TaxSlayer is one of the top professional tax filing services online. It offers unlimited phone and email support, as well as live chat services for Premium accounts and higher. TaxSlayer also guarantees that its software provides the greatest tax refund, or it will reimburse you the difference.

Best of all, TaxSlayer stands by its services by offering a 100% accuracy guarantee. If there are any issues with your taxes, other than user error, it covers any penalties you may incur. If you’re anticipating a tax return, you can have any service fee deducted right from your refund check to avoid any upfront, out-of-pocket expenses. 

Costs: Basic filing of 1040s are free. The Classic package is $19.95, the Premium package is $39.99 and the Self-Employed package is $49.95.

TurboTax

TurboTax is one of the most popular online tax software options available and serves millions of Americans every year. Its services come with a 7-year guarantee that ensures 100% accuracy, which means TurboTax will refund you for any penalties or interests accrued due to an error in its software.

TurboTax offers three tiers of services, including Simple, Deluxe, and Premium. The Simple package is ideal for the most basic tax returns. The Deluxe package is best for those with more credits and deductions, and the Premium plan is for investors and self-employed tax filers. Users can also upgrade to receive unlimited Live Assisted support from tax professionals or opt to have the company prepare their taxes for them.

Costs: Simple 1040 returns are free, if filed by March 31, while Deluxe services start at $59 and Premiums packages start at $105.

FreeTaxUSA

There are several ways you can file your federal taxes for free, and FreeTaxUSA is one of them. Its free services include its Basic, Advance, Premium and Self-Employed packages. These tiered packages are available to individuals, families, contractors, self-employed taxpayers and small-business owners.

TaxFreeUSA also offers a Deluxe package that includes live chat service for an additional fee. State tax filing services start at $14.99. You can import your W-2s and previous year’s taxes for easier filing. Its services include a 100% accuracy guarantee, as well as free federal tax extension filing services and unlimited amends.

Cost: Federal tax filing is free, but you can upgrade to the $7.99 Deluxe package that includes live chat support. State tax filing services start at $14.99.

TaxAct

TaxAct is another popular online tax filing service company. It offers four tiered packages, including its free basic version for simple tax returns, its Deluxe package for taxpayers with loans and children, its Premier package that is designed for investors and its Self-Employed package for those who are self-employed, contractors and small-business owners. All packages include live support through its free Xpert Assist services.

TaxAct lets you import information from your previous year’s tax returns and current year W-2s to simplify the tax filing process. It also offers an accuracy guarantee that covers any penalties and interest you incur (up to $100,000) if there is an error in your tax return due to TaxAct software.  

Cost: Basic tax filing services are free. The Deluxe package is $24.98, the Premier package is $34.95 and the Self-Employed package is $64.98.

What to Know about Online Tax Preparation Software

Before selecting an online tax filing service, it’s important to do your research. This online tax service comparison can help you identify the different services various tax filing companies offer. All the services companies listed above offer an accuracy guarantee, which can protect you if there’s an error in the software.

After you compare tax software, it’s important to choose the right package. For example, if you own your own home or have children, you likely won’t qualify for the basic package. If, on the other hand, you’re an investor or self-employed, the premium package might be the best option.

Get Help with Your Taxes

If you’re uneasy about doing your own taxes or have additional concerns, don’t hesitate to reach out to a tax professional, such as a CPA, for tax advice or tax filing services. For more tax tips and resources, check out Credit.com’s online tax education resources.

Source: credit.com

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Studies show that parents spend, on average, more than $650 per child on back-to-school supplies. This number is even higher for adult children heading off to college. With ongoing inflation concerns and rising costs, you, like many other parents, are likely looking for ways to reduce these costs as much as possible.

If you’re lucky enough to live in one of the states that offer tax-free weekends right before school starts, this may be one of your best chances for saving money on clothes, shoes and school supplies. While these events can’t show you how to get more money on your tax return, they can help you save money on sales tax on the supplies you buy now.

What is a tax-free weekend? Keep reading to find the answer to this question and see if your state participates.

tax free weekend

In This Piece

  1. What Is a Tax-Free Weekend?
  2. What States Do Tax-Free Weekends?
  3. When Does Tax-Free Weekend Happen?
  4. How to Prepare for a Tax-Free Weekend
  5. Prepare for Tax Season

What Is a Tax-Free Weekend?

As the name suggests, tax-free weekend is a designated weekend, or in some cases even longer, when the state agrees not to collect sales tax on specific items. The idea for tax-free weekends started as a way of helping parents offset some of the costs for back-to-school supplies, such as clothing, shoes and computers. Many states also set limits on what items are tax-free. For example, in many states, only clothing items that cost $100 or less are eligible.

These weekends include both in-store and online purchases. Each state has its own rules for which items you can purchase tax-free and which you can’t. It’s important to understand the specific details of your state before you start shopping.

How Many States Have Tax-Free Weekends?

The number of states scheduling these weekends seems to grow every year. In 2022, a total of 20 states held one or more tax-free weekends, or weeks, during the year.

What States Do Tax-Free Weekends?

First, it’s important to note that five states, including Alaska, Delaware, Montana, New Hampshire and Oregon, don’t have a sales tax, so it makes sense that they wouldn’t participate in these events. Out of the other 45 states, 20 held at least one tax-free weekend.

Participating states in 2022 were:

  • Alabama
  • Arkansas
  • Connecticut
  • Florida
  • Illinois
  • Iowa
  • Maryland
  • Massachusetts
  • Mississippi
  • Missouri
  • Nevada (only for members of the National Guard)
  • New Jersey
  • New Mexico
  • Ohio
  • Oklahoma
  • South Carolina
  • Tennessee
  • Texas
  • Virginia
  • West Virginia

When Does Tax-Free Weekend Happen?

When is the tax-free weekend? That depends on where you live. Because tax-free weekend is not a national event, each state sets its own dates and determines how long the event will last. For example, Iowa’s tax-free event runs from Friday to Saturday, while New Jersey holds weeklong tax-free events.

Additionally, some states are starting to hold two tax-free events each year. For example, Florida holds its standard back-to-school tax-free event in late July but also has a tax-free event for outdoor recreational items in early July. Some states are also holding special tax-free events. For instance, in 2022, Tennessee held a tax-free event on groceries for the entire month of August as well as a year-long tax holiday on gun safety products such as gun safes.

When Does Tax-Free Weekend Start?

Because the main goal for tax-free weekends is to help parents offset the cost of school supplies, most states hold their event close to the beginning of the school year. For instance, states with an early start date for school, including Alabama, Mississippi and Florida, typically hold their weekend in July, while other states, such as Missouri, Oklahoma, and South Carolina, wait until August to hold their tax-free weekend.

You can check with your state offices to find out exactly when it starts in your state. Because these tax-free events include online sales, most events begin just after midnight, at 12:01 a.m. on the first day of the event.

When Does a Tax-Free Weekend End?

For a majority of participating states, these events last the entire weekend, including Friday, Saturday and Sunday. Some states, such as Iowa and Arkansas, only hold 2-day tax-free events, while other states, including Florida, New Jersey and Illinois, have weeklong events. Because most of these events begin just after midnight on day one, they often end just before midnight at 11:59 p.m. on the last day of the event.

How to Prepare for a Tax-Free Weekend

If you’re fortunate enough to live in a state that holds tax-free weekends, you want to make sure you head into this event prepared. Here’s a list of tips that can help you make the most of these tax-free events.

Find Out What’s Included

The last thing you want to do is get to the register just to find out some of the items you want to purchase aren’t tax-free. You can avoid this hassle by checking your state’s list of eligible items. If you’re shopping online, make sure no tax was added to eligible items. If you’re shopping in-store, always double-check if you’re not sure what items are tax-free.

Know the Limits

Most states also set limits on how much an item can cost to remain tax-free. In almost all cases, these limits are based on the price per item and not the total of everything you purchase. Be sure to check these limits and track the items you’re purchasing to make sure you don’t purchase ineligible items.

Set a Shopping Budget

Before the event starts, sit down and set a shopping budget. This step can make sure you stay focused on purchasing the things you need the most and prevent you from spending too much money.

Look for Bargains

Tax-free weekends don’t affect the stores’ profits. So, in an attempt to attract the most customers, many stores run sales during these special events. Check out various stores’ online ads to find out which ones are offering the best deals on the school supplies you need most.

Focus on Big-Ticket Items

If you want to get the biggest bang for your buck, focus on purchasing the most high-value items on your shopping list first. This practice can help you save the most amount of money. Just be careful that all the items you purchase are under the eligibility limits.

Prepare for Tax Season

Don’t miss out on the significant amount of savings you can receive at these tax-free events. Do your research and plan ahead. The same can be said about filing your taxes at the end of the year. You always want to do your research and understand how the IRS determines how much tax you owe.

Unless you plan to have a professional complete your taxes, you also want to know how to do taxes. Understanding how the tax filing process works and what credits and tax deductions you can take can help minimize your overall tax burden. If you need more help with your taxes, check out Credit.com’s tax center.

Source: credit.com

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How Much Money Do You Lose to Taxes, and Do You Care?

About half of Americans would rather get a bigger tax refund than an extra $115 per paycheck, according to a recent survey Credit.com conducted. But a bigger tax refund isn’t always a good thing. Learn more about what you can do with a larger paycheck.

Methodology

Note: This survey was conducted for Credit.com using Suzy.com. The sample consisted of a total of 1,028 responses per question and is not statistically representative of the general population. This survey was conducted in October 2022.

In This Piece

  1. More Than Half of Americans Prefer a Larger Tax Refund
  2. What Can You Do with a Bigger Paycheck Instead?
  3. How Can You Earn More Money Throughout the Year?
  4. Ways to Get a Bigger Tax Refund

More Than Half of Americans Prefer a Larger Tax Refund 

We asked more than 1,000 people aged 18 to 99 whether they’d like a $3,000 tax refund or $115 more in take-home pay on each paycheck. Surprisingly, 52% of the respondents in our tax refund survey said they’d take the bigger tax refund. 

Men were more likely to choose the bigger tax refund, at 54.2%, and millennials aged 25 to 34 were the most likely age group to choose the bigger tax refund. People aged 18 to 24 were least likely to say they’d take the bigger tax refund.

It’s important to note that in many cases, getting a tax refund means you overpaid the IRS throughout the year. You could’ve kept the money yourself and put it to work for all those months instead of letting the government earn interest on it. If you’re not sure what your tax refund might look like, see how you can maximize your tax refund so you can plan ahead.

What Can You Do With a Bigger Paycheck Instead? 

To find out how much money you lose to taxes, learn how to read a pay stub so you can add up your tax payments. If you’re paying too much and getting a refund every year, you can adjust your withholdings to get more out of your paycheck every payday. Here are a few things you can do with a bigger paycheck:

  • Invest more in retirement. When you’re paying less to the federal or state government every pay period, you have more money to invest in retirement. If you were already getting along without this extra money every pay period, it might be a good idea to contribute it to a 401(k) or other tax-deferred accounts. If your employer offers a contribution match, this is a great way to maximize retirement savings.
  • Pay off more debt. Alternatively, funnel that extra money every paycheck into paying off debt. Every little extra bit you can pay off each month cuts down on long-term interest expenses, so you may be able to save yourself a lot in the long term.
  • Invest in savings accounts. Sock the money away in savings accounts with high-interest yields for an easy, safe way to earn a little money on your cash. Savings accounts also ensure your money is readily available if you need it.

How Can You Earn More Money Throughout the Year? 

What if you’ve already adjusted your tax withholdings so you’re not losing money every pay period to taxes unnecessarily? If you want more take-home income every month, you may have to look for other ways of earning money, including:

  • Side hustles. Join the gig economy to make extra money delivering groceries or food, writing content for others, doing surveys or market research, babysitting, walking dogs or any number of other tasks. Remember that, as a freelancer, you’ll be responsible for paying taxes on anything you earn via a side hustle.
  • Investments. Make investments so your money is working for you. You might invest in stocks and bonds, more conservative options like CDs or property you can rent or flip for a profit.
  • Asking for a raise. Boost your paycheck by asking for a raise if you think you’ve earned it, your current job duties have grown and aren’t in line with your pay or you haven’t had a cost-of-living adjustment in some time.
  • Getting help with finances. Get help managing your finances so you can reduce your debt or interest payments. If you can lower how much you need to pay on debt every month, you have a lot more discretionary income to work with.

Ways to Get a Bigger Tax Refund 

If after everything above you still agree with the 52% of respondents in our survey who said they’d rather have a bigger tax refund, there are some things you can do to get one. They include:

  • Adjusting your withholdings so more is taken out in taxes each paycheck. Note that this will reduce how much you take home out of each paycheck.
  • Maximizing your tax refund. While you can do your taxes for free, you may find paid tax filing software has more options for increasing your refund via credits and deductions.
  • Get expert help with taxes. Work with professionals who can help you learn more about your tax situation and how you can maximize your refund. Start with information on Credit.com to get help with your taxes.

Source: credit.com

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Studying abroad offers a unique opportunity to expand your cultural horizons, build valuable skills and prepare for the global workforce. More than 300,000 U.S. students study abroad each year, according to the State Department.

There isn’t one way to study abroad in college: Programs can vary by cost, length, level of cultural immersion and more. So you’ll have to do some research to see which is a good fit for your academic, personal and financial goals.

Follow these steps to tailor your study abroad experience.

Research study abroad programs (early!)

Begin researching study abroad options at least four to 12 months before when you’d like to start your program. This gives you time to apply for a passport, meet with an advisor and make a financial plan to pay for studying and living outside the U.S. Make sure to keep track of application requirements and deadlines as you do your research.

Students often study abroad during their sophomore or junior year of college, but there are exceptions. For example, some incoming students at New York University can apply to spend their entire first year of college at international campuses in England, Spain or Italy. Studying abroad earlier in your college career could mean more academic flexibility, since you won’t be scrambling to fulfill major requirements yet.

If you’re a high school student set on studying abroad in the future, consider applying to colleges that have robust programs. For example, Vermont’s Middlebury College offers 90 programs in more than 40 countries — and over half of its junior class studies abroad. And Pennsylvania State University has more than 300 programs across 50 countries.

Choose the right program for you

Whether it’s a summer language course in Beijing or a full semester of engineering classes in Sydney, taking classes in another country offers a wide range of experiences. The costs of studying abroad can vary widely, too, but you can use scholarships, grants and federal and private student loans for some programs.

With hundreds of options available, determine your top priorities to help narrow down the list. Start by defining your personal goals. Then, look at factors like program administration, academics, location, language of instruction and how your credits will transfer to your home institution.

Your college’s study abroad office — sometimes also called “education abroad,” “global education” or “international studies” — is a valuable resource. Study abroad advisors can help identify programs that align with your goals and academic requirements and guide you throughout the application and enrollment process.

Here are a few of the most common types of study abroad programs.

Exchange programs

Your home university may partner with an institution abroad and offer a student exchange program. Participating students usually pay their typical tuition and fees to their home university while studying abroad — which could be an in-state student rate — and enjoy much of the same financial aid they normally do, like federal student loans.

Exchange programs offer high levels of cultural immersion, since students take classes alongside full-time students at the partner university. Students can also expect support and guidance from their home and partner universities, since they’ve already established a relationship.

Faculty-led study abroad

Professors at your home university may lead study abroad trips. These programs usually last a few weeks, and take place during a school break. Instruction is typically similar to what you’d receive in the U.S. and the program may include prearranged travel. The price can vary depending on program lengths, location and more. Because these faculty-led programs often occur outside of the academic calendar, they typically cost extra on top of regular semester tuition. Financial aid may apply.

You’ll likely study alongside students from your home university, which may limit cultural immersion. Faculty-led programs could work for those who’ve never traveled abroad or want a shorter-term program in a specific academic area.

Direct enrollment at a foreign university

U.S. students may enroll directly at a foreign university for a period of time and still receive course credit at their home university. Students pay international tuition rates directly to the foreign school. This route may be more or less expensive than a prearranged exchange program, depending on the tuition you’re paying at your home university and what you’ll pay abroad. It also requires more research to determine if you’re eligible to enroll and receive academic credit.

This may be a good choice if you’re not interested in any of the options offered by your home college, if you aim to live and study among foreign students only or if you want a high level of independence.

Third-party study abroad programs

Third-party study abroad providers like Academic Programs International (API), Council on International Educational Exchange (CIEE) and DIS offer a variety of study abroad programs. These are good options if you’re looking to study alongside international students from different schools and countries, or if you want a unique experience not offered by other programs. The costs of these programs vary widely, but they tend to be more expensive.

On average, semesters abroad arranged by a third-party provider were $8,718 to $17,933 in 2019, according to research from study abroad program database GoAbroad.

Check with your home university’s study abroad office for a list of preapproved third-party providers and programs to ensure your credits will transfer.

Internships, research and volunteering

Studying abroad doesn’t always require studying. Some programs are designed around research, internship or volunteer opportunities. Sometimes, these types of study abroad programs can help you earn academic credit toward your degree. You may also enroll in related classes abroad while participating.

With this route, you’ll be immersed in the workplace and community of your country of study. Despite working, you may still need to pay for the program, in addition to flights and housing. Program costs can vary.

Apply

Once you’ve found a few study abroad programs that look compelling and you understand the costs, you’ll need to start the application process. This will look different depending on the program, but many applications include similar components: letters of recommendation, transcripts, personal essays and language requirements when applicable.

Just like the research process, it’s important to start your application early. Get organized and reach out to professors for letters of recommendation, if necessary, well before the deadline. You may also need to meet with an advisor at your school’s study abroad office.

Make your application stand out by demonstrating clear academic objectives, personal interest in the program and a strong transcript.

Secure funding

For costs you can’t cover upfront, prioritize aid you don’t need to pay back, like scholarships.

Private student loans can fill any funding gaps, but they should be a last resort. They don’t have the same protections and perks as federal loans.

Work-study and the need-based Pell Grant cannot be used for study abroad. However, the State Department’s competitive Benjamin A. Gilman International Scholarship Program is designed to help Pell recipients pay for international study. The top award is $5,000. Check out the full list of study abroad scholarships offered by the U.S. government and foreign governments on the State Department’s USA StudyAbroad website.

Plan your logistics

The logistics of moving to another country can be daunting, even when you have a study abroad coordinator helping you through the process. Note these important factors as you plan.

Passports and student visas

Keep track of relevant student visa requirements and deadlines. Depending on your country of study, visa processing can take from a few days to months. You may need to move quickly after getting accepted to a program.

You’ll likely need a U.S. passport in hand before applying for a visa. If you don’t have one already, plan for processing times of at least three months.

Housing

Housing is also important to consider before hopping on your international flight. Some programs will arrange an apartment, dorm or homestay on your behalf, while others will leave finding housing up to you — which can be difficult to do in advance.

Consider what matters most to you when deciding on housing. Living with a host family may offer you higher levels of cultural and language immersion, but a dorm or apartment could mean more flexibility and independence.

Study abroad budgets

Prepare a spending plan and budget to cover the day-to-day costs of your life abroad. This may include personal travel, emergency funds, international banking fees and other expenses outside of your typical student lifestyle. Consider applying to scholarships intended for study abroad that could help out with these types of expenses.

For some students, a study abroad credit card may help them avoid high transaction fees while earning travel points to cover flights and other expenses. But be wise with your spending. Not paying off the balance each month can lead to ballooning debt.

Source: nerdwallet.com