If I Pay Off The Back Taxes On A Home, Will I Own It?

I’m Ilyce Glink and here’s today’s real estate question: If I pay off the back taxes on a home, will I actually own it? Okay here’s your answer: not quite. Let me explain. If a property owner doesn’t pay the tax bill for a piece of real estate, the county assessor can actually sell the property to someone willing to pay the taxes. But in most cases, the investor who pays the tax bill doesn’t immediately get ownership of the property. Instead, the original owner has time to repay the investor the amount of the tax bill plus some interest rate, which is called redeeming the taxes. In many counties the owner has up to two years to bring the tax bill current and the investor might receive as much as 18 percent interest over that time. Now in an era where interest rates are at historic lows, 18 percent is a pretty awesome rate of return. And many people go into buying up properties at tax sales but aren’t really looking to take possession of the property. They’d rather have the homeowner redeem the taxes and earn a good return on their initial investment. Occasionally, there are situations where a tax sale may have been in error and the person that put up the money to buy the unpaid taxes at the auction may end up getting his or her money back, but they won’t get any interest on the cash. That’s not so good. If the taxes are redeemed, then the owner actually keeps the property. But if the two-year period elapses and the owner fails to repay the amount that’s owed plus interest, the title in the property would transfer to the ivnestor. And trust me, many investors wind up with title to the property. I have a friend whose brother lost several properties he owned because he failed to pay the back taxes. This is incredible to her. The properties were worth several hundred thousand dollars apiece and the investor picked them up for less than $10,000 per property. Wow. Now, that is an amazing rate of return, right? Even if the propeties needed a tremendous amount of repair. To find out more, contact the assessor’s office in your area. Thanks for your question. Don’t forget to share this video and follow me on Twitter and Facebook. Until next time. I’m Ilyce Glink.

Pay Philadelphia taxes electronically for free

You can pay most City of Philadelphia
taxes online for free with E-Check. It’s easy, fast and secure. You need to gather four numbers to use E-Check. Your City Tax Account ID, a Personal Identification Number, or PIN, your bank account number, and a bank routing number. If you don’t already have a Tax Account ID and PIN this video will show you where to get
them later on. Find your bank account and routing numbers at the bottom of your
checks, or contact your bank to get your account
and routing numbers. To pay with E-Check, go to phila.gov/pay.
Select the tax you want to pay. You will be directed to the Department
of Revenue’s eFile/ePay website. This site allows you to file and pay most City of Philadelphia taxes electronically. It also allows you to get a City of Philadelphia Tax Account ID and PIN if you don’t have them already. To do so, select “Register for a Philadelphia Tax Account Number,” and follow the system’s prompts. You will need to provide some personal information, including your name, Social Security Number or EIN, a mailing address, a phone number, and a valid email.
Your Tax Account ID and PIN will be sent to you via email. With the four numbers in hand, you’re ready to pay with E-Check. On the website’s home page,
select “Make an Electronic Payment” from the menu on the left.
Enter your Tax Account ID and PIN numbers in this window. Select submit. Once logged into the system, you’ll see your name displayed here. From the
drop-down boxes in the center of the screen, select the tax type you want to
pay, the account ID, if you have more than one, as well as the tax year and period
you want to pay. Enter the amount you owe, and select “Make Payment.” In this page enter your correct email
address twice. When you finalize payment this will allow you to receive an email
confirmation. Select “PAY NOW.” In this page, check the payment amount. If it’s incorrect change it here. This is important: Make sure you select
E-Check from the payment options. E-Check is free and the City will not save any of your banking information. You have the option of paying with a debit or credit card, but there’s a service fee. Once you’ve picked E-Check, select “Continue.” This page contains our official vendor’s Terms & Conditions. Select “Accept.”
Next, enter or amend your information in the fields provided. Required fields are
marked with a red asterisk. Under “Check Information,” select your bank account type from the drop-down box. You are then prompted to enter your bank routing and account numbers twice. First in these fields and then again in these fields.
Once you’re done, select “Continue.” If any information on this page is incorrect, select “Edit.” If the information is correct, select “Submit.” Don’t click on submit more than once. This may cause multiple payments to go through. You can print this confirmation page for your own records. You now know how to pay City taxes with E-Check. If you still have questions visit
our website: phila.gov/revenue Please follow us on Facebook and Twitter
and subscribe to our YouTube channel for more videos like this. Thanks for watching!

Do I Need to Pay Federal Taxes? (Tax Basics 2/3)

Meet Ray. Ray is an incoming senior at State University
who just finished up a summer internship at Corporate Co. Ray had a great experience,
and made a lot of money, so he thinks he might have to submit a tax return. There’s just one problem. Ray has no idea where to start. What should he do? Well, for starters, Ray needs to figure out
whether or not he even needs to file a tax return. While this sounds complicated, it’s actually
quite simple. If Ray’s income exceeds a certain threshold,
he’ll need to file a tax return. Otherwise, he generally won’t. So what’s the threshold? Well, as of 2015, single, independent individuals
with gross income above $10,300 must file tax returns. While that may seems sizeable, keep in mind
gross income includes every major form of income, such as earned income, like from wages
and self- employment, and unearned income, like from investments and interest, so almost
everyone will clear the threshold. But that’s not the only criteria. If you have $400 worth of net earnings from
self-employment, you’ll have to file a tax return, even if you don’t meet the overall
income threshold. Finally, we come to dependents. They must also file a tax return, so long
as they exceed one of the following criteria as of 2015: $6,300 in earned income $1,050
in unearned income, $400 in net earnings from self employment, or, wait for it, gross income
that exceeds the larger of these two criteria: • $1,050
• Or earned income, up to a limit of $5,950, plus $350. We know this may all seem overwhelming. But don’t worry. The IRS actually has a great “Do I Need
to File” Tool that will walk you step by step through this entire process, even covering
scenarios too complex to explain here. But let’s get back to Ray. Where does he fall? Well, Ray is an independent with $30,000 in
gross income, so he’ll definitely have to file a federal and state tax return. The due date for this is usually April 15th,
but Ray can generally start as soon as mid to late January. Finally, even if Ray didn’t meet the income
threshold, he may still want to file a tax return. That’s because if he worked as a traditional
employee throughout the course of the year, income would have been withheld from his paycheck
by his employer, and the only way to get that money back would be by filing a tax return. Hopefully you and Ray now better understand
whether or not you need to file a tax return. Be sure to check out our next video, where
you’ll learn how to actually pay your taxes, and be sure to check out our website, where
you can find more educational material and free recommendations for great tax-filing

What if I can’t pay my taxes? – TurboTax Support Video

If you’re unable to pay your taxes by
April 15th don’t worry, you have a couple options. Even if you can’t pay all of
your taxes, you should file them or file an extension by April 15th to avoid a late filing penalty. If possible, pay as much as you can by the deadline. That’ll help reduce any penalties and interest. To make a partial tax payment, select Pay by check in TurboTax when asked how you want to pay your federal taxes, and send what you can. If you’re able to pay the rest of your taxes
within four months, call the IRS to discuss timing. If you already filed your
taxes but need more time to pay, you may qualify for an IRS installment plan. You can apply for an IRS installment plan by filling out form 9465 with TurboTax. You can also go to irs.gov/payments to learn about the different payment options. For more answers to your questions visit

Sales and Use Tax: Filing and Paying a Sales & Use Tax Return

Filing and Paying a Sales & Use Tax Return In this video, you’ll see how to file a sales and use tax return. This screen lists the approximate start time
for each topic. To view a specific topic, use the controls
on your video player to move forward to the time listed. To begin, select the File Return link for
the period you are required to file. Gross Receipts Gross receipts are the total amounts your business received from all sources during
its accounting period, without subtracting any costs or expenses. Gross Receipts include taxable and non-taxable
sales, exempt sales, leases, and rentals sourced in Minnesota. Don’t include sales tax collected in Gross
Receipts. Enter the total gross receipts of all business
activities sourced within Minnesota in the Gross Receipts for Location 001 field. My business has $34,123 in Gross Receipts. Don’t enter commas, periods, or cents. Use whole dollar amounts and round to the
nearest whole dollar. You’ll report your taxable sales and purchases
in the Enter Taxable Sales and Purchases section. Taxable Sales and Purchases On line 100, general rate sales tax, in the
amount column enter your total taxable sales, leases, rentals, and services subject to Minnesota
general sales tax. Don’t include non-taxable sales or sales
tax collected in the amount. Make sure to enter the taxable sales and not
the tax collected. My business has $34,123 of taxable sales sourced
in Minnesota. I’ll enter 34,123 in the amount column for
line 100. After I complete the amount field and press
enter, the tax due will calculate automatically in the Tax Due field. The amount column is multiplied by the tax
rate to calculate the tax due. In this example, $34,123 multiplied by 6.875%
results in $2,346 of tax due. Notice the tax due column is rounded to the
nearest whole dollar. On line 200, Use Tax Purchases, enter the total purchases subject to Minnesota Use Tax
in the amount column. Use tax applies when you buy, lease, or rent
taxable items or services used in your business without paying sales tax to the seller. Use tax may be due when you bring items into
Minnesota or when you take items out of inventory. Use tax is also due if a seller does not charge
Minnesota sales tax on taxable items. See Fact Sheet 146- Use Tax for Businesses,
for additional information. My business bought $633 of office supplies
online from a vendor that does not collect Minnesota Sales Tax. I’ll enter 633 in the amount column for
line 200. The tax due will calculate automatically after
I move to the next field or press Enter. The amount column is multiplied by the tax
rate to calculate the tax due. In this example, $633 is multiplied by 6.875%
for use tax due of $44. On line 210, Variable Rate Purchases, enter the total purchases subject to a variable
rate in the amount column and calculate the tax due manually to enter in the tax due column. Use the variable rate to report use tax on
purchases you made when the vendor only collected some sales tax but not the full General Rate
of 6.875%. See Fact Sheet 146- Use Tax for Businesses,
which has additional information when variable tax is due. I don’t have any variable rate purchases
to report, therefore I’ll leave the zero in the amount and tax due columns. If you’re registered for additional sales and use taxes, such as local or special taxes,
they’ll also appear on the return. See our website for additional information
related to local, other, and special taxes. There are fact sheets and industry guides
available to review for rates and when to apply the tax. Adding a Tax Line to Your Return. You must add additional tax lines to your Sales and Use Tax return if you’re required
to collect, report, and pay local or special taxes that are not already displayed on your
return. This includes any local taxes, special local
taxes, vehicle excise taxes, or goods and services taxes. In addition to adding taxlines directly from
your return, you can also add local taxes by managing your sales locations in e-Services. For more information, see our “Adding Local
Taxes” video. To add a tax line to a current return, select
the Add a Tax Line link at the bottom of the return. A new row and a drop down menu appears. Scroll through the list to select the tax
line you need to report. I want to add Hutchinson Sales since my sales
are sourced in Hutchinson. Enter the total amount of sales subject to
the local tax rate in the amount column. All of my sales took place in Hutchinson so
I’ll enter 34123 in the amount column. The tax due of $171.00 calculates automatically. I also need to report additional local taxes
for Hutchinson on the purchases entered in line 200. I’ll select the Add a Tax Line link again. I’ll select Hutchinson Use from the drop
down menu to add the tax line. Enter the total amount of purchases subject
to the local tax in the amount column. All of my purchases are used in Hutchinson
so I’ll enter 633 in the amount column. The tax due of $3.00 calculates automatically. Some areas have more than one local or special
tax. If you have sales or use tax due on multiple
tax lines, you must enter the total amount of sales or purchases on each applicable line. Tax lines you add will appear on your sales
and use tax returns going forward after the current return has been processed. A Summary of Your Return The amounts entered on the previous screen
are summarized to total the Gross Receipts for all locations, Taxable Sales for all locations,
and Taxable Purchases for all locations. If you need to make any edits, you may select
the View/Edit – Return Information link. A pop up screen appears to make any necessary
edits. The tax for all taxable sales and purchases reported are combined on the Tax line. If any payments are made prior to completing
the return, the credits appear in the Deposits and Credits line. If you’re filing and paying the return late,
projected penalty and projected interest calculates automatically. For more information on penalties and interest,
visit our website and enter the keyword “Penalty” in the search box. The projected amount due line calculates a
total of the tax, penalty, and interest, less any credits. During the filing process if you need to return
to a previous page, select the Previous button. Don’t select Back within the e-Services menu
or use the back button on your browser to go back within the return. This will cause you to lose any unsaved progress. The Next button advances you to the following screen. If you’ve made an error within the page,
you won’t be able to advance until you fix the error. The Cancel button will delete any progress and return you to the last screen you were
on before opening the return. When you’re filing a sales and use tax return, if you’re not ready to submit your return
you can save it by selecting the Save and Finish Later button. When you select this button, e-Services will
save the information you have filled out so far on the return. The return is not submitted to the Department
of Revenue and you will need to finish completing the return and submit the return within 14
days of selecting this button. After 14 days, the saved return expires, and
you’ll need to start the filing process over. If the information is correct, select Next. Making a Payment When Filing The projected amount due displays and asks if you’d like to make a payment. If you don’t select to make a payment online
with the return, a notice displays indicating no payment is being submitted with this return. I’ll make a payment with this return by
selecting Yes from the drop-down menu. Answer the question that asks if funding will
be transmitted to or received outside of the United States. The Department of Revenue does not accept
electronic payments from a bank located outside of the United States. See our website for additional payment options. Enter your bank information. The information we use in this example is
fictitious. When making a payment and entering bank information,
you can save the bank information to be used again in the future. To save the bank information for future use,
select Yes. When you save bank information in e-Services,
you must give it a name. By default, it’s the name of the bank followed
by the last four digits of your account. If you want to change the name, select No
under “Use default bank name”. When making a payment while filing a return,
the projected amount due displays in the Payment Amount field. You must confirm this amount by entering the
payment amount in the Confirm Payment Amount field. The Payment Date defaults to today’s date. If necessary, you can change it to a date
in the future by using the calendar icon in the Payment Date field. The Return Summary, Projected Amount Due,
and Payment Information are displayed. If you made a payment for the full amount
due, a projected balance of zero displays. To submit the return and payment, select Submit. The confirmation page displays and includes
a confirmation number. Your payment has been submitted and your banking
information has been saved. The next time you make a payment with this
account, you’ll be able to use your saved banking information. Payments generally take 3 business days to
process and to post to your account in e-Services. The processing time to submit to the bank
starts on the date you select. Postdated payments are submitted to your bank
on the next business day after the date you select. The Printer Friendly button prints the web
page with the confirmation number. The Email Me button sends an email of the
confirmation page to your e-Services registered email address. The Print Return button prints a copy of the
return including each tax line. The print options will generate a pop-up screen. The Close button returns you to the main menu. If you need additional assistance with pop-ups
or other areas in e-Services, see our help page by selecting the Menu above.


would you believe me if I told you that
Warren Buffett pays less tax than his secretary you may wonder how a
billionaire pays fewer taxes than an average income earning secretary and the
answer is that there are two kinds of taxpayers those who accept taxes as a
natural part of life and pay whatever the government tells them to and there
were others who do everything in their power to avoid paying taxes let’s give
each of these types of people a name we will call the willful taxpayer Paul and
the tax avoider Jack to Paul when the government comes knocking at the end of
the year he doesn’t see it as a big deal earning $40,000 a year
Paul hands over his $15,000 worth of income taxes and moves on about his life
sure he would love to keep more of the $15,000 but he sees paying taxes as a
normal part of life jack on the other hand is a medium-sized business owner
who draws himself a salary from the tech company he owns and built from scratch
jack has over 50 employees working for him and has seen his business grow
year-over-year unlike Paul Jack despises tax he thinks to himself how can the
government who played no part in making his business’s success take such a huge
chunk of his money for nothing to make matters worse being taxed personally and
by being a business owner jack is subject to just about every tax
imaginable such as personal income tax sales tax excise tax property tax and
investment tax with all these potential taxes being applied to his income Jack
decided to look into how big corporations avoid paying taxes after
hearing that in 2018 Amazon paid zero income tax even though
they earned over two hundred billion dollars in revenues that year determined
to avoid losing a sizeable chunk of his earnings to tax Jack looked into ways he
could cut down on the amount of corporate tax his business pays and
reduce his own personal tax bill in his hunt for tax strategies Jack came across
the following techniques method number one riding off expenses given that most
rich individuals earn their fortunes through a business this gives them the
opportunity to write off expenses and their taxable income you see most
expenses you occur in your day-to-day business operations can be written off
against your income to lower your taxes payable for example let’s say you run a
digital marketing agency and are in $200,000 a year in revenues if you had
no expenses then the whole $200,000 would be subject to tax however as most
businesses incur expenses these costs will reduce what amount of profits will
be subject to tax for instance if you have $100,000 worth of legitimate
business expenses a year then this would make your annual profit $100,000 instead
of the $200,000 you earned in revenue which would cut your taxes paid on your
earnings by more than half eligible expenses can include things
like business meals office supplies new laptops internet connections etc
employee benefits staff training rent and leases car expenses etc as the owner
of the business if you decide to take a trip for a conference to develop your
skills in digital marketing you can decide to write that off as well
again this method of reducing your taxes is only enjoyed by people who own
businesses leaving little wonder as to why most people who own businesses seem
to be considerably richer than people who work as employees method number two
diverting income as of 2017 the United States corporate income tax rate was
reduced from thirty five percent to twenty one percent and while this
offered many companies Amazon included the opportunity to significantly reduce
their income tax payable many companies still elect to recognize their income in
countries with even lower tax rates for instance the Cayman Islands has no
income tax no corporate tax no estate or inheritance tax and no gift tax or
capital gains tax making it a pure tax haven in short whatever you earn you
keep of course without any calculations it is obvious that this is the
significant savings to any business who can realize their income overseas but
just how much would this save you if you had set up a tax haven in this country
let’s say your business earned five million dollars last year instead of
paying an income tax of thirty five percent for 1,750,000 dollars you would
instead pay nothing and keep that almost two million dollars for yourself besides
allowing you to realize income tax free the Kane
have very strict banking laws designed to protect banking privacy the country
does not have any tax treaties with other nations
thus guarding the finances of its offshore banking clients from the tax
authorities of other countries moreover offshore corporations in the
Caymans are not required to submit financial reports to any Caymans
government authority an incorporation in the Caymans is a very simple streamlined
process with all these benefits it’s no wonder companies are flocking to
these remote destinations to hide their earnings method number three netting
revenues against losses if you’ve ever looked at the stats in favor of starting
a business then you will know just how bleak they can be the numbers show that
20% of small businesses fail in their first year
30% of small businesses fail in their second year and 50% of small businesses
fail after five years in business finally 70% of small business owners
fail in their tenth year in business with the chance of success in business
being rather low there are still numerous companies that succeed and make
a fortune for which they need to protect and one
of the ways they do this is through the use of loss carryforwards you see most
businesses require a few years in operation before they start turning a
profit and in the years where business is not exactly booming losses are bound
to be incurred these losses while unfortunate at the time are excellent
tax avoidance tools for future periods you see like expenses loss carryforwards
can be netted against your earnings to reduce your overall taxes payable
meaning that less of your income is subject to tax method number for issuing
stock options another way businesses reduce their taxes is by issuing stock
options to its stake holders this method is particularly convenient for
businesses for two reasons number one it is booked is an expense which will
reduce profits and ultimately the amount of money that is subject to tax
and number two it does not result in a cash outflow for the business
you see when stocks are issued they are booked as an expense for accounting
purposes but no cash changes hands this means that the company can reduce its
profits through the expense and maintain a strong cash position
moreover companies that use this strategy gain the benefits realized by
incentivizing their shareholders to further increase the stock price if you
own stock in the company you worked for wouldn’t you put an extra effort in
order to make the company’s stock value rise so that you could cash out your
options for more money with these four corporate tax strategies in mind jack is
starting to feel more confident that he can reduce or eliminate his corporate
tax bill but he knows that he needs to withdraw some income from his business
in order to live and once that cash to be minimally taxed so he decides to
switch gears and look into ways he can reduce his personal tax owing method
number five leveraging geographical tax laws for the past 20 years jack has
grown his business in the heart of Silicon Valley however his patience with
living in the state with the highest income tax rate in the United States has
finally reached a tipping point with the state income tax rate of 13.3% for the
highest income earners Jack is seeing a large chunk of his income being handed
over to his state government with even more being passed along at the federal
level while federal taxes can’t be avoided
Jack wonders what he can do to avoid some of the other taxes he is being
subject to that are eroding his personal wealth
Jack began researching other states with lower income tax rates and was surprised
to see that 7 states were income tax free such as Texas Nevada and Florida
meaning that he could save the 13.3% tax he was currently paying and still enjoy
the warmth of the Sun all year long as Jack began looking into housing options
in each of these three states he wondered if there were other ways he
could further reduce his personal tax bill method number 6 investing in real
estate part of the reason the rich continue to get richer is that they make
their money work for them and one of the ways they do this is through real estate
you see not only does owning real estate increase your wealth by generating
income but it also allows for the reduction in taxes payable when you buy
a property you are requiring a depreciable asset and because the asset
reduces in value over time from an accounting perspective you are able to
deduct depreciation and reduce the amount of income that is subject to tax
common deductible expenses include repairs to the property and mortgage
interest and the more money you spend on expenses the more you can reduce your
tax selling however once a property is fully depreciated what do you do you
sell that property and buy a new one while selling property usually triggers
tax there is such a thing as a 1031 exchange which allows you to defer the
tax you paid on selling the property if you buy
a new property within 60 days of sale in essence you can continue to depreciate
your properties and then sell them in perpetuity and never pay the tax while
still being able to use the assets to generate rental income method number
seven deferring income while Jack has looked into moving states and using real
estate to reduce his taxable income he still feels as though some of his income
will need to be sheltered for tax and another way he can do this is by
deferring his income the most common tax deferral vehicle is an individual
retirement account or an IRA which allows you to move your income into a
fund and subject your earnings to tax at a later date if you’re an employee you
probably use this type of account to hold your savings and allow them to grow
over time however they also double as a solid tax
avoidance strategy you see income earned from employment is subject to tax unless
that is you contribute the funds to your IRA account in the year you contribute
money into your IRA you will receive a deduction from your taxable income or
the amount you contributed this strategy is particularly effective for
high-income earners because it reduces their tax bill during their highest
earning years for instance if you earn five hundred thousand dollars a year and
are in the highest tax bracket your income is probably being subjected to
tax of up to 40% but what if you could avoid the 40% tax and instead have part
of your income only be taxed to 20% well you can do just that using an IRA
you see when you contribute to your IRA you do not pay any tax in the year you
contribute and instead pay tax when you withdraw all the funds which is
typically during retirement however during retirement
you’ll probably be earning much less than $500,000 meaning that the money you
withdraw will be taxed at a lower rate and the difference in tax rates is how
much you would have saved by using this income deferral technique with all these
tax avoidance techniques in your financial toolbox
you only have one question left to answer which type of tax payer will you
be from here on out a Paul or a jack thanks for watching

Why “Billionaire’s Row” Pays the Lowest Property Tax Rate in NYC

432 Park Avenue, designed by Rafael Viñoly is the tallest residential tower in the Western Hemisphere. One57 designed by Pritzker Prize winning architect Christian de Portzamparc has service run by Hyatt’s five-star staff from their Park Hotel. This is Billionaires Row, a stretch of new super tall residential skyscrapers with multi-million dollar apartments in midtown Manhattan.But many of these 100 million dollar apartments that have been purchased, now sit empty, and their owners pay less in property taxes than the average New York City homeowner. These apartments are a safe investment. They’re also lucrative. Not only because the New York City housing market keeps climbing upwards, with a 52 percent price increase, and new developments over the past five years, but also because they don’t cost a lot to maintain. That’s because their taxes are so low. The billionaires who own these apartments are paying a tiny fraction of the taxes that they’d be paying if they lived in a regular apartment building of the same price. Look at this chart by CityLab. It shows how much the apartments would be taxed if the city used the average property tax compared to how much they’re actually paying. The reason why they’re not paying anything in taxes is because New York City’s property tax laws were put into place in 1981. New York City sorts all property into four classes; small residential, large residential, commercial, and industrial. Classes one and two are for the small and large residential buildings. The buildings we’re looking at fall under class two, since they are almost all individually owned condominiums without rental incomes, the city’s Department of Finance chooses a comparable rental building, and creates an imaginary income statement for the condominium based on how much its rental counterpart is making. Then they formulate a property tax off of that number. They don’t take into account the sale price. So, that 100 million dollar price tag is ignored. The problem is is that there is just no comparable buildings for those on Billionaires Row. Any comparison is a wild undervalue. So, billionaire owners pay the property tax rates of buildings with way, way less value. Not that they’re complaining, and there’s more additions on the way. 111 West 57th Street, designed by SHoP Architects is the skinniest, super tall building in the world. Central Park Tower also called the Nordstrom Tower is not completed yet, but will top out as the tallest residential building anywhere. When architect Jean Nouvel’s new building nicknamed The MoMA Tower is complete, it won’t compare to any rental building. After all, do any of those have temperature controlled wine vaults? The owners of Billionaires Row pay less property taxes by percentage than most homeowners. But Mayor Bill De Blasio and a Democrat-filled city council formed an advisory commission on property tax reform in May. They’re looking for a way to make their system revenue neutral, which would hopefully balance out the vast disparity in property taxes. Even still, the buildings have passed a literal shadow over Central Park, and have noticeably changed the New York City skyline. But one thing is for certain, this is where the money is. Leave a comment below, throw us a like, subscribe, and ring the bell to be notified for our next video.

Lyft Drivers: Helpful Forms and Paying Taxes – TurboTax Tax Tip Video

Hi, this is Lisa Skelly, one of the tax and Lyft partner-experts here at TurboTax, and I’m going to talk you a little bit about the tax forms you’re going to receive and paying taxes. Now, being a Lyft partner and owning your own business means you’re not going to receive a W-2 from Lyft. You’re going to get some other tax forms, but because you’re not getting a W-2, they are not withholding any taxes for you. You’ll be responsible for those but it will all be a part of the return that TurboTax Self-Employed helps prepare for you. Now, the tax forms you will receive from Lyft are the 1099-K and a 1099-MISC. To see those you can go to your dashboard and click on the tax document link. The 1099-K is income from actually driving someone. So, every time you have someone in the car that will show on the 1099-K. The 1099-MISC is income that Lyft is paying you directly, things like bonuses or referring a friend. That all shows up on the 1099-MISC. Now, also in the dashboard just under that tax document will be your Lyft driver summary. In that summary are some of the expenses you will be able to take against the income. TurboTax Self-Employed will guide you through to where to put each of those items in. Our goal here at TurboTax is to help you in minimizing your taxes.

Who Pays the Tax?

♪ [music] ♪ – [Tyler] In the last lecture,
we showed that the legal incidence of a tax does not determine
the economic incidence. In this lecture,
we’re going to talk about how the economic incidence
of taxes actually is determined. Who bears the burden of a tax? Here is the rule for the economic
incidence of a tax. The more elastic side
of the market will pay a smaller share of the tax,
a smaller burden. Similarly, the less elastic side
of the market or rather the more inelastic side
of the market will pay a greater share of the tax. So more elastic
pays a smaller share, less elastic pays a greater share. I’m going to show you this
in a couple of diagrams and then give you the intuition
for why it’s the case. Let’s suppose
we can’t remember the rule. Is it the more elastic side
which bears the smaller share of the tax or the greater share
of the tax? Say we can’t quite remember.
Well, no problem. Let’s just draw the diagram
and read it off as it happens. For instance, let’s draw a diagram which has a pretty elastic
demand curve and relatively speaking
a pretty inelastic supply curve. Here’s the price
when there’s no tax. Now let’s look at what happens
when there is a tax and we’ll use our wedge method. Here’s the tax and the height
of the wedge gives us the amount of the tax. What do we do? We drive this wedge
into the diagram until the top of it
hits the demand curve and the bottom of it
hits the supply curve and then we just read
the answer off our diagram. Point B, this tells us the price
paid by the buyer. Point D, this tells us the price
received by the seller. Let’s compare. When there was no tax,
the price paid by the buyer was at A, and with the tax
the price to the buyer goes up a little bit to point B. The buyer isn’t paying much
of a higher price. On the other hand the seller
is receiving a lot less. In this case, when demand
is more elastic than supply, the demanders pay
a smaller share of the tax and the suppliers
pay a larger share. Therefore we can just read
off the diagram what happens when demand
is more elastic than supply. You don’t have
to remember the rule, you don’t have to memorize it
because I’m going to give you some intuition to make it easy
in just a moment. You simply have to draw the diagram
and be able to read the answer off the curves. Let’s look at another case. In this case, we’ve drawn
a supply curve which is very inelastic
and a demand curve which is less elastic
than the supply curve. Once again we’re going
to take our tax wedge, we’re going to push it
into the diagram and what happens? You can see it right here. We just have to read it
off the diagram. Now we see that compared
to when there was no tax, the price to the buyer
has gone up a lot and the price to the sellers
has gone down by just a little bit. When the supply
is more elastic than demand, buyers pay the greater share
of the tax, that is the price to the buyer
goes up more than the price
to the sellers goes down. The buyers pay more of the tax
when the supply curve is more elastic. Let’s give some intuition. You can always get the right answer
by drawing the curves. And let’s consider the intuition
for why that’s the case. So here’s the intuition
for remembering the rule. Think about elasticity
as a kind of escape. The side of the market
which is the more elastic can escape the tax more easily. Why does that makes sense?
Remember what elastic demand means. It means that demanders
have good substitutes for the taxed good
and so they can escape the tax. When the tax is high,
the demanders are going to say, “We’re just going to go buy
the substitutes. We have plenty
of good substitutes.” On the other hand,
think about what it means when the demand is inelastic. It means that there
are no good substitutes so it’s hard to escape the tax. What about the supply side,
elastic supply? Well, that means the resources
which are used to produce the taxed good,
they can easily be moved to other industries. The resources
can move around easily. If you try to tax the industry
a lot then the land, the capital, the workers in that industry
which were used to produce the good,
they’re just going to flow to other industries
and so the suppliers can relatively easily
escape the tax. On the other hand,
if supply is inelastic that means the resources used
to produce this good, they really can only be used
to produce this good. They’re fixed, they’re hard
to move around, and those factors
are not that useful for producing other goods,
so that makes it difficult for the suppliers
when the supply curve is inelastic. That means it’s difficult
for the suppliers to escape the tax. What if the demanders
and the suppliers are both pretty elastic? Well, here’s the thing. Somebody has to pay the tax,
both sides can’t escape the tax at least if the good is going
to be bought and sold, therefore the burden is determined
by the relative elasticities. It’s about which side has it easier
to escape the tax and that side will pay
less of the tax. The side which is less elastic,
they’re going to pay more of the tax
because that side finds it harder to escape the tax. So let’s do an application,
say social security taxes. Last time we showed
that the legal incidence of social security taxes
has no bearing on the economic incidence,
but we didn’t say what the economic incidence
actually is. So let’s do that now. We’re going to have the price
of labor up here, the wage, and the quantity
of labor down here. The whole question
now boils down to is the demand for labor,
more elastic than the supply of labor
or vice versa? Think about the demanders
of labor, businesses, what substitutes
for labor do they have? If the price of labor goes up,
what can those businesses do? What about the supply
of labor, the workers? If their wage goes down,
what can they do? If you think about it,
I think you’ll see that for most workers,
especially full time workers, they don’t really have a lot
of good substitutes for work. Most workers need some kind of job. Even if their wage goes down,
they’re going to continue to work because they need to pay the bills. On the other hand,
the demanders of labor if the wage were to go up, they could substitute
capital for labor, they could move their investments
to other countries. They have quite a few
good substitutes. So if that’s actually how it works, we should probably draw
the diagram like this with a fairly inelastic
supply of labor and a fairly elastic
demand for labor. Economists have done studies
of this and on average this is what they find. So now think about your FICA taxes,
that’s a tax on labor. What’s the effect of that? Well, it’s going to look
something like this. Notice that the wage
paid by buyers of labor, that’s the wage paid
by the firms — that goes up only a little bit. On the other hand,
the wage received by the suppliers of labor,
that is the wage which the workers end up with,
that goes down by a lot. And this makes perfect sense
when we have a very inelastic supply of labor. The laborers can’t escape
the tax and, therefore, they end up bearing
most of the burden of the tax. This doesn’t mean, by the way,
that we shouldn’t have social security taxes. It may in fact be a good way
of forcing people to save for their own future,
but this does mean it is not a free lunch
for the workers. The workers’ wages will drop
because of the tax. If we didn’t have
the social security tax, wages for most workers
would in fact be higher. Here’s one more application,
health insurance mandates. Suppose that the government
requires employers to provide health insurance
to their workers as is now the case
for many employers under the Affordable Care Act. Who’s going to pay for this? Who will end up paying for this? Is it primarily the employers
or primarily the workers? It’s really just the same analysis
as we had before. A health insurance mandate
is quite similar to a tax. A health insurance mandate
simply means that the employers have to pay a higher wage,
but that’s just, then, the same as a tax. What we just saw
is that if labor supply is less elastic than labor demand,
which in many cases makes sense, then in that case most
of the mandate will actually be paid for
by the workers. Real wages will fall. Again this doesn’t necessarily mean
that the mandate is a bad idea but it does mean
it’s not a free lunch for the workers. The workers end up paying
for their health care through the medium of lower wages. Taxes have a couple
of other effects including the raising of revenue
and also creating some dead weight loss. Those are what we’re going
to look at in the next lecture. – [Narrator] If you want
to test yourself, click Practice questions. Or if you’re ready to move on,
just click Next Video. ♪ [music] ♪

Who pays the lowest taxes in the US?

This person on the left — she represents
the poorest 10 percent of Americans. And on the right — he is the very richest
10 percent. So let’s ask this group a simple question: What percentage of your income gets taxed? Most Americans pay multiple income taxes … to
the federal government, and state governments, and local governments. But a recent analysis by two economists added
up all the income taxes. And when you do that, the data shows that
poor people pay a very small part of their income to the government. And rich people pay more. This concept, of taxing the poor at a lower
rate — and taxing the rich more… this is called: progressive taxation. It’s how taxes work in most countries. But it’s also why some critics question
whether these people… … are getting away without paying their
fair share: “The middle class and the poor that pay, if
anything, a lot less.” “Why is it that 45 percent of the population
of this country is not contributing back to the rest?” But now let’s add one more guy to this group of 10: This guy — he represents the 400 richest Americans. Billionaires. Billionaires don’t make most of their money
through typical income. So their income actually gets taxed at lower
rates than these less rich people. Now, you might be thinking, don’t billionaires
pay taxes in other ways? And the answer is yes. This is just the income tax, and there are
lots of other kinds of taxes in America. And this analysis, where this data came from? It looked at all of those taxes. And it shows that, when we add them all up… There actually is someone in this group who
might not be paying their fair share. Let’s go back to our first chart, with these
11 people. Remember, this is just the income tax. What happens when we add in all the other
taxes? Well, let’s look at another kind of tax:
Corporate and property taxes. These are the taxes we pay on the things we
own: Usually businesses, and property, and the money we make on them… Usually, rich people own more things. So these corporate and property taxes hit
them the hardest. Rich people also tend to be from rich families. And when they inherit a lot of money, the
government taxes them. This is called an estate tax. Put these taxes together, and it’s clear
that they place a much heavier burden on the rich — including billionaires. Add these back onto the income taxes, and it looks like the rich really do pay way more than the poor. But now let’s talk about another tax. This one’s buried in your paystub. Look closely, and you’ll see something called
a Medicare tax and a Social Security tax. Sometimes paystubs call them FICA. Anyway, combined, these are called payroll
taxes. Medicare and Social Security are two really
important programs: they provide health care and a modest income for when we get old and
retire. But they’re also expensive. Which is why we have these payroll taxes — separate from the income tax — to pay for them. So on your paycheck, you’ll notice that you’re
taxed 7.65 percent in payroll taxes. And your company is supposed to pay another
7.65 percent on your behalf. But economists have found that, in practice,
the way companies pay their part of the payroll tax… is by just paying workers less. So in reality, many workers pay nearly the full 15.3
percent toward this tax. And everyone is on the hook for the same percentage. But the wealthy? Once someone earns more than about $130,000
a year … the money they make beyond that isn’t subject to the Social Security tax. It’s capped. That means the rich pay a really small portion
of their income toward payroll taxes. And poor people and the middle class pay way
more. Add payroll taxes onto the chart, and it starts
to flatten out. The last type of taxes we’re going to look
at are the taxes we pay when we buy stuff. For example, let’s say you’re looking to buy
a t-shirt. When you check out, you pay a sales tax, which
is a percentage of its cost. And sales taxes apply to most things: Furniture. Toilet paper. Laundry detergent. For some items, like beer and gasoline, there
are additional taxes that get incorporated into the price tag … before you even get
to the store. These are called consumption taxes. And we all pay the same rate on the things
we buy, regardless of how rich we are. You might think that, since rich people usually
buy more things — and more expensive things… they pay a larger percentage of their income
toward these taxes. But, relative to how much money they have,
the stuff they buy, and the taxes they pay on that stuff, take up a relatively small
portion of their income. Meanwhile, everyone, even people with almost no money, needs to buy certain basic things to survive. And for poor people, those basic things and the taxes that come with them cost them almost everything they earn. So if we chart how much of their income each
of these people pays in consumption taxes… … we can see that poor people pay a much larger
portion. When we put these taxes together… Suddenly we see a big change. The chart shows us that this line, from before,
is a lie. That America’s tax system as a whole, isn’t
very progressive. Instead, it’s mostly flat. Poor people pay about the same portion of
their income in taxes as rich people. And this guy — this billionaire — is paying
a smaller portion than everyone else. Even the poorest. If you look at just certain types of taxes, it’s natural to assume that rich people pay a bigger tax burden in the US, and that poor people aren’t exactly paying their fair share. But a more complete look at the bigger picture,
challenges that. And it suggests that, if we’re looking for
a group that isn’t paying their fair share, we might be looking on the wrong end.