College expenses continue to rise, with the average in-state student living on campus spending over $27,000 per academic year. Despite the high costs, a majority of Americans are skeptical of the value of a college education, especially if it means taking on debt. Only 22% of survey respondents believe college is worth the cost if loans are required, while 47% think it’s only worth it without loans. As the cost of education continues to climb, alternative career paths, like content creation on social media platforms, are becoming increasingly popular avenues for income.
Financial literacy, including an understanding of the tax code, is important for all adults to have. A recent national tax poll conducted by TaxEDU found that many Americans are confused by and dissatisfied with the federal tax code. More than two-thirds of respondents did not know the top federal income tax rate, and over half were unsure about how tax brackets work. Furthermore, the majority of respondents also answered incorrectly when asked about the value of tax credits versus deductions.
The IRS has issued warnings about tax scams and inaccurate social media advice that have led taxpayers to file inflated refund claims. To help provide accurate and reliable tax and financial information, Forbes is introducing a new feature in their newsletter—Taxes from A to Z. This week focuses on applicable federal rates (AFRs) and their importance in various transactions, including loans between family members. Additionally, the newsletter addresses questions from readers about topics like using IRAs to pay off student loans and the deductibility of interest on reverse mortgages.
The IRS announced a permanent, free tax filing option called Direct File after a successful pilot program that received positive feedback from users, who appreciated the ease of use and trustworthiness of the service. Despite this, some concerns remain about the IRS being both responsible for calculating taxes owed and receiving tax payments, which some believe could present a conflict of interest. Additionally, taxes and filing deadlines for the upcoming months are outlined in the newsletter, along with updates on tax conferences and events in the industry.
In an effort to provide valuable information to readers, the newsletter includes a trivia question about the share of total federal income taxes paid by the top 1% of taxpayers. The answer, 42%, highlights the significant contribution made by this group. The importance of understanding tax rates and financial literacy is emphasized throughout the newsletter, with contributions from various tax experts and professionals offering insights and advice on navigating complex tax issues. Feedback is encouraged from readers to help improve the quality of the newsletter and address any concerns or questions they may have about taxes and financial matters.
