Speaking of bad habits, you may be procrastinating on the tax paperwork, and since there is less than a week to the filing deadline, be sure to either file an extension or just bite the bullet and file now.
Don't believe how much your bad habits are costing you? Greene-Lewis breaks down what your bad habits are really costing you.
"If you’re in a casino or placing a bet at a sports event, you’re likely not concerned or thinking about the tax implications of your winnings, but failure to properly report your new loot can result in consequences and penalties.
If you are lucky enough to win gambling winnings of more than $5,000 from sweepstakes, wagering pools, and the lottery, you will have a flat 25 percent tax withheld, unlike taxes withheld from wages, which are progressive. For example, the tax on your gambling earnings would be the same, whether you won a $100,000 jackpot or a $10,000 one.
Gambling winnings from bingo, keno, and slot machines are not subject to automatic withholding, but it’s not just winner chicken dinner! You are required to give the payer your Social Security number or the payer may automatically withhold 28 percent from your winnings.
Don’t forget you may also be able to deduct your gambling losses up to the amount of gambling winnings claimed."
Read on for more.
Taxes on Cigarettes, Beer, and Wine
"With growing deficits in Washington and increasing health concerns, the U.S. government continues to increase federal and state tax rates on cigarettes and alcohol. From cigarettes alone, the U.S. generates approximately $32 billion in tax collections annually. Also, since 2001, the average state cigarette tax rate has jumped from 43 cents per pack to $1.45 per pack.
Taxes on beer, wine and spirits varies by state as well as the type of alcohol you buy and the alcohol content of the beverage. For a beer, you’ll likely pay the federal government between 2 and 5 cents per can, or 12 to 30 cents per six pack. For wine, the tax for a 750 ml bottle of wine ranges from 4 cents for hard ciders to 67 cents for naturally sparking varieties. Given liquors and spirits have the highest alcohol content, they also have the highest liquor tax. An average 80-proof 750 ml bottle will cost you around $2.15 in federal taxes."
"The tax on tanning became effective in 2010 and was initially created for two main reasons. First, to provide additional revenue to the government to help pay for healthcare reform and second, provide a negative incentive for the use of tanning salons given notable research findings that long-term use can cause health consequences.
According to the IRS, taxable tanning services include, “employing any electronic product designed to incorporate one or more ultraviolet lamps intended for radiation of an individual through ultraviolet rays, with wavelengths between 200 and 400 nanometers, to induce skin tanning.”
Sounds complex right? Just think of what those ultraviolet rays are not only doing to your skin but to your taxes! The tanning tax is 10 percent of the amount charged for the tan, so if you pay $25 dollars for a tanning service, the tax is $2.50. Sometimes this tax is included in the price you paid for your tan and the tanning salon owner is responsible for paying collected tanning tax to the IRS.
If you still want to tan, use spray tans or suntan lotions — they’re much safer and there’s no tanning tax on these services."