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Published: Friday, 01 April 2022 02:06
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Income Tax in India:

 

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Published: Thursday, 31 March 2022 23:44
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Income Tax in USA:

There are 2 type of income tax you have to pay in USA.

  • Federal Income Tax: This is a tax that is levied by the central (federal) govt on individual income to all it's residents. You have to file a federal tax return to pay for taxes.
  • State Income tax: This is a tax levied by the respective states on the income of the residents of it's state. This is on top of the federal income tax. State income tax is highest in California at around 14%. It averages around 5%. It's progressive tax, same as federal tax, where marginal tax rate is lower at lower income, and keeps going higher for higher income. This is a good link showing state income tax for all states:
    • Link => https://www.tax-rates.org/taxtables/income-tax-by-state
    • Texas, Florida, Washington, Nevada, Wyoming and Alaska have no state income tax. But they make up for it by levying higher property tax or sales tax. That's still better.
    • You have to file separate tax return for state income to your respective state. This doubles the burden.

We won't talk about state income tax anymore below. Just Federal taxes below.

Federal Income tax:

Tax foundation is a non profit org which has lots of tax related details: https://taxfoundation.org/

Here's the tax history in USA: https://www.investopedia.com/articles/tax/10/concise-history-tax-changes.asp

Historical tax rates: https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/

Here's the summarized timeline of Federal Income tax. USA became independent in 1776, and the constitution initially written forbade any direct taxes not levied in proportion to each state's population. Some taxes were still levied from time to time, but The Supreme Court declared a flat tax contained in the 1894 Wilson-Gorman Tariff Act unconstitutional in 1895. The 16th amendment was introduced in 1913 to pave the way to an income tax by removing the proportional to population clause, and this is the time when "Federal Income tax" was officially enacted in 1913. Many of the taxes we pay today were created in the 1920s and 1930s, including the estate tax, gift tax, and Social Security taxes. "Social Security Act of 1935" was passed and started SS tax collection in 1937. In 1920's less than 1% of Americans were paying taxes, but by 1945, 43 Million Americans were paying taxes, with top rates of 94%. Alternative Minimum Tax (AMT) came into existence in 1978. Ronald Reagan, a Republican, became US president in 1981. He drove a lot of tax reforms, and his economic reforms came to be known as "Reaganomics". In years from 1981 thru 1986,There were major changes via "The Economic Recovery Act of 1981". In 1986, another tax reform act lowered the top rate from 50 to 28%, cutting corporate taxes from 50% to 35%. All of this resulted in nearly 1M Americans becoming millionaires for the first time. under President Bush, tax laws were again changed in 2001 resulting in tax cuts and increase in tax credits. The former President Bush tax cuts expired in 2010.

The big change in tax laws came in 2017 via The Tax Cuts and Jobs Act of 2017 (TCJA). TCJA  is a congressional revenue act of the United States signed into law by President Donald Trump which amended the Internal Revenue Code of 1986. TCJA is a temporary change in tax laws applicable for returns filed in 2018 through 2025.  TCJA increased the standard deduction from $6,500 to $12,000 for individual filers, from $13,000 to $24,000 for joint returns, while also eliminating personal exemptions. It also increased the child tax credit from $1K to $2K. The TCJA eliminated or restricted many itemized deductions. In net, it was a wash for a family of 4. 

NOTE: Tax slabs and deductions go up every year based on inflation. They don't require any tax law changes. Tax laws which have to be authorized by Congress  have been changing every few years, and generally change tax rates or deductions allowed.

IRS (Internal Revenue Service) is the government body supposed to collect taxes. You can find all the tax forms, guidelines and all the tax rules on this website. If you ever have a doubt about any tax related stuff, you can call them using the phone number on their website. They will note down your question and someone will get back to you in couple of days with an answer. You should note down the ID of the IRS person, and the data and the time you talked to him, in case there is a dispute later on.

Tax rates for each year: This link is for tax rates for 2024. At the bottom of the page, there are links for previous year's tax rates, deductions, etc. Or you can replace the year in the link to go that year's tax rates.

Tax Return Breakdown:

Firstly, Filing federal taxes in USA are pretty simple compared to taxes in India, if you maintain a simple return. And the taxes are lot lower here in USA than what most people tell you. You pay about 15% in taxes on salary of around $100K as of 2009 !! For year 2022, the same analysis still holds true where you pay 15% tax on salary of around $150K. I've updated tax laws as per the latest updates.

Let's say you are employed here in USA with a company and make $W (or the money that's reported as your salary on pay-stub. This is also the amount reported on your W-2). The company would deduct taxes (estimated taxes based on information you give them) and hand you the remaining money. Actual taxes are calculated when you file the tax return. If you had overpaid taxes, you get a refund.

Tax Free Contributions/deductions:

There are few contributions that you are allowed to make, which lowers your taxable income. Basically these contributions are taken directly out of your paycheck, and you pay $0 tax on it. These are the tax free deductions that you are allowed to make:

  1. Health insurance Premium: If you are in USA, most of the employers pay for your health insurance premium. Health insurance for a family runs at around $15,000/year (for a decent health insurance plan, see in health section for more details), but the employer picks up about 80% of the tab. So, your share of health insurance premium is only 20% or about $3000/yr. This money thankfully is deducted from your income before you pay any taxes. That means your effective taxable income is lower by that amount.
  2. Health Savings Account (HSA): This is a new type of account that is allowed under the High Deductible Health plan. This money is deducted from your income before you pay any taxes.
  3. AD&D Coverage: Next if you signed for any AD&D coverage (which basically covers you and your family incase of an accident, this is different than life insurance), the premium that you paid for AD&D coverage is also deducted from your income before you pay any taxes.
  4. Flexible spending health (FSA): FSA accounts are additional accounts for Dental/Vision plans that you can setup at your employer. This is totally optional. The money that you put in this account is once again deducted from your income before you pay any taxes.

For all above Health Insurance Plans and Accounts, look in the "Health Insurance section". So, to summarize:

  • Your Salary = $W
    • Health Insurance Premium paid by you = $A
    • HSA money contributed by you and deducted from your salary = $B
    • AD&D Premium paid by you = $C
    • FSA money contributed by you and deducted from your salary = $D
  • So, your taxable income ($TI) = $W - $A - $B - $C - $D

This taxable income is what is reported as medicare wages (item 5 on W-2). Now start's your taxes on this taxable income $TI.

SS and Medicare taxes:

These are taxes that everyone pays irrespective of their income. These are automatically deducted out of your paycheck, so you don't need to file for them in your Federal income tax return. Look under "social security benefits" section for more details on these.

  • Social Security taxes: Firstly you have to pay Social Security taxes on your taxable income. It's 6.2% of your salary. It's applied only on the first $110K of your salary (for year 2009). So, the maximum Social Security taxes that you can pay is $7K or so. Remember that social security taxes are actually 12.4%, but these are divided equally between the employer and the employee. So, if your employed, your employer pays the other 6.2% of your salary to the IRS. Note, that if you were self employed, you would have to pay the total 12.4% tax out of your own pocket. So, govt penalizes for being self employed !! The amount of $TI that is subject to SSN tax is reported as social security wages (item 3 on 2009 W-2). This is equal to max of $TI and $110K. Every year, the limit on which SS tax is applied goes up so that 6% of eligible taxpayers pay the maximum SS tax. As of 2022, the max SS tax is $147K
  • Medicare Taxes: Next you have to pay Medicare taxes on your taxable income. It's 1.45% of your salary. There's no upper limit on this (unlike social security taxes), so you have to pay this tax on all of your taxable income. Once again like the social security taxes, Medicare taxes are 2.9%, but these are divided equally between the employer and the employee. So, if your employed, your employer pays the other 1.45% of your salary to the IRS. Note, that if you were self employed, you would have to pay the total 2.9% tax out of your own pocket. Again this is like a penalty for being self employed !! The amount of $TI that is subject to Medicare tax is reported as medicare wages (item 5 on 2009 W-2). This is equal to $TI.
    • UPDATE 2013: Two additional Medicare taxes were added via the Affordable Care Act (ACA) in 2013. First was the "Additional medicare tax" of 0.9% which was levied on W2 wages of > $200K for individuals and > $250K for married filing jointly. This was only levied on employee and NOT the employer. The second was the the net investment income tax, also known as the “unearned income Medicare contribution surtax,” which is an additional 3.8% tax applied to net investment income above $250K (for married filing jointly) . Like the additional Medicare tax, there is no employer-paid portion.

Remember that there's nothing you can do to lower your social security and the medicare taxes. These are taken out of your salary directly, and you are not supposed to be concerned about these when you file your federal taxes or state taxes. No deduction, credits, etc applies to these taxes.However, if somehow (because of job change, etc) you paid more than the max amount required in SSN taxes, you can claim a refund when filing taxes.

So, your salary after paying these taxes is:

  • Effective salary = $TI - 0.062*$TI (max of around $7K for yr 2009, or $9K for 2022) - 0.0145*$TI.
    • If you are making less than $110K, your effective salary is = 0.9235*$TI.
    • If you are making more than $110K, your effective salary is = 0.9855*$TI - $(max_ss_tax).

401K Retirement Contributions:

If you contribute any money in 401K retirement plan, you don't have to pay any federal taxes on that amount of money. Effectively, your salary is lowered by that amount before you pay any federal taxes. Look in the 401K section to see how much you should be contributing to your 401K. There's a yearly limit on how much can you conribute to 401K. As of 2022, the limit is about $20K per year.

So, your new effective salary subject to federal taxes is ($W0) = $TI - 401K_contribution.

This effective salary ($W0) is what is reported as your wages on W-2 (item 1 on W-2). This is also what you report as your wages on federal income tax return (item 7 on form 1040 in year 2009 tax forms).

NOTE: We pay SS and Medicare taxes on the 401K retirement contribution. The only tax we get sparred from is the Federal income tax. So, 401K contribution is not treated the same way as other contributions like your HSA/FSA contribution. Many folks are misguided that they pay no taxes on your 401K contribution, which isn't true. You always pay SSN+Medicare taxes on 401K contributions.

AGI and Taxes:

Now with all these contributions out of way, we came to effective salary. This effective salary $W0 is what is subject to federal and state taxes. This is the place where you can save a lot by taking advantage of tax breaks. Let's start with your AGI:

On top of $W0 (item 1 on W-2 form) being reported above, you may also have other income ($OI). This other income might be interest income from fixed deposits, income from stocks, dividends from stocks, real estate rental income or any other income from any source. Now all of this other income ($OI) is added to $W0 to get your Adjusted gross income (AGI).

  • $AGI = $W0 + $OI

Remember this AGI is the most important number on your income tax return. This AGI decides entirely what federal taxes you are going to pay. All the statistics on IRS website or elsewhere are based on this AGI number. Most of the tax credits, deductions, etc are based on AGI, so you want to keep this number low. If your AGI is > $400K (as of 2022 for married filing jointly(), you may lose a lot of freebies allowed by the tax laws :(. So, try to keep AGI below 400K, or Wages and other income to less than half a million dollars.

NOTE: You pay social security and Medicare taxes only on your wages (Box 1, 3 or 5 of your W-2), and NOT on any other income ($OI) which is interest income, stock or home sale profit etc. For interest income, many banks/brokerage choose to report bonus income, referral, credit card rewards, etc as Miscellaneous income while others choose to report it as plain interest income or not report at all. That has tax consequences. Head to "Bank Account" section under Finance for more details.

HSA contribution: One other item that affects AGI is your HSA (health savings account). It's indicated as $B above. With the Obama Healthcare reform in 2013, more and more employers switching to High deductible healthcare plan (HDHP). As of 2022, most of the employees have switched to HDHP plans. Look in health insurance section for more details. The money that you and your employer contribute towards an HSA is reported on box 12 of W-2 form, with a code W. The employer portion of this amount (usually $1K for family HDHP) is not included in your wages, and as such you never paid any tax on that amount. However, the employee portion of this amount is included in your wages and is going to be taxed, so you'll have to include this amount in your tax return, in order to claim deduction for your share of contribution to HSA. Entering this amount on your tax form, reduces your AGI by an equivalent amount. So, final AGI = above AGI - HSA contribution by employee. SS and Medicare taxes aren't levied on this HSA contribution, it's just the federal taxes that get confusing.

Estimated Federal taxes are calculated on AGI and what you get in hand is after deducting these estimated federal taxes from AGI. These are called taxes withheld at source.

Now, when you file your yearly income tax return, you can calculate your total taxes. Depending on whether your actual taxes calculated are more or less than the taxes withheld, you may owe money to IRS or get a refund from IRS. Let's walk through the federal tax calculation process starting with AGI:

Deductions:

Deductions are the provision in ta law, which allow you to reduce your taxable income by a given amount, so that you don't have to pay any federal income tax on that amount. This is to help 95% of the people in bringing down their taxes. Deductions are applied before calculating Federal income taxes. Below are the most common deductions that almost everyone is eligible for.

  1. Standard Deduction: You are entitled for a standard deduction of $SD ( for year 2009). This standard deduction basically means that you don't pay any federal taxes on this amount of money, and you can subtract this amount from your AGI.
    • Year 2009: SD is approx $5700 for single filers and $11,400 for married filing jointly
    • Year 2018-2025: As per TCJA of 2017, SD has been doubled. For year 2022, SD is approx $12950 for single filers and $25,900 for married filing jointly
  2. Itemized deductions: In case you don't want to take standard deduction, you have an alternate choice of taking "itemized deduction". Itemized deduction allows you to add deductions allowed by tax laws, and come up with total deduction amount. If your "itemized deduction" amount comes out to be more than "standard deduction" amount, then you should take itemized deduction. However, "itemized deduction" carry more scrutiny by IRS, so I usually go with standard deduction if the 2 amounts are close to each other. Some of the deductions that can be itemized are:
    • Year 2018-2025: As per TCJA of 2017, itemized deductions were greatly reduced. In parallel, std deduction amount was raised. Effectively, this made itemizing deductions a less appealing choice for most of the tax payers in the bottom 90% taxpayers. Biggest items for itemizing are:
    • Years except above: Itemized deductions allowed were more generous, and so a,lot of people opted for this.
    • Common deductions allowed under "itemizing" are:
      1. Mortgage Interest: If you own your house, and pay mortgage on it, then you can deduct the interest payment portion of it.
      2. Property tax: If you paid property tax for your house, you can deduct it here. Most states have property tax of around 1% of the value of house, but states with no state income tax, have property tax as high as 3.5% of the value of the house. This can easily get to $20K-$30K in property taxes. Before TCJA of 2017, all of the property tax was deductible, but now,it's subject to a max amount of $10K, even if you paid more than that.
        • Year 2008: There was one year in 2008 where you could have claimed a deduction of $1000 for property taxes paid on your home in the year 2008 (if you own a home and you paid over $1000 in property taxes. If you paid less than $1000 in property taxes, you can deduct only up to the amount of taxes paid). This was allowed for people filing standard deduction, so everyone got some tax saving. This was to help taxpayers mired in the financial depression of 2008-2009.
      3. Charity contribution: You are allowed to deduct charity contributions up to a limit. No receipts are needed.
      4. State income tax: If you paid state income tax, you can deduct that amount here
      5. State sales tax: There is a calculator on IRS site that allows you to claim a "standard sales tax" deduction based on the state you live in. You can use this amount, or you can use your own amount that you spent on buying things. It's better to stick with "standard sales tax" amount, as that is very generous, and you don't need any receipts for that.
  3. Personal Exemption: You are also entitled for a Personal exemption and one additional exemption for each of the dependents (For years before 2018 and after 2025). Each exemption was approx $3650 as of 2009. If you are married filing jointly, you get exemption of 2*$3650 = $7300 (one for you and one for your wife). Your children, parents and almost anyone qualifies to be your dependent for whom you pay majority of the expenses, and who aren't filing their own tax return, and aren't claimed as dependents on anyone else tax return (as that would imply double exemption for same person, not allowed). So, for a family of 4, it would be $14,600 (for year 2009)
    • Year 2018-2025: As per TCJA of 2017, Personal exemption has been eliminated. If Personal exemption and SD were both same as before the cuts, SD would be about $25900/2, and Personal exemption would be about $4K, so sum of the two for a family of 4 would be about $13K+$4K*4=$29K. So, TCJA resulted in loss of about $3K in tax deductions for a family of 4. However, later we'll see that child credits were doubled, getting us to a breakeven point compared to before TCJA.

The exemptions listed above are always there (with exception of personal exemption from 2018-2025), though their amount varies each year. Any additional deductions are for certain years only, but are listed above for completeness.

So, your taxable income subject to tax after these deductions is ($TIT) = AGI - Std_deduction - Exemption*number of dependents - Any_other_exemptions.

Now, we need to calculate taxes on $TI (taxable Income or item 43 on form 1040 for year 2009). In US, there are marginal tax rates, implying you pay a higher tax rate for higher income. Tax rates start from ~10% for lower income, and goes as high as 40% for higher income. You can look at sample tax rates for 2009 by going to IRS website. Here's a quick summary:

  • you pay 10% on income between $0 and $C1 (For single person $C1 is around $10K, for married person filing jointly $C1 is doubled)
  • you pay 15% on income between $C1 and $C2 (For single person $C2 is around $35K, for married person filing jointly $C2 is doubled)
  • you pay 25% on income between $C2 and $C3 (For single person $C3 is around $85K, for married person filing jointly $C3 is $150K)
  • you pay 28% on income between $C3 and $C4 (For single person $C4 is around $170K, for married person filing jointly $C4 is $220K)
  • you pay 33% on income between $C4 and $C5 (For single person or married filing jointly $C5 is around $370K for both)
  • you pay 35% on income over $C5 (Top tax bracket range is 35%)

As you can see that income threshold for higher taxes are doubled for married people for income < $150K. This is so that people in middle class (those typically making < $250K) don't get penalized for being married, where only 1 spouse is working. However for higher income, married people don't get any advantage.

So, net tax payable ($NT) = tax_rate*$TIT (tax rate will apply different to different portions of your income as it's marginal progressive tax rate)

Credits:

Once you calculate your taxes using the tax rate table, you can now start claiming credits on your tax. Remember, credits are different than deductions. Deductions as mentioned above only lower your taxable income by that amount, so you are only saving on tax that would have paid on that income. Credits in contrast lower your tax bill by the credit amount. For Ex, suppose your net taxable income is $10K, and you are paying tax of $1K (assuming 10% tax rate) on this. If you are allowed to take an additional deduction of $1K, this will lower your taxable income to $9K, and so you will be paying a tax of $900 now (assuming 10% tax rate). That's a savings of $100. Now on the contrary assume that you are allowed to take a credit of $1000. Then, you subtract $1000 from the tax of $1K and you are left with $0 in taxes. So, credits are much more beneficial than deductions.

Few of the credits that are more commonly used. Note these credits vary widely from year to year.

  1. Child credit: For every child you have, you can take some credit provided the child is under a certain age limit and satisfies certain other requirements. a credit of $1000. This is on top of the personal exemption that you can claim for your child. So, for a person in 15% tax bracket range, this is like a total of around $1500 that you get per child from the government.
  2. Earned Income Credit, Make work Pay credit, Education credit, etc ...

So, final tax payable ($FT) = $NT - all_credits

Final Taxes:

Year 2009:

So, let's take an example of a person making $110K, married filing jointly and having 2 kids, and filing taxes for year 2009. We chose $110K, since for any salary upto $110K, a tax filer is able to get advantage of most of the credits/deductions, and still falls under 15% tax bracket. His final tax is as follows:

  • Taxable wage for Social security and Medicare = $110K - $3K (health insurance premium) - $1K (FSA contribution) = $106K. This is your AGI.
  • SS and Medicare tax (collectively known as FICA tax) = $106K*0.0765 = $8.1K.
  • If you are enrolled in HDHP instead of regular co-pay plan, then you can deduct your HSA contribution, to lower down your AGI. So, if you contributed let's say $5K in HSA, your AGI will be $101K. Note, that you have to pay SSN and medicare tax on this HSA contribution of $5K. Look in health insurance section for details about HSA.

Taxable wage for Federal Tax = $106K - $12K (401K contribution of $7K + HSA contribution of $5K) = $94K
Federal taxable wage after deductions = $94K - $12K (standard deduction) - $14K ($3.5K *4 as 4 dependents) = $68K

Federal Tax = $9.6K (approx based on 15% tax rate on $68K)
Credits = $2K for two kids
Net tax to be paid = $9.6K - $2K = $7.6K

State Tax = varies depending on state

So, net tax = $7.3K (SS/Medicare) + $7.6K (regular) = $14.9K (assuming no state tax)
As a percentage of your income, your net tax is less than 15% on your total wage (for a married couple with 2 children for year 2009). That's a pretty low tax rate on a salary of $110K.

Year 2022:

So, let's take an example of a person making $150K, married filing jointly and having 2 kids, and filing taxes for year 2022. We chose $150K for 2 reasons: Firstly a salary of $110K in 2009 would  easily be $150, since for any salary up to $110K, a tax filer is able to get advantage of most of the credits/deductions, and still falls under 15% tax bracket. His final tax is as follows:

  • Taxable wage for Social security and Medicare = $110K - $3K (health insurance premium) - $1K (FSA contribution) = $106K. This is your AGI.
  • SS and Medicare tax (collectively known as FICA tax) = $106K*0.0765 = $8.1K.
  • If you are enrolled in HDHP instead of regular co-pay plan, then you can deduct your HSA contribution, to lower down your AGI. So, if you contributed let's say $5K in HSA, your AGI will be $101K. Note, that you have to pay SSN and medicare tax on this HSA contribution of $5K. Look in health insurance section for details about HSA.

Taxable wage for Federal Tax = $106K - $12K (401K contribution of $7K + HSA contribution of $5K) = $94K
Federal taxable wage after deductions = $94K - $12K (standard deduction) - $14K ($3.5K *4 as 4 dependents) = $68K

Federal Tax = $9.6K (approx based on tax rate on $68K)
Credits = $2K for two kids
Net tax to be paid = $9.6K - $2K = $7.6K

State Tax = varies depending on state

So, net tax = $7.3K + $7.6K = $14.9K (assuming no state tax)
As a percentage of your income, your net tax is less than 15% on your total wage (for a married couple with 2 children for year 2009). That's a pretty low tax rate on a salary of $110K.

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Published: Wednesday, 23 March 2022 18:55
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Enjoy :-))))

 

You don't know shit:

A guy was seated next to a 10-year-old girl on an airplane. Being bored, he turned to the girl and said, "Let's talk. I've heard that flights go quicker if you strike up a conversation with your fellow passenger."

The girl, who was reading a book, closed it slowly and said to the guy, "What would you like to talk about?"

Oh, I don't know," said the guy. "How about nuclear power?"

"OK," she said. "That could be an interesting topic. But let me ask you a question first. A horse, a cow and a deer all eat the same stuff... grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?"

The guy thought about it and said, "Hmmm, I have no idea."

To which the girl replied, "Do you really feel qualified to discuss nuclear power when you don't know shit?"

Idiots in classroom:

"If there are any idiots in the room, will they please stand up" said the sarcastic teacher.

After a long silence, one student rose to her feet.

"Now then young lady, why do you consider yourself an idiot?" inquired the teacher with a sneer.

"Well, actually I don't," said the student, "but I hate to see you standing up there all by yourself."

Relatives:

My father would have used one of his favorite jokes to explain the situation.

A husband and wife were driving down the countryside and came across a farm filled with pigs, donkeys and mules.

The husband pointed to them and said to his wife, “Your relatives.”

Without missing a beat, she said, “Yes. In-laws.”

 Forgiveness:

One Sunday in church, Pastor's sermon was about forgiveness. He asked everyone in the church to stand up. Then he asked those who had any enemies to sit down. Everyone sat down but one very old woman.

"You have no enemies at all?" asked Pastor.

"Not a single one," she answered, nodding her agreement.

"Please, come up here and tell everyone how you reached such a great age without having any enemies," said Pastor. A deacon accompanied the elderly woman to the pulpit and everyone in church applauded as she slowly made her way up the steps. Pastor adjusted the microphone.

"You must have done a lot of forgiving," said Pastor. "Please, tell us your secret."

The old lady smiled beatifically.

"I outlived the bitches," she said.

 

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Published: Wednesday, 09 February 2022 01:33
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Flights:

There are many Airlines both domestic and international that you can take from USA to any other place in the world. Some airlines are most effective for flying within USA, while others are cheaper when flying internationally. It's a non solvable problem on how to find the cheapest flights to anywhere. One of the sites that comes closest to helping you is www.google.com/flights. Here you can put in your dates and it will show you the whole monthly grid for all departure and arrival dates. It doesn't allow you to book from their site, but gives you instructions on where to go to book at the price they are showing you. I've used google flights website almost exclusively to find best deals on flights. you can also just explore a country or just explore to find cheapest flights to anywhere. A lot of neat info.

Few tips when booking flight tickets:

  • Book Directly: Always book directly from the airline website (i.e www.delta.com, www.klm.com, etc). That way you deal directly with the Airlines company. Also, as a sided bonus, you have 24 hours to cancel any flight and get full refund. This is by law of USA, and no Airline can deny that. IF you book via a travel agent, then this protection still applies, but travel agents may charge a service fee, etc.
  • NO OTA: Never book from travel companies or  3rd party reseller websites (OTA or Online Travel Aggregator) (i.e www.expedia.com, www.cheapoair.com, etc) for reasons mentioned above. These middle men companies basically butcher you when you try to modify or cancel an existing reservation. They will try to sell you tickets $5-$10 cheaper (by using coupons when you book your ticket the very first time) than booking directly from the airlines, but it's not worth it.
  • No Insurance: Never buy insurance or higher priced tickets which provide you protection in case your flights get cancelled or your plans change. Such insurance costs a lot of money. It's usually cheaper to call the airlines directly, and pay a little money ($100 or so along with the fare difference) and get the tickets modified.
  • Use Good Credit Card: Always book airlines tickets with a credit card that provides full protection incase you aren't satisfied with your purchase. A credit card like "Chase" has always covered me in case airlines refused to refund.
  • Fly off season: When you fly off season, you can fly for so much cheaper than when you fly during holiday season. For USA, peak prices are in November around ThanksGiving, in December round Christmas, during summer (from late May to Mid August), during spring break (mid March) and during long weekends (.e when it's aholiday on Fridy or Monday, giving you a 3 day weekend). These high priced dates very much coincide with when schools are off in those cities. Whenever Kids schools are having a holiday, prices go up significantly, as everyone wants to use Kids holidays to travel. In USA, school attendance is mandatory, and kids can't skip schools for more than 10 days or so in the whole year (unless accompanied by a doctor's note). So, everyone schedule their travel plans around Kid's holidays. Best to avoid those times. If you do have to travel uring these holidays or peak travel time, try to drive to that place and choose a place within driving distance. That way you don't have to cough up 10X the price for flight tickets. You will still be paying higher for hotels or lodging.
  • Single Reservation Code: Always book flights which are all under a single reservation code. What I mean is that if there's a layover or a stop in between your flight, then all segments of your flight should all be booked under a single code. This will automatically happen if you book your ticket directly with airlines, so it's not an issue there. However, if you book tickets thru OTA, then they may sometimes book your tickets separately for each segment of your flight. If you are traveling internationally, those tickets may not even be valid, and you may not even be allowed to board the plane. It's very important to note this, as there will be no refund and no alternate flight to take.
  • Beware of Scam: Google flights will list a lot of legal scam OTA in their search. I've fallen prey to these, and never thought that companies like google will allow scammers to be in their search results. Reviews are all over the internet, on how these scam companies never refund any money, nor have any customer service. By the time you file dispute with your credit card, it's already beyond 60 days, so you are out of luck. Some of such OTA:
    • Kiwi => www.kiwi.com : => This is one of the scam companies that shows up in top search results. They provide cheaper flights, the only catch is you won't have any flights.
    • Flight Network => www.flightnetwork.com : => This is another of those scam companies, that I've been a victim of. They literally disappear after taking the money. I got flight cancellation emails, no customer service to talk to. Thanks to "chase dispute provision" on their credit card, I was able to dispute the charge and get all of it back. I was lucky as my flight was within 60 days, so I found out.
    • FlightHub => https://www.flighthub.com : => This scammer shows up in search results from Kayak, as well as few other scam companies. Their prices will always be few hundred dollars cheaper, but your tickets may get cancelled, or may turn out to be fake. On top of that, they will charge you for multiple insurance. You have to keep on watching your credit card for every charge from them, as mot of them will be bogus charges.

 

 

Government Mandated rules for USA flights:

 

 

Domestic Flights in USA:

These are few airlines which are really cheap for flying domestic:

  • Spirit / JetBlue Airlines: These used to be separate companies, but announced merger in 2022. These are one of the cheapest airlines as you can make a roundtrip within USA for < $100. However, they allow only 1 carry on and no checkin for free. Even the carry on can't be anything larger than a backpack that should fit under the seat in front of you. If it doesn't look like backpack or small enough size, they will charge you for extra luggage. Every extra luggage costs you more than the price of the ticket itself. They nickel and dime for everything, but that's just because they are so cheap. If you have kids or luggage, then these airlines are NOT for you. Nevertheless, you should always check the fares on these airlines before you book anywhere else. Jetblue used to have "All you can Jet" sales in between 2010-2020, where you could buy an unlimited pass for $500 or o for 30 days, and then fly anywhere to anywhere within USA as many times as you wanted within those 30 days (i.e like a flight buffet for 30 days). They don't offer these anymore (at least I haven't seen any such promo since 2020). Best to avoid this airline unless you are desperate.
  • Frontier Airlines: They tried to merge with Spirit, but that deal didn't go thru. Now, Frontier is the only other low cost airline. Their fares, service, etc are similar to Spirit Airlines. They too nickel and dime for everything, so best to avoid. They also have also started "All you can fly pass" wich is as useless as their airline.
  • Southwest Airlines: Southwest is one of the best airlines with the best service. (UPDATE 2025: A lot has been changing since 2024, and SW may be not much better than Spirit/Frontier, etc. So, check before you fly.) They charge you more, but they often have sales going on. Most of the times in off season, you can find flights for $100-$150 roundtrip in USA. They allow 2 checkins and 1 carryon for no extra charge (UPDATE Mar, 2025: No more free bags => https://www.doctorofcredit.com/southwest-will-start-charging-for-checked-bags-ending-2-free-bags-policy/). You can change flights without incurring any fees, though those new vouchers will expire within a year (southwest updated their policy as of July 2022, where these credits won't ever expire, so excellent deal for consumers). They also have few international destinations in Central and South America, here you can get great prices during off season sales. Check their website for all destinations. Their Giftcards are usually on 10% sale at Costco and Sams club. You can load up as many as you want, so it's effectively 10% discount on your tickets. Sometimes during Thanksgiving, memorial day, or random times of year they have 15%-25% sale off these GC. That is the only time that I try to pick these GC. Booking Southwest flights with credit card gives no additional advantage, as southwest anyway allows you to change flights for free. So, buy these GC in advance, if you anticipate a flight in near future (taxes + fees can be paid using GC too. Only caveat is you can use a max of 3 GC per passenger, and max 3 forms of payment, so you may need to use other form of payment as credit card. Southwest airlines is not included in any search result on internet, so you don't really see them listed on any travel portal website I don't know of any way to look up prices of southwest flights, except by going directly to southwest.com. (UPDATE: May 2024: They are now included in google.com/flights and shows up in their search too, but booking has to be done via southwest.com).
    • Southwest GC on sale:
    • SW GC can't be used for:
      • EarlyBird Check-In 
      • Pet Fares 
      • Unaccompanied Minor fees 
      • Southwest Vacations Packages 
      • Cargo 
      • Hotel 
      • Rental car 
      • Southwest Airlines merchandise 
      • Oversized, overweight, and excess baggage fees 
      • Upgraded Boarding at the airport
    • Southwest Rapid Rewards (RR) membership: I would recommend to become a rapid rewards member. It's free to sign up. Few advantages of RR membership:
      • All your credits, vouchers can be stored in your account, otherwise the credits/vouchers remain attached to the reservation number, and it's hard to retrieve them in case you don't remember your old reservation number. You have to search thru countless emails.
      • You also get points for every flight you take. You earn points @ 6 points/dollar spent => 6% cashback for cheapest "Wanna Get away fares". For more expensive class, you earn 8, 10 or 12 points per dollar. Points are valued at around 1.3-1.4 cents per point. So, effectively you are getting around 10% cashback. That means for every 10 flights taken, you may earn 1 free flight. You can also get points by making other non-airline purchases. This 10% cashback is pretty generous, as even other big airlines give you 15% cash back at best (UPDATE Mar, 2025. Points have been devalued to 2 points/dollar, basically points are useless now => https://www.doctorofcredit.com/southwest-cuts-earning-rates-on-wanna-get-away-fares-6-2/).
      • You can also buy points if you are running short on them. They sell points for 3 cents per point. Many times they have sale on points, where you can buy them for 1.5 cents per point. One such sale is here: https://onemileatatime.com/deals/buy-southwest-rapid-rewards-points/
    • Southwest Vouchers: You get Vouchers from SW when they delay flights, cancel flights or for any other reason. These usually expire within a year. The trick to stop them from expiring is to use them to book any flight for that amount or slightly over the voucher amount. Use the Vouchers to pay for it, and then cancel the tickets immediately. Then you'll get the refund as flight credits which never expire (as per updated rules from 2022). You don't lose anything in the process, and can effectively use the credits anytme in future.
    •  Southwest flight search: If you are looking for lowest fares to all cities in USA from a particular city, there's a direct link where it shows this. I use this often to plan random trip to places, when it's going for < $100 roundtrip.
  • American Airlines, United, Delta and Misc: All these airlines also provide a lot of domestic flights, but their prices vary a lot. Also, their cheaper flight options have same kind of restrictions on luggage as Spirit/Frontier, etc (i.e allowing only a backpack for free, no refunds, etc).  Usually you will be able to find same iterinery flights for little bit more at Southwest. So, it's best to go with Southwest as it gives you much better value in terms of price and flexibility (i.e free cancellations, points, 2 baggage for free, etc).

 

 

International Flights from USA:

For International flights, there's no single option. Off season, you may get crazy deals for flying to the other side of the globe for $700 (i.e India, Thailand, etc), or $200 for flying to Europe. Many travel companies offer decent packages for traveling to other countries which include hotels, flights as well as entrance tickets to many of the attractions. Groupon is usually a good place to start your search for such vacation packages. Few good airlines to fly to India are KLM, Delta, Emirates, Qatar, Lufthansa, British Airways, etc.

  •  International destinations: Destinations like Cuba, Puerto Rico, Mexico, etc have deals from time to time where you can get flight tickets for < $200 roundtrip on AA, delta, etc. Look for those in google.com/flights.

Links for some cheap flights:

Slickdeals link is one of the best places to see if there's anything being given out for cheap. Of course they are from a specific city to anther specific city, so this is mostly for people who are just looking to go anywhere anytime.

https://slickdeals.net/travel-deals/

 Few such deals:

 

 

GC DEALS:

 

Southwest $500 GC deals on costco.com and samsclub.com :

On reddit: Apparently people are selling SW on reddit for less than 75%, i.e $500 SW credit selling for < $375 (Google “reddit gift card exchange). Not sure how safe is it??

Southwest GC deal for 10% off is always valid at these 2 discount stores. Deals for > 10% come few times a year. During Thanksgiving, Christmas, you may get the GC for 14% off. Sams club had it for $400 on 2023 BF deal. Costco's lowest had been $420. $430 is the more common one, so buy it at that price. If you bought the GC for a higher price from costco and are within 30 day window, see costco in the "stores" section for a price match. It's hit or miss, but worth the try. Costco also gives 2% cashback for being a executive member on everything, so essentially you are getting $500 GC for $420. Below are the deals:

 

 

 

2025:

 

 

05/12/2025: Cheap ticket from USA to India = $494 from SFO to Mumbai

Roundtrip from San Francisco to Mumbai, India on Delta/KLM for $500 for travel in 2025 (Selected dates only). Similar to earlier deals from 2022 and 2023. However, this is insanely cheap, with Airlines losing money. If you are near SFO area, definitely book it, as it seems to be a price mistake, and will go away any time soon. I can't take advantage of this deal, so bad :(

https://slickdeals.net/f/18309850-rt-san-francisco-to-mumbai-india-494-airfares-on-virgin-atlantic-or-lufthansa-with-1-free-checked-bag-travel-september-november-2025

 

 

 

2024:

 

,

03/09/2024: Southwest $500 GC for $430 on costco.com : expires 03/10/2024 

Same deal as last time on costco.

https://slickdeals.net/f/17342835-southwest-airlines-500-e-gift-card-430-from-costco

 

 

 

2023:

 

 

,

05/27/2023: Southwest $500 GC for $430 on costco.com : expires 05/28/2023 

Same deal as last time on costco.

https://www.doctorofcredit.com/costco-com-500-southwest-egiftcard-for-429-99-limit-2/

 

 

04/12/2023: Cheap ticket from USA to India 

Roundtrip from New York to New Delhi, India on American Airlines for $650 for travel in Feb 2023. Similar to  a deal from 2022 from San Francisco to New Delhi on Singapore Airlines.

https://slickdeals.net/f/16571627-american-airlines-round-trip-nonstop-flight-from-new-york-ny-to-new-delhi-india-648-travel-february-2024-select-dates?src=frontpage

 

,

03/14/2023: Southwest: 20% Off Points Bookings With Promo Code SAVE20NOW => expires 03/16/2023

You get 20% off when booking with points, when traveling by May 24, 2023. Cancel and re book for existing flights, if fares are the same or lower.

https://www.doctorofcredit.com/southwest-20-off-points-bookings-with-promo-code-save20now/

 

,

03/03/2023: Southwest $500 GC for $430 on costco.com : expires 03/05/2023 

Usually these GC go for $450, so you are getting extra $20 or extra 4% discount. Limit 2 per account. If you are frequent SW traveler and traveling in next few months, you may want to haord up. Otherwise not worth it, as that $500 is anyway yielding 5% yearly in bank accounts, so extra 4% is more or less a washout.

https://www.doctorofcredit.com/costco-com-500-southwest-egiftcard-for-429-99-limit-2/

 

 

 

2022:

 

 

,

10/26/2022: Frontier Airlines launches "all you can Fly": 

Frontier Airlines  announced "all you can fly" pass similar to what we had seen for JetBlue. But this is 1 year pass compared to 1 month pass for JetBlue. Details are unknown, but might be a good deal who can take off from work during weekdays.

https://www.doctorofcredit.com/frontier-to-launch-all-you-can-fly-gowild-pass/

UPDATE: One important detail that I found id that flight is only confirmed a day before departure, so basically you are on standby all the time on all the flights. So, basically renders this pass useless for any trip, as you can't plan anything, and risk getting stuck in a foreign city with unlimited expenses.

 

,

09/26/2022: Few cheap air tickets to Europe from USA: 

Jan-Mar of any year is very low on air travel, and so deals abound. Here are few:

Roundtrip Newark, New Jersey to Barcelona, Spain for $300:

https://slickdeals.net/f/16047343-roundtrip-flight-newark-nj-ewr-to-barcelona-spain-bcn-298-travel-january-may-2023?src=frontpage

 

 

09/08/2022: Cheap ticket from USA to India 

Roundtrip San Franciso, California to New Delhi, India on Singapore Airlines for $700 for travel between March 2023 to May 2023:

https://slickdeals.net/f/16058476-san-francisco-to-new-delhi-india-687-rt-airfares-on-5-singapore-airlines-with-2-free-checked-bags-flexible-ticket-travel-march-may-2023

 

 

09/07/2022: Free Companion ticket when booking with Southwest: Expires 09/08/2022 

This offer comes about 1-2 times a year. You get a free companion pass for traveling between 4th Jan, 2023 and 4th Mar, 2023. However, you need to book your current flight by 8th September, 2022 for travel by 17th November, 2022, in order to get the companion pass. Companion pass will be issued on Jan 4th, 2023, so you can book your 2023 flight only after that date.

https://www.doctorofcredit.com/southwest-get-2-months-companion-pass-when-you-fly-once-by-11-17-22/

 

 

 

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