Expatriates that work overseas may be able to reduce their tax bill by filing IRS Form 2555. This is because the foreign-earned income exclusion allows certain US citizens to exclude a portion of their earnings from federal taxes. In order to qualify for this, expats must meet the bona fide residency and physical presence tests. … Read more
When workers have been misclassified as independent contractors, they can use Form 8919 to report the amount they believe should have been withheld from their pay. This will ensure that their Social Security earnings are correctly credited to their record. If you are a recruiter who provides contract staffing services, it is your responsibility to … Read more
When it comes to investing in small businesses, tax incentives can make a significant difference. Section 1202 of the Internal Revenue Code (IRC) offers a potential avenue for tax savings through the Qualified Small Business Stock (QSBS) provision. QSBS refers to shares of stock in certain qualifying small businesses, and taking advantage of the Section … Read more
Pensions and annuities are both types of retirement income streams, but they differ in their structure and how they are funded. A pension is a fund set up by an employer to pay a person a steady stream of income after they retire. It is typically tax-deferred and provides a guaranteed minimum income level at … Read more
Credit for the Elderly or Disabled is a tax credit, which means that it lowers your total tax liability dollar for dollar. The IRS provides a maximum credit of $7,500. It is available to individuals who are either above age 65 or have a permanent and total disability and have taxable disability income. The credit … Read more
Pass-through business owners can claim a deduction on up to 20% of their qualified business income (QBI). The deduction is available for taxable income up to a threshold that increases each year with inflation. For tax year , the threshold is $364,200 for married taxpayers filing jointly and $182,100 for single taxpayers. The deduction is … Read more
Taxation is integral to any government’s financial structure, providing the necessary funds to support various public services and initiatives. Among the different types of taxes imposed by the Internal Revenue Service (IRS) in the United States, excise taxes play a significant role. IRS Publication 510 is a comprehensive guidebook created by the Internal Revenue Service … Read more
A tax implication refers to the consequences, obligations, or effects that arise from a specific financial transaction or event about taxation. It represents the impact on an individual or entity’s tax liability, including the calculation and payment of taxes, potential deductions, exemptions, or credits, and compliance with relevant tax laws and regulations. Tax implications can … Read more
IRS Publication 551, Basis of Assets, is a critical resource that aims to clarify the intricate process of determining the basis of assets for tax purposes. The basis refers to the value assigned to an asset, which is used to determine the amount of gain or loss when the asset is sold, exchanged, or disposed … Read more
Trusts are legal vehicles for allowing third parties to hold and direct assets on behalf of beneficiaries. They can help people avoid taxes, protect their estates from creditors and heirs and dictate the terms of inheritance. Trusts are not just for the wealthy; anyone can set up a trust to meet their particular needs. A … Read more