To claim a medical expense tax deduction, you must have incurred tax-deductible medical expenses, complete the appropriate forms, and itemize your deductions. Deductible expenses vary by jurisdiction and must exceed a certain percentage of your adjusted gross income. Allowable expenses include physician fees, hospital stays, tests, dental fees, and medically necessary aids. You may also […]
A gross tax is additional compensation paid to cover an employee’s tax liability for benefits received, with approximately 77% of large US corporations offering it. The tax increase is the most commonly used benefit, but it is controversial due to criticism of excessive executive pay packages. The SEC issued new regulations in 2006 to increase […]
Businesses use tax returns to report sales tax collected and paid to the government agency. Sales tax is a flat rate charged at the point of purchase, and the government agency responsible for administering the tax creates rules about what items are taxable. Businesses can either receive a credit for sales tax paid on purchases […]
US taxpayers can give up to $13,000 tax-free in gifts each year, with couples able to give up to $26,000. Charitable gifts and donations to a spouse are exempt, while the unified credit exempts the first $1m in gifts during a person’s lifetime or at death. The gift tax exclusion is often used as an […]
The home improvement tax credit was a deduction for American taxpayers who made energy-efficient improvements to their homes, established in 2009 as part of the American Recovery and Reinvestment Act. The credit expired in 2010/2011, but some states offered similar incentives. A home improvement tax credit is a deduction that American taxpayers were allowed to […]
Two types of flat tax systems proposed for the US: flat sales tax and flat income tax. Benefits of flat sales tax include consistency and ease of management, but some areas may lose revenue. Flat income tax promotes fairness, but some households may pay more and tax deductions would not be allowed. Experts predict economic […]
Intangible assets, such as copyrights and patents, require an intangible tax, which is a form of sales tax. The tax rate is determined by adding a percentage of the item’s value to its retail cost. However, the value of intangible assets can be difficult to quantify, leading to undervaluation or avoidance of the tax. The […]
LLCs in the US are subject to tax as a separate entity or through pass-through income tax of its members. They must follow the same tax deduction rules as other businesses, with allowable expenses falling into two categories: capital expenditures and business expenses. Business expenses include overhead costs, while capital expenditures require depreciation. LLCs can […]
When visiting a tax preparation service, bring personal identification, income verification forms, Social Security benefits information, past tax returns, child care provider information, unemployment compensation statements, and receipts for medical expenses, charitable contributions, and interest and mortgage payments. Using a professional tax preparer can be a great idea, especially if there isn’t much time to […]
A tax return loan is a cash advance offered by tax preparation companies, allowing taxpayers to receive their refund within 24 to 48 hours, but fees are deducted from the refund, reducing the amount received. Qualification requirements vary, and fees may include loan origination and finance charges. A tax return loan is a cash advance […]
A recapture tax allows a state or provincial tax agency to impose a tax on a deceased taxpayer’s estate, diverting funds from national or federal governments. It is common in the US, where some states do not impose estate, death, or inheritance taxes. The process is straightforward, but if no estate taxes are owed to […]
The estimated tax penalty is a penalty collected by the IRS when a person underpays estimated taxes or does not pay on time. Individuals must pay estimated taxes on income not subject to automatic withholding, and certain situations may allow a person to obtain a waiver to avoid the penalty. An estimated tax penalty is […]
The additional child tax credit is a refundable credit beyond the taxable income bill for parents who have a child or dependent to care for, but they must meet specific eligibility requirements set forth by the IRS. A professional tax preparer can help determine eligibility. The additional child tax credit is a specific part of […]
A tax clerk is responsible for tax functions, such as collecting taxes and issuing licenses. It is an entry-level job that requires a minimum of a high school diploma and basic computer and customer service skills. The clerk can work at the local or national level. A tax clerk is an individual who works in […]
Tax penalties are fees for misrepresentation of information or late payments. They vary depending on the violation and jurisdiction, and are in addition to any taxes owed. Common penalties include underreporting income and late payments. It is important to be honest and seek help from an accountant or tax attorney, and to create a payment […]
Tax incidence determines which group ultimately pays a tax, with the burden often passed on through economic layers. The true payer of the tax is usually the group that pays the most, which can be the retailer or customer for commercial products. However, in some cases, such as with perishable goods or local taxes, the […]
A tax refund in the US is the result of overpaying taxes during the year, which is returned to the taxpayer. Some view it as forced savings, while others see it as an interest-free loan to the government. Tax preparation and planning can help avoid overpaying taxes. Consulting a tax professional may be necessary for […]
The Canadian dividend tax credit reduces the tax citizens pay on dividends from Canadian companies. Eligible and non-eligible dividends are taxed differently, but the credit generally equals the amount of the dividend. The credit offsets the tax collected on the dividend payment, eliminating double taxation. The effective tax rate on dividends has decreased, increasing the […]
Tax refund loans, also known as instant tax refunds or quick tax refunds, offer quick money owed by the US Internal Revenue Service but are criticized for misleading marketing and high interest rates. Taxpayers should consider all consequences before taking advantage of them. Tax refund loans, which used to be known as instant tax refunds […]
A business tax receipt is a legal document that proves a business has paid taxes and has a current license. It includes business and owner information, taxes paid, and is transferable if the business is sold. Businesses without a receipt may face penalties and fines. It’s important to keep a copy in case of emergencies. […]
