The tax base of a community is the total assessed value of income and property, used to calculate taxes owed and fund government services. It includes property value, sales activity, and earned income. Regular evaluations are necessary to adjust tax rates and avoid placing an unreasonable burden on citizens. Tax bases, as they relate to […]
Homeowners with mortgages can deduct interest on their primary and second mortgages, as well as take advantage of a home office deduction. Points paid when buying a home or refinancing are also tax deductible, while costs associated with selling a home can be deducted from taxable income. Eligibility requirements vary and should be checked annually. […]
US taxpayers can benefit from refundable tax credits, such as the earned income tax credit and additional child tax credit, which can result in a net payment from the treasury to the taxpayer. Tax credits are generally more valuable than tax deductions as they directly reduce taxes owed. Refundable tax credits have been subject to […]
Buying tax lien certificates can be a low-risk investment with attractive returns, but buyers should research the sales process, understand the rights conferred by ownership, consider the impact of bankruptcy filings, and assess the condition of the target property and any environmental issues. Buying tax lien certificates is an investment strategy known for its relatively […]
Tax due diligence is a vital part of corporate mergers and acquisitions, requiring an in-depth review of tax documents by professionals. It satisfies the fiduciary duty of executives and directors to maximize value for shareholders and can take months to complete. Tax consequences can make or break a sale, and multinational companies require a professional […]
The Low Income Housing Tax Credit is a federal program that provides tax credits to developers who build low-income housing. State authorities distribute the credits according to federal guidelines, and projects must meet income threshold requirements and maintain standards for at least 30 years. Investors can use the credits to reduce their tax liability for […]
GAAP and tax accounting have different rules and motivations, with GAAP providing more detail and a better overall picture of a company’s health. Both methods are necessary for tax filing, and larger companies with international presence may use International Financial Reporting Standards (IFRS). The main differences between generally accepted accounting principles (GAAP) and tax accounting […]
The tax benefit rule in the US requires taxpayers to pay tax on recovered money that wasn’t counted in previous taxable earnings, with exceptions that can reduce tax bills. It applies only if there was a tax benefit, and taxpayers must itemize the situation on their tax return. The tax benefit rule is a feature […]
Tax planning involves managing tax implications, understanding deductible expenses, and planning to ensure timely payment. It aims to reduce taxable income through exemptions, deductions, and tax credits. Tax planning is a broad term used to describe the processes used by individuals and businesses to pay taxes due to local, state, and federal tax agencies. The […]
A carbon tax is a tax on greenhouse gas emissions, designed to account for the social cost of those emissions. It can be levied on all emissions or companies can receive a cap and pay a tax on emissions above that level. A major disadvantage is that it is a national measure trying to solve […]
A tax analyst ensures a company follows tax laws, completes tax forms, and identifies opportunities for savings. They must stay current with tax codes and make recommendations to management if discrepancies are found. A tax analyst is a financial officer who specializes in a company’s tax matters. One of the most important jobs an analyst […]
Consolidated tax returns allow affiliated corporations to file one return for the annual period, simplifying the tax filing process and sometimes allowing for tax breaks. The format was developed in the early 20th century to prevent profit shifting and became mandatory in 1918. It was repealed after World War I but reinstated in 1942 due […]
Corporate tax planning involves minimizing tax liabilities through deductions and write-offs. It varies by jurisdiction and requires understanding of tax laws. Multinational corporations must be particularly cautious. Planning is usually done by accountants or lawyers and involves studying inferences, loopholes, and exclusions. It is advisable for businesses to invest in tax planning to maximize savings. […]
Excise taxes are levied on certain goods and services, such as clothing, gasoline, or prepared food, by local, state, or national tax agencies. They can be used instead of or in addition to income taxes, and are used to generate revenue for community improvements. Different variations of the tax exist, and some countries charge more […]
Sales tax audits are conducted by tax authorities to ensure correct payment of taxes. Audited companies must provide records and may face penalties for errors. Sales tax is a major revenue stream for many jurisdictions, and audit procedures vary. Companies may also apply for refunds if they have overpaid. Some businesses hire outside consultants to […]
Trusts offer tax exemptions depending on their structure and disbursement of funds. Beneficiaries are usually exempt from inheritance tax until they receive funds, and undistributed income is not taxed. Seek legal advice to optimize financial benefits and comply with tax laws. Many different types of trusts offer the benefit of some form of tax exemption. […]
Keep tax documentation for at least seven years, including W-2s, but discard accompanying materials like receipts and interest income statements. Retain some tax documents for more than ten years to prove eligibility for retirement income. It’s often hard to know when you can get rid of personal records, like tax paperwork. Also, it can be […]
FUTA tax is a tax paid by employers on behalf of their employees in the US, established by the Federal Unemployment Tax Law to provide resources for unemployment benefits. It is not deducted from employees’ paychecks and is subject to certain qualifications and changing regulations. In the United States, FUTA tax is a specific type […]
Choose the best corporate tax software by comparing features and testimonials, ensuring it is approved by tax agencies, interfaces with accounting software, and allows for transfer of personal income tax information. Partnerships are pass-through entities, and the best software should provide official tax returns for each jurisdiction and import information from accounting software. You can […]
Tax planning is a business planning process executed according to a fiscal year, which is different from the traditional calendar year. Businesses use tax planning to mitigate tax liabilities, calculate revenue, and accurately write-off expenses. Different nations have different rules for the fiscal year, and tax planning is considered a normal part of business accounting. […]
