Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
As such, it is much more common for such firms to "low-ball" on salaries so as to keep FICA expenses low and maximize what is seen in the form of S-Corporation distributions, which are exempt from FICA. ON the other hand, C-Corporations tend to maximize salaries and minimize dividends because the former is deductible but the latter is not. Beyond that, the IRS is clearly not a fan of the five percent of gross receipts aspect of the construction business in this case. It is clearly a thinly veiled dividend because it goes up and down (scales) with the revenue of the firm, much like a dividend (Kirkland, 2013). The solutions to this challenge is to either classify the upper half of the income as regular income that is fixed in nature or reclassify the salary above the first five million as a dividend. If minimizing tax impacts is the goal, then paying all of the President's salary as straight salary is probably the goal. However, adjusting it to keep up with revenue would be a bad idea. If the revenue fluctuates a lot, a dividend would be the wise course. If business is good and steady, a fixed salary should work…
With regard to the salaried people the federal tax system has improvised a method to flush the surplus spending funds in advance by the mandatory provision of requiring employers to withhold tax from payments in advance which on remitting will be computed as part of the total tax liability of the employee. This method of advance collection is an important feature said to be the pillar of the tax
Soyoung Kayla Kim Law and Economics Economic Analysis of Tax Evasion The taxation system in the United States is highly complex and growing more so each year, with a mass of different types of taxes. The issue of tax reform arises in every election season in the United States as politicians try to reassure as many voters as possible that they will pay the least possible amount of taxes (while still receiving all
tax system of one country with that of another is an exercise fraught with dificulties and ultimately doomed to failure . tax system will never be much more than a reflection of strongly national cultures and forces. discuss this statement in the light of your knowledge of comparative tax system in developing and/or developed countries i Tax Systems The following pages focus on analyzing the factors of influence on different countries'
Where individual taxpayers are concerned, the abstruseness and complexity of filing one's taxes can have the impact of obfuscating the legal imperatives driving one's filing obligations. This means that an individual may report his or her taxes inaccurately but without the intention to commit fraud. According to Daily, "Although auditors are trained to look for fraud, they do not routinely suspect it. They know the tax law is complex
Flat Tax over the Current Tax Policy The focus of this paper is to demonstrate effectiveness of flat tax over the current tax rate. Presently, the U.S. government employs progressively tax law as the current tax policy. Under the current tax policy, the government increases taxes with increase in income. Analysis of the current tax policy reveals that the tax system is very complicated to understand because corporate organizations face multiple
global tax treaties, UN model and OECD model with the view of analyzing their consideration towards rights to capital and tax income. By throwing light on differences and similarities among the models, the fundamental logic of each of them is explained. The article explains the prospecting policies of consideration when tax treaties are to be signed. It is because there is strong need to enforce a flexible but more