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here 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 and expect to find a few errors in every tax return. They will give you the benefit of the doubt most of the time and not go after you for tax fraud if you make an honest mistake. A careless mistake on your tax return might tack on a 20% penalty to your tax bill. hile not good, this sure beats the cost of tax fraud -- a 75% civil penalty. The line between negligence and fraud is not always clear,…
Daily, F.W. (2010). Negligence vs. Tax Fraud: How Can the IRS Tell the Difference? NOLO.com.
Del Llano, R. (2011). 11 Most Common Tax Fraud Schemes. Governmentfraud.us.
Del Llano, R. (2011). Emerging Schemes. Governmentfraud.us.
McCoy, K. (2012). IRS Tax Fraud Crackdown Targets Identity Thieves. USAToday.
Thus, the per capita tax revenue is presented in Table 5.
Table 5: atio: Per Capital Tax evenue ($Million)
atio: Per Capital Tax evenue
atio: Per Capital Tax evenue
The findings from table 5 reveal that both states record increase in per capital tax revenue at the end of the fiscal years 2009 to 2010. In the New York, the government realizes ratio of $2,880 per person in 2009. However, the par capital tax revenue increased to $2,995 per person in 2010. Thus, the per capita tax revenue is increasing in the New York. Similarly, Pennsylvania recorded ratio of $2,173 per person in 2009 however, the ratio per capital tax revenue increased to $2,228 at the end of the fiscal year 2010.…
Kahn, D.A. (1990). The Two Faces of Tax Neutrality: Do They Interact or are They Mutually Exclusive?. Northern Kentucky Law Review, Vol. 18, p. 1.
State of New York (2009). Comprehensive Annual Financial Report for Fiscal Year Ended 2009. New York State Government.
State of New York (2010). Comprehensive Annual Financial Report for Fiscal Year Ended 2010. New York State Government.
State of Pennsylvania (2009). Commonwealth of Pennsylvania Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2009. Pennsylvania State Government.
Opening: This memo concerns the income tax questions for John and Jane Smith, a married couple. John is a lawyer and has questions regarding income to his firm, investment in office space, and overall preparation techniques. Jan has questions regarding business related activities, real estate investments, business expenses, and business investments.
How is the $300,000 treated for purposes of Federal Tax income?
Under 26 U.S.C. Section 1402, "The term "net earnings from self-employment" means the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business, plus his distributive share (whether or not distributed) of income or loss described in section 702 (a)(8) from any trade or business carried on by a partnership of which he is a member"
All income earned during a business year…
The author of this report is asked to answer a set of four questions relating to tax law and its sources/adjudication. The first question asks what the primary sources of tax law are. The second question asks what the secondary sources of tax law are. The third questions asks what "substantial authority" is as it relates to tax law. The final question asks what the role of the courts and the Internal evenue Service as it relates to interpreting and applying the sources of tax law.
Primary sources of tax law include five major things. The first thing that is a primary source of tax law is the actual Internal evenue Code. The IC is located in section 26 of the United States Code. The second source is the decisions of the United States Tax Court, district courts, the Court of Federal Claims, the federal circuit…
Georgetown. (2013, September 2). Tax Research - Federal Georgetown Law.
Georgetown Law. Retrieved September 2, 2013, from http://www.law.georgetown.edu/library/research/guides/federal_tax.cfm
Tarlton. (2013, March 1). Primary Sources - Federal Tax Research Guide
Tarlton Guides at Tarlton Law Library. Home -- Tarlton Guides at Tarlton Law
An evaluation of two types of taxes: Sales vs. income
Sales taxes are invariably regressive taxes. Poorer people use a larger percentage of their taxes for consumption-related expenses, so they pay proportionately more of their income in sales taxes. For the wealthy, more of their spending is concentrated in savings and investments, since they can save a larger proportion of their income and still meet basic expenses. Of course, given that they often buy more items and more expensive items than the poor, the wealthy may pay more in total sum value than the poor in sales taxes. But as a proportion of their income, it is usually lower. Also, the poor spend a higher percentage of their income on necessities such as food which they cannot cut back on, even when the sales tax increases. Often, items like food and clothing are exempt from the sales tax to…
Are federal taxes progressive? (2012). Tax Policy Center: The Brookings Institution.
Brown, Dorothy. (2012). Let's kill the progressive income tax. CNN. Retrieved:
Tax eturn eporting
In the intensely personal working relationship which is necessarily fostered between tax preparers and their clients, a great deal of trust is required to assure that each party acts in accordance with the rule of law and the boundaries of ethical conduct. Certified Public Accountants (CPAs) and other recognized tax preparers are morally, ethically and legally bound, both by federal tax code and professional pride, but the demands of clients who are interested in preserving their own financial assets often conflict with these priorities. From the disclosure of certain questionably gained assets to the reporting supplementary income to the Internal evenue Service, individual taxpayers often subject their tax preparers to undue pressure and untenable requests. If a client employing my tax preparation services asked that I not report certain information which may implicate them with the law, I would be considerate of their personal circumstances but ultimately…
Davis, C. (2007, December 11). What's different about tax preparer penalties?. California CPA Magazine, 14(12), 132-136. Retrieved from http://www.calcpa.org/Content/24865.aspx
Internal Revenue Service, Office of Professional Responsibility. (2010). CPA disbarred for failure to exercise due diligence and compliance problems. Retrieved from http://www.irs.gov/newsroom/article/0,,id=225261,00.html
United States Treasure Department, Internal Revenue Service. (2011). Regulations governing practice before the internal revenue service. Retrieved from http://www.irs.gov/pub/irs-utl/pcir230.pdf
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 system. The collected amounts are either adjusted to the next year tax if surplus, or credited if equal. This collection method raises revenue to the tune of seventy billion Dollars annually.
The taxation of company income is the subject of a debate. While individual income is taxed, the taxing of corporate income by legal fiction of considering it an entity has caused ire to noted economists and business persons. Heavy burden is shouldered by the stock holder, who also pays the…
Archer, William; Roth, William V; Impact on Individuals and Families of Replacing the Federal
Income Tax. DIANE Publishing. 2000.
Ephraim P. Smith, Philip J. Harmelink, Hasselback. James, R. 2005 Federal Taxation Basic
Principles; CCH Tax and Accounting. 2005.
Tax systems are an important and integral part of any economy around the world. Taxes are imposed by the governments on various activities and it eventually becomes an important source of revenue generation for the governments. Governments use tax revenues in order to finance their public expenditures. Besides that taxation systems are also a very important tool for the governments in order to influence the aggregate demand and consumer expenditures in the economy. This means that the governments influence the way people spend their money. This in turn influences the rate of inflation and employment in the economy.
On a broader perspective there are two types of taxation systems namely direct taxes and in direct taxes. Direct taxes are taxed charged on one's income and they cannot be avoided as they are charged at source. Examples of such taxation system include income tax and corporation taxes. In contrast, indirect taxation…
Altig, D. (1996). Making Sense of the Federal Budget Impasse. 1+. Retrieved August 7, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5045083382
Altig, D., Auerbach, A.J., Kotlikoff, L.J., Smetters, K.A., & Walliser, J. (1998). Assessing Fundamental Tax Reform. 1+. Retrieved August 7, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5045057544
Altig, D., Fitzgerald, T., & Rupert, P. (1997). Is Noninflationary Growth an Oxymoron?. 1+. Retrieved August 7, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=5045040198
Atkinson, A.B. (1996). Public Economics in Action: The Basic Income/Flat Tax Proposal. Oxford: Clarendon Press. Retrieved August 7, 2011, from Questia database: http://www.questia.com/PM.qst?a=o&d=30420417
Tax Case Study
Tax code section 721 "provides that no gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." Both parties agreed to contribute personal assets to the partnership, and they, nor the LLC, suffers any tax consequences as a result of the conversion of the property to the partnership. Because both contributed equal property to the LLC when it was formed (or so they thought) they both have a 50% ownership of the partnership.
The initial basis of both is not actually 50%. Tax code section 722 "provides that the basis of an interest in a partnership acquired by a contribution of property, including money, to the partnership shall be the amount of the money and the adjusted basis of the property to…
Commonwealth of Massachusetts. (2010). Apportionment of income. Retrieved from http://www.mass.gov/?pageID=dorterminal&L=4&L0=Home&L1=Businesses&L2 =Current+Tax+Year+Information&L3=Guide+to+Corporate+Excise+Tax&sid=Ad or&b=terminalcontent&f=dor_help_guides_abate_amend_corporate_issues_app ortionment_of_income&csid=Ador
IRS. (2010). Tax information for businesses. Retrieved from http://www.irs.gov/businesses/index.html?navmenu=menu1
Taw Law and Accounting
In the United States, 43 states currently impose a personal income tax. New Hampshire and Tennessee tax only "intangible" income, which is composed of interest and dividends. The remaining 41 states have "broad-based" income taxes, with most sources of income subject to tax. In 1932, Washington voters approved an initiative establishing a personal income tax. However, the State Supreme Court ruled this initiative unconstitutional. Since then, the voters have defeated six constitutional amendments trying to enact a personal income tax. The last proposal in 1973 was defeated 77% to 23%. Subsequent efforts at enacting a personal income tax have died in the Legislature.
State income taxes are generally tied in varying degrees to the federal IS personal income tax statutes. This creates a number of administrative efficiencies for the states. It also makes it simpler for the taxpayer to comply. While most income is…
Dupell, T. (1997). Practice management companies improve practices' financial position. Healthc Financ Manage, 51(11), 56, 58-60.
Marcus, K.R. (1993). Recognizing Medicare hospital payments appeal opportunities: falling into the 'GAAP' (generally accepted accounting principles). Healthspan, 10(9), 8-12.
Reinstein, A., & Budzinsky, A.J. (1992). Closing the GAAP (generally accepted accounting principles) with special reports. Healthc Financ Manage, 46(3), 82, 84-85.
How Change in (2017) Tax Law Affected People and Economy
Tax Cuts and Jobs Act (TCJA) of 2017 led to significant tax changes that affected individual taxpayers, businesses and the economy. The new tax legislation was signed into law on 22nd December 2017 by President Donald Trump. Three days earlier (19th December 2017) both the U.S Senate and U.S House of Representatives had passed the bill in a vote of 51- 48 and 227 -203, respectively. Most of the provisions in TCJA are valid from January 1, 2018 to December 31, 2025. This paper will compare the prior tax law with the current provisions of TCJA and highlight the impact of tax changes on individual taxpayers, businesses, and the economy in general.
Individual Tax Reforms
TCJA lowered the tax bill of individual taxpayers. Some of the individual tax reforms are explained below.
Income Tax Rate
The TCJA law lowers…
Marsan, D. (2018). The Tax Cuts and Jobs Act of 2017 (TCJA) and Its Impact on Investors, Their Trusts, Investment Entities, Retirement Plans and Estates -- Part 1 Tax Reform for Individuals. Journal of Taxation of Financial Products, 15(4), 11-52. Retrieved from https://ssrn.com/abstract=3292280
Smith & Howard. (2018, March). 2018 Tax Cuts & Jobs Act Overview. Retrieved from https://www.smith-howard.com/2018-tax-cuts-jobs-act-overview/
Tax Foundation. (2017). Preliminary Details and Analysis of the Tax Cuts and Jobs Act (241). Retrieved from https://files.taxfoundation.org/20171220113959/TaxFoundation-SR241-TCJA-3.pdf
Head Of Household Filing
The narrative this assignment is based on is predicated on the fact that a married couple, consisting of Brett and Kathy, want to file income taxes as having separate households. This situation is unusual for several reasons. Firstly, the pair is legally married—which typically mandates a joint household income tax filed between them. Moreover, they also live in the same residence, which is seemingly another factor for which they would want to file a joint income tax. They also share the fiscal responsibilities for both raising three children and maintaining the home in which all three live. The client wants to file a head of household separate income tax because he makes more money than Kathy does.
The research conducted for this assignment indicates there is little chance for Brett successfully filing as head of household. One can file for head of household if one is…
Internal Revenue Service. \\\\"Filing status.\\\\" www.irs.gov Retrieved from https://www.irs.gov/faqs/filing-requirements-status-dependents-exemptions/filing-status
Simple IRA and Qualified Plans
1. A simple IRA has both advantages and disadvantages when compared to a qualified plan like a 401K. Both are tax-deferred savings accounts, but where the differences lay could matter for a company like 3P. These two types of plan are mutually exclusive – an employer cannot have both at the same time (Appleby, 2019).
However, with a simple 401K the employer could have another plan for employees who aren’t covered by the 401K, which would typically be employees who earn less than $5000 per year. This may not apply to very many people, but could theoretically be one of the differences between the two types of retirement plan. Employees under 21 or who have worked for less than a year may or may not be covered, but there is no age requirement for a simple IRA. If the company has a lot of younger…
Table of Contents (optional)
Louise is aged 50 and single. Since 1994 she has carried on a retail business as a sole trader. Her trading profits as adjusted for tax purposes and after capital allowances, for the year ended 30th April 2009 were $150,000.
The business is carried out from a number of valuable retail outlets, all of which are owned by Louise personally. These units have been acquired over a number of years since 1994 and their market values have increased considerably in recent years.
Apart from her single personal allowance tax credit, Louise is entitled to income tax relief in respect of $10,000, which she pays annually to a evenue approved pension scheme.
Louise's personal living expenses and other financial commitments total $50,000 per annum (including the contribution of $10,000 to the evenue approved pension scheme referred to above).
Louise is considering transferring her business to…
Maertin, James CPA. U.S. Tax Preparation Worldwide. [
http://www.hmrc.gov.uk/menus/aboutmenu.htm "HM Revenue and Customs: About Us." Hmrc.gov.uk. Crown Copyright. 2005-04-18.
Sugary sodas contain corn syrup, but the American Agricultural Department subsidizes American farmers for growing corn, and this is one of the reasons that high-fructose corn syrup is so ubiquitous in the food supply. e are taxing corn syrup and subsidizing it at the same time, in other words. "The bigger issue, which the industry neither can nor particularly cares to rebut, is that the product [corn syrup] exists at all. e pump absurd quantities of cash into subsidizing corn (we also have a huge tariff on Brazilian sugar cane, incidentally). Over the past 10 years alone, Congress has appropriated more than $50 billion to encourage farmers to grow the stuff. But people don't want to eat $50 billion in subsidized corn. And if the cobs just sat around developing mold, Congress would cut off the spigot. Enter high fructose corn syrup, which sucks up the subsidies and created a…
Adamy, Jane. "Soda Tax Weighed to Pay for Health Care." The Wall Street Journal. May 12,
Klein, Ezra. "The Problem with Corn Syrup. The American Prospect. 2008.
Tax Efficient Financial Strategies
Company Name Here
MACOBUTTON AcceptAllChangesShown [name]
Tax Efficient Financial Planning
Astute financial planning in the current economic climate is critical. While we cannot control the ebbs and flows of either the market or the decisions of the government that affect one's personal finances, we can attempt to grow and preserve wealth through tax efficient financial planning. There are solid vehicles available, if utilized correctly, can successfully minimize income, capital gains and estate taxes for our clients. Below provides detailed information on vehicles available to provide minimal tax exposure.
Income Tax Minimization
Deferred Variable Annuities
Using this method clients not only are able to minimize their incomes taxes, but they this vehicle also provides asset protection.
401K or other Qualified etirement Plan
Contributions to a 401k or a similar retirement plan are tax-deferred and not-taxable until withdrawal. Contributions help to lower an individual's AGI thereby…
Baldwin, W. (2010, July 30). Six Ways To Avoid Capital Gains Tax Page 2 of 3 - Forbes.com. Information for the World's Business Leaders - Forbes.com. Retrieved July 26, 2011, from http://www.forbes.com /2010/07/30/avoid-capital-gains-tax-anschutz-personal-finance-baldwin-tax-strategy_2.html
Botkin, S. (2010). Lower Your Taxes - Big Time 2011-2012. New York: McGraw-Hill.
Taxes on Alcohol and Tobacco:
The alcohol industry is increasingly being considered for an increase in taxes in attempts to help in providing health care insurance to all people. As heath care insurance continues to be a major issue in the United States, policy makers are looking for effective measures to provide health insurance coverage for all. Currently, senators and other policy makers are focusing on the ways to provide health care coverage in order to extend insurance for approximately 50 million uninsured Americans that could total to $1.5 trillion over a decade. Furthermore, these policymakers are examining various ways to lessen expenses and increase taxes including increasing alcohol and tobacco tax to help cater for the expansion. The main reason for the proposed increase in taxes of alcohol and tobacco is that they are among the main contributors to the increasing medical costs. With these proposals and measures, the…
Gravelle, J.G. & Zimmerman, D. (1994, March 8). Cigarette Taxes to Fund Health Care
Reform: An Economic Analysis. Retrieved October 28, 2012, from U. http://www.forces.org/evidence/files/crs-tax.htm
"Higher Taxes on Alcohol Being Considered." (n.d.). Promises Treatment Centers. Retrieved October 28, 2012, from http://www.promises.com/articles/public-policies/higher-taxes-on-alcohol-being-considered/
If the decision is made to remain affiliated with the taxpayer, the member should ensure that the error is neither repeated nor perpetuated.
The rules and regulations implemented for tax service providers and other officials working with taxpayer clients are established in order to ensure the stability and ethical values of the position. Taxpayers are very important, as they uphold the economics and financial health of their community and their country. In this regard, it is the obligation of the tax service official to respect both the system and the client by upholding a high level of ethics.
In turn, the taxpayer should assist the preparer in the mission to provide accurate information that is free of errors. In the case of errors, it is important to emphasize that the system does provide for human error. If either the tax preparer or the taxpayer can be shown not to…
Pennsylvania, on the other hand, does not create its budget using this framework; though there are certainly credits, deductions, etc., that are similar to the items listed as tax expenditures in the other states' budgets, this is not the perspective the State of Pennsylvania applies to its budget (Pennsylvania Office of the Budget, 2012). This is perhaps reflective of the increasing criticism the tax expenditure framework or model has received from primarily conservative policy makers and analysts, that see the practice as less straightforward in its appraisal of revenues and expenditures than could be accomplished (Burman, 2003).
Connecticut General Assembly. (2010). Connecticut Tax Expenditure eport. Accessed 7 April 2012. http://www.ctmirror.org/sites/default/files/documents/TaxExpenditureeportMarch2010.pdf
Minnesota Department of evenue. (2012). Tax Expenditure Budget. Accessed 7 April 2012. http://taxes.state.mn.us/legal_policy/Documents/2012_tax_expenditure_links.pdf
Oregon Department of evenue. (2012). A Summary of Oregon Taxes. Accessed 7 April 2012. http://www.oregon.gov/dor/STATS/docs/oregon-taxes-summary-150-800-401.pdf
Pennsylvania Office of the Budget. (2012). Governor's Executive Budget. Accessed 7…
Connecticut General Assembly. (2010). Connecticut Tax Expenditure Report. Accessed 7 April 2012. http://www.ctmirror.org/sites/default/files/documents/TaxExpenditureReportMarch2010.pdf
Minnesota Department of Revenue. (2012). Tax Expenditure Budget. Accessed 7 April 2012. http://taxes.state.mn.us/legal_policy/Documents/2012_tax_expenditure_links.pdf
Oregon Department of Revenue. (2012). A Summary of Oregon Taxes. Accessed 7 April 2012. http://www.oregon.gov/dor/STATS/docs/oregon-taxes-summary-150-800-401.pdf
Pennsylvania Office of the Budget. (2012). Governor's Executive Budget. Accessed 7 April 2012. http://www.portal.state.pa.us/portal/server.pt/community/current_and_proposed_commonwealth_budgets/4566
Tax esearch Memorandum
From: Tax Accountant, CPA
You incurred $15,000 of educational expenses over the past year in pursuit of your MBA, part of your professional development as a practicing egistered Nurse and nursing administrator. Your employer does not offer an educational expense reimbursement program, and you wish to claim these educational expenses as business expenses in order to claim greater tax deductions. You have worked in numerous administrative positions in your capacity as a nurse, and feel that the pursuit of an MBA was a clear part of your career development.
The only issue is whether or not the education you received at the expense of $15,000 can be deemed work-related education as defined and applied by the IS, which recognizes such expenses as business expenses for employees. If the education can be deemed work-related according to IS rules and definitions, the deduction of the…
IRS. (2011). Tax Benefits for Work-Related Education. Accessed 25 March 2012.
Tax Court. (2009). T.C. Summary Opinion 2009-182. Accessed 25 March 2012.
In the meantime, you have a normal, functioning economy. Keynes's theory impelled a host of interventionist economic policies during the Great Depression and formed the essence of Roosevelt's New Deal which influenced Britain and other countries in dealing with their own related depressions. The Great Depression in all countries had compelled people to hoard their money causing the economy to stop at a standstill. Keynes's theory urged governments to step in and to encourage public spending, which the government did by both increasing the money supply and buy buying things itself. In this way, government spending is more effective than taxes since raise in taxes will only serve to dissuade people from buying. An attitude which leads to reduced consumerism, more businesses closing, less employment, firing of current workers, and reluctance to engage in discretionary spending.
2. Division of Government Functions
Our federal system divides responsibilities between the various levels…
Tax Memo: Pension Payments
From, Tax Accountant, CPA
You are the president of a corporation owned by yourself and other family members. Your salary from this corporation during the year in question was $48,000. During this same year, $12,000 was also contributed by the corporation to a pension plan held on your behalf. You believe that this contribution should not be considered a part of your taxable income for the year in question. The IRS agent conducting an audit of the year in question believes the pension plan amount should be considered when making a determination of reasonable compensation.
The issues in this case are (1) whether it is proper to include the pension plan in a determination of compensation, and (2) if such inclusion would affect the determination of the compensation amount of any tax liabilities for the corporation or Mr. Jones during the year in question.…
A preview of capital structure issues
In regards to the overall business environment, capital structure has profound implications of the business, irrespective of its industry. For one, a firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $40 billion in equity and $160 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example is referred to as the firm's leverage. This leverage has implications on the entire firm. For example, leverage in many respects is a double edges sword. On one hand, leverage can amplify gains for firms. However, if used incorrectly, leverage can also amplify loses. As such, firms must be cognizant of its capital structure as complacency can hinder overall business performance. Debt and equity financing, can have a profound implications on the…
1) Myers, Stewart C.; Majluf, Nicholas S. (1984). "Corporate financing and investment decisions when firms have information that investors do not have." Journal of Financial Economics 13 (2): 187 -- 221
2) Baker, Malcolm P; Wurgler, Jeffrey (2002). "Market Timing and Capital Structure." Journal of Finance 57 (1): 1 -- 32.
3) Lyandres, Evgeny and Zhdanov, Alexei, Investment Opportunities and Bankruptcy Prediction (February 2007) Available at SSRN: http://ssrn.com/abstract=946240
4) Timmer, Jan (2011). Understanding the Fed Model, Capital Structure, and then Some.
Tax Deductions: Are Unpaid Loans Tax Deductible?
John loaned his friend Jack $1,000. Jack did not repay the debt and left town. John wants to know if he can claim any tax deduction, and, if so, what is the character of the deduction? However, to answer John's question, one must first find out more information about the nature of the loan. This is critical because there are two broad types of loans and debts: business loans and personal loans. Furthermore, under the correct circumstances, it is possible for people to take tax deductions for certain types of business loans and personal loans. Knowing whether John made Jack a loan from his personal money or from his business money is the crucial first step in determining which, if any, Internal evenue Service (IS) regulations or tax laws will permit John to deduct the unpaid debt.
If John is a business owner…
Bailey, A.C. (2014). Unpaid personal loans can reduce your tax bill. Retrieved April 12, 2014
from MyTaxHQ website: http://mytaxhq.com/unpaid-personal-loans-can-reduce-your-tax-bill/
Fishman, S. (2013, June 7). Bad loans to friends and family may be tax deductible. Retrieved April 11, 2014 from Inman News website: http://www.inman.com/2013/06/07/bad-loans-to-friends-and-family-may-be-tax-deductible/
Internal Revenue Service. (2013, December 12). Topic 453- Bad debt deduction. Retrieved April 12, 2014 from IRS website: http://www.irs.gov/taxtopics/tc453.html
eaton also adds that low and moderate income people tend to spend money on goods and services that are more likely to result directly in jobs and incomes in the community (the spending continues multiplying on a secondary or tertiary basis). Higher income people spend in a way that contributes to "leakage" to their local economy by taking trips to buying non-local goods and services.
The implication of eaton's article is that tax cuts should be directed at low and moderate income people to stimulate the economy. Perhaps, from a strictly MPC point-of-view, this is correct. but, high income people also invest which stimulates the economy and this should have been explored as well.
51% Say Cut Everybody's Taxes to Stimulate the Economy (2009, June 11). Rasmussen Reports. http://www.rasmussenreports.com/public_content/business/economic_stimulus_package/june_2009/51_say_cut_everybody_s_taxes_to_stimulate_the_economy
eaton, R. (2003) the Idolatry of ideology Alternatives Magazine. http://www.alternativesmagazine.com/25/beaton.html
51% Say Cut Everybody's Taxes to Stimulate the Economy (2009, June 11). Rasmussen Reports. http://www.rasmussenreports.com/public_content/business/economic_stimulus_package/june_2009/51_say_cut_everybody_s_taxes_to_stimulate_the_economy
Beaton, R. (2003) the Idolatry of ideology Alternatives Magazine. http://www.alternativesmagazine.com/25/beaton.html
Accessed 15 September 2009. http://www.nchc.org/facts/coverage.shtml
Newhouse, J. (1993). Free for all?: Lessons from the RAND health insurance experiment. New York: Harvard University Press.
Physicians for a National Health Program. Accessed 15 September 2009. http://www.pnhp.org/
Quadagno, J. (2005). One nation, uninsured. New York: Oxford University Press.
Sains, a. (2002). "European and U.S. health insurance converging." Europe 420, pp. 11.
Salmon, K. (2007). "Ailing U.S. health insurance system under the spotlight." PharmacoEconomics & Outcomes News 524, pp. 3-4.
Stevens, W. (2003). Health insurance: current issues and background. Hauppauge, NY: Nova Publishing.
homasson, M. (2000). he importance of group coverage: How tax policy shaped U.S. health insurance. Washington, D.C.: National Bureau of Economic Research.
revino, F. (1999). "Quality of healthcare for ethnic/racial minority populations." Ethnicity & health 4(3), pp. 153-64.
U.S. Census Bureau. (2006). "Income Climbs, Poverty Stabilizes, Uninsured Rate Increases." Accessed 15 September 2009. http://www.census.gov/Press-Release/www/releases/archives/income_wealth/007419.html
Thomasson, M. (2000). The importance of group coverage: How tax policy shaped U.S. health insurance. Washington, D.C.: National Bureau of Economic Research.
Trevino, F. (1999). "Quality of healthcare for ethnic/racial minority populations." Ethnicity & health 4(3), pp. 153-64.
U.S. Census Bureau. (2006). "Income Climbs, Poverty Stabilizes, Uninsured Rate Increases." Accessed 15 September 2009. http://www.census.gov/Press-Release/www/releases/archives/income_wealth/007419.html
Tax Returns for C Corporation and Partnerships
Tasty Treats and Beverages is a registered company in the United States. The company was incorporated in 2004, and operates under the C Corporation for the tax purpose. A C-corporation refers as a business entity subject to the federal income tax. A company operating under the C Corporation can enjoy host of tax credit that can assist it to enjoy a tax reduction that the company has to pay to the federal government. This paper uses the excerpt from the Tasty Treats & Beverages, Inc. annual income statement to prepare the tax return for the company.(See Appendix 1).
Tasty Treats & Beverages, Inc.
Income Statement ($)
For year ended December 31, 2013
Revenue from sales
Income before taxes
Federal income tax expense
Net income after taxes
As being revealed in the company statement of income data,…
ill ignoring any pollution problem be beneficial to the community? Most businessmen would probably answer that question with a negative, but does that mean they feel compelled to do anything about the problem, even if their corporation was the one that caused it. Currently the answer would be no, but if they were going to be penalized for not doing so, and that penalty was coupled with an incentive for accomplishing the objective, then it would probably be a no-brainer, even based on the businessman's viewpoint.
Peter Coy states; "A few polluters that cannot easily reduce emissions will pay a substantial cost, but those with the technology to cut emissions cheaply will have a far greater incentive to do so than they would have under traditional regulation." The same technology used to accomplish a cleanup, can also be used for other reasons, which is an additional benefit to the corporations.…
Coy, P. (1997) Clean Air in an Era of Cheap Oil, Businessweek, November 3, 1997, pg 144
Hoerner, J.A., (2005) Tax Waste, Not Work, http://www.tompaine.com/articles/tax_waste_not_work.php , Accessed Sept 15, 2007
Kripke, G., Dunkiel, B., (1998) Taxing the Environment: Corporate tax Breaks to Promote Environmental Destruction, Multinational Monitor, Vol. 19, Number 9, pp 9-15
Morris, D., (2005) Restructuring Minnesota's Tax System: Taxing Pollution Rather Than Work and Investment, Testimony before the Minnesota House of Representatives Committee on Taxes, February 23, 1995, http://www.ilsr.org/ecotax/gtaxtest.html , Accessed Sept 15, 2007
ith the extra money that businesses make, they not only invest it, but they pay some of that in taxes as well. Those taxes go to government, which can spend more. Government spending also fuels increases in business income. As governments collect more taxes from business, they can reduce consumer taxes further.
The net effect of all of this is that lowering taxes on consumers can have an exponential effect on increasing the Gross National Product. Tax reductions not only have a direct effect, but they have indirect effects that filter throughout the nation's economy. In this way, cutting taxes boosts the economy.
Cloutier, R. (2009). Do tax cuts stimulate the economy? Investopedia. Retrieved November 29, 2009 from http://www.investopedia.com/articles/07/tax_cuts.asp?viewed=1
Medicare, in addition to covering the elderly, is made available to lower-income individuals, and other direct assistance programs also go to these individuals. Combined with other goods and services such as road maintenance and other infrastructure, national security, etc., which are all consumed essentially evenly (again, in one perspective), this would mean that those at the lowest end of the economic spectrum consume the most and should pay the most -- a regressive tax that places the largest burden on those with the least ability to pay (417). In another perspective, however, those with high levels of income, wealth, and consumption benefit a much greater degree from the general services the government provides. The owner of a company benefits from the roads each time an employee drives into work, and from airwaves every time an Internet sale is made, and so on. Calculated thus, the benefit principle would lead to…
This is designed to help support individuals who are dealing with financial challenges. The problem is that select amounts of recipients will use as a way to live off of the government. (Wolf, 2005)
How might a socialist and a capitalist government differ in its treatment of the problem of unemployment?
Socialists want to see massive amounts of government spending to create new jobs, training programs and provide unemployment benefits. A capitalist is opposed to these kinds of programs and believes that charities / private enterprises can address these issues.
In your opinion, should the government have the responsibility of providing health care for every citizen? Why or why not?
Yes, the government should provide health care. The reason why is because prices are increasing exponentially and the number of uninsured is rising. These factors are a sign that there is very little competition inside the sector. To address these…
2012 Puerto Rico Statehood Amendment. (2012). Boards. Retrieved from: http://www.boards.ie/vbulletin/showthread.php?p=77582334
Commerce Clause. (2012). Britannica. Retrieved from: http://www.britannica.com/EBchecked/topic/127865/commerce-clause
Principles of Constitutional Construction. (2010). Constitution.org. Retrieved from: http://constitution.org/cons/prin_cons.htm
Sin Taxes. (2005). Six Taxes. Connecticut Voices for Children. Retrieved from: http://www.ctkidslink.org/publications/bud05sintax02.pdf
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
The following pages focus on analyzing the factors of influence on different countries' taxation systems. The paper begins with an introductory section that allows readers understand the point-of-view used in this paper. The following section refers to describing the taxes pand taxation systems used by most countries and their objectives, in order to understand the similarities and differences between these taxation systems. The paper continues with the analysis of several factors that influence countries' tax system design, like cultural factors, technological developments, and natural resources. In order to exemplify this, the taxation…
1. Pasekova, M. et al. (2011). Comparative Analysis of Tax Systems: Some Evidence from CEE Countries. World Academy of Science, Engineering, and Technology. Retrieved February 27, 2012.
2. Greenhouse, S. (2011). Tiny Tax on Financial Trades Gains Advocates. The New York Times. Retrieved February 28, 2012 from http://www.nytimes.com/2011/12/07/business/global/micro-tax-on-financial-trades-gains-advocates.html?_r=1&pagewanted=all .
3. Ross, M. (2004). Does Taxation lead to Representation? Cambridge University Press. Retrieved February 28, 2012.
4. Seto, T. (2008). Four Core Principles of Tax Design System: Introduced and Applied to the Taxation of Multinationals. Loyola Law School. Retrieved February 28, 2012.
To minimize the impact on business and property owners, the tax should be one that they can apply at the consumer level. An excise tax raises the cost of goods, whereas a sales tax does the same thing but forces the consumer to pay. A property sales tax would already be applied at the consumer level.
As a citizen, I will not necessary see benefit from these taxes -- it depends on what the taxes are used for. ith regards to paying other taxes, I am only concerned with my total tax burden. Shifting taxes from one type to another, if it for me is tax neutral, is irrelevant. I would prefer that my taxes are reduced overall, and if these taxes facilitate that, then I would prefer them.
IRS. (2008). Business taxes. Internal Revenue Service. Retrieved February 11, 2010 from http://www.irs.gov/businesses/small/article/0,,id=98966,00.html
IRS. (2008). Business taxes. Internal Revenue Service. Retrieved February 11, 2010 from http://www.irs.gov/businesses/small/article/0,,id=98966,00.html
Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client
Reorganization takes into account any company restructuring that may be tax-free under the United States law section 386. It encompasses the notion of acquiring new entities in a manner that all financial transactions are non-taxable. There are certain general requirements that have to be met in order to qualify. To begin with, it must be a plan of reorganization, must have a sound and fitting business purpose, and must satisfy continuity of interest as well as continuity of business enterprise examinations. There are different forms of reorganization that include type A, B, C, and D. reorganizations (Macabacus, 2017). To begin with, type A reorganization takes into account mergers and consolidations. The advantages of this reorganization type is that it is flexible, funds and other…
The author of this report has been asked to review a situation where a corporation has received unwanted attention from the Internal Revenue Service (IRS) for a few reasons. Among those reasons are income that is deigned to be a de facto dividend, stock redemptions that are improper and a rental loss situation. The goal across the board is to devise a compensation and tax approach that will prevent the IRS from claiming tax avoidance or other such things as well as a plan that limits tax implications and higher costs for the firm. While it is sometimes rankling and maddening when the IRS makes such moves, their reaction is a little predictable given the facts involved.
The IRS taking issue with the compensation is a little predictable, and for a few reasons. First, it is presumed by the author of this response that the company…
The consequences of tax refunds, for tax payers, include larger fractions of billable fees being billed to the client, then when they owe additional taxes. This is true even with the tax liability itself is constant. This finding goes beyond the commonly understood consequence of overpaying taxes -- a loss of investment income, by giving the government an interest-free loan. An additional wealth-related consequence is the higher preparation fees those receiving refunds pay. This affects millions of taxpayers as approximately 25% of taxpayers made tax payments via quarterly estimated tax payments (Hatfield, Jackson & Schafer, 2008). There are several ethical implications to these relationships as well.
Hatfield, Jackson and Schafer (2008) note the recent investigation into Jackson Hewitt franchises and the generation of fraudulent refunds. These types of firms often also earn additional income from refund anticipation loans. This behavior is contrary to tax professionals standards of conduct, established by…
Hatfield, R., Jackson, S., & Schafer, J. (2008). An investigation of the relation between tax professionals, tax refunds, and fees. Behavioral Research in Accounting. 20.2. 19-35.
prediction comparison vote real members House Representatives a law. 1. You choose real members House Representatives, Republican Democrat. (There 435 members House, find interests .
A tax on obesity as seen by Republican member of the U.S. House of Representatives Bill Cassidy and Democratic member of the U.S. House of Representatives James McGovern
Obesity has come to be a significant issue in the United States today, with more and more individuals displaying the malady's symptoms. As a consequence, the authorities have gotten actively involved in trying to control it through installing tougher regulation and by implementing programs meant to educate people with regard to attitudes they should take toward the concept. hile agreeing about the significance of this issue, American politicians seem to have different opinions on the matter -- some believe that the solution stays with tougher legislations while others consider that it all comes down to education and…
"Bipartisan Bill Launched to Treat and Reduce Obesity," retrieved July 13, 2014, from http://conscienhealth.org/2013/06/bipartisan-bill-launched-to-treat-and-reduce-obesity/
"Rep. Jim McGovern's 4th "End Hunger Now" Speech: The Obesity Paradox -- Video," retrieved July 13, 2014, from http://www.hhe.tv/rep-jim-mcgoverns-4th-end-hunger-now-speech-the-obesity-paradox-video/
"Text of the Treat and Reduce Obesity Act of 2013," retrieved July 13, 2014, from https://www.govtrack.us/congress/bills/113/hr2415/text
Alacare Home Health Services Inc., Petitioner vs. Commissioner of Internal evenue
The comparison of American Institute of CPAs' (AICPA) Statements on Tax Standards and the Treasury Department Circular 230 rules to practice.
Alacare Home Health Services, Inc., Petitioner vs. Commissioner of Internal evenue espondent
In the addressed case, the petitioner was from Birmingham, Alabama, and was a Medicare-certified home health care agency which uses accrual method of accounting. As admitted by the respondent, the figure for office expenses in 1996 was overstated and should've been $247,413 and not $259,062 (Tax Attorney esources - Alacare Home Health Services, Inc. - Page 7 - U.S. Tax Court Opinions, 2001). In 1995, the computer expenses amount had also been overstated due to an error in valuing depreciation and so, instead of $104,806, $101,806 had been recorded. A petition was formed in 1982 and from 1995-1996, the petitioner treated the cost of capital…
(2001). Laws - Legal Research. Tax Attorney Resources - Alacare Home Health Services, Inc. - Page 7 - U.S. Tax Court Opinions. Retrieved June 7, 2016, from http://law.onecle.com/tax/2001/alacare.tcm.wpd07.html
(2001). Leagle.com -- A leading provider of copies of primary case law from all Federal courts and all State higher courts. ALACARE HOME HEALTH SERVICES, INC. v. COMMISSIONER -- Leagle.com. Retrieved June 7, 2016, from http://www.leagle.com/decision/2001187581ertcm1794_11728/ALACARE%20HOME%20HEALTH%20SERVICES,%20INC.%20v.%20COMMISSIONER
Schreiber Jr. (2014). The Tax Adviser. An Overview of AICPA and IRS Rules of Practice. Retrieved June 7, 2016, from http://www.thetaxadviser.com/issues/2014/feb/tpr-feb2014.html
Foreign Work eimbursement
When it comes to job situations that involved a lot of travel or otherwise involve being away from home, working a foreign assignment would surely have to be near or at the top when it comes to the complexity and considerations that are involved. There are some massive legal and lifestyle implications involved including paying for lodging/food while working abroad, the tax implications and so forth. The assignment for this paper asks the author to offer an opinion on the most "essential" reimbursement types when it comes to working abroad. While some may point to cost of living, rent or food, the real issue would be taxes due to the complexity and variance of the tax codes and treaties that exist between the United States and other modernized countries of the world.
Many employers operate and exist in multiple countries and this sometimes necessitates having domestic…
IRS. (2015). Moving Expenses to and from the United States. Irs.gov. Retrieved 11 November 2015, from https://www.irs.gov/Individuals/International-Taxpayers/Moving-Expenses-to-and-from-the-United-States
IRS. (2015). Publication 15-B (2014), Employer's Tax Guide to Fringe Benefits. Irs.gov. Retrieved 11 November 2015, from https://www.irs.gov/publications/p15b/ar02.html
IRS. (2015). Social Security Tax Consequences of Working Abroad. Irs.gov. Retrieved 11 November 2015, from https://www.irs.gov/Individuals/International-Taxpayers/Social-Security-Tax-Consequences-of-Working-Abroad
IRS. (2015). Tax Topics - Topic 514 Employee Business Expenses. Irs.gov. Retrieved 11 November 2015, from https://www.irs.gov/taxtopics/tc514.html
When considering your case for qualification for Innocent Spouse Relief, the facts are blatantly clear. Under certain circumstances, a spouse can qualify for relief from the IRS. Unfortunately, as detailed below, you do not qualify for any of these relief efforts. Your actions appear to be in strict opposition of the relevant tax code and can be considered fraudulent. Below is a brief explanation of the relevant facts pertaining to your case, the specific issues of your case, and our conclusion.
To begin, married couples who file joint returns are jointly liable for their federal income tax liability. In addition, married couples who live in community property states are jointly liable for community income regardless of how they file their returns. Innocent spouse relief takes three forms under Sec. 6015. The three instances are outlined below. Unfortunately, Mrs. Hapless you do not qualify for relief under any of…
Tax Planning -- Employer (II of II)
Tax Planning - Employer
The marketplace that businesses operate in has become more and more globalized and international in nature, not to mention extremely competitive. This particular report will focus on the employer and their tax implications when it comes to operating and/or headquartering in one or more countries around the world. The prior report focused on the employee. While the implications for the employee are complicated and diverse enough, they become even more complicated when speaking of the employer, and for a number of reasons.
Just as there were a number of considerations relevant to the employee and their tax treatment, there are a number of tax considerations that USCo will need to consider for themselves and they are as follows:
The actual headquarters location (nation, state/province and county/city)
The actual locations outside of that home country (or state and city)…
Bachmann, H. (2009, August 20). Can Swiss Banks Thrive After the UBS-U.S. Deal?
Retrieved December 3, 2014, from http://content.time.com/time/business/article/0,8599,1917648,00.html
Canada. (2014, December 3). Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)).
Retrieved December 3, 2014, from http://laws.justice.gc.ca/eng/acts/I-3.3/
Tax laws affect taxpayers because they create the taxpayer and govern all aspects of the taxpayer's obligation to the state. Without tax law, there would be no taxpayer; it is the tax laws that create the obligation to pay taxes, and the punishments for non-payment. Tax laws establish who pays taxes, at what rate they pay taxes, the punishments for late or non-payment, and the establish the tax collection body (IRS) and grant that body the authority to run the tax system. Taxation is one of the major ways in which the state can influence behavior in a democratic country. States have long reserved the right to taxation, and the exclusivity of this right has been a feature of government for centuries. Today, there are usually specific rules regarding what layer of government can levy taxes for what purpose. Taxes have different names, too, including excise taxes, income taxes,…
Tax Avoidance & Firm Growth
What follows in the next few pages is a review of whether there is a correlation between tax avoidance with corporations and firm growth. Indeed, looking at the literature reveals that the evidence is mixed but that the overall answer is a condition "yes," that there can indeed be a link between tax avoidance and firm growth. To explain the conditional nature of the answer garnered, one can look to the work of Desai, Foley and Hines (2006) when they assert that "firms with sizable foreign operations benefit the most from using tax havens, an effect that can be evaluated by using foreign economic growth rates as instruments for firm-level growth of foreign investment outside of tax havens" (Desai, Foley & Hines, 2006). They further state that "one percent greater sales and investment growth in nearby non-haven countries is associated with a 1.5 to 2%…
Chang, S. (2012). The Great Debt Controversy in the U.S. And Beyond. SERI
Quarterly, 5(2), 50-62.
Desai, M.A., & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal Of Financial Economics, 79(1), 145-179.
Tax Equity and Fairness
Taxes on property are also known as ad valorem tax imposed on the real value of the estate or other assets that an individual owns. The local government imposes these property taxes and charges are on a recurring basis (Mikesell, 2014). For example, a homeowner either pays their taxes on a yearly basis or gives a monthly fee as part of the mortgage payments. It is worth noting that these taxes are subject to fluctuation basing on the jurisdiction assessment of the property's worth by looking at factors like its market value, condition, location and the changes to the apportioned amount to the various tax recipients. For instance, when residents of a given community vote to have the millage rate increased for their school system, this affects the tax rate on homeowners. Therefore, the tax levied is increased on their properties, and the reverse applies; when…
Laureate Education (Producer). (2008). Budget management functions: Revenue [Video file]. Retrieved from https://class.waldenu.edu
Mikesell, J. L. (2014). Fiscal Administration: Analysis And Applications For The Public Sector (9th ed.). Boston, MA: Wadsworth
Tax Code 1231, 1245, 1250, 291
A Section 1231 asset is an asset that is non-capital, that it may receive capital gain treatment. To be a Section 1231 asset, the asset must be personal or real property used in a trade/business that has been owned for a year -- for example, a piece of equipment like a tractor. Equipment is treated the same whether it is owned by a sole proprietor or a corporation. So if it were purchased for $20,000, sold for $50,000, with a depreciation of $4,000, with a $16,000 basis, the gain would be $34,000. If the tractor were held as a 1231 asset, the gain would be the same regardless of whether you were a sole proprietor or a corporation. The gain would be counted as an ordinary income -- and the $4,000 depreciation portion of the $34,000 could be counted as Section 1245 gain (ordinary…
Anderson, Ken; Pope, Thomas. Prentice Hall's Federal Taxation 2015: Corporations,
Partnerships, Estates, and Trusts. NY: Prentice Hall, 2015. Print.
functioned by a state or educational organization, like a college, with tax compensations and hypothetically other inducements to make it cooler to save for college and other post-ancillary training for a selected beneficiary, such as a juvenile, daughter/son, or grandchild (Feigenbaum 2002, pg. 34). 529 plans apart from secondary benefits, have a main advantage linked to earnings.
The earnings of a person enrolled in a 529 plan are not subject to federal tax and normally not subject to state tax when used for the qualified education expenditures of the selected beneficiary. These expenditures would typically include: tuition, books, fees, books, even room and board. There are some things that are not deductible in a 529 plan, one such are contributions. Additionally, it is important to keep in mind that the IS, from time to time, will update or modify their tax laws.
Since 2009 or 2010, a qualified, nontaxable distribution…
Ameriprise. (n.d.). 529 Plan Contributions | Ameriprise Financial. Ameriprise.com. Retrieved March 1, 2014, from http://www.ameriprise.com/budgeting-investing/financial-planning-articles/estate-planning-information/529-plan-contributions.asp
Feigenbaum, R.A., & Morton, D.J. (2002). The 529 College Savings Plan. Naperville, Ill.: Sphinx.
IRS. (n.d.). 529 Plans: Questions and Answers. 529 Plans: Questions and Answers. Retrieved March 1, 2014, from http://www.irs.gov/uac/529-Plans:-Questions-and-Answers
IRS. (n.d.). Instructions for Form 709 (2013). Instructions for Form 709 (2013). Retrieved March 1, 2014, from http://www.irs.gov/instructions/i709/ch02.html
Federal Government Tax
The main source of government income is taxes. The government taxes various organizations in the economy differently to ensure that adequate revenue is collected. Corporate use loopholes in the tax system to reduce the tax paid to the federal government. The government should eliminate these loopholes to improve tax collection. Some taxes such as gift and estate tax as they are counter productive. Changes made to the federal tax collection systems will increase the tax collected by increasing compliance.
esearch the most common tax loopholes used by corporations and partnership to avoid paying federal income tax. Discuss two (2) loopholes identified and what strategies you would recommend to the federal government for closing these loopholes.
The federal government gets most of its revenue from collection of tax used to fund most of the expenditure. The government should ensure that the tax collection avenues are free from loopholes…
Gans, J. (2011). Principles of economics. South Melbourne, Vic: Cengage Learning.
Ganghof, S. (2006). The politics of income taxation: A comparative analysis. Colchester: ECPR Press.
Conklin, D.W., St.-Hilaire, F., & Institute for Research on Public Policy. (1990). Provincial tax reforms: Options and opportunities. Halifax, N.S: Institute for Research on Public Policy = Institut de recherches politiques.
Pechman, J.A. (1987). Federal tax policy. Washington, D.C: Brookings Institution.
Capital Gains Tax in Australia
Capital gains tax refers to a type of tax levied on capital gains incurred by organizations or individuals. The capital gains refer to the profits that an organization or individual selling a capital asset obtains through selling an asset at a price higher than the original price. In many countries, the amount of capital gains tax takes into consideration the type of investment and the holding period of the asset. Australian capital gains tax takes a proportion of all achieved capital gains. Capital gains are not separate tax but part of the income tax on individuals and corporations upon disposing of capital assets. Australian capital gains tax exempts personal properties such as home, car, and furniture. Australian residents in any part of the world are subject to capital gains tax.
Issue 1. Moodly's Conversion of her main residence.
Moodly being a childcare worker, wishes to…
OECD Tax policy studies. 2006. Taxation of Capital Gains of Individuals: Policy
Considerations and Approaches. No.14. Paris: OECD Publishing.
Pricewaterhouse Coopers. 2006. Mergers and acquisition: A global Tax Guide. New Jersey:
John Wiley and Sons Inc.
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 aggressive strategy. The Section 1 of the article discusses rights about tax earnings through immovable property. The Section 2 is about business profits. The Section 3 throws light upon income from investment channels like royalties, interests and dividends. The Section 4 describes the capital gains. The conclusion of the article is given in Section 5.
ight to tax income from immovable property
Because of well-known significant relationship between the country of source of the income and the source of income itself,…
Bin Yang, A Comparative Study on the Rules and Administration of the International Taxation System (China Tax Publishing House, 2003).
Bin Yang, International Taxation (Fudan University Press, 2004).
Commentaries on Paragraph 3, Article 7 of the OECD model.
Jin Zhi Liu (translator), Commentaries of UN model Tax Convention between Developed and Developing Countries (China Financial & Economic Publishing House, 1996) 56.
Income Tax Deduction
Taxes have existed in the United States for all of its existence but they took on many forms prior to the modern income tax. The income tax was not finalized and permanently ensconced in the United States law until the 1910's. The tax rates, at its normal levels, have been adjusted upwards and downwards depending on the economic cycles with the most recently developments being the "Bush Tax Cuts" of the 2000's and the recent tax spikes under the Obama Administration. While income taxes affect some more than others, nearly all people are affected based on the assets/income they possess and earn as well as the familial structure they maintain.
Common Tax Deductions
As noted in the introduction, familial status and assets/income are far and away the biggest determinants on how much tax is paid, if any. Indeed, some people actually get money from the government and…
IRS. (2014, February 28). Internal Revenue Service. 401(k) Plans. Retrieved February 28, 2014, from http://www.irs.gov/Retirement-Plans/401 (k)-Plans
IRS. (2014, February 28). The Health Insurance Marketplace. The Health Insurance Marketplace. Retrieved February 28, 2014, from http://www.irs.gov/uac/Newsroom/The-Health-Insurance-Marketplace
IRS. (2014, February 28). SOI Tax Stats - S Corporation Statistics. SOI Tax Stats - S Corporation Statistics. Retrieved February 28, 2014, from http://www.irs.gov/uac/SOI-Tax-Stats-S-Corporation-Statistics
IRS. (2014, February 28). EP Abusive Tax Transactions - S Corporation ESOP Abuse of Delayed Effective Date for Section 409(p). EP Abusive Tax Transactions - S Corporation ESOP Abuse of Delayed Effective Date for Section 409(p). Retrieved February 28, 2014, from http://www.irs.gov/Retirement-Plans/EP-Abusive-Tax-Transactions-S-Corporation-ESOP-Abuse-of-Delayed-Effective-Date-for-Section-409 (p)
The common guiding principles of economics provide little direction. As a consequence, U.S. international tax policy is a clutter of rules with a diversity of political and economic reasons. It is frequently described as a concession that strikes a balance. Policy leans toward tightening foreign tax rules and putting foreign income on equal footing with U.S. income when it is thought that foreign investment hurts the U.S. economy. Then policy leans toward relaxing the rules and giving foreign income favorable treatment if it is thought that foreign investment promotes U.S. interests (Sullivan, n.d.).
Due to the fact tat every government charges taxes by its own process and at its own rates, the ensuing system of international taxation often warps investment and adds to reductions in international economic well-being. The environment of these alterations depends on the way of taxing profits from international investment. If investment earnings are taxed only at…
Tax Research Memo
Personal Injury winning treatment and other issues research
John Smith tax issues
Treatment for purposes of Federal Tax Income of $300,000 fee received out of the amount awarded by Jury.
Applicable Law:Any winnings in a personal injury lawsuit that cover the treatment of physical injuries are not taxable except for attorney fees which are taxable. IRC SEC 104(a)(2).Taxability also depends upon the place of residence of the taxpayer.
$300,000 received by John Smith as fees from jury award is taxable for federal tax income purposes.
Treatment for purposes of Federal Tax Income of $25,000 expenses paid upfront and received out of the amount awarded by Jury.
Applicable Law: Any winnings in a personal injury lawsuit that cover the treatment of physical injuries are not taxable except for attorney fees which are taxable. IRC Sec 104(a)(2).Any expenses can be claimed as a deduction.Taxability…
Cancellation of debt in this instance may not be taxed in this manner but might be taxed another way.
Certain farm debts: This exemptions only applies to debt incurred directly from an operation of a farm. If more than half your income from the past three years came from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
Since 2007 and 2008, California conformed, with modifications to IC section 108 (a)(1) (E) that allows a limited amount of COD income resulting from the foreclosure or short sale of a qualified principal residence to be excluded. This exclusion does not currently apply for any foreclosure or short sale that occurs on or after January 1, 2009. Danny made his short sale in 2012. "The Mortgage Forgiveness Debt elief Act of 2007 was enacted on December…
Foreclosure and Short Sales | California Franchise Tax Board, (2012) [ONLINE] Available at:https://www.ftb.ca.gov/professionals/taxnews/2009/July/Article_9.shtml. [Accessed 16 June 2012].
New California short-sale law can help homeowners -- North Bay Business Journal - North San Francisco Bay Area, Sonoma, Marin, Napa counties - Archive, (2012) [ONLINE] Available at: http://www.northbaybusinessjournal.com/39868/new-california-short-sale-lay-can-help-homeowners/ . [Accessed 16 June 2012].
The Mortgage Forgiveness Debt Relief Act and Debt Cancellation, (2012). [ONLINE] Available at: http://www.irs.gov/individuals/article/0,,id=179414,00.html . [Accessed 16 June 2012].
U.S. TAX in the TEATMENT
US Tax Treatment
Items of income considered earned from within the U.S.
Earned income can be defined as the payment for the performed personal services, for example wages, professional fees or salaries. The list below provides the categories of the types of income tax. It is essential to appreciate the fact that deductions made on the income are determined by the category in which the income falls. The column with heading variable income consists of income in the category of either unearned or earned income or even both (Fraser, 2009).
Types of income
Variable income: they include rents, royalties, and business profits
Unearned income: such incomes include annuities, pensions, social security benefits, Alimony, gambling winnings, capital gains, and interest dividends.
Earned income: tips, professional fees, bonuses, commissions, wages and salaries
Besides the types mentioned which always occur in the form of cash, other taxable sources…
Bater, P. (2007). The tax treatment of NGOs: Legal, fiscal and ethical standards for promoting NGOs and their activities. The Hague [u.a.: Kluwer Law Internat.
Dilworth, R.H. (2009). U.S. tax treatment of financial transactions involving foreign currency -- 1990. Arlington, VA: Tax Analysts.
Fraser M. (2009). Canada-U.S. Tax treaty: A practical interpretation. Toronto: CCH Canadian Limited.
Hammer, D.L., Shartsis Friese LLP., & American Bar Association. (2005). U.S. regulation of hedge funds. Chicago, Ill: American Bar Association Section of Business Law.
The Federal Tax system that is managed by the Internal Revenue Service (IRS) contains many complicated rules and regulations that presents many problems and issue for taxpayers wishing to abide by these laws. Itemized deductions is one method of self-reporting that taxpayers choose to use to file their returns. The purpose of this essay is to examine the use of itemized deductions on federal income tax returns. This investigation seeks to understand the history of this application while also evaluating the complex nature of the qualities that determine the appropriateness of this selection. This essay will also examine the effectiveness of itemized deductions as part of the larger component of income tax returns. The essay will conclude by highlighting certain examples where IRS audits were started because of misuse of the itemized deduction.
History of the Itemized Deduction
According to the Internal Revenue Service's web site its history…
The Internal Revenue Service Tax Code. Viewed 19 Feb, 2013, Retrieved from http://www.irs.gov/publications/p17/ch20.html#d0e67864
Viard, A. (2013). The myth of the limits on itemized deductions. The American, January 9, 2013. Retrieved from http://www.aei.org/article/economics/fiscal-policy/taxes/the-myth- of-the-limits-on-itemized-deductions/
Wood, R. (2013). Shh, Home Office and other IRS Audit Trigger Secrets. Forbes, 25 Jan 2013. Retrieved from http://www.forbes.com /sites/robertwood/2013/01/25/shhh-home-office- and-other-irs-audit-trigger-secrets/
For the tax preparation software, the status would be yellow. Everything appears to be moving forward properly at this time and there have not been any reasons to get behind or to have overtime on the project. However, there is more to the issue than just what is taking place at the moment. There are concerns that may present themselves in the future, and in order to plan for these properly it is necessary to focus on what could occur based on these concerns. There are two risks that are the most important to consider. These are that it is hurricane season in Florida, where three of the developers are located, and that the one person who decided to take early retirement (and is leaving in a week) is the only person who knows how to work with the IS to get approval for the final product. All…
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Nokes, S. (2007). The definitive guide to project management (2nd ed.). London: Financial Times/Prentice Hall.
Phillips, J. (2003). PMP project management professional study guide. NY: McGraw-Hill Professional.
professional VAT (value added tax) advice for the managing director of the Grape Limited. The Grape Limited is a U.S. multinational company and decides to incorporate new companies that provide supply management services, management company, manufacturing company and marketing companies. The management company will deliver supply management services to foreign services providers. On the other hand, the manufacturing company will focus on the electronic parts, and marketing company will deliver marketing services for the parts manufactured by the manufacturing company.
The VAT (value-added tax) is a government levy on any goods or services produced in the epublic of Ireland. The first condition that must be fulfilled before Grape Limited demands for the VAT numbers is to incorporate its businesses in the epublic of Ireland. After the company registrations, the next step is to apply for the VAT number. To apply for the VAT registration number in the epublic…
Chattered Accountant (2014). Form VAT 56A. Ireland.
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O'Brien, C. (2014). Personal Tax. KPMG Ireland .
KPMG (2009). Ireland: Country Fact File. KPMG International.
The same goes for business-related periodicals and magazines. (Dratch 2008, p. 2)
Mileage: Once again, this involves careful bookkeeping, but the deductions can add up. Keep a dated log of all business-related mileage, tolls, and parking costs. According to the IRS website, the 2009 IRS deduction rate for business-related mileage was 55 cents per mile.
Travel, Entertainment, and Meals: For the small business, 100% of travel and entertainment expenses are deductible, as well as 50% of meal expenses. It should come as no surprise that these deductions must have supporting documentation showing them to be business-related.
Shelter Your Income
Investment property can be a valuable tax shelter. The IRS allows you to shelter up to $25,000 in an investment property, but there are strict requirements. You must own 10% of the property as an individual owner, not through limited partnership. And you must be involved in the "active management" of…
Akasie, Jay. (2009, Apr. 6). Last Minute Small Business Tax Tips. Retrieved May 29, 2010 from http://www.forbes.com . [website]
Dratch, Dana. (2008, Mar. 26). A Dozen Deductions for Your Small Business. Retrieved May 30, 2010 from http://www.bankrate.com/finance/money-guides/a-dozen-deductions-for-your-small-business-1.aspx . [website]
Tax Tips for Small Businesses. (2010, Jan. 20). Retrieved May 30, 2010 from www.fool.com. [website]
In addition, the estimation of seventy-seven thousand individuals that would be able to receive an additional refund from the tax credit suggests that it could actually cost the state a substantial amount of money to operate this program. These students would not only pay no taxes, but would actually receive money from the state -- a minimally employed student that owed no income tax to begin with could actually receive a refund of eight hundred dollars (forty percent of two-thousand) or more. Clearly, there would be a major impact o the overall state budget from the cost of this program. Though a billion dollars doesn't go as far as it used to, it is still a substantial portion of the state's total sixty-three billion dollar budget (POB, 2012). Though the money saved or sent out to individual taxpayers through this tax credit would most likely be used to make purchases…
PASDC. (2012). Quick facts. Pennsylvania State Data Center. Accessed 3 March 2012. http://pasdc.hbg.psu.edu/sdc/pasdc_files/pastats/PaFacts_2011.pdf
POB. (2012). Budget in Brief. Pennsylvania Office of the Budget. Accessed 3 March 2012. http://www.budget.state.pa.us/portal/server.pt/community/current_and_proposed_commonwealth_budgets/4566
ather than being idle and receiving public benefit, individuals of working age typically prefer completing useful work. Mark P. Altieri, an associate professor of accounting at Kent State University, Kent, Ohio, and Jason A. othman, (2006), an associate at Wickens, Herzer, Panza, Cook and Batista, note a number of enhancements to WOTC in the article, "Surviving Katrina: Tax breaks for victims of the costliest catastrophe in American history."
According to Altieri and othman (2006), in regard to the WOTC - general law, under IC section 51, the WOTC provides motivation for employers to hire economically disadvantaged individuals. These disadvantaged individuals include qualified ex-felons, food-stamp recipients, veterans, summer youth employees, as well as individuals who receive certain welfare benefits (Altieri & othman, ¶ 23). Altieri and othman explain that in the past, the WOTC -- Katrina was expanded to embrace individuals whose principal residence on August 28, 2005, was located in…
Altieri, M.P., & Rothman, J.A. (2006). Surviving Katrina: Tax breaks for victims of the costliest catastrophe in american history. Journal of Accountancy, 201(2), 58+. Retrieved June 1, 2009, from Questia database: http://www.questia.com/PM.qst?a=o&d=5013771777
Anonymous. (2008). Special tax credit aids Paulding Co. development. Toledo Business Journal.
Telex Communications, Inc. Retrieved June 01, 2009 from HighBeam Research:
http://www.highbeam.com/doc/1P3-1619413051.html Battersby, M.E. (2009). The Memorial Day tax surprise. Metal Center News. Sackett Business