The principle of vertical equity states that people with a higher ability to pay taxes should pay more taxes than those with a lower ability to pay. The ability-to-pay principle is the most commonly used basis for determining who pays how much in taxes. There are two main theories of vertical equity: the benefit principle … Read more
. What is the 1099-MISC form? The 1099-MISC form is a tax form used to report miscellaneous income. Does a 1099 mean I owe money? The IRS Form 1099 is issued to taxpayers who have received income from sources other than their regular job or salary. This includes interest income, dividends, capital gains, rental income, … Read more
The Adjusted Cost Base (ACB) is the cost of an investment adjusted for capital gains or losses. The ACB is used to calculate the capital gain or loss when an investment is sold. The cost of an investment includes the purchase price, plus any commissions or fees paid. If the investment is a security, the … Read more
S. Virgin Islands. Form 8689: Allocating Individual Income Tax to the U.S. Virgin Islands Can I efile with 8689? Yes, you can efile with 8689. Does the U. S. Virgin Islands tax Social Security? Yes, the U.S. Virgin Islands taxes Social Security. However, the tax rate is only 3.84 percent, which is lower than the … Read more
Take-home pay is the net amount of an employee’s income that is available after taxes and other deductions have been taken out. The amount of take-home pay will vary depending on an individual’s tax bracket and the amount of deductions that are taken out. How can I calculate my income tax? If you want to … Read more
The IRS defines earned income as “wages, salaries, tips, and other taxable employee pay,” as well as “net earnings from self-employment.” In order to qualify as earned income, the money must have been earned through active work, rather than passive income sources such as investments. There are a few exceptions to what is considered earned … Read more
Income splitting is the process of allocating income between family members in a way that minimizes the overall tax liability. This can be done through a variety of methods, including: -Transferring income-producing assets to lower-income family members -Setting up a family trust -Estate planning Income splitting can be a complex process, and it’s important to … Read more
A levy is a legal seizure of property to satisfy a tax debt. The Internal Revenue Service (IRS) is authorized to levy, or seize, property to collect taxes you owe. The IRS can seize real estate, personal property, vehicles, boats, airplanes, bank accounts, wages, retirement accounts, commissions, dividends, and more. The IRS must first assess … Read more
Tax accounting is the process of preparing financial statements for tax purposes. This includes calculating taxes owed, filing tax returns, and preparing for audits. Tax accountants must be well-versed in tax law and have a deep understanding of financial accounting. While tax accounting is similar to financial accounting, there are some key differences. For one, … Read more
The Self-Employed Contributions Act (SECA) is a tax imposed on self-employed individuals and sole proprietors. The SECA tax is used to fund Social Security and Medicare benefits for self-employed individuals and their families. The SECA tax is calculated as a percentage of the self-employed individual’s net earnings from self-employment. Is FICA mandatory for self-employed? Yes, … Read more
