The term “Inside the Fixed and Variable Rate Allowance (FAVR)” refers to the portion of an employee’s income that is not subject to income tax. This portion of an employee’s income is typically used to cover the costs of housing, transportation, and other necessary expenses. The FAVR allows employees to keep more of their income, … Read more
Indirect Tax: Definition and Examples. What is not indirect tax? Indirect taxes are taxes imposed on the sale or exchange of goods and services, as opposed to direct taxes, which are levied on income or wealth. Some examples of indirect taxes include value-added tax (VAT), sales tax, excise tax, and customs duty. How many types … Read more
A private letter ruling (PLR) is a written statement issued to a taxpayer in response to a specific inquiry concerning how a tax law applies to the taxpayer’s particular set of facts. A PLR is binding on the IRS with respect to the taxpayer who requested it and cannot be used or cited as precedent … Read more
The process of reassessment occurs when the government decides to reassess your taxes. This can happen for a number of reasons, but usually it means that the government has found new information that they believe you should be taxed on. This new information could be anything from a change in your income to a change … Read more
A sin tax is a tax imposed on certain goods and services that are considered harmful to society. The most common examples of sin taxes are those imposed on tobacco and alcohol. The rationale behind sin taxes is that they will discourage people from consuming these harmful products and, in turn, improve public health. Some … Read more
A local tax is a tax imposed by a local government, such as a city, county, or school district. The tax may be imposed on property, income, sales, or some other base. Local taxes are used to finance local government services such as police and fire protection, schools, and parks. What is included in state … Read more
A surcharge is an additional fee that is charged on top of the regular price of a product or service. The surcharge is typically added to cover the cost of a specific expense, such as shipping or handling. Surcharges are a common practice in many businesses, and are typically disclosed to the customer before the … Read more
A non-covered security is a security that is not subject to the rules and regulations of the Securities and Exchange Commission (SEC). Non-covered securities include private placements, unregistered securities, and foreign securities. Non-covered securities are generally more risky and less liquid than covered securities. How does the IRS know your capital gains on real estate? … Read more
What Is a Tax Identification Number (TIN)? A tax identification number (TIN) is a unique number assigned to individuals and businesses by the Internal Revenue Service (IRS) for tax purposes. TINs are used to identify taxpayers and track tax liabilities. There are several types of TINs, including Social Security numbers (SSNs), employer identification numbers (EINs), … Read more
The At-Risk Rules are a set of IRS regulations that define the circumstances under which a taxpayer is considered to be at risk for purposes of claiming a deduction for losses incurred in a business venture. The rules are designed to prevent taxpayers from claiming deductions for losses that are not actually at risk of … Read more
