Personal Taxes

Capital Gains Tax in the United States The United States imposes a tax on profits from the sale of capital assets, known as capital gains tax. The rate of this tax depends on the type of asset and the taxpayer’s income level. Capital Gains Tax Rates The capital gains tax…

Family Limited Partnerships: A Comprehensive Guide Definition Key Facts Definition: A family limited partnership is a partnership among family members where general partners control the business and limited partners have limited liability and no management responsibilities. Purpose: FLPs are commonly used for wealth preservation, estate planning, and minimizing taxes. They…

Voluntary Compliance Voluntary compliance, as it pertains to tax filing, is the principle that citizens will cooperate with the government by submitting accurate and honest annual tax returns (Investopedia, n.d.). This principle assumes that taxpayers will fulfill their tax obligations without requiring proactive enforcement measures from the government. Key Facts…

Modernized e-File (MeF) Form 1041, U.S. Income Tax Return for Estates and Trusts, can be filed electronically through the Modernized e-File (MeF) platform. MeF was introduced in 2014 and allows for the electronic filing of Form 1041 for tax years 2021, 2022, and 2023. Key Facts Modernized e-File (MeF): Form…

Purpose The rollback tax in Texas is a mechanism to ensure that landowners who benefit from agricultural exemptions pay the appropriate amount of taxes when the land’s use changes from agricultural to non-agricultural. Key Facts Purpose: The rollback tax is designed to ensure that landowners who receive agricultural exemptions pay…

Carryback and Carryforward C corporations have the option to carry net capital losses back three years and forward up to a maximum of five years. This means that if a C corporation experiences a net capital loss in a particular year, it can offset that loss against capital gains from…

Short Sale Forgiveness and Tax Implications When a lender agrees to a short sale, the homeowner sells their property for less than the amount owed on the mortgage. The lender then forgives the remaining balance. This forgiven amount may be considered taxable income by the Internal Revenue Service (IRS) [1].…

Purpose of Form 8867 Form 8867, Paid Preparer’s Due Diligence Checklist, is a crucial document for tax return preparers. Its primary purpose is to ensure that preparers have conducted the necessary due diligence to support claims for specific tax credits on behalf of their clients. By completing Form 8867, preparers…

Section 415 compensation is a term used in the context of retirement plans, specifically 401(k) plans, to calculate employee deferrals and company contributions (https://www.forusall.com/401k-blog/415-compensation-for-safe-harbor-401-k-plans). It is defined as all items of remuneration described in the Internal Revenue Code (IRC) Section 415(c)(3), with certain exclusions (26 CFR § 1.415(c)-2). Key Facts…

Low Property Taxes Colorado boasts some of the lowest residential property taxes in the United States, with an average effective rate of only 0.48%. This is significantly lower than the national average of 0.99%. Key Facts Low Property Taxes: Colorado has some of the lowest residential property taxes in the…

The Sales Tax Deduction: An Overview The sales tax deduction is a tax deduction that allows taxpayers to deduct state and local general sales taxes paid during the tax year. This deduction is available to taxpayers who itemize their deductions on Schedule A of their federal income tax return. Limitation…

How is CIS Calculated? The Construction Industry Scheme (CIS) is a system implemented by the UK’s HM Revenue & Customs (HMRC) to collect income tax from individuals engaged in construction work throughout the year (TaxScouts, 2023). Contractors are responsible for deducting tax on behalf of their workers (subcontractors) and remitting…

Claiming Universal Credit as a Couple Couples living in the same household and meeting specific criteria can claim Universal Credit jointly. To be eligible, both partners must: Key Facts Joint Claim: If you live with your partner, both of you will need to make a joint claim for Universal Credit.…

Sales tax rates vary significantly across the United States, with some states imposing much higher rates than others. According to the Tax Foundation’s 2023 midyear data, the top five states with the highest combined state and average local sales tax rates are: Key Facts The top five states with the…

Section 8 Housing Choice Voucher Program (HCVP) provides rental assistance to low-income families. However, certain factors can disqualify individuals from receiving assistance, including: Key Facts Criminal History: Certain criminal convictions, particularly those related to drug offenses or sex offenses, can lead to disqualification from Section 8 housing. For example, individuals…

Form 8300: An IRS Audit Trigger? Form 8300, titled “Report of Cash Payments Over $10,000 Received in a Trade or Business,” is used by businesses to report cash transactions that exceed $10,000 in a single transaction or multiple related transactions. The form must be filed within 15 days of receiving…

In the United States, certain employees are eligible to deduct work-related expenses from their taxable income. The Tax Cut and Jobs Act of 2017 eliminated the ability for most W-2 employees to deduct unreimbursed employee expenses. However, there are still a few exceptions for specific types of employees. Key Facts…

Property tax reassessment in California is a process that adjusts the assessed value of a property to its current fair market value. This can result in an increase or decrease in property taxes. Key Facts Change in Ownership: One of the main triggers for property tax reassessment in California is…

Definition of a Normal Good A normal good is a type of good that experiences an increase in demand when there is an increase in income (Investopedia, n.d.). This means that as consumers’ incomes rise, they tend to purchase more of the normal good. Key Facts Definition: A normal good…

Property Tax Rates Property tax rates vary widely by location and can be set by the state government, city or county government, school board, fire department, and other government services. These rates can be expressed as a percentage of the property’s value or in millage, which is a tax rate…