Coronavirus relief for payment of 2019 tax due & filing tax return

The Government just announced a three-month extension on this year’s April 15 US tax payment deadline for the 2019 tax year.  In other words, that the tax payment deadline is pushed back by 90 days for both individuals and corporations. As per the announcement, individuals and small business owners will be allowed to defer up to …

Read moreCoronavirus relief for payment of 2019 tax due & filing tax return

Original Kiddie Tax Computation Method Restored!

Kiddie tax computation method which was changed from the tax year 2017 is again restored to the original method of computation vide signing of Appropriations Act of 2020 by President Trump on December 20, 2019, The original kiddie tax computation taxes the child’s net unearned income at the parents’ tax rate if it’s higher than …

Read moreOriginal Kiddie Tax Computation Method Restored!

Alternative Minimum Tax Calculator for 2017 & 2018

alternate minimum tax calculator

 Alternative minimum tax is automatically imposed on a taxpayer earning beyond a threshold. If you are wondering about various rules and conditions related to AMT tax , please read FAQs on Alternative Minimum Tax or AMT ? Section 55 of US Code 26 deals with the AMT and the number of  conditions  this provision contain really makes …

Read moreAlternative Minimum Tax Calculator for 2017 & 2018

Who Needs to File Tax Return ? Check This Calculator

who needs to file tax return

who needs to file tax returnAs per US Code 26 , section 6012 , every individual having for the taxable year gross income which equals or exceeds the exemption amount. So an Individual who has Gross Income of 4050 or more for Tax Year 2017 , he /she needs to file the tax return.I have created an easy calculator way to find out who really needs to file tax return to IRS as per US Code 26

Read moreWho Needs to File Tax Return ? Check This Calculator

How is the Year 2017 Exemption Phaseout Computed ?

The personal exemption phaseout means as your income grows, you will get less of standard exemption for tax year i.e $ 4050 ( Year 2017) . But ,the government desires that as the income of a tax payer increase , he/she should not claim personal tax exemption to the same extent which a taxpayer of …

Read moreHow is the Year 2017 Exemption Phaseout Computed ?

Rollover of Retirement Plans : A Quick Guide !

rolloverWhy rollover of retirement plans? Because Retirement plans have taxation issues at the time of withdrawal . So, when you quit or leave a job, you may have up the options to withdraw funds, but then you will have to pay the tax on the withdrawal . There are two options for you under which you may not be paying tax – either rollover to new employer or rollover to IRA .

. So , if you withdraw from a retirement plan, you might have to pay the tax .   By rolling over, you’re preventing taxation of your savings and therefore the kitty grows further. If you don’t roll over your payment, it will be taxable (other than qualified Roth distributions and any amounts already taxed) . Further, you may also be subject to additional tax unless you’re eligible for one of the exceptions to the 10% additional tax on early distributions.

Read moreRollover of Retirement Plans : A Quick Guide !

How is Unemployment Compensation Taxed Under US Tax Law ?

unemployment compensationIn the United States , a worker receives unemployment compensation or  benefits equal to between 40-50% of their previous pay generally . This is on account of Federal Unemployment Tax Act (FUTA), which authorizes the Internal Revenue Service (IRS) to collect an annual federal employer tax. This tax funds the program to compensate  workers who have become unemployed through no fault of their own. As a rule , if anyone receieves  unemployment compensation during the year, he/she  should receive Form 1099-G that shows the amount of unemployement compenation paid to him .

Read moreHow is Unemployment Compensation Taxed Under US Tax Law ?

5 IRS Tax Tips for Persons Earning Tips Income!

tax tipsInternal Revenue Code tax tips same way it treats any other income under the principle that all receipts are income unless clearly provided that an income is not taxable. Tips receipts by employee are taxable income under IRC . US tax law  requires that employers in certain sectors like food and restaurant , bars, casino where it is custom to tip the employee to submit an annual report about the tips . From the information out of such report , IRS can compare the tips reported in the W2 to find out unreported tips . Therefore , it is legally important to tell the employer about the tips received by the employee. Please note that not only the tip receipt is taxable income , it is also subject to Social Security and Medicare tax withholding. So, every time one under reports , he/she also prevents unlawfully withholding tax on such income .

Read more5 IRS Tax Tips for Persons Earning Tips Income!

Malcare WordPress Security