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 More »5 IRS Tax Tips for Persons Earning Tips Income!

4 Extended Tax Breaks You Can Claim for Tax Year 2015

extended tax breaksThe tax breaks list always changes . So the tax year 2015 is no different . Here are four  tax breaks that are officially expired on December 31, 2014, , but the Congress extended for tax year 2015 . If you are eligible to claim the following four tax breaks and you thought that the tax year has passed , don’t do the mistake. Claim these tax breaks while filing the IRS tax return for tax year 2015Read More »4 Extended Tax Breaks You Can Claim for Tax Year 2015

Tax Effect of Nonresident Alien Spouse Chosen As Tax Resident of US Simplified !

nonresident alienInternal Revenue Code allows a US citizen or a resident alien to treat his/her spouse as tax resident of US . This is an option granted to him/her. There maybe various situation in which during a tax year, one spouse is nonresident alien and one is resident alien . Choosing your partner (spouse ) who is nonresident as tax resident of USA may effect your taxation and also certain other legal obligation arise. Read More »Tax Effect of Nonresident Alien Spouse Chosen As Tax Resident of US Simplified !

Who Can File IRS Tax Return as Head of Household ?

Head of HouseholdIRS tax return under US tax laws can be filed in four ways-as Single person, as married couple filing jointly or as  widow(er) , or married  filing separately and  as as Head of Household . The tax brackets for each of these types of filing of tax return are different. The deductions and exemptions are also fixed differently for these types of filing of IRS tax return. The Head of Household status is for a single or unmarried person who actually share certain kinds of person living with him. IRS calls those persons as qualifying persons . In the instant post , certain points related to filing of tax return as Head of Household is explained .Read More »Who Can File IRS Tax Return as Head of Household ?

How to Find if You Are Tax Resident of USA ?

residential statusIn order to determine the  tax laibility of a persons who visits USA or stays in USA or works in USA or earns any income connected to USA , the first and foremost creteria is to find out the residential status of the person as per Internal Revenue Code . This is so , because the law for residents anbd non -residents are quite different. So , how do you determine if you are resident as per US tax laws ? Well the Internal Revenue Code (26 US Code )  7701

Read More »How to Find if You Are Tax Resident of USA ?