An alternative minimum tax (AMT) places a floor on the percentage of tax that a filer may be required to pay to the government.

IRS provides tax inflation adjustments for tax year 2020

"IRS provides tax inflation adjustments for tax year 2021

IRS provides tax inflation adjustments for 2021

An alternative minimum tax (AMT) places a floor on the percentage of taxes that a filer must pay to the government, no matter how many deductions or credits the filer may claim. If the TMT is higher than the taxpayer's regular tax liability for the year, they pay the regular tax and the amount by which the TMT exceeds the regular tax. The AMT recalculates income tax after adding certain tax preference items back into adjusted gross income. Preferential deductions are added back into the taxpayer's income to calculate his or her alternative minimum taxable income (AMTI), and then the AMT exemption is subtracted to determine the final taxable figure. The IRS has specific formulas in place to determine which portion of this income and deductions the tax filers need to note on Form 6251, and it uses another set of formulas to determine how these numbers lead to AMTI.

Alternative Minimum Tax (AMT)

The American Taxpayer Relief Act of 2012 was passed in response to the approaching combination of spending cuts and tax hikes known as the fiscal cliff.

H.R.8 - American Taxpayer Relief Act of 2012

Monetary Policy and the State of the Economy

Sequestration Order for Fiscal Year 2013 Pursuant to 251A of the Balanced Budget and Emergency Deficit Control Act, as Amended

An Overview of the Tax Provisions in the American Taxpayer Relief Act of 2012

American Taxpayer Relief Act Reduces Deficits by $737 Billion

The American Taxpayer Relief Act of 2012 is a bill signed into law by President Barack Obama on Jan. 2, 2013. Republican members of Congress strongly supported tax and spending cuts, and were ultimately persuaded to agree to a handful of politically palatable tax increases. Along with these extended tax cuts, ATRA raised payroll taxes for many Americans and reversed cuts for the highest earners that had been passed with the support of the George W. Bush administration. Federal Reserve Chair Ben Bernanke coined that term in February 2012 to describe a package of tax increases and spending cuts set forth in the Budget Control Act of 2011. Congress ultimately opted for this third option, passing the tax measures of ATRA with the intention of addressing spending cuts through the subsequent sequestration process.

American Taxpayer Relief Act Of 2012

The Bush tax cuts were a series of temporary tax relief measures, some later extended, enacted by President George W. Bush in 2001 and 2003.

The 2001 and 2003 Bush Tax Cuts and Deficit Reduction

H.R. 1836 (107th): Economic Growth and Tax Relief Reconciliation Act of 2001

President Bush Helped Americans Through Tax Relief

Economic Growth and Tax Relief Reconciliation Act (2001)

Taxes, Investment, and Economic Expansion: The Case for the Jobs and Growth Tax Relief Reconciliation Act of 2003

Jobs and Growth Tax Relief Reconciliation Act of 2003

Jobs and Growth Tax Relief Reconciliation Act of 2003,

The “'Fiscal Cliff' and the American Taxpayer Relief Act of 2012

Federal Budget Deficit Totals $1.4 Trillion in Fiscal Year 2009

Table of Contents
What Are the Bush Tax Cuts?
Understanding the Bush Tax Cuts
The Bush Tax Cuts for Families
The Bush Tax Cuts for Businesses
Extension of the Bush Tax Cuts
The Downside of the Bush Tax Cuts The measures lowered federal income tax rates for everyone, decreased the marriage penalty, lowered the capital gains tax and the tax rate on dividend income, and increased the child tax credit. Increased the amount of income exempt from the Alternative Minimum Tax (AMT) in order to allow more taxpayers to pay tax at the regular income tax rate instead of the higher minimum tax rates. Some of the benefits of the EGTRRA tax cuts included:
Lowering the maximum estate, gift, and generation-skipping transfer tax rate to 50% in 2002 from 55% in 2001, with an additional 1% reduction each year until 2007.
Removing the time limit on student loan interest deductions for tax purposes. Table of Contents
What Are the Bush Tax Cuts?
Understanding the Bush Tax Cuts
The Bush Tax Cuts for Families
The Bush Tax Cuts for Businesses
Extension of the Bush Tax Cuts
The Downside of the Bush Tax Cuts

Bush Tax Cuts

Cafeteria plans allow employees to choose from a variety of different benefit options that are made before any taxes are deducted.

FAQs for Government Entities Regarding Cafeteria Plans

A cafeteria plan is an employee benefit plan that allows staff to choose from a variety of pre-tax benefits. A cafeteria plan is an employee benefit plan that allows staff to choose from a variety of pre-tax benefits. Employees have several pre-tax options including insurance benefits, retirement plans, and benefits that help with life events. However, some benefits—like group life insurance benefits that exceed $50,000 or adoption assistance benefits—require employers to withhold both Social Security and Medicare taxes. A cafeteria plan is also referred to as a flexible benefits plan or Section 125 plan.

Cafeteria Plan

A capital gains tax is a levy on the profit that an investor gains from the sale of an investment such as stock shares. Here's how to calculate it.

Tax Topic No. 409: Capital Gains and Losses

Biden's Top Marginal Capital Gains Tax Rate Would Be Highest in OECD

Publication 550: Investment Income and Expenses

Publication 946: How to Depreciate Property

Find Out if the Net Investment Tax Applies to You

Publication 544: Sales and Other Disposition of Assets

Publication 538: Accounting Periods and Methods

Table of Contents
What Is the Capital Gains Tax?
Understanding the Capital Gains Tax
Capital Gains Tax Rates 2021
Computing Your Capital Gains
Capital Gains Tax Strategies The tax rates for long-term capital gains are consistent with the trend to capital gains being taxed at lower rates than individual income, as this table demonstrates. Capital losses will offset capital gains and effectively lower capital gains tax for the year. That's wise because the tax you will pay on long-term capital gains is generally lower than for short-term gains. This tax imposes an additional 3.8% of taxation on your investment income, including your capital gains, if your modified adjusted gross income or MAGI (not your taxable income) exceeds certain maximums.

Capital Gains Tax

The Constructive Sale Rule, Section 1259, is a section of the Internal Revenue Code that expands the types of transactions that are considered to be sales.

26 U.S.C. 1259 - Constructive sales treatment for appreciated financial positions

The Constructive Sale Rule, Section 1259, is a section of the Internal Revenue Code that expands the types of transactions that are considered to be sales and are subject to capital gains tax. The purpose of the constructive sale rule is to prevent investors from locking in investment gains without paying capital gains and to limit their ability to transfer gains from one tax period to another. The Constructive Sale Rule, Section 1259, is a section of the Internal Revenue Code that expands the types of transactions that are considered to be sales and are subject to capital gains tax. The Constructive Sale rule was instituted to counter hedge funds, which used them to avoid higher tax rates on short-term capital gains. Prior to this rule, there were rampant constructive sales, particularly by hedge funds, as a way to remove tax liabilities by stalling the realization of gains on sales.

Constructive Sale Rule, Section 1259

A conveyance tax is imposed on the value of a real estate deal.

Conveyance tax is a tax imposed on the transfer of real property at the state, county, or municipal level. If the property is sold for a very low amount or is transferred for free, such as between family members, it may be exempt from conveyance tax but may still be subject to estate tax, in some cases. Conveyance tax is a tax imposed on the transfer of real property at the state, county, or municipal level. The conveyance tax is also called a real estate transfer tax. In other cases, state conveyance tax rates vary based on the value of the property transferred.

Conveyance Tax

A corporation is a legal entity that is separate and distinct from its owners and has many of the same rights and responsibilities as individuals.

Model Business Corporation Act, Subchapter C, Directors.

Chapter 7 Bankruptcy: Liquidation under the Bankruptcy Code.

A corporation is a legal entity that is separate and distinct from its owners. The process of turning a private corporation into a public corporation is far more complex, as it falls under federal laws requiring full and public disclosure of financial information to potential shareholders and to the government. A corporation is created when it is incorporated by a group of shareholders who share ownership of the corporation, represented by their holding of stock shares, and pursue a common goal. Although the members of the board are not personally responsible for the corporation's debts, they owe a duty of care to the corporation and can incur personal liabilities if they neglect this duty. The precise legal definition of a corporation differs from jurisdiction to jurisdiction, but the corporation's most important characteristic is always limited liability.

Corporation

A correspondence audit is a type of tax audit performed by mail.

Charity and Nonprofit Audits: Correspondence Audit

A correspondence audit is a type of tax audit that the Internal Revenue Service (IRS) performs via mail. A field audit is another type of audit similar to an office audit but instead occurs at either the taxpayers’ home, place of business or accountant's office, and not at an IRS office. An office audit is a type of in-person audit in which a representative from the IRS interviews the taxpayer and inspects their records, usually at an IRS office. The next step after a correspondence audit is an office audit, where the IRS requires the taxpayer to come to an IRS location to discuss the issue in question. A correspondence audit is a type of tax audit that the Internal Revenue Service (IRS) performs via mail.

Correspondence Audit

A custodian is a financial institution that holds customers' securities in electronic or physical form to minimize the risk of theft or loss.

Investor Bulletin: Custody of Your Investment Assets

A custodian or custodian bank is a financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost. A custodian or custodian bank is a financial institution that holds customers' securities for safekeeping to prevent them from being stolen or lost. In the U.S., some of the largest custodian banks include the Bank of New York Mellon, JPMorgan Chase, State Street Bank and Trust Co., and Citigroup. In the U.S., some of the largest custodian banks include the Bank of New York Mellon, JPMorgan Chase, State Street Bank and Trust Co., and Citigroup. The custodian has the authority to make investment decisions regarding the assets in the account, but the funds are ultimately intended for use only by the named beneficiary.

Custodian

A deferred tax asset is a line item on a company's balance sheet that reduces its taxable income. 

Treasury Department and IRS Issue Guidance for Consolidated Groups Regarding Net Operating Losses

Summary of Statement No. 109: Accounting for Income Taxes

A deferred tax asset is an item on a company's balance sheet that reduces its taxable income in the future. If the tax rate for the company is 30%, the difference of $18 ($60 x 30%) between the taxes payable in the income statement and the actual taxes paid to the tax authorities is a deferred tax asset. A deferred tax asset is the opposite of a deferred tax liability, which indicates an expected increase in the amount of income tax owed by a company. A deferred tax asset represents a financial benefit, while a deferred tax liability indicates a future tax obligation or payment due. A deferred tax asset can arise when there are differences in tax rules and accounting rules or when there is a carryover of tax losses.

Deferred Tax Asset

A deferred tax liability is a line item on a balance sheet that indicates that taxes in a certain amount have not been paid but are due in the future.

Publication 537 (2020), Installment Sales

A deferred tax liability is a listing on a company's balance sheet that records taxes that are owed but are not due to be paid until a future date. 1:26
The deferred tax liability on a company balance sheet represents a future tax payment that the company is obligated to pay in the future. As the company continues depreciating its assets, the difference between straight-line depreciation and accelerated depreciation narrows, and the amount of deferred tax liability is gradually removed through a series of offsetting accounting entries. A common source of deferred tax liability is the difference in depreciation expense treatment by tax laws and accounting rules. The company recognizes the deferred tax liability on the differential between its accounting earnings before taxes and taxable income.

Deferred Tax Liability

A deficiency is the numerical difference between the amount of tax reported on a tax return and the amount that the IRS determines is actually owed. 

IRS Letter CP3219A: Statutory Notice of Deficiency (ASL) - YouTube Video Script

A deficiency is the numerical difference between the amount of tax that a taxpayer, or taxpaying entity, reports on a tax return and the amount that the Internal Revenue Service (IRS) determines is actually owed. A deficiency is the numerical difference between the amount of tax that a taxpayer, or taxpaying entity, reports on a tax return and the amount that the Internal Revenue Service (IRS) determines is actually owed. A deficiency is assessed when the amount or tax liability reported to the IRS by the taxpayer is less than the amount reported by third parties. The notice, which is not a tax bill, specifies the inconsistencies between the taxpayer's reported tax liability and the liability assessed by the IRS. When your reported income to the IRS is less than the income reported for you by employers or other sources, you will receive a deficiency notice.

Deficiency

A dividend imputation reduces or eliminates taxes on cash payouts to stock shareholders. Its proponents decry the dividend tax as double taxation.

Table II.4. Overall Statutory Tax Rates on Dividend Income

Centre for International Finance and Regulation: Research Working Paper Series, Dividend Imputation: The International Experience

Dividend imputation is a tax policy used in Australia and several other countries that eliminates the double taxation of cash payouts from a corporation to its shareholders. Through the use of tax credits called franking credits or imputed tax credits, the tax authorities are notified that a company has already paid the required income tax on the income it distributes as dividends.﻿﻿ The shareholder does not then owe taxes on the dividend income. Many prominent countries used to practice dividend imputation but have since stopped the practice, such as the United Kingdom and Germany
Where dividend imputation is practiced, it is mostly conducted through tax credits offered to shareholders, which are used to offset taxes. These countries include the following:
United Kingdom
The United Kingdom and Ireland, for example, previously offered partial imputation with tax credits that effectively reduced taxation on the dividends by 12.5% to 25%. Dividend imputation is a tax policy used in Australia and several other countries that eliminates the double taxation of cash payouts from a corporation to its shareholders.

Dividend Imputation

An expatriation tax is a government fee charged to those who renounce their citizenship or take up residency in another country. 

Instructions for Form 8854, Initial and Expatriation Statement

How Countries Define their Income Tax Borders

Instructions for Form 8854, Initial and Annual Expatriation Statement

An expatriation tax is a government fee charged to individuals who renounce their citizenship, usually based on the value of a taxpayer's property. In the United States, the expatriation tax provisions under Section 877 and Section 877A of the Internal Revenue Code (IRC) apply to U.S. citizens who give up their citizenship, and long-term residents who end their U.S. resident status for federal tax purposes. , the expatriation tax provisions under Section 877 and Section 877A of the Internal Revenue Code (IRC) apply to U.S. citizens who give up their citizenship, and long-term residents who end their U.S. resident status for federal tax purposes. These rules apply to anyone who expatriates with a net worth of over $2 million, fails to certify that they’ve complied with U.S. tax law for the five years preceding their expatriation, or who has an annual net income tax for the five preceding years over a certain amount.﻿﻿ This amount changes each year based on inflation, but in 2020 it was $171,000. The expatriation tax in the U.S. is based on the value of an individual taxpayer’s property on the day before their expatriation.

Expatriation Tax

A field audit is a comprehensive tax audit conducted by the Internal Revenue Service (IRS) at either your home, place of business or accountants office.

Publication 556: Examination of Returns, Appeal Rights, and Claims for Refund

26 USC 6501: Limitations on assessment and collection

Publication 1035: Extending the Tax Assessment Period

A field audit is a comprehensive tax audit conducted by the Internal Revenue Service (IRS) at either the taxpayer's home, place of business or accountant's office, so they can examine your individual or business financial records to ensure you filed your tax return accurately. A field audit is a comprehensive tax audit conducted by the Internal Revenue Service (IRS) at either the taxpayer's home, place of business or accountant's office, so they can examine your individual or business financial records to ensure you filed your tax return accurately. A field audit differs from a correspondence audit in that a field audit is conducted in person rather than by mail, by an IRS Revenue Agent who will review your tax records for a particular year. There are three possible IRS audit outcomes available: no change to the tax return, a change that is accepted by the taxpayer, or a change that the taxpayer disagrees with. It is really important to be represented by a tax attorney—and/or the individual who prepared and filed the tax return—at the time of the audit, especially if there have been any understatements of income, overstatements of deductions or if your tax return contained false or misleading information.

Field Audit

Form 1065: U.S. Return of Partnership Income is a tax document issued by the IRS used to declare the profits, losses, deductions, and credits of a business partnership.

2019 Instructions for Form 1065, U.S. Return of Partnership Income

2019 Partner's Instructions for Schedule K-1 (Form 1065)

Instructions for Form 1065: U.S. Return of Partnership Income

Form 1065: U.S. Return of Partnership Income is a tax document issued by the Internal Revenue Service (IRS) used to declare the profits, losses, deductions, and credits of a business partnership.﻿﻿ In addition Before completing Form 1065, filers need information from:
Form 4562: Depreciation and Amortization
Form 1125-A: Cost of Goods Sold
Form 4797: Sale of Business Property
Copies of any Form 1099 issued by the partnership
Form 8918: Material Advisor Disclosure Statement
Form 114: Report of Foreign Bank and Financial Accounts Disclosure Statement
Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts
Farming partnerships need a copy of Form 1040 individual tax return as well. Form 1065: U.S. Return of Partnership Income is a tax document issued by the Internal Revenue Service (IRS) used to declare the profits, losses, deductions, and credits of a business partnership.﻿﻿ In addition IRS Form 1065 is used to declare profits, losses, deductions, and credits of a business partnership for tax filing purposes. Foreign partnerships with income in the U.S. must also file Form 1065.

Form 1065: U.S. Return of Partnership Income

Form 1095-A: Health Insurance Marketplace Statement is a form sent annually to Americans who buy insurance through the healthcare exchange,

No Health Insurance? See If You'll Owe a Fee

Form 1095-A is a form that is sent to Americans who obtain health insurance coverage through a Health Insurance Marketplace carrier. When preparing your tax return, you or your tax preparer will use 1095-A to fill out Form 8962: Premium Tax Credit if you are eligible to receive the credit. Form 1095-A is a form that is sent to Americans who obtain health insurance coverage through a Health Insurance Marketplace carrier. According to the IRS, if you are expecting to receive a Form 1095-A, you should wait to file your income tax return until you receive it. However, if you are eligible for a subsidy or tax credit, you need to transfer that information to Form 8962 and include it with your tax return.

About Form 1095-A: Health Insurance Marketplace Statement

Form 1095-C is a tax form reporting information about an employee's health coverage offered by an Applicable Large Employer.

About Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Form 1095-C: Employer-Provided Health Insurance Offer and Coverage is an Internal Revenue Service (IRS) tax form reporting information about an employee's health coverage offered by an Applicable Large Employer (ALE). Form 1095-C: Employer-Provided Health Insurance Offer and Coverage is a tax form reporting information about an employee's health coverage offered by an Applicable Large Employer (ALE).
Applicable Large Employers (ALEs) typically have 50 or more full-time employees. Form 1095-C: Employer-Provided Health Insurance Offer and Coverage is an Internal Revenue Service (IRS) tax form reporting information about an employee's health coverage offered by an Applicable Large Employer (ALE). If Parts I and II are the only sections filled, the employee may also receive a Form 1095-B: Health Coverage, which provides proof of coverage from the insurer chosen by the employer.
Form 1095-B is used by employers to report information to the IRS and to taxpayers about individuals covered by minimum essential coverage and who are not liable for the individual shared responsibility payment. Information from this form also helps determine a taxpayer's eligibility for credits, such as the premium tax credit
Information from this form also helps determine a taxpayer's eligibility for credits, such as the premium tax credit.

Form 1095-C: Employer-Provided Health Insurance Offer and Coverage

Form 1120-S: U.S. Income Tax Return for an S Corporation is used to report the income, losses, and dividends of S corporation shareholders.

About Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, Etc.

About Form 1065, U.S. Return of Partnership Income

About Form 2553, Election by a Small Business Corporation

About Form 1120-S, U.S. Income Tax Return for an S Corporation

Form 1120-S: U.S. Income Tax Return for an S Corporation is a tax document that is used to report the income, losses, and dividends of S corporation shareholders. Form 1120-S: U.S. Income Tax Return for an S Corporation is a tax document that is used to report the income, losses, and dividends of S corporation shareholders. Use Form 1120-S to report the income, gains, losses, deductions, credits, and other information of a domestic corporation or other entity for every tax year that is covered by an election to be an S corporation. A corporation must file Form 1120-S if it elected to be an S corporation by filing Form 2553, and the Internal Revenue Service (IRS) accepted the election. Form 1120-S reports the income, losses, and dividends of each S corporation shareholder.

Form 1120-S: U.S. Income Tax Return for an S Corporation

Form 4070: Employee's Report of Tips to Employer is a tax form distributed by the Internal Revenue Service (IRS). Employees who are compensated by tips use this form to report those tips to their employers.

Form 4070: Employee's Report of Tips to Employer

Instructions for Form 8027: Employer's Annual Information Return of Tip Income and Allocated Tips

Form 4070: Employee's Report of Tips to Employer is a tax form distributed by the Internal Revenue Service (IRS). Employees document their daily tips on Form 4070A.
Form 4070: Employee's Report of Tips to Employer is filed by employees who are compensated by tips. The form must contain the employee’s name, address, Social Security number, the month covered by the report, and the total amount of tips received. Form 4070 is used by employees who are compensated by tips to report those tips to their employers. If the amount of tips reported by employees is under 8% of receipts, the employer must allocate the difference between the reported tip income and 8% of the receipt gross.

Form 4070

Form 8949: Sales and Other Dispositions of Capital Assets is an Internal Revenue Service (IRS) form used by individuals, partnerships, corporations, trusts, and estates to report capital gains and losses from investment.

2018 Instructions for Form 8949, Sales and Other Dispositions of Capital Assets,

2011 Instructions for Schedule D (and Form 8949),

2018 Instructions for Schedule D, Capital Gains and Losses,

About Form 1099-B, Proceeds from Broker and Barter Exchange Transactions.

2020 Instructions for Form 1099-B, Proceeds from Broker and Barter Exchange Transactions,

Form 8949: "Sales and Other Dispositions of Capital Assets" is an Internal Revenue Service (IRS) form used by individuals, partnerships, corporations, trusts, and estates to report capital gains and losses from investment.﻿﻿ Taxpayers must use the form to report short- and long-term capital gains and losses from sales or investment exchanges. Individuals must use the form to report the following:
The sale or exchange of a capital asset not reported on another form or schedule
Gains from involuntary conversions (other than from casualty or theft) of capital assets not used in your trade or business
Non-business bad debts
Worthlessness of a security
The election to defer capital gain invested in a Qualified Opportunity Fund
The disposition of interests in Qualified Opportunity Funds(s)
Anyone filing a joint return must complete as many copies of the form necessary to report their transactions along with those of their spouse. But before an individual can enter the net gain or loss on Schedule D, Form 8949 must be completed.﻿﻿ The transactions taxpayers must report on Form 8949 are reported by brokerages annually to the IRS and to taxpayers using Form 1099-B: Proceeds from Broker and Barter Exchange Transactions. Form 1099-B reports the cost basis of the investor’s buy and sell transactions.﻿﻿ In effect, Form 8949 reflects information about transactions that are captured on Form 1099-B, as well as from the taxpayer's own records.
Click this link to download a copy of Form 8949: Sales and Other Dispositions of Capital Assets. A capital asset transaction for which no Form 1099-B (or substitute statement) is issued must be listed on another Form 8949.﻿﻿ Form 8949

IRS Form 8949

From the Latin frater, meaning brother, a fraternal organization is a social group that often exists for mutually beneficial purposes.

IRC 501(c)(8) Fraternal Beneficiary Societies and IRC 501(c)(10) Domestic Fraternal Societies

A fraternal organization is a brotherhood or a type of social organization whose members freely associate for a mutually beneficial purpose such as for social, professional or honorary principles. Ranging from college fraternities to professional organizations and trade unions to civic clubs, fraternal organizations provide deep networks for members as well as social activities, leadership training, and continuing education. A fraternal organization is a brotherhood or a type of social organization whose members freely associate for a mutually beneficial purpose such as for social, professional or honorary principles. A fraternal organization is a social club or membership organization formed around a common bond, ideology, or personal background. Fraternal organizations are often granted preferential tax treatment as 501(c)10 organizations, and provide certain benefits to members such as discounted life or health insurance coverage.

Fraternal Organization

A gambling loss is a loss resulting from games of chance or wagers on events with uncertain outcomes (gambling). 

Publication 529: Miscellaneous Deductions

About Form W-2 G, Certain Gambling Winnings

A gambling loss is a loss resulting from games of chance or wagers on events with uncertain outcomes (gambling). Winnings or losses can be from the following gambling activities: lotteries, raffles, dog races, horse races, casino games, poker games and sports events. Crippling gambling loss or debt can lead to embezzlements, writing bad checks and committing other crimes in order to cover a gambler’s losses. A gambling loss is a loss resulting from games of chance or wagers on events with uncertain outcomes (gambling). Taxpayer notes must include the date and type of gambling, the name and address of the gambling venue, the people that the taxpayer gambled with if applicable, and the amounts won and lost.

Gambling Loss

The gas guzzler tax is a U.S. excise tax imposed on the manufacturers or importers of passenger cars that do not meet fuel economy standards.

FOTW #1183, April 26, 2021: New Cars Purchased with Low Fuel Economy Ratings Continue to be Assessed a Gas Guzzler Tax

Vehicles Subject to the Gas Guzzler Tax for Model Year 2016

Fact #915: March 7, 2016 Average Historical Annual Gasoline Pump Price, 1929–2015

Tax Preferences for Sport Utility Vehicles (SUVs): Current Law and Legislative Initiatives in the 109th Congress

US Auto Sales Decline 1.4% in 2019; Car Sales Plummet as Trucks, SUVs Gain

The gas guzzler tax is a surcharge added to the sales or lease price of cars in the U.S. that have poor fuel economy ratings. Manufacturers are required to use the same test as the EPA when they measure vehicle fuel economy for the gas guzzler tax and new car fuel economy labels. Shoppers for a new car will see the amount of the tax posted on the window sticker of the car if it is subject to the gas guzzler tax. The gas guzzler tax is a surcharge added to the sales or lease price of cars in the U.S. that have poor fuel economy ratings. The combined city and highway fuel economy that is used to determine tax liability is not adjusted to account for in-use shortfall, so it is higher than the mpg values provided in the Fuel Economy Guide and posted on the window stickers of new vehicles.

Gas Guzzler Tax

IRS Publication 519 or the U.S. Tax Guide For Aliens is an IRS document that details tax procedures for individuals who are not citizens of the U.S.

About Publication 519, U.S. Tax Guide for Aliens

Publication 519: U.S. Tax Guide for Aliens

About Form 1040-NR, U.S. Nonresident Alien Income Tax Return

IRS Publication 519 is the U.S. Tax Guide For Aliens, a document the Internal Revenue Service (IRS) publishes that details the tax procedures for aliens, individuals that are not citizens of the United States.﻿﻿ Not all aliens are subject to U.S. taxes. To meet this test, an individual must reside in the U.S. on at least:
1.  31 days during the current year, and
2.  183 days during the three-year period that includes the current year and the two years immediately before that, counting all the days you were present in the current year, one-third of the days you were present in the first year before the current year, and one-sixth of the days you were present in the second year before the current year.
The green card test states that an individual is a resident, for U.S. federal tax purposes, if they are a Lawful Permanent Resident of the U.S. at any time during the calendar year. IRS Publication 519 provides tax information and guidance for aliens in the U.S.
Taxation will depend on whether a person is a resident or non-resident alien, or dual-status.
Non-residents may be subject to income tax from both U.S. and foreign authorities. The most important aspect of IRS Publication 519 is its definition of a taxpayer's status as either a non-resident alien or a resident alien using the substantial presence test or the green card test as the applicable tax rules are based on that status. Individuals determined to be non-resident aliens are generally subject to two different tax rates on their U.S. income, one for effectively connected income, and one for fixed or determinable, annual, or periodic (FDAP) income.

U.S. Tax Guide For Aliens

IRS Publication 970: Tax Benefits for Education is a publication by the Internal Revenue Service (IRS) geared to higher education costs and expenses.

About Publication 970, Tax Benefits for Education.

Publication 970: Tax Benefits for Education,

Fiscal Year 2020 Budget of the U.S. Government, Analytical Perspectives,

Flores Update Regarding Tax Relief for Graduate Students.

Changes to the 2017 Publication 972 Due to the Bipartisan Budget Act of 2018.

H.R. 1892: Bipartisan Budget Act of 2018.

IRS Publication 970 is a document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students and families saving or paying for college.﻿﻿ Further tax incentives to education spending outlined in IRS Publication 970 include the ability to cash in savings bonds tax-free if the proceeds are used for education, the ability to take penalty-free withdrawals from retirement savings accounts and the deductibility of education expenses from business income. These benefits include the deductibility of interest paid on student loan debt, tax-free treatment of canceled student loan debt, the deductibility of tuition and fees, contributions to tax-advantaged Coverdell Education Savings Accounts (ESAs), and participation in a qualified tuition program. In addition, IRS Publication 970 outlines 10 tax benefits that students and their families can claim in order to reduce the income tax they owe. IRS Publication 970 is a document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students and families saving or paying for college.

IRS Publication 970 : Tax Benefits for Education

IRS Publication 972 provides instructions for parents and guardians of children under age 17 on how to claim the child tax credit.

Publication 972 (2018), Child Tax Credit.

Get Ready for Taxes: Here's how the New Tax Law Revised Family Tax Credits.

2018 Instructions for Schedule 8812 (2018).

What's New With the Child Tax Credit After Tax Reform.

Publication 972 is a document published by the Internal Revenue Service (IRS) that provides guidance on determining the exact amount of the child tax credit that taxpayers can claim. The document includes an update on any changes in the tax credit for the year,﻿﻿ a worksheet to help taxpayers calculate their child credits in certain unusual cases,﻿﻿ as well as instructions for determining the child tax credit to claim on Form 1040, and the amount of earned income to enter on Schedule 8812: Additional Child Tax Credit. According to the document, a qualifying child or dependent must:
Be under the age of 17 by the end of the tax year;
Be claimed as a dependent on the taxpayer's federal tax return;
Be a U.S. citizen, resident alien, or national—more information on residency requirements can be found in IRS Publication 519;
Have lived with the taxpayer for more than half of the tax year; and
Not have provided more than half of their own financial support. Following changes to the law in 2017, the refundable portion of the child tax credit, known as the additional child tax credit (ACTC), increased to $1,400 from $1,000. The IRS allows families with an annual income of more than $2,500 to request a refund using the ACTC.﻿﻿ To make a claim for a refund, filers must complete Schedule 8812.
The child tax credit has limits and is not available to taxpayers at certain high-income levels.

Publication 972: Child Tax Credit

A limited partnership is when two or more partners go into business together, with the limited partners only liable up to the amount of their investment. 

THE UNIFORM LIMITED PARTNERSHIP ACT (ULPA) (2001) (LAST AMENDED 2013)

Limited Liability for General Partnerships: Another Louisiana Anomaly?

Table of Contents
What Is a LP? Pros
Personal liability protection for limited partners
Pass-through entity for taxation (i.e. only taxed once unlike C-corp)
Ease of creation and reporting (e.g. no required annual meetings)
Less formal structure
No self-employment taxes for limited partners
GPs have unlimited personal liability (although they also have management control of the LP)
Limited partners limited in management participation
Ownership can be harder to transfer than other entities, such as an LLC
Not as flexible for changing management roles
Businesses that form a limited partnership generally do so to own or operate a set of specific assets, such as a real estate investment partnership or LP for managing oil pipelines. However, the general partner of a limited partnership has unlimited liability for the debt, and any limited partners have limited liability up to the amount of their investment. LP FAQs
The Bottom Line
A limited partnership (LP)—not to be confused with a limited liability partnership (LLP)—is a partnership made up of two or more partners. An LP allows certain investors (limited partners) to invest without having a management role or any personal liability, while the general partners carry all the liability.

Limited Partnership (LP)

A limited liability company (LLC) is a corporate structure that protects its investors from personal responsibility for its debts or liabilities.

When You Might Be Personally Liable for LLC or Corporate Debt

Apply for an Employer Identification Number (EIN) Online

LLC Filing as a Corporation or Partnership

Well Known LLC Companies: Everything You Need to Know

A limited liability company (LLC) is a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities. The primary difference between a partnership and an LLC is that an LLC separates the business assets of the company from the personal assets of the owners, insulating the owners from the LLC's debts and liabilities. A limited liability company (LLC) is a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities. While the limited liability feature is similar to that of a corporation, the availability of flow-through taxation to the members of an LLC is a feature of a partnership rather than an LLC. Many view an LLC as a blend of a partnership, which is a straightforward business agreement between two or more owners, and a corporation, which has certain liability protections.

Limited Liability Company (LLC)

Material participation tests are a set of Internal Revenue Services (IRS) criteria that evaluate whether a taxpayer has materially participated in a trade, business, rental, or other income-producing activity.

Publication 925 (2018), Passive Activity and At-Risk Rules,

Material participation tests are a set of Internal Revenue Services (IRS) criteria that evaluate whether a taxpayer has materially participated in a trade, business, rental, or other income-producing activity. However, passive activity rules limit the deductibility of losses when taxpayer participation fails to meet at least one of the seven material participation tests. The participation of limited partners in enterprises owned by them is passive participation unless they pass material participation tests one, five, or six. Passive activity rules apply to participation that fails to meet one of the material participation tests. Material participation tests are a set of Internal Revenue Services (IRS) criteria that evaluate whether a taxpayer has materially participated in a trade, business, rental, or other income-producing activity.

Material Participation Tests

A nanny tax is a tax paid by people who hire household help, such as a babysitter or maid, and pay them more than a specified threshold.

Publication 926: Household Employer's Tax Guide

Topic No. 756 Employment Taxes for Household Employees

IRS: Plan now to use Health Flexible Spending Arrangements in 2019

Topic No. 602 Child and Dependent Care Credit

Employer and Employee Responsibilities - Employment Tax Enforcement

Understanding Employee vs. Contractor Designation

A nanny tax is a federal tax paid by people who employ household employees and pay wages over a certain amount. 1:31
Household employees are hired persons whose work is controlled by the employer; such employees include babysitters, nannies, butlers, and cooks.﻿﻿ The nanny tax exists because the IRS considers an ongoing household helper as the taxpayer's household employee, rather than an independent contractor. A nanny tax is a federal tax paid by people who employ household employees and pay wages over a certain amount. A nanny tax is a federally required tax paid by people who employ household employees and pay wages over a certain threshold. The nanny tax enables a household employee to receive covered employment benefits and protections, such as Social Security, Medicare, and unemployment benefits.

Nanny Tax

Not for profit refers to a type of organization or enterprise that does not earn profits for its owners.

Exemption Requirements - 501(c)(3) Organizations

About Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code

Exempt Purposes - Internal Revenue Code Section 501(c)(3)

Exempt Organizations: What Are Employment Taxes?

Not-for-profit organizations are types of organizations that do not earn profits for its owners. Indeed, since not-for-profit enterprises wish to accomplish their objectives in the same way as for-profit enterprises, business tactics and management techniques honed in the for-profit world often work well in not-for-profit organizations too. Even tax-exempt not-for-profit organizations are required to remit payroll taxes on behalf of their employees, who also must report income from nonprofits to the IRS.
Thanks to their tax-exempt status Almost anyone can start a not-for-profit and apply for tax-exempt status, but most not-for-profit organizations won't qualify for 501(c)(3) status. Aside from the distinguishing feature that a not-for-profit organization does not distribute profits to its owners, many nonprofits have much in common with for-profit organizations.

Not for Profit

Passive activity loss rules are a set of IRS rules that prohibits using passive losses to offset earned or ordinary income. 

2018 Instructions for Form 8582, Passive Activity Loss Limitations,

Topic No. 425, Passive Activities -- Losses and Credits.

Publication 925, Passive Activity and At-Risk Rules,

Passive Activity Losses - Real Estate Tax Tips.

Publication 925: Passive Activity and At-Risk Rules,

Passive activity loss rules are a set of IRS rules that prohibit using passive losses to offset earned or ordinary income. Generally, passive losses (and income) can come from the following activities:
Equipment leasing
Rental real estate (though there are some exceptions)
Sole proprietorship or a farm in which taxpayer has no material participation
Limited partnerships (though there are some exceptions)
Partnerships, S-Corporations, and limited liability companies in which taxpayer has no material participation
If you are unsure whether a loss should be classified as passive or not, it is worth consulting with a professional accountant to ensure your taxes are being filed correctly. Passive activity loss rules are generally applied at the individual level, but they also extend to virtually all businesses and rental activity in various reporting entities, except C corporations, in order to deter abusive tax shelters.﻿﻿ There are detailed rules about how much in passive losses is deductible; the Tax Cut and Jobs Act of 2017 changed some of these numbers. Passive activity loss rules are a set of IRS rules stating that passive losses can be used only to offset passive income. Passive activity loss rules are a set of IRS rules that prohibit using passive losses to offset earned or ordinary income.

Tax Laws and Regulations

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