Before the actual amount of tax to be paid is determined, various direct offsets to tax liability are taken. Such “direct offsets” are called “tax credits.” The credits are dollar-for dollar-reductions of the tax liability. Credits are usually calculated based
After adding up all the income and taking all the deductions, we have arrived at the net taxable income amount. Based on that number, the income tax is calculated from the tax brackets that are adjusted annually for inflation. The
Note that the standard deduction amounts are used if the total of all the “below the line” deductions does not exceed $13,850 for single and married filing jointly, $20,800 for head of household, and $27,700 for married filing jointly or
Health savings account (HSA) Contributions other than employer contributions, rollovers, and qualified HSA funding distributions from an IRA to your HSA are deductible. One-half of self-employment tax If you are paying a self-employment tax, either from your Schedule C business
The first step is to add all the wages, interest, dividends, net income from rental properties, net business profits, various pension payments, and net capital gains (losses) – everything taxable and received during the reporting year. Next, take deductions. Deductions
Dependents can be a “qualifying child” and/or a “qualifying relative”. Note: Social Security Numbers or ITINs (Individual Taxpayer Identification Number) are required for dependents. “Child”: a son, daughter, stepson, or stepdaughter of the taxpayer, any foster child placed with the
There are five filing status possibilities for U.S. resident individuals: 1. SINGLE Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law. 2. MARRIED FILING JOINTLY (MFJ) a. Your marital status on
DAO: The Structural Issues Blockchain technology has evolved to offer programmatic solutions for augmenting the governance potency of organizations by implementing smart contracts, the execution of which is guaranteed upon the occurrence of certain events. This allows for an organizational
Utilizing sustainability credits and green tax incentives for sustainable ventures. In the wake of the world going green and being environmentally conscious, organizations are implementing green practices to lessen their ecological footprint and boost their public image. Many businesses will
Virtual currency is a digital representation of value. The IRS describes convertible virtual currency as a virtual currency with an equivalent value in real currency or acting as a substitute for real currency. Real currency is “the coin and paper