If you are an alien (not a U.S. citizen), you are considered a non-resident alien unless you meet one of two tests: the (a) green card test or (b) the substantial presence test for the calendar year (January 1 –
Most states have income taxes that feature varying levels of conformity with the Federal rules. For example, the tax liability in California is calculated similarly to the Federal. There are some differences that change every year. The tax rate on
Expert Guidance on Tax Planning for Film Production Businesses: Credits, Deductions, and Compliance Filmmaking involves creating interesting financial returns in the enchanting world that revolves around the movie industry. Of course, it is enticing to make fascinating movies but comprehending
Stock Options in General If you receive an option to buy stock, you may have to recognize income and pay taxes when you exercise the option or dispose of the stock received on the exercise of the option. There are
There are some additional taxes that are not based on net taxable income. Here are some of them. Self-Employment Tax There is an additional tax levied on all the earned income of self-employed individuals. The rate is 15.3% for the
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