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Income Tax Law Questions
In most cases right after the first of the year people are receiving their W-2s and are getting ready to prepare their income
, but there are those that may not feel that they are required to do so. Often this triggers a set of ongoing questions like: is there a
that mandates paying income taxes? Are there income tax laws that specify how a person who lives in one state and works in another should be filed? These and questions like them have been answered below by the Experts.
Is it true there is no law to pay income tax?
This is not true in most cases, though there are many people out there that continue to claim that income taxes do not have to be paid and that making individuals pay income tax is unconstitional. Congress passed the
Internal Revenue Code
, in which the
laws are contained. This is the law that lays out the requirements that people must pay income taxes.
If a self employed person has residences in multiple states and earns money in all those states how does the individual file their state income tax?
Since each state has a right to tax the income of an individual, the individual will have to file a tax return for each state that the money that was earned in and pay the taxes required. An individual who owns multiple residences will usually have one primary residence where they receive their mail and their driver’s license is issued by that state. An individual should first start with preparing a Federal Income tax return and then prepare
state income tax
returns for the other states in which income was earned, saving for last the state in which the individual has claimed their primary residence. After the other states income taxes have been filed and paid, the state in which the primary residence is located should be filed and the other states income tax may be taken credit for on the primary state’s income tax.
How do income taxes work for an individual who works in the international water all year?
Ships and aircraft that travel in international airspace or water do not fall under the classification of being in a foreign country. When it comes to income tax, if an individual were to have worked for, at the minimum, 330 days out of 12 months in consecution in waters under the domain of another government other that the United States, the individual would be eligible for an
earned income credit
. For an individual to meet the criteria to receive the earned income credit, according to federal income tax law, the individual would need to have been physically present in a foreign country for the set 330 days of 12 months, being in international waters is not considered being present in a foreign country.
Is there a income tax law federal or state, that mandates that a second home must be 100 miles from the primary residence, in the State of California?
In many cases, there is no federal or state income law that requires that an individual’s second home must be 100 miles from their primary residence. An individual is able receive the
income tax deductions
and interest from their mortgage regardless of the mileage difference between the primary and secondary homes. Mortgage lenders may make this a rule in terms of the property being an investment or income property versus being a second home, and for this reason may stipulate that the secondary home must be 100 miles from the primary residence.
The Internal Revenue Code was passed by Congress, which states that income tax must be paid. The Internal Revenue Code even lays out what is considered to be income. If an individual has multiple homes in multiple states and makes earns an income in all of these states, then according to income tax law, they must pay the income taxes for each state on the income earned in that state. If an individual works in international waters they are not exempt from paying taxes on their income according to federal income tax law. If an individual has any questions regarding income tax law they are able to ask their questions to an Expert.
Recent Income Tax Questions
I am a high income earner who has a residence and a job in
I am a high income earner who has a residence and a job in CT. I was offered a similar paying job in NYC just today. NY state taxes are higher than they are in CT (hard to believe) and there are NY City taxes to include in my calculus as well. I am interested to get a sense of what my total state tax liability might be is I decide to work in NYC instead of CT. Indeed, let's say the NY state tax rate is 8.5% and the CT rate is 6% and the NY City tax is 3.5%. Would my net tax rate increase be 6%?
Can you tell me how the State of California taxes the growth
Can you tell me how the State of California taxes the growth of a deferred foreign pension (defined contribution or defined benefit) - no distributions are in receipt yet - and which information forms should be used (1099 something??). I am given to believe the pensions are treated as foreign employee trusts rather than grantor trusts - at least for IRS purposes. Foreign pension companies do not issue 1099 type info forms. The DB pensions are covered by tax treaty till distribution for fed tax but I think California does not abide by these tax treaties.
Again Lane, My question this time concerns expenses tax
Hi again Lane, My question this time concerns expenses tax acceptance. We need to pour money into new LLC company and one of ideas how to do that is long term loan from parent company. If we do that it ll create interests. Are this expense for interests
for parent company acceptable from pov of income tax ? Please let me know asap. Peter
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