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Taxes on Income
on income is charged to an individual or business, including corporations and other legal entities. Income
can be progressive, proportional or regressive. When the taxes are levied on the income of companies it is called a
or profit tax.
Individual income taxes
usually tax the total income of the individual allowing for some
. Corporate income taxes often tax net income which is the difference between
, expenses and write-offs. Listed below are some of the most commonly asked questions about taxes on income answered by the Experts.
A person received income from consideration for easement and damages, along with tree damage, in connection with exercising a Right-of-Way agreement. Do they need to pay taxes on this income?
In most cases, if a person sells or leases a right-of-way easement, they would report this in the form of a capital gain on schedule D when they file their returns. Any compensation they receive for tree damage would be reported as a casualty loss where the value of the trees is diminished. Therefore, they would report both the loss and the income from the loss, and depending on whether there is a net market value loss, they could claim additional deductions. h2> An insurance policy that a person paid for on their own now pays them back after they were suspended from work. Does the person have to pay taxes on this income? In most cases, since the individual paid the premiums, the insurance payments will not be taxed under the Federal Insurance Contribution Act (FICA). However, if the amount that the insurance company pays the individual is higher than the premiums paid out by them, the income would be subject to taxes. They would need to report the difference between these amounts on the
Internal Revenue Service
(IRS) form 1040.
Would a person who teaches piano lessons in their own home be required to keep records and deductions, pertaining to this income, for tax purposes?
As a general rule, if an individual is given a 1099 by anyone, then they would need to file the income. Even though the IRS does state that any income is reportable, they would have a difficult time knowing that a person earned a little money on the side. However it would be recommended that in the future they keep records of income and expenses.
Do inmates pay income taxes on income earned outside of prison?
Although the rates might change every year, typically, if an inmate receives
exceeding $8,950, they would have to file a federal income tax return.
When a deceased person’s assets are designated as Transfer On Death (TOD), with minimal cash and scant personal effects, what is the way that tax would be paid on income and gains from January 1st to the date of death?
Typically the executor of the estate will need to file the last tax return. Also he can pay the taxes from whatever source is in the probate estate, but the TODs will bypass probate and become the beneficiary’s assets immediately.
The concept of taxing income is a modern innovation and is the result of an orderly society with reliable records. For most of history, these preconditions did not exist and taxes were based on other factors such as wealth, social position, and ownership of the means of production. These precursors to our tax system helped to open the door to many issues and questions involving taxes on income. If you have any more questions on this topic, put them to Tax Professionals on JustAnswer who can offer insights and information to help you with your own case.
Recent Taxes on Income Questions
Hi I am a non resident alien based in the UK. I have inherited a deferred compensation acc
Hi I am a non resident alien based in the UK. I have inherited a deferred compensation account in the US from my recently deceased aunt. The bank that holds the account has asked me to fill in a W-8Ben form and told me that they would not withhold any tax and that it would be my own responsibility to pay any tax that might arise in the US.
Do you know if I have to pay tax on an inherited Deferred Compensation Account. To whom this would be payable and what percentage is due ?
Non resident alien owning a LLC doing business in US - what
Non resident alien owning a LLC doing business in US - what taxes do I pay?
I want to become an Amazon.com seller, but I live in Europe and I don't have substantial presence in US. I am planing to open a LLC – single member (US entity) as a non resident alien to sell products bought from a US factory that will be stored in Amazon fulfillment centers. Here are some questions:
- What is the best state for incorporation? I've read that Delaware would be the best choice.
- Besides the franchise and register agent tax are there any other early costs like a percentage tax for income?
- Do I pay taxes in US as LLC– single member (US entity) and also as a Non resident alien individual?
- Am I considered a Non resident alien individual by US since I don't have a green card or plan to visit US?
- What taxes do I pay as a LLC– single member (US entity) and how often do I file it? On the sale taxes I understand it all depends on the volume of the sales, but I don't know what are the other taxes I must pay and how soon I'll have to fill for them.
- What taxes do I pay as Non resident alien individual owning a LLC – single member and how often do I file it?
- Do I need a EIN if I don't have employees? Do I have excise tax liability as a LLC?
- Do I withhold taxes on income, other than wages, paid to a non-resident alien?
- If I have nexus in CA and I sell to a NY resident, will I charge him the CA sale tax?
- If I have nexus in CA and NY, but the order is shipped from CA to a NY resident, will I still charge him NY sale tax?
- Since I'm living in Romania country that has a double tax treaty with US how will that work in relation to my taxes?
- What is the usual fee for having an accountant to file all the tax documents for me?
- Is there a software recommended for bookkeeping and helping me file sales taxes reports easily and any other documents and taxes I must pay?
Hi, I am a freelance writer leaving in Poland but I do have
Hi, I am a freelance writer leaving in Poland but I do have a double citizenship - Polish and American. I pay my taxes here in Poland right now as I live here for the time being and all my earnings are here. Most of my earnings are royalties from my copyrighted works such as: songs, theater plays, screenplays. But I also work as a freelance writer. In Poland in my Polish tax return most of my income is classified as royalties. What about in America? Do I enter my royalties income in my American tax return on schedule E or do I need to enter it on schedule C?
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