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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
When the trust turns to an estate, when person dies, and went
When the trust turns to an estate, when person dies, and went into probate. the basic part of trust was signed filed with Alaska state court system. In the basic signed trust document he states his directions on how he wants his estate to be carried out. He had an Roth IRA with bank 100K, and no beneficiaries, so the estate became the beneficiary. I am told this Roth ira account is acting As the corpus of the estate,and when his Thrift and Savings plan 300K (goverment retirement plan.) was deposited into the corpus account, it now has income. Is the dispersed amount Intended to its beneficiaries, taxable in entirety? or is segmented out when dispersed? non taxable portion of corpus (Roth), and taxable part of thirft and savings plan ? the estate is showing a K-1 is taxing beneifciaries for both the corpus part and adding the TSP part togather in lump sum. Is entire amount taxable? or only the Tsp part of lump some ? when check is written to its intended beneficiaries?
I am a Finnish national with a Mexican residency. I own an offshore account in Luxemburgh.
I am a Finnish national with a Mexican residency. I own an offshore account in Luxemburgh. I am loaning a US company $2 million USD. They are giving me 10% interest on that money which they agreed to pay me quarterly.
I am also getting 10% equity in the project which will eventually get me $60,000 a year.
I plan to keep the interest gained and dividends gained in the US.
Do I pay taxes on this money? Where, in the US or in Mexico?
Lev. I understand that I do not have to pay taxes on income
Hi Lev. I understand that I do not have to pay taxes on income received from a lawsuit settlement for construction defects if my repair cost exceeds the settlement amount. I received a 1099-MISC and cannot figure out how to offset the "other income" amount. Can you guide me through that?
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