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Serious Ramifications Of Tax Evasion

Serious Ramifications Of Tax Evasion

Tax evasion is a criminal charge which, if proved, can result in the U.S. taxpayer being imposed with the obligation to serve a term in prison or to pay a fine to the government. Specifically, evading one’s tax obligations to the U.S. government is considered a felony. 
To this end, tax evasion can be punished with a term of imprisonment lasting for a maximum duration of 3 years, as well as a fine going up to $100,000. That being said, non-payment of tax charges in this regard will not result in penalties being issued against people suspected of this offense unless they can be proved to have done so in a court of law. 
Tax evasion, as a criminal offense and the grounds for legal action, should not be confused with the similarly named occurrence of tax avoidance, which refers to the hoped-for consequence of legal measures taken to avoid tax obligations.

Making the House Tax Credit Work for You

Making the House Tax Credit Work for You

A house tax credit is a credit that is given to first time home buyers. House tax credits are also given to individual who have not owned a home in over three years. When a person purchases a house, a house tax credit is given if there income falls under a certain limitation. 
As of 2010, if an individual home owner makes over $75,000 they are not eligible for a house tax credit; if joint home owners make over $150,000 then they too are not eligible for the credit. A house tax credit is filed for after the close of the sale for the home is under way.  Often, if a loan is used, then the tax credit is not offered to the new home owners. The cutoff date to receive house tax credits is November 30th. As of 2010, the tax credit was $8,000.

Know the Tax Credit Laws

Know the Tax Credit Laws

There are tax credit laws and oftentimes, they are set up to expire at a certain point in time. For example, recent tax credits enacted by Congress may expire in one year or more. If Congress does not act on that expiration, the tax credit expires. However Congress may also vote to extend tax credits.
 
The current state of the economy has seen an increase in debate about tax credits. In fact, some tax credits were set to expire and Congress voted to extend them. There are also tax credits which remain in effect as allowable deductions. For example, individuals get a tax credit for the number of dependants they are able to claim on their taxes.
Tax credits may be based on income or other factors such as household size. In any case, tax credits are used to lessen an individuals or entity’s tax burden.
 
 

How Do I Save Tax Under Sec 80C?

How Do I Save Tax Under Sec 80C?

There are various ways to save tax under sec 80c. Knowing the various tax exemptions that fall under section 80c that that you may qualify for when completing your taxes. Knowing the the exemptions of section 80c will provide you with the maximum benefit of your tax planning. 

To save tax under sec 80c you must have the have one of the following types of deductions:

Life Insurance Premium – having made any sort of contribution to a Life insurance policy will help you to save tax under sec 80c. Your spouse and children are also eligible to save tax under sec 80c with your life insurance premium. 

Tuition Fees– when filing taxes if you have tuition fees they can be listed in section 80c. Any amount paid in regards to tuition for the education of one or more children is considered a tax deduction and will help you save tax under sec 80c. 

Prinicple Part of a Home Loan– your home loan can also be a viable deduction used  under section 80c. There are 2 parts to your home loan. The prinicple part of of the loan can be used as a tax exemption and help you to save tax under sec 80c. 

ULIPs (Unit Linked Insurance Plans) – another deduction that can be used under sec 80 is your ULIP. A ULIp is an insurance plan that combines a life insurance plan with either a stock market investment or mutual fund investment. 

There a number of deduction options listed above that you can take advantage of when filling out sec 80c of your tax filing. Contact tax lawyers for legal advice and assistance.

Gift Tax Overview

Gift Tax Overview

A gift tax can be imposed on a transaction involving some kind of gratuity being given to a recipient, as can come in such various forms as physical items, financial products, or other kinds of assets given as a gift, as may be either tangible or intangible. As such, the person who is giving the gift will most often be faced with the particular gift taxes in effect for a jurisdiction. 
The judgment that the transfer of a property asset was gratuitous, and as such constitutes a gift and comes under the coverage of gift taxes, is made according the absence of any form of compensation having been offered in return for the asset involved. Gift taxes can also be potentially imposed when a gift is considered to have been gratuitous in part, due to involving some form of compensation being offered to the donor, but one which is sufficiently less than the asset’s value.

Understanding the Tax Law

Understanding the Tax Law

In order to provide public services such as police enforcement, health benefits, and public schooling, individual states must enforce tax laws on its citizens. The Federal Government has upheld the right for states to tax its citizens since the beginning of America's history. 

States generate revenue through various medians:aid given by the Federal government and through administering taxation, licenses, and fees. The most common types of local tax laws that states impose are:sales tax, corporate income tax, property tax, personal income tax and miscellaneous taxes. Each set of tax law is unique and provides a stream of revenue for the state. Contact tax lawyers for legal advice and assistance.

State sales tax

A tax levied on the purchase of goods and services. In addition to the sticker price, a sales tax is imposed on the item. Not all states impose sales taxes on goods or services, but those that do use a regressive tax system and charge a flat percentage rate. Tax laws regarding sales tax include two different variations-vendor tax and a consumer tax

A vendor tax is imposed on the individual making the sale of the good or service. This tax law is imposed because some states feel as though it is a privilege to do business in their jurisdiction. The vendor tax is not taxed per item sold but rather on the total amount of items sold in a given time frame.

A consumer tax is placed on the purchaser of the item. In addition to the price of good or service a buyer will pay an additional percentage to the sticker price. The proceeds taken from the consumer tax will be delivered by the vendor to the state's government.

Personal income tax

Currently 41 states impose a personal income tax on their residents. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not include personal income into their tax laws. States that do require the tax use both a graduated income tax and a flat rate. One must figure out his taxable income to establish the starting point. Deductions vary based on state to state, knowledge of your individual state's tax laws is imperative.

Corporate income tax

Most states enforce a corporate income tax, which charges businesses an income taxes similar to that of an individual. Tax laws vary based on state for corporations-some use graduated methods while others impose a flat rate. States attempt to entice new businesses to operate in their jurisdiction by including incentives or by lowering their corporate income tax.

Property Tax

The tax laws that provide the most revenue for a state are most commonly property taxes. An individual will be taxed annually for the property owned, based on the land's value or a percentage of the value. The state government establishes the guidelines for the amount of property taxes required, but the individual pays the local county or town in which the property is located. All 50 states have unique tax laws in regards to property tax. Some states permit local communities to tax real property, or property attached to the land. Examples include, homes, apartments, condominiums, or factories. Other states impose tax laws that allow local governments to tax personal property. Examples include jewelry, boats, furniture, airplanes, artwork, or cars.   

Miscellaneous tax

In addition to property tax, sales tax, and corporate income tax, states have the ability to alter their tax laws to include taxes on fuel and inheritances. All 50 states have some form of fuel tax, which effects the purchase of liquid gasoline and diesel fuels. Tax laws on fuel vary from state to state but all of them are a cents per gallon tax, and are paid to the distributors. 

The gas tax is considered to be a "user tax." Since money is required to maintain roads  taxes will be imposed on those who drive on them. User taxes are paid for by those who benefit from the service in which the tax pays for. Another example of a user tax is the tax placed on cigarettes. Individuals who use vehicles to protect or maintain the community are exempt from this tax law.

Inheritance taxes are imposed on the transfer of property after the owner's death. This state tax law is similar to a personal income tax, where the state will determine whether a graduated method or flat rate will be imposed. An estate tax, which is administered under federal tax law is not to be confused with inheritance taxes. Estate taxes are imposed on the entire estate of the individual whereas an inheritance tax focuses on the transfer of property

The Difference Between State And Federal Taxes

The Difference Between State And Federal Taxes

Tax laws may apply on the local, state and federal level. In fact, many taxes are imposed from more than one jurisdiction. For example, individuals may pay state and federal income taxes, although some states do not impose an income tax.

 

As with any laws, federal tax laws supersede state and local laws. In no case, does a local or state law overrule a federal tax law. A tax may be imposed by all entities, but when state and local taxes are imposed, they do not negate a federal tax.

 

In addition, when states have decided not to impose a tax, such as Florida which has no income tax, it does not negate the individual’s responsibility to federal taxes.

 

When there is a conflict between local state and federal laws, the federal law is always applicable, regardless of the jurisdiction.

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