Taxes

A:

Energy tax credits are incentives to lower taxes for people who use alternative energy resources. These are authorized by the U.S. Congress. They work by reducing income tax owed by a dollar-for-dollar basis. In contrast, a tax deduction lowers the amount of income subject to tax.

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  • How Do You Find a Company's Tax ID Number?

    Q: How Do You Find a Company's Tax ID Number?

    A: A company's tax ID number is the employer identification number (EIN). Sometimes it's referred to as the FEIN, which stands for federal employer identification number. These names all refer to the same identification code assigned to companies by the IRS. Not all businesses require a tax ID number. For example, there are many sole proprietorships without employees that use the owner's social security number to file taxes. However, it can be a wise decision to use an EIN, because it can protect one's identity and it's one less instance that requires a social security number. There are several ways to search for a company's tax ID number.
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  • What Is the Purpose of an Audit?

    Q: What Is the Purpose of an Audit?

    A: An audit is a process that the Internal Revenue Service uses to check that the numbers of an account correspond with the tax return. While the IRS chooses to audit those with suspicious activity on their returns, there are also audits on a random sample of people and companies.
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  • What Is a Luxury Tax?

    Q: What Is a Luxury Tax?

    A: A luxury tax is essentially a tax placed on any goods or services the United States government as well as many state governments deem as non-essential. Such a tax is aimed at only those who are wealthy enough to afford luxury items. Despite the fact that many items formerly considered luxury goods no longer are viewed that way, the term persists.
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  • Which U.S. State Has a Belt Buckle Tax?

    Q: Which U.S. State Has a Belt Buckle Tax?

    A: Texas has a seemingly arbitrary law on the books that charges sales tax for some clothing items, such as belt buckles, but not for others, such as the belts themselves. This tax system applies to other things, such as rain boots, which are taxable, but not cowboy boots, which are exempt.
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  • What Is Taxation?

    Q: What Is Taxation?

    A: Taxation is when governments require citizens to pay a certain amount of money to help fund public institutions. Taxes are used to pay for things like public education, welfare programs, transportation infrastructure, defense funds and libraries.
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  • Why Are Taxes Important?

    Q: Why Are Taxes Important?

    A: The IRS indicates that taxes are vital to support the infrastructure that citizens rely on at the local, state and federal levels. Taxes support national defense programs, roadway construction, social service programs, public health and education. Without taxpayer support, many of these programs cannot exist.
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  • How Do You Find Out Property Taxes by Address?

    Q: How Do You Find Out Property Taxes by Address?

    A: SFGate Home Guides explains that since property taxes are public records, information about the taxes levied on a specific address are obtainable from the local government entity that maintains those records, which is typically the county assessor's office or recorder's office. Many localities make this information available online.
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  • What Are Energy Tax Credits?

    Q: What Are Energy Tax Credits?

    A: Energy tax credits are incentives to lower taxes for people who use alternative energy resources. These are authorized by the U.S. Congress. They work by reducing income tax owed by a dollar-for-dollar basis. In contrast, a tax deduction lowers the amount of income subject to tax.
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  • What Is a 501(c)3?

    Q: What Is a 501(c)3?

    A: The term "501(c)3" refers to the most common type of nonprofit organization recognized by the IRS. According to About.com, this category embraces such diverse entities as old-age homes, charity hospitals, schools, churches and the Red Cross, among others. These organizations are exempt from taxation, and donations to them are generally tax deductible.
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  • What Are the Characteristics of a Good Tax System?

    Q: What Are the Characteristics of a Good Tax System?

    A: The strongest tax systems create fairness, assure adequacy, simplicity, transparency and promote administrative ease according to the Oklahoma Policy Institute. Ultimately, strong and healthy tax systems create healthy and vibrant economies, and may even promote peace and create strong and stable governments.
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  • Do You Pay Taxes on Life Insurance Payouts?

    Q: Do You Pay Taxes on Life Insurance Payouts?

    A: Life insurance that pays out on the death of an insured person is not taxable unless the policy was turned over to the recipient for a price, according IRS Publication 525. Any amount received in excess of the value of the insurance is interest and is taxable.
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  • How Did Chuck Berry Get Into Tax Trouble?

    Q: How Did Chuck Berry Get Into Tax Trouble?

    A: Rock and roll pioneer Chuck Berry served 120 days in prison during the late 1970s as a result of tax evasion chargers. This sentence also included a requirement that Berry complete 1,000 hours of community service, which he apparently took care of by performing concerts.
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  • When Was a Former IRS Commissioner Convicted of Tax Evasion?

    Q: When Was a Former IRS Commissioner Convicted of Tax Evasion?

    A: In 1952, former IRS commissioner Joseph Nunan got in trouble for tax evasion. In an odd twist, his problems were not due to corruption or hypocrisy but a simple misunderstanding over $2,000. He won a bet on a presidential election and forgot to claim the winnings on his tax return.
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  • Are Dental Implants Tax Deductible?

    Q: Are Dental Implants Tax Deductible?

    A: The Internal Revenue Service states that the amount paid for dental implants can be reported as a medical expense on Schedule A, Itemized Deductions. Not all taxpayers benefit from these expenses, as medical expenses have to exceed a percentage of income before they become deductible.
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  • Are Church Tithes Tax Deductible?

    Q: Are Church Tithes Tax Deductible?

    A: According to Publication 526 of the Internal Revenue Service, cash donations to religious organizations are tax-deductible. Examples given in the publication include "churches, a convention or association of churches, temples, synagogues, mosques and other religious organizations." Since tithes are monetary gifts to a church, they are not subject to taxation by the IRS.
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  • What Is the Hotel Room Tax in California?

    Q: What Is the Hotel Room Tax in California?

    A: The hotel room tax in California is 12 percent of the bill charged by the hotel owner. Known as Transient Occupancy Tax, it is the responsibility of the hotel owner to pay the tax to the state of California.
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  • Why Does Maine Have a Blueberry Tax?

    Q: Why Does Maine Have a Blueberry Tax?

    A: Maine's blueberry tax is related to the berry's success as an export. This state alone produces as much as 99 percent of the wild blueberries consumed in America, and the tax impacts the growers, sellers and workers who support the blueberry industry.
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  • Why Do Baby Names in Sweden Need Tax Agency Approval?

    Q: Why Do Baby Names in Sweden Need Tax Agency Approval?

    A: There are a couple of reasons why the Skatteverket, the Swedish tax agency, oversees the names Swedes give to their children. Their goals are to protect children from potentially confusing or offensive names and to prevent Swedes from naming their children after the Swedish royal family.
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  • What Are Some Examples of Direct Tax?

    Q: What Are Some Examples of Direct Tax?

    A: Some examples of direct taxes include income taxes, taxes on assets and real property and personal property taxes. These are taxes that a person must pay directly to the entity collecting the tax. The taxpayer is not able to shift the burden of these taxes onto another individual or group.
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  • What Is Fat Tax?

    Q: What Is Fat Tax?

    A: As of 2014, a fat tax is a proposed tax on unhealthy foods to discourage consumers from buying them. This tax, also known as the Twinkie tax, was largely developed by Kelly Brownell, a psychology professor at Yale University, who discussed the idea in the New York Times in 1994.
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  • How Can You Find Out Whether You Owe Money to the IRS?

    Q: How Can You Find Out Whether You Owe Money to the IRS?

    A: The IRS Tax Help Line for individual taxpayers, available at 1-800-829-1040, provides information about prior-year tax returns and any account balances due to the IRS. This line is designed for taxpayers who submitted a Form 1040 return.
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