Taxes

A:

The formula for calculating income tax is the product of the total amount of taxable income multiplied by the tax rate, according to the Internal Revenue Service. The formula to account for multiple marginal tax rates requires multiplying the total amount of money earned in each successive bracket by the tax rate and adding the values together.

See Full Answer
Filed Under:
  • How long should you keep tax records?

    Q: How long should you keep tax records?

    A: According to the Internal Revenue Service, how long people should keep their tax records depends on the type and purpose of the documentation, but IRS and Forbes magazine guidelines say that keeping records three to six years from the filing date or due date, whichever is later, covers many eventualities. The IRS recommends keeping tax records at least until the statue of limitations related to a certain record expires.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • How many years can you file back taxes?

    Q: How many years can you file back taxes?

    A: Back taxes can be filed for up to 10 years after the tax year in which the resident neglected to file income taxes, according to ETaxes.com. After 10 years, the statute of limitations runs out for the Internal Revenue Service to collect back taxes in most states. In a few states, the statute of limitations never runs out, meaning back taxes can be filed at any point in the resident's life.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • What can I write off on my taxes as an independent contractor?

    Q: What can I write off on my taxes as an independent contractor?

    A: TurboTax reports that independent contractors can deduct half of the self-employment tax, health insurance premiums, office expenses, retirement plan contributions and business travel expenses. Independent contractors can also deduct the mileage accumulated on a personal vehicle when driving for business-related purposes. About.com notes that business equipment, employee benefits and wages, advertising costs, professional dues, professional services and repair costs can also be tax deductions for independent contractors.
    See Full Answer
    Filed Under:
  • What are some examples of indirect tax?

    Q: What are some examples of indirect tax?

    A: One example of an indirect tax is sales tax, which is imposed entirely on the buyer rather than both on the seller and the buyer. Indirect taxes are taken from stakeholders that are generally not thought to be entirely responsible for the amount being taxed.
    See Full Answer
    Filed Under:
  • How far back can the IRS audit you?

    Q: How far back can the IRS audit you?

    A: As of 2014, the IRS can audit tax returns that have been filed within the past three years. However, if a substantial error is found, the agency can include additional years. In this case, an audit usually does not cover returns that date back further than the past six years.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • What kinds of things might get you audited?

    Q: What kinds of things might get you audited?

    A: While only about 1 percent of taxpayers get audited every year, there are a few red flags the IRS tends to look out for in order to determine the unlucky few who fall under that category. These include tax filings that point to carelessness or dishonesty.
    See Full Answer
    Filed Under:
  • Are property taxes deductible?

    Q: Are property taxes deductible?

    A: Typical real estate property taxes are deductible, as of 2014. Amounts paid for local and state property taxes can be included on itemized federal tax returns. The deduction is for the actual payment to the taxing authority, not the amounts paid in to escrow.
    See Full Answer
    Filed Under:
  • How much is the import tax from China to the USA?

    Q: How much is the import tax from China to the USA?

    A: The import tax from China to the United States varies based on the product. For instance, the maximum amount of tariff for imported eel products is 16 percent, while the same maximum for imported zinc oxide is 5.5 percent.
    See Full Answer
    Filed Under:
  • What is France's "Google tax"?

    Q: What is France's "Google tax"?

    A: France's so-called "Google tax" isn't aimed at the search-engine company but rather at the international tech industry as a whole. The tax allows the French government to levy taxes on Internet companies that operate in France like traditional businesses.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • What is "intangible tax"?

    Q: What is "intangible tax"?

    A: An intangible tax is a tax assessed by federal and state governments on assets of intangible value, such as goodwill, the value of a worker’s experience and/or knowledge, trade and franchise names, non-competitive agreements related to business mergers and acquisitions, trademarks and a company’s human capital. The Internal Revenue Service defines intangible assets as types of property that possess value but cannot be touched or seen.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • How does an IRS audit work?

    Q: How does an IRS audit work?

    A: During an IRS audit, a tax return is examined line-by-line to make sure that everything is in order and nothing unusual is listed. If a suspicious item is found, the auditor asks the taxpayer to explain or justify it. Depending on the results of the audit, additional taxes may be owed.
    See Full Answer
    Filed Under:
  • Which states have the lowest income taxes?

    Q: Which states have the lowest income taxes?

    A: Almost all Americans are required to pay state income tax in addition to the federal income tax. These tax rates may change from year to year, with some states raising or lowering their tax rates. In 2014, some states, such as Texas and Alaska, required no state income tax.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • How do you check if you owe the IRS back taxes?

    Q: How do you check if you owe the IRS back taxes?

    A: Find out if back taxes are owed to the Internal Revenue Service by calling the toll-free number at 1-800-829-1040 or visiting a local IRS office. Phone services are available Monday through Friday between 7:00 a.m. and 7:00 p.m. in each local time zone, according to the official website.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under:
  • 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.
    See Full Answer
    Filed Under: