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Minimum Tax for everybody |
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 It is a fac that Alternative Minimum Tax (AMT) was prepared as a tax for "the wealthy."But nowadays people find themselves liable for the tax due to growing incomes and targeted applicability.
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Read more... [Minimum Tax for everybody]
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Things you should know about tax changes:
- They accelerate rate reductions on ordinary income
- Rates on dividends which were paid by domestic and some qualified foreign corporations turned to be reduced to a top rate of 15%.
- One lowered the top tax rate on long-term capital gains from 20% to 15% for sales of assets after May 5, 2003.
- The child tax credit on dependent children younger than 17 was raised to $1,000 effective through 2010.
- One raised the alternative minimum tax exemption for both single filers and married couples .
- The legislation contained a variety of sunset provisions
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Read more... [Tax changes]
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 The most important thing in handling the audit is advance preparation. When you get into the IRS office, you will have to produce your records quickly. They ought to be organized by topic so that you do not waste time leafing through pages for a receipt or other document. Providing the agent questions an item not mentioned in the notice of audit, refuse politely but firmly to answer the questions. If you you have nothing against the agent's proposed changes, you will be asked to sign a Form 870, which, when signed, permits an immediate assessment of a deficiency plus penalties and interest, if due. In case you don`t agree with the agent and the examination takes place in an IRS office, you might ask for an immediate meeting with a supervisor to argue your side of the dispute.
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Read more... [Penalties and audits]
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 Long-term capital gains are taxed at lower rates than the ones imposed on standard income. The maximum tax rate is generally 15% for taxpayers whose top bracket exceeds 15%, and 5% for taxpayers whose top bracket is 10% or 15%.
It would be sufficient to to consider both the type of capital asset sold and the length of time it was held by you as an investment.
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Read more... [Long-term capital gains]
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If you have already decided on your income tax liability you can be able to reduce that liability by claiming one or more tax credits. It is important to note that they do not create a refund if they exceed your tax liability.
There are some nonrefundable credits which include:
a) the child tax credit
b) dependent care credit
c) adoption credit
d) education credits
e) retirement savings credit
f) credit for the elderly and disabled
g) mortgage interest credit
h) and D.C. first-time homebuyer credit.
As for refundable credits, they include:
- the additional child tax credit
- the earned income credit
- the health coverage credit.
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Read more... [Tax credits]
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