Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004? > NetSparsh

Home
>
Tax
>
Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed, nothing is quite so satisfying as an income tax refund." There's no question that saving money in taxes is high on everybody's list of financial priorities, especially small-business owners.

Taxes are an inevitable - and painful - part of every business owner's life. But there are ways to reduce, if not eliminate, your company's tax burden if you know how to use business-expense tax deductions to your advantage.

Most business owners know they owe taxes only on their net business profit - that is, their total profits after they subtract their deductions. As a result, knowing how to take full advantage of your deductible business expenses can dramatically lower your taxable profits.

Here are the 3 mostly overlooked tax deductions:

1. Full home office write-off: The rules allowing a taxpayer to claim the home office deduction have been loosened, beginning January 1, 1999. No longer does the home office need to be the "principal place of business" for the taxpayer. The home office test can now be satisfied if the taxpayer uses the home office for "administration or management activities" and there is no other fixed location in which the taxpayer performs such activities for his business. The home office still must be used exclusively for business purposes to qualify. This will allow more taxpayers who conduct business outside of their office, but use their home to perform administrative tasks, to qualify for the home office deduction.

2. Writing off family medical expenses: This strategy is a little more complicated but is well worth the extra effort. To use this strategy, first you must hire a spouse or other trusted family member to work for your home or small business; either full-time or part-time status will work. Next, you need to set up and sign a medical reimbursement plan. You may need the advice of an accountant to help you with this. This plan allows any sole proprietor to convert all family out-of-pocket medical expenses into legitimate business deductions. Finally, your spouse or family member pays all out-of-pocket medical expenses for the family, keeping receipts and documenting miles driven for medical purposes. At a specified time, your business reimburses your spouse or family member for these expenses and deducts them as a business expense.

3. Writing off your child's college education expenses: If you frown at the high cost of a college education, this tax strategy is for you. You can put your child on the payroll of your business for performing office chores and other business-related tasks.

The most common way to utilize young children in your business is for them to provide cleaning services, or routine copying, filing and typing. These are jobs that even a 10-year-old is clearly capable of performing, and jobs that you'd arguably have to pay someone to do if your child were not available.

In 2005, a child can earn up to $5,000 and pay no federal income taxes on the earnings because of the standard deduction. Your business can deduct wages paid to your child-provided the amount is reasonable and for bona fide work. Bottom line: You'll escape federal income taxes of up to $5,000 of your business income, and if you are a sole proprietorship, you will eliminate self-employment tax on the income as well.

Any income your child earns over and above the $5,000 standard deduction is taxable at your child's rate. Since the 10% tax bracket extends to $6,000 for a single filer, your child could earn an additional $6,000 and owe just $600 of federal income tax on the money. Because your marginal tax rate is likely much higher, the extra money your child earns may result in family tax savings. Even better, if your business is not incorporated, you won't have to withhold or pay FICA (Social Security and Medicare) payroll taxes on the earnings of a child under age 18.

Salim Omar, CPA is author of the newly published book, Straight Talk About Small Business Success In New Jersey. He is a well-known tax and financial educator. More free information can be obtained from his website http://www.OmarGroupCPA.com

In The News:

GST Council may look to rationalise 28% slab; taxes on cement may be cut Economic TimesThere were around 226 goods in the 28 per cent category, when the Goods and Services Tax (GST) was implemented on July 1, 2017.

Confused about tax return changes? Here's how to find your new bracket CNBCWe're not all accountants. We don't all hire one each year at tax time, either. But with the IRS updating tax brackets for 2019, along with other changes that are ...

Bitcoin Will Be Worthless Until You Can Pay Your Taxes With It BloombergFor the cryptocurrency to have real staying power, it'll need help from the IRS.

Best ELSS fund to save taxes this financial year Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

The case for raising the alcohol tax Vox.comA higher alcohol tax would save lives, prevent crime, and mostly affect excessive drinkers.

China's Rich Rush to Shelter $1 Trillion From New Taxes BloombergQuint(Bloomberg) -- Wealthy Chinese are rushing to shelter assets and income in overseas trusts before new tax rules go into effect next month, including provisions ...

Income Tax Return (ITR) filing: This State Bank of India scheme helps you save on taxes; gives 7.35 pct int... Zee BusinessIncome Tax Return (ITR) filing: The State Bank of India also offers an investment tool that allows you to claim an exemption in tax. The investment attracts an ...

Airtel Niger faces shutdown over non-payment of taxes Business TodayThe General Tax Directorate of Niger ordered the closure of the offices of Airtel Niger, seeking tax amounts that have been disputed by Airtel.

EDMC proposes two new taxes, education cess in 2019-20 budget Times of IndiaNew Delhi, Dec 10 () Cash-strapped East Delhi Municipal Corporation (EDMC) on Monday proposed two new taxes and an education cess in its budget for ...

This falling market offers an opportunity to cut your taxes in retirement CNBCRecent market declines don't have to be all bad news for investors: They may provide you an opportunity to cut your taxes in retirement. The Dow Jones ...

Dems aim to punt vote on ObamaCare taxes | TheHill The HillHealth-care companies are making a last-minute push to delay ObamaCare taxes as part of a year-end government funding deal, but they face resistance from ...

Tax on your gold and real estate investments LivemintHere is a look at the taxes that apply to short-term and long-term gains from these two asset classes.

EDMC proposes 2 new taxes and an education cess in its 2019-20 budget Business TodayEDMC Commissioner Puneet Kumar Goel made the announcement of new taxes while presenting the budget at the civic agency's Patparganj headquarters.

Climate change: Protecting the poor from green taxes BBC NewsAs President Macron caved into the yellow vest fuel tax protests, President Trump was triumphant. The French humiliation showed people rejected the sort of ...

California proposes a plan to tax text messages CNNSan Francisco (CNN Business) California regulators want to tax text messages to increase funds for programs that bring connectivity to underserved residents.

Gov. Abbott’s property tax reform plan calls for $1.3B from state in 2020 San Antonio Express-NewsAUSTIN — Republican Gov. Greg Abbott said Wednesday state lawmakers will ultimately decide how to fund his plan to limit how much local school districts can ...

Fiat Chrysler may review $5.7 billion plan if Italy taxes diesel, petrol cars ReutersFiat Chrysler (FCA) could review its 5 billion euro ($5.7 billion) Italian investment plan, which includes a shift to cleaner engines, if Rome raises taxes on petrol ...

Govt says no scope for corporate tax cut in near future LivemintEuropean Union and the US cutting corporate tax rates not sufficient to sway India, says CBDT.

'No tax benefit on house sale if new flat is in wife's name' Times of IndiaIndia Business News: The Income-Tax Appellate Tribunal (ITAT)'s Mumbai bench recently denied a taxpayer I-T benefits available when long-term capital gains ...

Withdrawals Under National Pension Scheme To Be Tax-Free BloombergQuintWithdrawals made by subscribers of the National Pension Scheme at the time of retirement will be made tax free.

Taxmen catch buffalo meat, slap Rs 25 lakh in taxes, penalty Economic TimesThe Commercial Taxes department officials in Belagavi have collected Rs 25 lakh in GST levies as well as penalty after intercepting four trucks mounted with ...

India's tryst with taxes Forbes IndiaWhile the rich pay a bulk of the income tax paid by individuals in India, many wealthy people do not pay their share of taxes.

California mulls tax on text messaging, may lead to showdown with federal regulators Fox NewsA California regulator's plan to tax texts in order to fund cellphones for the poor hit a snag Wednesday after a Federal Communications Commission ruled text ...

China's rich rush to shelter $1trn from new taxes Moneyweb.co.zaThe practice of holding wealth abroad or changing tax residence status has become commonplace in China.

Investing solely to avoid taxes is a bad, wasteful strategy: View Economic TimesWhile many opt for creative accounting of expenses and tax deductibles, these practices also needlessly complicate matters for inheritors.

6 last-minute tips that will trim your 2018 tax bill CNBCBefore you break out the Champagne, take a look at these six strategies that could help you trim your 2018 tax bill — as long as you act before Dec. 31.

7 year-end tax tips to boost your refund CNBCEven under the new law, there are still moves you can make before 2018 ends to lower your tax bill.

Beware! These tax-saving investment mistakes can sink your finances The Financial ExpressIt's said, if you fail to plan, it means you plan to fail. So, it's better to plan before you make your tax-saving investments, so that you may reach your financial goal ...

FCC panel wants to tax Internet-using businesses and give the money to ISPs Ars TechnicaAt AT&T's urging, committee proposes tax on websites to pay for rural broadband.

GOLDSTEIN: If Trudeau's re-elected, carbon taxes will go even higher Toronto SunEnvironment Minister Catherine McKenna and Prime Minister Justin Trudeau have finally outlined in recent media interviews what Canada's carbon pricing/tax ...

No tax on up to Rs 50,000 interest for senior citizens Times of IndiaIndia Business News: In a notification issued on December 6, it has clarified that no TDS has to be deducted under section 194-A of the Income Tax (I-T) Act in ...

Hindustan Unilever pitches for reducing corporate tax rate Moneycontrol.comWhile GST has proven to be a game changer and is positively impacting taxation practices,

Taxing Text Messages & Electricity - One Way Texas Is Like California: Unelected Officials Can "Tax" ForbesAs early as Dec. 20, the Public Utility Commission of Texas may vote to increase electricity costs on consumers by up to $4 billion. Meanwhile, in California, that ...

Divorcees can save on taxes — if they take this one step CNBCIf you're planning on shedding weight in 2019 — in the form of your soon-to-be ex — be sure you understand this tax-planning benefit. Why the "head of ...

Agent's Take: Here are the NFL's real highest-paid players after taxes and salary deferrals are considered CBS SportsWe did the math, and these 15 players are the real top earners in 2018.

Kentucky physician sentenced after failing to pay taxes for 4 years WKYTDr. Werner Grentz, 69, was sentenced to federal prison Wednesday after authorities say he falsely reported his yearly income as $0 between the tax years ...

French lesson for Modi: Don't raise fuel tax Economic TimesRIOTERS IN PARIS Last weekend, demonstrators turned Paris's wealthiest neighbourhoods into a battle zone to make themselves heard. Until Saturday ...

Nassau property taxes take spotlight at reassessment meeting News 12 Long IslandNassau residents are getting the chance Wednesday night to weigh in on the county's controversial property reassessments.

Income Tax Return (ITR) filing: No need to generate slip! From bank ATM to Aadhaar, 5 steps to tax redempti... Zee BusinessIncome tax return (ITR) filing: Taxes form a major part of the outgo for any salaried employee. However, not everyone has to pay taxes and file for Income Tax ...

BIR files tax raps against 20 firms, 4 businessmen ABS-CBN NewsMANILA- The Bureau of Internal Revenue (BIR) filed with the Department of Justice Thursday tax evasion cases against 20 companies and 4 individuals based ...

Trump’s Tax Cuts Made a Difference in 2018. Just Not the One Backers Were Hoping For BloombergQuint(Bloomberg Businessweek) -- The Tax Cuts and Jobs Act that President Trump signed a year ago seems to have boosted economic growth in 2018. But there's ...

How to save tax on capital gains arising from selling a house Economic TimesMy 71-year-old father had purchased a house in 1972 for Rs 1,000. Now he is planning to sell it for Rs 28 lakh. What will be his capital gains tax liability?

Good jump! Corporate tax collection up 18 per cent in April-November, fastest in five years The Financial ExpressCorporate tax collection grew an impressive 18.3% in April-November of FY19, the fastest pace in at least the last five years.

Delhi government has unearthed Rs 262 crore cyber-tax fraud: Manish Sisodia Economic TimesNEW DELHI: The Delhi government has unearthed a cyber-tax fraud totalling Rs 262 crore committed by over 8,700 traders who were found showing fraudulent ...

Central govt staff can now save tax via NPS with only 3-year lock-in Economic TimesSubstantially reducing the lock in for availing section 80C tax benefit on NPS investment the government has brought it on par with one of the most popular tax ...

The Golden Age of Rich People Not Paying Their Taxes The AtlanticAn eight-year campaign to slash the IRS's budget has left the agency understaffed, hamstrung, and operating with archaic equipment. The result: a ...

Going Through Divorce? Start These 3 Steps Today To Save On Taxes ForbesThe Tax Cut and Jobs Act eliminated the alimony deduction for divorces after 2018. The new law will mean less money for expenses of the two household.

Delco signs off on $354 million budget - and $25 tax cut The Delaware County Daily TimesIf's official - Delaware County taxes are going down. Delaware County Council Wednesday signed off on a $354 million spending plan for 2019 that includes a ...

Pay Your Taxes In Bitcoin, Trigger Tax Losses On Price Drop Too ForbesWith Bitcoin and other crypto prices down again, many holders don't want to sell. But if you owe taxes, how about paying them in Bitcoin? Selling now may ...

Direct tax collections rise 15.7% YoY for April-November period Economic TimesThe direct tax collections are up 15.7% for the April-November period from corresponding period a year ago, data released by the government on Monday ...

Taxpayers Alert! Have you filed your income tax? Remember these deadline nears; know from TDS, TCS to chall... Zee BusinessAlthough one would not like to share their income and income from other sources with authorities, however, it comes as a helping hand for government in ...

Big crackdown on GST evaders! Tax evasion worth whopping Rs 12,000 crore detected in April-November The Financial ExpressThe government has detected GST evasion worth Rs 12000 crore in 8 months till November, a senior tax official said Wednesday.

The Tax Cuts And Jobs Act: 3 Changes You Should Know ForbesTax season is coming more quickly than you might think — has the Tax Cuts and Jobs Act affected you? Read here to discover more!

More Property Tax, Health Plans Part Of Proposed Delhi Civic Body Budget NDTV NewsHike in property tax, levying of professional and betterment taxes, and plans for a health scheme on the lines of Ayushman Bharat for Class IV employees were ...

National Pension system: Now get tax-free maturity withdrawals; check details here The Financial ExpressThe government has made the whole 60% of the NPS accumulated corpus tax free, bringing it at par with PPF and EPF, besides raising its contribution to 14% of ...

How senior citizens can avail tax break on interest income under Sec 80TTB Economic TimesBudget 2018 introduced a new section, 80TTB, under the Income Tax Act which allows senior citizens to claim tax break on specified interest income up to Rs ...

Income Tax Raids Old Delhi's Private Vaults, Seizes Rs 5.5 Crore Cash NDTV NewsThe department's surveillance has been high in Chandni Chowk after cash worth Rs 35 crore was seized in currency notes of Rs 2000 from a private vault last ...

Income Tax panel won’t cut rates; but don’t lose heart, here’s what it will do for taxpayers The Financial ExpressThe task force was set up by the finance ministry in November last. Arbind Modi was made the convenor of the panel and he retired on September 30.

Don’t expect a big tax break Newfoundland and Labrador The TelegramThe province of Newfoundland and Labrador isn't in a position to reduce taxes by much right now, suggests the findings of the Independent Tax Review ...

US State of Ohio Accepts Bitcoin for 23 Types of Taxes Bitcoin NewsThe U.S. state of Ohio has set up a cryptocurrency payment portal and reportedly starts accepting payments in bitcoin for 23 types of taxes this week. “Ohio has ...

'Taxes, Taxes and Taxes': Tax-Burdened Protestors Reach Tipping Point in Socialist France CBN NewsThe French are used to high taxes, but it was a new carbon tax that finally pushed French taxpayers to the tipping point, and ignited the worst protests in 50 ...

France’s protesters are part of a global backlash against climate-change taxes Washington PostThe single most effective weapon in the fight against climate change is the tax code — imposing costs on those who emit greenhouse gases, economists say.

Paris Is Burning Over Climate Change Taxes -- Is America Next? ForbesThe bottom line is this: economic freedom—the kind you get with a large middle class—leads to prosperity, economic growth, and technological innovation.

Are the French hit especially hard by fuel taxes? The GuardianA planned rise sparked the gilets jaunes protest – here's how their fuel costs compare with the rest of Europe.

Taxman starts questioning & issuing notices to BPOs Economic TimesIndustry trackers fear that more and more companies may now be issued notices and questioned.

UBS report: Many Americans should expect bigger tax refunds in 2019 Business InsiderThe new GOP tax law went into effect at the start of 2018, and a UBS analysis suggests it could have a big impact on federal tax refund checks.

Halifax council agrees to airport tax deal TheChronicleHerald.caRegional council agreed Tuesday to a taxation agreement with the Halifax International Airport Authority. The 20-year agreement to kick into effect on April 1 will ...

Pakistan government to impose 'sin tax' on tobacco Economic TimesISLAMABAD: Pakistan will soon impose a 'sin tax' on cigarettes and sugary beverages and that fund would be diverted to the health budget, Minister for National ...

10 things you probably didn't know you could deduct on your taxes Business InsiderWhat deductions are you missing when filing your tax return? Here are 10 that are often overlooked ahead of tax day 2019.

Tax on free services: PMO set to wade into ₹40,000 cr spat between banks, revenue dept BusinessLineMumbai, November 25. With banks staring at a massive tax outgo of ₹40,000 crore on free services provided to customers to maintain a minimum balance, and ...

How to Tell If Tax Reform Is Working BloombergA year later, it's too soon to tell. But there is one indicator that offers grounds for optimism.

ETWIW: Multicap funds, financial planning errors, and efficient tax planning in Kolkata Economic TimesDo multicap mutual fund schemes make more sense after the recent re-categorisation exercise by Sebi?

The Trump tax cuts are putting America in a hole Yahoo FinanceTax cuts and a slowing economy will erode America's fiscal strength during the next decade, according to a new report from Moody's Investor *Service*, the ...

What the Amazon tax breaks really mean Vox.comI think the easiest way to understand Amazon's HQ2 and the specific question of cities handing out tax subsidies is to abstract away from the particular details of ...

Tax savers start hunting for best ELSS ahead of tax-saving season Economic TimesTraditionally, January to March is known as the tax-saving season. However, the season has already started in December ahead of the tax season next year.

SC orders Aleema Khanum to pay Rs29.4m as fine, tax on foreign properties DAWN.comThe Supreme Court on Thursday ordered Aleema Khanum, Prime Minister Imran Khan's sister, to pay Rs29.4 million in taxes and fines. A three-judge SC bench, ...

A tax hike on alcohol is the obesity fix Australians need to swallow The GuardianThe national health impact could be substantial, preventing more than 190000 cases of diabetes and 16000 cases of cancer.

French taxes cut as Macron caves in to rioters, admitting he is 'partially responsible' Sky NewsBy Alix Culbertson, news reporter. Emmanuel Macron has promised to raise the minimum wage as he acknowledged he was partially responsible for weeks of ...

BBMP to issue warrants, seize properties of tax defaulters Times of IndiaBENGALURU: The Bruhat Bengaluru Mahanagara Palike (BBMP) is all set to crack the whip on those who have defaulted on payment of property tax for long.

Mayor Rahm Emanuel pushes state gas tax increase to fund major transportation bill Chicago TribuneMayor Rahm Emanuel on Tuesday called for a 20 to 30 cent per gallon increase in the state's gas tax to fund a major statewide transportation bill.

Modesto City Council approves tax rate for marijuana retailers The Modesto BeeThe City Council in Modesto, California, has approved a tax rate for cannabis retailers and other marijuana businesses, including distribution, microbusiness, ...

Tax treatment of NPS set to change LivemintCompulsory annuity and tax treatment made NPS a less preferred option by the financial advisors.

Six tax deductions you'll lose on your 2018 return CNBCIf you were hoarding receipts in a shoebox with the hope of claiming a big break on your 2018 taxes, prepare to be disappointed. That's because the Tax Cuts ...

Why only 2% of Chinese pay any income tax The EconomistOF COURSE NOT, I'm not an idiot,” says Liu Yongli, a chauffeur in Beijing, when asked whether he has ever paid personal income tax. Despite earning well ...

Niger government orders closure of Airtel arm over unpaid taxes Economic TimesKOLKATA: The Niger government has ordered the closure of Bharti Airtel's whollyowned arm in the African country for nonpayment of over $107 million (about ...

Ottawa council sets property tax increase goal of three per cent in 2019 Ottawa CitizenOttawa residents should prepare their household budgets to absorb increases in property taxes and water bills in 2019 after council on Wednesday set its ...

Run, tax-evaders, run Economic TimesOn December 1, world leaders at the G20 summit in Buenos Aires, Argentina, agreed to reform the World Trade Organisation (WTO), even as the US and China ...

Vancouver's looming 5% property tax hike more evidence funding reforms needed CBC.caWe'll spare the suspense: even though the vote is a week away, Vancouver is going to pass a budget with the highest property tax increase in a decade, after an ...

Study pushes for Scottish land and property tax reform Financial TimesThere is a strong case for reform of land and property taxes in Scotland and the introduction of a land value tax might boost efforts to diversify ownership and ...

It’s time to reassess your taxable salary: Here are some important changes in income tax rules this year The Financial ExpressEmployers start asking for the proof of tax-saving investments and expenditures that are eligible for tax benefits for reassessment of your taxable salary to ...

Top five tax-saving bank FD rates Economic TimesTax-saving fixed deposits (FD) are one of the most popular investment avenues in the section 80C basket of financial instruments. To save tax, many people use ...

Vancouver council votes to scrap school tax CityNews VancouverVANCOUVER (NEWS 1130) – It's the latest push-back against the province's school tax, which would affect homes worth more than $3 million. Vancouver City ...

Tax queries: Gifts received from relatives are not taxable Economic TimesDilip Lakhani, Senior Chartered Accountant, answers queries from our readers on income tax and other levies. Can charges for services (such as courier, ...

How to avoid tax saving traps set by unscrupulous wealth managers, bank officials Economic TimesAn average investor neither has the time or the inclination to go into the finer details of the policy.

Tax refund scammers are finding new ways to steal from you Detroit Free PressThe Internal Revenue *Service* and others warn that ID theft continues, as crooks cook up elaborate schemes. A Georgia teen was arrested after one scam.

Letter from Africa: How to get Ghanaians to pay their taxes BBC NewsGhana's government should ban funerals for people who refuse to pay taxes, writes journalist Elizabeth Ohene.

Independent Tax Review Committee Targets Deficit Reduction Levy in Recommendations VOCMAn independent tax review committee is recommending that the provincial government eliminate the Temporary Deficit Reduction Levy before the end of 2019, ...

Tax Optimiser: How Wahi can cut tax by Rs 94,000 via education loan, NPS Economic TimesWahi can reduce her tax by over Rs 94000 if her organisation offers her the NPS benefit and few allowances are replaced with tax-free perks.

Converting company to LLP is a transfer, hence taxable, rules I-T Appellate Tribunal Economic TimesMUMBAI: A new tax ruling threatens to challenge a strategy that allowed thousands of businesses and professionals to reorganise themselves and attract ...

#ThotAudit: Trolls report camgirls to the IRS for tax evasion NEWS.com.auOnline sex workers have slammed a viral campaign by right-wing “incels” and men's rights activists to mass report them to tax authorities for allegedly failing to ...

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Tax Tax