It’s a slow news day so I thought I’d take a little time to find out more about the word we’ve all learned to love: Tax.
The word “tax” has been part of the English language since the 14th century. It derives from the Latin words taxare, meaning “to censure, to assess,” and tangere, meaning “to touch.”Â
From the Merriam-Webster online dictionary here’s the etymology [...]
Tags: Taxes 101
There have been many changes in the tax laws over the last year, but most of the tax code is the same.
Here are 7 tax advice articles I wrote last year that apply equally to this year:
7 All Time Tax Concepts
S Corporations Wages and Distributions: Basic Tax Planning
Taxes 101: What Filing Status Should You Use?
5 Rules for Keeping Your Tax [...]
Tags: Individual Taxation · Tax Tips · Taxes 101
If you own and operate a trade or business and have a history of losses, there is a very good chance the IRS will at some point disallow those losses, especially if you keep poor records.
Although good bookkeeping is important in all cases, it is especially important for taxpayer’s with businesses that have shown a pattern [...]
Tags: Taxes 101
Tax researchers, planners and return preparers should have a thorough understanding of how the tax laws are structured.
I found this outstanding primer on the organizational structure of the Internal Revenue Code and the Treasury Regulations at the Georgia State University College of Law website.
INTERNAL REVENUE CODE
Congress and the Treasury use organizational terms to direct readers to specified [...]
Tags: Taxes 101
At year end tax professionals generally advise their cash basis clients to accelerate expenses and defer income. However, this strategy only makes sense where a taxpayer’s marginal tax rate will decrease or remain relatively constant.
Experts are predicting that Congress and President Obama will raise tax rates either by the end of this year or sometime next year; [...]
I recently wrote in a post titled Tax Advice, Legal Advice & Piercing the Corporate Veil that it would be legal malpractice for an attorney to advise his corporate and business clients to commingle their personal and business funds.
I wrote the post in response to June Walker who had written a blog post titled You Do Not [...]
Tags: Business Transactions · Taxes 101
IRS Publication 538 contains guidance on accounting periods and methods to be used by taxpayers:
An accounting method is a set of rules used to determine when income and expenses are reported. Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item.
No single accounting [...]
Tags: Taxes 101
When you have a tax law that comprises more than 80,000 pages of complex text, you are going to have thousands of tax terms and concepts.
I did some research and have determined (unscientifically, of course) that the following 7 ubiquitous tax concepts are the most important:
Claim of Right – The receipt of cash or other assets that are not excludible [...]
Tags: Taxes 101
A majority of American small businesses use the S corporation form of doing business.
This article discusses one of the main tax planning techniques an S corporation can use to save taxes.
The S Corporation and Payments to Shareholder/Employees?
An S corporation is a pass-through entity and does not pay federal income tax.
The net earnings of the S corporation [...]
Tags: S Corporations · Taxes 101
Sometimes the IRS is simply wrong.
This happens more often than you might think.
Over the years we have found that the IRS makes mistakes most often in the following areas:
Wrongful Calculation of Penalties and Interest
Matching of Income to the Wrong Taxpayer
Wrongful Assessment of Penalties
Failure to Release a Lien
Incorrect Calculation of Collection Statute Expiration Dates
Misplacement of Tax [...]
Tags: Taxes 101 · Taxpayer Rights
Wall Street Journal – Taxes Blog
