Tax deductions for school tuition can alleviate the financial burden of education. If you pay for qualified education expenses, you may be eligible for deductions or credits. These expenses can include tuition, fees, books, supplies, and certain other costs. The American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) are two commonly used … Read more
Proportional tax is a tax system in which the tax rate is the same for all taxpayers, regardless of their income. This means that everyone pays the same percentage of their income in taxes. For example, if the proportional tax rate is 10%, then a person who earns $10,000 will pay $1,000 in taxes, and … Read more
Self-employed individuals, also known as independent contractors or freelancers, have unique tax reporting requirements. They are responsible for calculating and paying taxes on their earnings, including income, self-employment, and estimated taxes. The primary tax forms used by the self-employed include: Schedule SE (Form 1040), which calculates self-employment tax, and Schedule C (Form 1040), used to … Read more
The Sales Tax ID Number (STID) and the Employer Identification Number (EIN) are two distinct identifiers used for different purposes. The STID, also known as the Seller’s Permit Number, is issued by state or local tax authorities to businesses that collect sales tax on goods or services. It is used to identify the business and … Read more
Redundancy pay generally refers to a lump sum payment made to an employee whose job is being terminated. Tax treatment of redundancy payments may vary depending on the specific laws and regulations in each jurisdiction. In some cases, redundancy pay may be considered taxable income and subject to income tax. This is because the payment … Read more
Local property tax amounts are typically determined by multiplying the property’s assessed value by the local tax rate. The assessed value is usually based on an appraisal of the property’s market value, but it may also consider other factors such as the age and condition of the property. The local tax rate is set by … Read more
Homeownership offers tax benefits, reducing your taxable income. By deducting mortgage interest and property taxes from your taxes, you can lower your overall tax bill. This deduction incentivizes homeownership and helps make it more affordable for many households. The amount of the tax break depends on the size of your mortgage, your income, and your … Read more
Equalisation Levy is a tax that is imposed on specific digital services provided by non-resident companies to Indian customers. It is not explicitly a part of the Income Tax Act, but rather a separate levy introduced through the Finance Act of 2016. The levy targets digital services such as online advertising, software updates, and cloud … Read more
Pension contributions made by employees are generally tax-deductible, reducing their taxable income and thus decreasing the amount of income tax they owe. This means that a portion of the employee’s paycheck that goes towards pension contributions is not subject to taxation. The government encourages pension savings by providing these tax breaks, aiming to promote financial … Read more
Intercompany interest is a payment made between two companies that are part of the same group. It arises when one company lends money to another company within the group. The interest expense incurred by the borrowing company is deductible for tax purposes, while the interest income earned by the lending company is taxable. However, there … Read more