Tax On Gross Transportation Income Essay

AASB 112 Income Taxes is an incorporated amending of IAS 12 Income Taxes (AASB112 2012). The adoption of AASB 112 is illustrated as employing the main principle that current and deferred tax consequences arise from “(a) the future recovery (settlement) of the carrying amount of assets (liabilities) that are recognized in an entity’s statement of financial position and; (b) the current and future tax consequences of transactions and other events recognized in an entity’s financial statements” (IAS12 2012).

Arlen is required by his divorce agreement to pay alimony of $2,000 a month and child support of $2,000 a month to his ex-wife Jane. What is the tax treatment of these two payments for Arlen and Jane?

§ 1.61-1(a) - GI means all income from whatever source derived, unless excluded by law. GI includes income realized in any form, whether in money, property or services.

A Health Savings Account (HSA) plan requires a high-deductible medical insurance policy, which means that the premiums on the policy will be less than for a low-deductible policy. The contributions to the HSA are deductible for AGI, which reduces the nondeductible amount of itemized deductions subject to certain limitations, and the taxpayer does not have to itemize to obtain the deduction. The HSA distributions pay for the deductible medical expenses and they are not included in gross income. Also, the income earned on the HSA is not included in gross income if it is used to pay medical expenses not covered by the high-deductible plan.

Tax deductions are allowed to taxpayers only if specifically authorized by the Internal Revenue Code. Deductions allowable to individual taxpayers fall into four categories: trade or business expenses, expenses incurred for the production of income, losses, and personal expenses. In addition to discussing the general requirements for deductibility for each of the above types of expenses, this chapter also discusses the tax treatment of many commonly encountered expenses incurred by taxpayers, from trade or business expenses such as rent, insurance, interest, taxes, bad debts, etc. to employee business expenses (travel, transportation, etc.) to

The precise structure of inactive investment in a foreign nation depends largely on the treatment of the structure under the tax laws of the host country and the U.S.

However, the companies only have to pay the U.S. tax for foreign revenues once they bring the profits back to the United States. As a result of these current tax laws, U.S. companies that seek to avoid high corporate tax rates hold their foreign earned profits overseas. “It just makes no sense to pay a substantial tax on it,” said Joseph Kennedy, a senior fellow at the Information Technology and Innovation Foundation (Rubin, R.). It is far too easy for an IT corporation to create a patent in a foreign country and direct revenue to a corporation within that country, thus avoiding the much higher U.S. tax rates. According to Joint Committee on Taxation estimates, the lost revenue is increasing over time as corporations find even more creative ways to make their U.S. profits look like offshore income (Richards, K., & Craig, J.). As result, multinational American corporations have as much as $2 trillion held in overseas subsidiaries and if brought into the United States with the current tax laws, the federal government could benefit by nearly $50 billion per year.

348 U.S. 426, 431 [47 AFTR 162] (1955). Stated otherwise, gross income includes earnings unaccompanied by an obligation to repay and without restriction as to their disposition. James v. United States, 366 U.S. 213, 219

2. The primary means in which a corporation is able to do so is to qualify for benefits in the 1996 U.S. Model Treaty. There are actually a couple of different ways in which corporations can access these benefits in international transactions. One of the ways is if that corporation is regarded as a fiscally transparent partnership in another

During the tax period, maximum of the accounting firms have hefty load of work. Also, you will see that the majority of the proficient public accountants are busy in paperwork. With online income tax return filing preparation and mytaxreturn e-filing alternative, things have become a lot easier and quicker. Maximum of the persons who earn adequate money are usually required to give portion of it back to the government, via the standard way of filling out an income tax return. They then send the needed portion of their income to the government. But it is vital to know what portion of income is taxable and what is free of taxes, not always laid-back for individuals to calculate on their own. When it is required to fill out an income tax return, filing can be stress-free. It is particularly

The income earned by the U.S. individuals and corporations in the foreign countries or foreign source are taxed by the U.S. government, even though other countries also tax any income earned within their borders. To offset this double taxation of income by two different countries, the U.S. grants both individuals and corporations a foreign tax credit (FTC) that can be used to offset income taxes assessed by a foreign country on the income earned there (Foreign Tax Credit, FTC, n.d.). The FTC is allowable for foreign income taxes and other similar taxes, such as excess profit and war profit taxes. However, only income taxes qualify for the credit. The Value Added Taxes (VAT) and property, sales and severance taxes do not qualify, although they may be deductible.

The less taxes we pay, the more lives we save. The United States has the highest corporate tax rate of the 34 developed, free market nations that make up the Organization for Economic Cooperation and Development (DECD). Unlike other countries, the United States pays a marginal corporate tax rate of 35% at the federal level and 39.2% state tax are accounting. This is causing thousands on corporations to move operations out of the United States and into other countries. Therefore, the United States should lower the taxes on big corporations.

These two benefits alone save the cruise line immense amounts of money. Since they are not US companies, they are not bound by the laws other US businesses are such as employment taxes and minimum wage for their employees (Cruise Line International Association, 2012). They are also not subject to corporate income taxes, however they still must pay the going port fee whenever their ship docks. Another financial benefit stems from the building of their ships. Many times, the country in which the ship is being built will donate millions of dollars to the project tin order to facilitate jobs. This is a huge savings to the cruise line industry and helps maintain their costs.

A tax haven is a country that offers foreign corporations and individuals relatively low corporate and income tax rates, with a politically and economically stable environment. Some tax havens are Switzerland, Hong Kong, Bermuda, Ireland, and the Cayman Islands. Although the businesses have moved across seas, the United States forces them to pay the corporate tax. Fortunately for the businesses, it they keep their income and money across seas they do not have to the pay the American corporate tax, Unfortunately this is ghastly for the United States Government businesses keep their products and profits over seas.

As one of the largest part reputable tax havens in the Caribbean the BVI has very elevated standards. BVI tax havens encompass no taxes in place for BVI offshore companies who do no commerce in the jurisdiction. International business companies will disburse zero taxes on the profits, interests, dividends and other types of incomes earned exterior of the jurisdiction. For this motive the BVI can be regarded as a unadulterated offshore tax haven. BVI offshore corporations shell out no corporate tax, capital gains tax, estate tax, withholding tax and income tax. The merely money that an offshore company pays in the BVI is an annual fee which is salaried to the significant supervision authorities.