| Tax Shelters |
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| We hear about tax shelters all the time, but the average taxpayer is not quite sure whether they are good or bad. It is impossible to categorize all tax shelters as either good or bad. Each must be looked at separately and carefully to determine whether it is legitimate or abusive. More... |
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| Personal Service Corporations Formed to Evade Taxes |
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| A corporation whose employees/owners provide personal services in the fields of accounting, actuarial science, architecture, consulting, engineering, health, and the performing arts is a personal service corporation. An employee/owner is defined by the Internal Revenue Service as an individual who owns, either directly or indirectly, more than 10 percent of the outstanding stock of the corporation on any day of the tax year. More... |
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| Prepaid Farm Expenses |
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| Generally, taxpayers who use the cash method of reporting income and expenses must take deductions and credits in the year in which they are paid. There are exceptions to this rule for tax items such as prepaid expenses, which often must be accounted for in a different year in order to more clearly reflect income. More... |
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| Joint or Separate Return |
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| Every married couple has to make the yearly financial decision of whether to file a joint or separate federal income tax return. Filing a joint return is most beneficial when there is a substantial difference in the incomes of the spouses. Because the incomes of both spouses are combined in a joint return, it allows some of the income of higher earning spouse to be taxed at the lower marginal rate available to the joint filers, resulting in tax savings. More... |
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| Who May File a Joint Tax Return |
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| When a couple files a joint tax return, they are considered a single economic unit in the eyes of the Internal Revenue Service. But not every "couple" is entitled to file a joint return. Only a married couple may file jointly, They do not have to be married for the entire year. A husband and wife must be married on the last day of the tax year in order to benefit from the joint filing status for the entire year. These benefits include a lower tax rate and certain credits, such as the earned income credit, the tax credit for the elderly, and the credit for child and dependent care expenses, which are only available to married taxpayers who file a joint return. More... |
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