Income Tax Laws – Rules and Regualtions for Filing Tax Returns
Though paying taxes sound dreadful, it is mandatory for every citizen to pay taxes that ensures smooth running of various public services, and that it has the money to pay for the basic necessities of individuals. A certain percentage of an individual’s income is given as income tax.
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Income Tax Laws - the Important Aspects
The income tax laws in the United States are approved by the President, and the laws are enforced by the Internal Revenue Service. The IRS is also responsible for tax refunds, and for handing over the tax money to the US treasury.The income tax laws are formulated with five aspects on the tax system. The first aspect is that all are subject to income tax. This asks all individuals and organizations to report their income for further tax calculations, and to enjoy tax exemptions if any. The tax exemption law could be revoked, when a company fails to meet certain criteria for the exemption. The second aspect of the laws is that an individual is taxed based on his or her net income, except for any gifts, inheritances or scholarships. The third aspect of the income tax laws
is that the income tax must be paid throughout the year. The fourth aspect is that, the income tax is progressive, which means, the people who earn more are bound to higher tax rates. This is to ensure, those with modest income, are not levied a heavy burden of tax.The fifth and the final aspect of the income tax is that the tax system is voluntary. This lets people to take advantage of their tax benefits, and that the taxes can be minimized by properly planning and managing your finances.
Tax on Inheritance - Paying for the Rich Possessions
The inheritance tax is the same as “Estate tax”. Thos rich people, who have considerable large possessions like an estate, will be levied taxes, after they die. These taxes are considered unfair, as the person who owned the estate, before he or she died had paid the taxes already, and the tax of inheritance
still exits, which will be estimated upto 40-50 percent of the estate value or the assets owned. The amount changes depending on the location.There are certain loopholes in the tax laws, wherein you can get exempted from paying the tax on inheritance. Some countries let you give a large amount of money to one of the family members or survivors, free of tax. Giving the possession as a gift to someone, is another way to escape from inheritance taxes.
US Tax Code - Complex Legislation
The US Internal Revenue Service or the Bureau of Treasury, has formulated certain codes for the United States federal taxes. This US tax code is otherwise known as the Internal Revenue Code of 1986. The tax code is used for public policies, in addition to its intended use to raise revenue to the federal government. The US tax code is quite complex, and other than the purpose of raising revenue, the tax code is generally meant to pay taxes based on net income. This ensures that the taxes imposed on a taxpayer is based on the actual amount a taxpayer can pay. The tax code is built around a few concepts that are the most complicated legislations ever written for the government.Photo Source : flickr.com/thetruthabout/