14Feb/16

Will the Trustee Take My Tax Refund?

If you are considering petitioning for Chapter 7 bankruptcy and you are hoping to get or have gotten a tax refund, you most likely need to realize what happens to that refund.  Whether you lose the refund or not relies on upon the timing of your bankruptcy and the receipt of your refund. Be that as it may, there are things you can do to ensure you keep your duty refund.

Bankruptcy Estate

At the point when an indebted person documents for Chapter 7 bankruptcy, the majority of the individual’s benefits turn out to be a part of the bankruptcy estate, which is directed (controlled) by the Chapter 7 bankruptcy trustee. The Bankruptcy Code characterizes resources comprehensively. It incorporates more than cash in the bank or property. A tax return is a benefit that the trustee can use to pay unsecured lease. It is likely that the trustee will get some information about a tax refund at the meeting of banks. Find out more information here.

 Chapter 7 bankruptcy

In the Chapter 7 bankruptcy, it is mentioned that the trustee can utilize the advantages you have when you petition for bankruptcy to pay off your lenders. You can keep any benefits you get in the result of petitioning for bankruptcy. A tax refund can be precarious on the grounds that it frequently includes a procedure that starts before the bankruptcy recording date and proceeds thereafter.

Chapter 11 bankruptcy

Whether you can keep your tax refunds from wage earned before you record chapter 11 relies on upon how you deal with the timing of your bankruptcy and receipt of your tax refund. As a rule, If you arrange ahead you’ll have the capacity to keep your tax refund, or utilize the cash for different expenses. Read more here: http://www.businessnewsdaily.com/3973-bankruptcy.html

Timing of Your Bankruptcy

Depending upon how far ahead of time you know you will be petitioning for chapter 11, following are three points you could do to keep your tax refund from loan creditors:

  • Modify your withholding to decrease your refund to a minimum credit
  • Spend the refund on important expenses; or
  • Incorporate the refund in your bankruptcy exemptions.

File for Bankruptcy Within a Year

If you believe that you are going to petition for chapter 11 in the following year, you can stay away from the refund issue by changing your expense withholding so that you just pay the tax you owe. You will get more cash in every paycheck and your refund that will be too little to give any important installment to your loan creditors. The trustee might desert the refund, implying that you will have the capacity to keep the cash. It is imperative to ensure that you keep on withholding an adequate adds up to cover the charges you owe. In the event that you have gotten your tax returns and have not yet petitioned for chapter 11, you can keep the cash out of your bankruptcy home by spending it. The trustee can’t utilize cash to pay your banks that you no longer have.

14Feb/16

Corporate Tax In The United States

Corporate taxes are imposed in the US at the local, state and federal levels, on the income of people and entities that are treated as corporations. The tax rate on corporate income can vary from 15-35%, and taxes and rules are different in every jurisdiction. A corporation’s taxable income may be different from its book income, and corporations are also assessed a federal AMT or alternative minimum tax. Just as is the case with individuals, American corporations must file tax returns every year. There are some corporate transactions that are not taxable, such as acquisitions, mergers and liquidations. Shareholder dividends are taxed, and some corporations are subject to a foreign income tax, but may be allowed a credit for them.

Most shareholders aren’t directly taxed for corporate income, but they must pay taxes on all dividends. However, shareholders in an “S” corporation or a mutual fund are taxed on corporate money but do not pay dividend taxes. Corporate income taxes are based on the federal or state definition of taxable income (usually business receipts, minus the cost of goods and services sold). A federal corporate tax is imposed at different levels, and all taxable income above $335,000 is subject to a 34% or 35% tax rate. Local and state taxes are deductible in the calculation of federal corporate taxable income.

At the federal level, consolidated returns are permissible, and some states even require them. Members of a group are permitted to file just one return that reports their combined income, and to calculate a combined tax. When related entities don’t file a consolidated return, they fall under transfer pricing stipulations, and in these situations, the tax board may adjust the prices charged in between these entities. Corporate shareholders are taxed upon the distribution of earnings, and dividends. The tax rate on dividends is now lower than the rate for regular income for shareholders. To make sure that shareholders pay dividend taxes, there are two provisions: backup withholding on domestic shareholders, and withholding tax on shareholders who are foreign. Foreign corporations that operate in the US may fall under the branch profit tax, at the same rate as the dividend withholding. A corporation must file a tax return in any US jurisdiction that has an income tax, and it is payable through estimated payments at both the state and federal levels. More explained here.

Like any other entity, a corporation might be subject to withholding taxes upon making a payment to another entity, such as dividends or wages. These are generally not considered as part of the corporate tax, but the tax system might assess a penalty upon the corporation for not paying the tax. American corporations are subject to many other taxes, such as those on stock or capital, excise taxes, sales/use taxes, and property taxes.

Always visit https://www.taxreturn247.com.au/ if you need more help.

14Feb/16

Income Tax Rates By State

There are many states in the US that impose a state income tax, and there are seven that do not: Wyoming, Washington, Texas, South Dakota, Nevada, Florida, and Alaska. Tennessee and New Hampshire only tax interest income and stock dividends, and these states raise most of their revenue through other methods of taxation, such as increased sales tax. In May 2009, both Hawaii and Oregon had the highest state income taxes, at 11%. Of all the states that levy an income tax, the lowest rate is had by Illinois, with a flat 3% tax. Most states that have income taxes have them of a progressive nature, where the rates rise commensurate with income. For instance, taxation on a single Californian begins at 1% if they make $6,622, and rises up to over nine percent if they make over $44,800. Back in 2005, California added a 1% surcharge on incomes exceeding $1 million, equaling a marginal tax rate of 10.3%.

The state income taxes are assessed on top of the federal government’s income tax, with a maximum of 35% in Washington, Texas and Florida. Vermont has a tax of up to 44.5% of income, and California has the dubious distinction of a 45.3% maximum tax. These two taxation levels are accompanied by payroll taxes, such as contributions to Medicare and Social Security. However, those high figures don’t reflect that some local and state taxes (including the state income tax) are a federal tax deduction. An AMT (alternative minimum tax) itemization won’t offer much in savings, and those not affected by the AMT are effectively subsidized for a portion of the state income tax. However, the subsidy only affects those whose deductions exceed the standard, meaning that mostly middle-class taxpayers are eligible. Check this site for more help.

In addition to federal and state income taxes, plus payroll deductions, some states in America allow their counties and cities to assess additional income taxes. For instance, New York City has a city tax of a maximum of 3.648%, in addition to a state tax of 6.85% and the federal income tax. The maximum tax rate in New York City, with all income taxes, accounted for, is 45.498%, or roughly one and a third times the amount of federal-tax-only cities like Dallas, Miami, Houston and Seattle. Income tax rates vary widely by state, and if you are at all unsure, it’s best to consult a tax professional or an accountant.

Read more in our post here: http://www.michellesuniquejewelry.com/what-are-the-fees-for-a-tax-lawyer/

13Feb/16

What are the Fees for a Tax Lawyer

Tax lawyers are very useful in solving tax issues, and bringing tax relief to millions. The costs incurred with the hiring of a tax lawyer can vary widely from one place to another, and can also rise and fall depending on the chosen lawyer’s expertise and experience. If a particular lawyer has been in practice for years and has a long list of satisfied clients, their fees will almost certainly be higher than a newer attorney. If you have a tax attorney on retainer, the fee may be a couple of hundred to a few thousand dollars per month, depending on what the lawyer does for you. A typical tax lawyer charges a consultation fee of between $75 and $250, but there are some others too who work following the ‘No Win, No Free’ agreement. The preliminary consultation determines the customer’s needs and the amount of retainer needed. After the taxpayer reads over the retainer agreement, payment is made. Tax lawyers can charge hourly, on retainer, or on a contingency basis, where the attorney gets between 25% and 40% of the settlement amount.

An hourly fee is best for both lawyer and client because the other fee schedules often result in the lawyer ending up with more money than the client. However, hourly fees rack up fast- most cases average out at about $30,000-$50,000 in costs. The time an attorney spend isn’t just spent in the courtroom- there are countless hours spent in preparation for a case. Hourly fees can depend on factors such as the reputation of the client, the case’s complexity, the lawyer’s experience, and the area in which the client needs assistance. Hourly fees are often negotiable, and can be decided by the client having a frank discussion with the attorney regarding their requirements.

Some law firms and some independently practicing tax lawyers will charge a retainer fee, otherwise known as a flat fee. The retainer fee is not refundable under any circumstances. In a situation where a flat fee is charged, a single larger payment is made, and repeating payments are no longer necessary. Contingency fees can be applied in some situations, and the contingency fee is a payment made to the attorney for services rendered. The contingency fee is usually expressed as a portion of the recovery amount, and can range from one-quarter to almost half of the total, but averages about 33%. If the tax lawyer wins the case for their client, the IRS most often pays the attorney fees, and the client owes nothing out of pocket.

Find out more information here: https://www.quora.com/What-is-average-cost-for-a-tax-attorney