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Tag Archive for Federal Income Tax

Freeman Law Tax Update: What A Biden Presidency Means For Your Federal Income Taxes

Freeman Law Tax Update: What A Biden Presidency Means For Your Federal Income Taxes

(Reposted Blog From November 2020, They Are On Top Of It)

With the projected election of Joe Biden, Freeman Law has already begun to review what a Joe Biden presidency could mean to its clients.  And although many of determinations could potentially depend on results from President Trump’s election challenges and a final tally of the United States Senate, Freeman Law wants our clients to be aware of the potential tax changes that could occur in the next few years under Joe Biden.

Increase in Top Marginal Tax Rate for High-Earners.  Currently, the top federal tax rate is 37%.  Mr. Biden has proposed increasing the top federal tax rate to 39.6% for those making more than $400,000 per tax year.

Investment Income.  High-income taxpayers are currently taxed at approximately 23.8% on their net investment income, which includes capital gains and ordinary dividends.  Mr. Biden has proposed maintaining these rates except for those taxpayers who make over $1 million.  In these latter instances, Mr. Biden has proposed increasing the tax on net investment income to ordinary income tax rates of 39.6%.

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Many Corporations Will Pay A Blended Federal Income Tax This Year Under The New Tax Reform Law

WASHINGTON – Many U.S. corporations elect to use a fiscal year end and not a calendar year end for federal income tax reporting purposes.  Due to a provision in the recently enacted Tax Cuts and Jobs Act (TCJA), a corporation with a fiscal year that includes Jan. 1, 2018 will pay federal income tax using a blended tax rate and not the flat 21 percent tax rate under the TCJA that would generally apply to taxable years beginning after Dec. 31, 2017.

Corporations determine their federal income tax for fiscal years that include Jan. 1, 2018, by first calculating their tax for the entire taxable year using the tax rates in effect prior to TCJA and then calculating their tax using the new 21 percent rate, subsequently proportioning each tax amount based on the number of days in the taxable year when the different rates were in effect.  Read more

IRS Provides Tax Relief to Houston Area Storm Victims; Tax Deadline Extended to Sept. 1

David Green

Texas storm victims, including those in the Houston area, will have until Sept. 1, 2016 to file their returns and pay any taxes due, the Internal Revenue Service announced today. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief. Read more