Income Tax Consequences | TaxConnections

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What are the tax consequences for parents and workers hired to help with remote learning or childcare?

Because of the pandemic, many brick and mortar schools have shifted to remote instruction. However, for a variety of reasons, remote learning may not be a suitable option for every family. To address the particular needs and circumstances of each family, such as health concerns, some have turned to homeschooling pods (small groups of children sharing a learning space led by a pod instructor) or have hired nannies to care for younger children. Parents hiring pod instructors, nannies, and similar household workers may be unfamiliar with tax filing and withholding requirements. As a result, they may find themselves with unexpected tax liabilities or penalties. It is important to understand the tax consequences of hiring a household worker, including whether a worker is treated as an “employee” or an “independent contractor” for both federal and state reporting.

Employee or independent contractor?

Written by National Taxpayer Advocate | Posted in Remote Learning • Taxes

Introduction –

The purpose of this section is to provide a cursory view of foreign trusts and financial planning, the emphasis of which is asset protection from judgments. The basic taxation regime of a foreign trust can be reviewed in a previous writing, Income Taxation of Foreign Trusts and Beneficiaries, TaxConnections, November 25, 2013.

The focus here is the treatment by the United States taxing authority upon a foreign trust pertaining to the tax consequences subsequent to transfer. The points of relevance are the income tax treatment to the Settlor, beneficiary, and trust and the consequential use of the Read More

Written by William Richards | Posted in Estate Planning Tax • United States