State And Local Tax Deductions (SALT) Made Simple The State and Local Tax deductions enables taxpayers to reduce their federal taxable income by claiming certain state and local taxes they’ve paid, potentially lowering their overall federal income tax bill. However, this benefit is limited and nuanced, particularly after the 2017…
Creditable Withholding Tax: The Smart Way to Reduce Your Tax Bill Creditable withholding tax refers to a tax mechanism where a portion of a taxpayer’s income is withheld at the source by a third party—typically the payer of the income—and remitted directly to the government as an advance payment toward…
From Tax Preparer to Pro: Complete Your EFIN Application Today An Electronic Filing Identification Number EFIN Application number is a unique number assigned by the IRS to tax professionals and entities authorized to electronically file tax returns. Any tax professional planning to electronically file over 10 returns per year must…
Understanding The Complete Scenario On IRS Form 8938? Form 8938, officially known as the “Statement of Specified Foreign Financial Assets,” is a mandatory IRS reporting form used by certain U.S. taxpayers to declare foreign financial assets that meet or exceed specific monetary thresholds. This form was introduced as part of…
What Is IRS Form 6166? Form 6166 is an official U.S. Tax Residency Certificate issued by the Internal Revenue Service (IRS). It serves as a formal declaration that an individual or legal entity is a resident of the United States for income tax purposes under the provisions of the United…
IRC Section 125 and Its Treatment Under New York State Law IRC Section 125 governs what are commonly known as Cafeteria Plans or Flexible Benefit Plans. These plans allow employees to choose between receiving cash compensation or selecting from a menu of nontaxable fringe benefits — such as: These benefits…
A Complete Overview On Form 3520 Form 3520, officially titled “Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts,” is used by U.S. taxpayers to report certain transactions with foreign trusts, ownership of foreign trusts, or receipt of large foreign gifts and bequests. It is…
What Is True Up Accounting? Fully Descriptive Guide with Forms and Examples True-up accounting is the process of reconciling estimated or temporary entries with actual figures once accurate information becomes available. It ensures that the financial statements reflect reality—correcting for differences between what was originally booked and what truly occurred….
Qualified Business Income (QBI) — Ultimate Descriptive Guide (IRC §199A) Qualified Business Income (QBI) is defined as the net amount of income, gain, deduction, and loss generated by a qualified trade or business that is conducted within the United States. This income must be attributable to a pass-through entity, such…
Form 1042: Annual Withholding Tax Return for U.S. Source Income of Foreign Persons Form 1042 is the annual tax return U.S. withholding agents use to report payments of U.S.-source income to foreign persons and the taxes withheld on those payments.. It is part of the IRS’s mechanism for enforcing the…