Business tax is paid by large organizations and individuals running small businesses. The process of tax planning and submission is a very tedious one and requires meticulous planning from the taxpayers. Tax laws are very difficult for many people to understand and require a detailed study of all the intricacies contained therein.

Business tax lawyers are legal professionals with expertise in specifically dealing with issues related to business tax law. They guide individuals and organizations through the intricacies of meticulous tax planning, provide advice on leveraging tax benefits legally and negotiate issues concerning taxation claims by government agencies. The services of business tax lawyers help clients minimize tax liabilities thereby increasing their profits and maximizing the growth of their business. Tax lawyers also safeguard their clients from tax avoidance investigation by government agencies. In case of tax related litigation, they make expert counsel available to their clients and represent them in courts, if necessary.

The tax system in the United States is extremely complicated with various kinds of tax laws applicable to people such as sales tax, employment tax, property tax and many other local and federal tax laws. It’s advisable for new business organizations and individual entrepreneurs to appoint full time tax attorneys who can guide them through the various methods of structuring their businesses for tax exemption. This allows them to benefit from different kinds of rebates under various tax laws, without getting into legal hassles with tax departments.

Besides this, business tax lawyers also help and advice businessmen and organizations on specific tax planning for business contracts, acquisitions, mergers, divestiture, joint ventures, lease agreements, ownership and issues regarding overseas investment. They also play an important role in settling court cases with auditing authorities on behalf of their clients. If negotiation strategies don’t work, they represent their clients in court cases in an effort to secure their interests. Thus, business tax lawyers serve as helpful guides for businesses and individuals by planning various methods of tax exemption.

An organization has a large number of employees who receive a salary for the work they do. Some employees may be paid a stable salary while others are paid on the basis of productivity or the number of hours worked. All organizations having employees are in charge of paying payroll taxes. Payroll taxes are all the different forms of employment taxes paid by the organization and covers Federal and state income tax, social security and Medicare taxes and federal unemployment tax. Payroll taxes are deducted from the employees pay. Filing pay roll taxes becomes an important task in order to maintain proper record and pay taxes regularly.

There are a number of forms and documents that need to be filed with the IRS. Payroll taxes involve large number of deductions and exemptions that are to be taken into account during the filing process. First, pay roll taxes need to be calculated accurately and each of the employees is required to fill out a form know Form W-4. The form helps to calculate payroll taxes. The form is used to calculate federal and state income tax to be deducted from the salaries of the employees. Social security and Medicare deductions are also considered and the amount to be paid is calculated. Both the employer and the employee pay the calculated amount.

The organization must also file Form 941 with the IRS. In case of agricultural employees Form 943 needs to be filed. The amounts mentioned in Form 941 should be in accordance with the amounts given every month using tax coupons or the EFTPS. At the end of the tax year, Form 940, which is basically an information returns form, is required to be filed with the IRS. W-2 forms are also required to be filed with the IRS.

The IRS has its own website which provides all the information related to filing of payroll taxes. The rules and regulations specified on the IRS website must be strictly followed.

Many states have their own estate tax laws that you need to worry about. With the current law phasing out the estate tax over the next few years, the state's are beginning to feel the pinch of having less federal estate-tax revenue coming in.

Several states, especially those with budget issues, are levying some forms of estate and inheritance tax on their own.

Twenty-four states and Washington, D.C. now have an estate or inheritance tax. Some of these laws are new, some are not.

Although the current federal law exempts the first $2 million of an estate's worth, the threshold in some states is much lower. With a home, a retirement account and other investments, many estates easily become taxed by the state.

For example, in New Jersey, estates worth over $675,000 are subject to some form of state inheritance or estate tax.

The threshold is $1 million in D.C., Kansas, Main, Maryland, Massachusetts, Minnesota, Nebraska, New York, Oklahoma and Oregon.

The maximum rate varies, but is usually around 16%. Federally, you can recieve a deduction on your federal estate-tax liability based on the amount of estate tax paid to the state.

Don't just assume that since the federal estate tax is phasing out for a few years that you are out of the way. Estate taxes vary from state to state.

This leaves many people needing to think over where they choose to retire. Many states are starting to feel the pain of this as well, with several repealing their estate-tax laws to discourage high-income residents from leaving. For example, Oklahoma will be eliminating its estate tax over a three-year period.

Those goody bags Oscar presenters receive aren't tax free gifts anymore.

"The gift basket industry has exploded, and it's important that the groups running these events keep in mind the tax consequences," said IRS Commissioner Mark W. Everson in announcing the tax agency and film industry has reached an agreement on Oscar goody bags.

Oscar presenters walk off with over $35,000 worth of goodies in their gift bags, including a $25,000 four night stay at Honolulu's Halekulani Resort. But tucked deep in that bag will be a nice letter from the IRS.

In fact, the Academy of Motion Picture Arts and Sciences first contacted the IRS voluntarily due to the high value of the goody bags this year. The Academy was concerned with any potential tax issues for this year and previous years.

The Academy and the IRS have settled the tax obligations for all gifts through 2005, though no details were given as to how. Recipients of this year's gift basket will be issued informational tax forms by the Academy and will be responsible for their own income tax obligations.

It doesn't seem as if the "gift" should be taxed. After all, the goddies are given by the hotels, designers and manufacturers as a homage.

But the IRS says that at this level of cost, the gift bags have public relations value. This is business, according to the agency. The only option the stars have, according to an IRS spokesman, is to donate the gifts to a qualified charitable organization. If they do, they may be able to take a tax deduction, subject to the usual applicable limitiations and requirements.

This will affect many more people than just the Oscar stars. Celebrity fundraiser goody bags, celebrity golf, charitable organization and other entertainment events will all be handing out tax bills with their goody bags. The IRS is notifying all entertainment and charitable organizations that they must issue 1099-MISC forms at the end of each year to each celebrity or recipient of expensive gift baskets.

Those who wish to avoid the taxes must return the gift basket and have written proof of return.

What is taxable now? Everything recieved at a fundraiser -- from things in goody bags, items picked up at a free shopping table to rooms given as a courtesy. Even gift certificates and vouchers are taxable.

And if you are a celebrity and receive a free outfit to wear to an event, you are going to have to pay taxes on it. You will be taxed on the fair market value of the gift. Don't forget to keep track of all the goodies you receive during the year.

Don’t be in the dark about your taxes. If you are not very good with numbers but would like to get a clear estimate of how much you have to fork over to the government, then use a tax and tax refund estimator. This easy-to-use software will not only make managing your taxes a lot easier, but possibly also save you a lot of money.

Tax refund estimators can help forecast your tax situation for the upcoming year, and notify you of refunds if you are qualified. They are usually very intuitive and easy-to-use, so that you can print a comprehensive tax report within minutes. Choose the software that has tools and tips to help you minimize taxes and maximize your refund!

Most of this software requires you to connect to an online portal. You need to create an account and log in to use web-based peripherals, such as accessing your bank account or estimating the values of your property. It is therefore important that you only buy from trusted software brands, because while poorly developed software is cheaper, it is also more likely to compromise the security of your data.

Tax refund estimator software programs are just estimation tools, so your actual tax and tax refund will vary slightly from what you will initially generate from the software. The reports produced by such software programs are not valid for use in a federal income tax return. You still need the help of a licensed accountant for official taxation matters.

It may also take a while to set up the first time you use the software, because you need to detail your taxes in the past (the software uses this as a benchmark for your current tax situation). Prepare all the papers and references you may need so that the information you input is accurate. A simple mistake on your part can cause the software to churn out incorrect estimations.

Congress first imposed the first federal income tax in 1862 to raise money for the Union in the Civil War. A 3% tax was fixed on incomes above $600. Those with incomes above $10,000 had to pay 5% in taxes.

After many changes and appeals, the states ratified the Sixteenth Amendment to the United States Constitution, which made possible modern income taxes. For the first time, Form 1040 appeared. People earning above $3,000 had to pay 1% tax on net personal incomes, and those with incomes above $500,000 had to pay 6% surtax.

Today more than two-thirds of the nation pays taxes. People earning less than $20,000 pay no income tax as a group. Payroll taxes for Social Security, Medicare and Unemployment Insurance amount to 7-10% of every dollar. Personal and corporate income taxes are major earners for federal taxes.

Income tax can be calculated in two ways. First of all gross income minus any applicable deductions is calculated, and on this a marginal tax percentage is applied as per the taxpayer’s income bracket. Then, applicable tax credits are subtracted, which gives the income tax owed.

Refundable tax credits are given if these calculations are in the negative or if the federal withholding tax is greater than the income tax that is actually owed. The taxpayer then gets a tax refund. He could receive one even without paying any federal income tax.

The newer Alternative Minimum Tax (AMT) is based on gross income. This was introduced to prevent people from using loopholes in the tax laws. It is calculated without taking into account certain tax preference items. It also has exemptions and deductions. This higher income base is taxed in two rate brackets of 26% and 28%; this depends on the taxpayer’s income. Unfortunately the addition of unrealized gain on incentive stock options made it difficult for people who could not come up with cash to pay tax on gains that weren’t realized. The modified AMT takes into account this problem.

American salaried people usually pay progressive income tax. Non-resident Americans have to pay taxes as per the flat rate. They also have fewer allowed deductions.

If you have all the documents, it is easy to file taxes yourself. However if you are in the higher tax bracket, you may need a consultant to help you. The IRS also helps in filing your returns; call the IRS customer service representatives toll-free at 1-800-829-1040.

The IRS website (www.irs.gov) gives you extensive information. You could also go to websites like About Taxes (www.abouttaxes.org), Complete Tax (www.completetax.com), or World Wide Web Tax (www.wwwebtax.com). Do keep in mind that a little bit of care in documentation goes a long way to filing a tax return without any ensuing problems!

You are moving to a new town to take a job. It is going to cost money to make the move. The question that should come to your mind is whether you can deduct any of this stuff.

Moving Expenses – What Can You Deduct?

If you are moving to a new location seeking employment or because you have a job, you could be in luck. Yep, you can deduct some or all of your expenses.

First and foremost, you have to meet some basic tests issued by the IRS. Are you moving more than 101 miles? If you are taking a position with a company, do you expect to live in the new area for a year and work at least 39 weeks during that year? If you are self-employed, do you intend to live in the new area for two years and work at least 78 weeks during that time? Since you cannot read the future, you can make an educated guess that you will do so. If you can read the future, please contact me immediately. I have some stocks I would like to discuss with you.

Assuming you have met the IRS tests, you can now claim moving expenses as tax deductions. So, what exactly does that mean? Well, you can deduct the costs associated with packing up and physically moving your stuff from here to there including truck rentals, moving companies, boxes and so on. You can also include shipping costs for cars and pets. You can even deduct a room rental on the day you leave in your old town and the day you arrive in the new one.

When it comes to actually shipping yourself from point A to point B, the IRS gets a bit cheap. You cannot deduct any meals. None. Nada. You can, however, deduct costs associated with physically traveling and sleeping. There is no logical reason as to why you can deduct travel and accommodations, but not meals. Welcome to the world of tax.

Finally, a few crafty taxpayers have managed to get themselves in hot water over one issue. The IRS never lets a taxpayer double dip. If an employer reimburses you for any of your moving expenses, you do not get to claim the same expenses as a deduction! Trust me, you do not want to be sitting in front of an IRS agent trying to explain this one. The only exception to this rule is if the employer gives you a payment in advance to cover the move. Said advance is taxable income to you, so you can deduct your expenses against it.

Are you sufficiently confused yet? If not, keep in mind the above discussion only relates to federal taxes. Many states will also allow you to deduct certain moving expenses. The bad news is each state seems to calculate it differently!

In our modern society, moving to a new location because of a job is a fairly frequent event. While moving is hardly enjoyable, you do get some deductions out of it.

Deducting The Cost of Moving To A New Job

The days of spending 30 years in one town at one job seem to be a thing of the past. Even huge companies like General Motors are being forced to redefine themselves. This redefining often comes in the form of letting employees go. As this occurs throughout our economy, people find themselves moving numerous times to new take new employment positions.

I will not beat around the bush on this one. I HATE moving. Really bad. I am sure you feel the same way. There is, however, one small silver lining to the grueling, miserable process. Yep, you can deduct the expenses you incur in getting your stuff from here to there.

In a shocking twist given the nature of the tax code, the test to determine if your moving costs are deductible is fairly simple. Well, for the tax code it is. The test says that you can claim deductions if the distance from your old home to your new place of employment is more than 50 miles than the distance from your old home to your old place of employment. Only in America could we make such a simple issue so complex. You can run the calculation yourself, but an easier guideline is just to figure out if your new job is more than 101 miles away. Why the IRS refuses to take the simple approach is anyone’s guess.

Alas, the IRS is paranoid about cheaters, which means there are a few other rules as well. First, you cannot deduct any expenses that your new employer reimburses you for. Seems fair enough. You also must actually work in the area you move to for at least 39 weeks of the one year period after you get there. You do not have to work at the same job or for the same company the entire time. For professional loafers, this gives you 13 weeks to sit on your duff and enjoy the new environment without working.

If you are self-employed, the moving test is a bit tougher. The distance test is the same, but you must work in the new area for 78 weeks out of the two years immediately following your move. Yes, you must live there for two years to get the deduction. Just more proof that the IRS hates you.

Moving is a nightmare. If you meet the handy, dandy tests of the IRS, at least you can deduct some of the cost.

Whether you are an active day trader or just put money into the market for long term gains, taxes are something you need to address. The IRS views traders and investors differently.

Taxes for Day Traders and Investors

As odd as it may sound, the tax code is fairly vague on the issue of taxes for day traders versus investors. Alas, the IRS has instituted a more definitive view on the subject. If you are unaware of the differences, your tax return filings could end up getting you in a hot spot.

Just so we understand what is being discussed, day traders and investors are two birds of a feather. A day trader spends their days trading stocks in short time increments. They are looking to profit from quick movements in stock. They tend to win big and lose just as big. Investors, on the other hand, tend to dump money into an account a once or twice a month. They are buying stock with the idea that it will gain value for them down the road in a few months or years.

As strange as it may sound, the IRS has looked to business to distinguish between day traders and long term stock investors. Simply put, the IRS views day traders as a small business, while those that buy or sell stock less frequently are simply stuck with Schedule D stock reporting. The difference may sound minute, but it matters from a tax point of view.

Day traders and investors are both stuck with paying taxes on their gains and dividends. Given the nature of the game, however, day traders rarely have dividend income because they do not hold on to the stock long enough. The real advantage for day traders, however, comes in the additional expense department.

Since day traders are viewed as small businesses by the IRS, they can deduct whatever any small business can. This includes expenses such as those related to home offices, internet access, stock research costs, utilities and so on. An investor cannot deduct these expenses in relation to their investment activity. In simple terms, the day trader gets to claim expenses on Schedule C, while the investor does not.

So, does this mean you should try to claim yourself as a day trader if you trade stocks more than a few times a month? Well, you have to be careful. The rule is unusually vague, even for the tax code. It states that you must trade sufficiently frequently and substantially to be considered a day trader. A better rule used by most accountants is to only claim day trader status if the activity is your only job.

When preparing your taxes, the goal is obviously to deduct every last penny you can. Many people are amazingly good at it. Just keep in mind you need receipts for the deductions.

List of Tax Records To Keep

Filling out and filing tax returns is really a quest to conquer the mountain. In this case, the mountain is your gross income. The IRS helpfully lets you know this by making you write it down right away and repeat it in various places on your 1040 form. How nice of them.

To conquer the mountain, you start shaving it down by claiming deductions. The more you can claim, the better off you are. Some people have lots of deductions that help in this regard. Others create lots of interesting deductions to do the same. Whatever you approach, keep in mind you need receipts to support those deductions should the IRS ask to see proof. Here is a list of common tax records you need to keep to support those deductions.

1. Mortgage Interest Payments. One of the great things about owning a home is the mortgage. Oh, wait. The great thing is the mortgage interest deduction, not the mortgage. To prove the amount you have been paying the piper, you should keep the form 1098 you receive from your lender each year. Given the fact the deduction is usually sizeable, make sure to keep it in a safe place.

2. Dependent Support. If you claim someone as a dependent, you may be in for a surprise. You need to be able to prove that you provide more than 50 percent of the support for that person. Happily married parents usually do not have problems, but the IRS likes to zing divorced parents on this issue. Keep records in the forms of receipts, checks and invoices in such a situation.

3. Home Repair Receipts. No, you do not have to show the receipts each year. The issue really comes up when you decide to sell your home. To cut your tax bill, you should claim all repairs and improvements you made since owning the home. Guess what, you need receipts to support those claims. In simple terms, save every receipt related to your home or risk losing the deductions.

4. Medical Expenses. Health care costs are out of control as we all know. If you are claiming deductions related to medical care, keep those receipts and bills.

Obviously, there are other areas where you need to keep receipts, but these are some of the more common places where people fall down on the job. In general, you should keep all the receipts for three years, but I suggest doubling that number. With home repair or improvement expenses, you need to keep them for five years after you get around to selling your home.

If you are expecting an income tax refund like millions of US taxpayers, read on. The good news is, you will have extra money. The bad news? It will be tough figuring out how to use it.

If you still don’t know how to make the most out of the extra income that’s about to come your way, here are some helpful ideas from financial experts.

Pay off your credit cards, your 401(k), or your mortgage. Paying off the amount you still owe on plastic maybe the wisest thing to do. Credit card interest rates are at an all-time high, so free yourself from crippling balances by wiping them out. Remember that paying just the minimum payment is never a good idea. Your money just goes into servicing the interest, and does not really reduce the principal.

But if your credit card is in good shape, why not make a lump sum payment to the principal on your mortgage? Doing so can save you a lot of money in the long run. Think about it: if you pay $1,000 to your principal on a $100,000-mortgage (assuming your rates are at 7 percent), you would save at least $4,000 over the loan term.

You can also use the money to add to the balance in your 401(k), and then use the money you would have used to pay the loan as additional tax-deferred premiums instead. This is not only sensible, but also very wise. This way, you put the money you have borrowed back into your account and let it earn interest, and make extra contributions to build up your account.

Establish a savings account for emergencies. You could lose your job anytime, so don’t dilly-dally; put aside your tax refund for an emergency account and be prepared for such a situation. An emergency fund should allow you to get by for at least three months if you ever lose your job. Use your tax rebate to beef up your existing emergency fund, or to start one if you haven’t yet.

If you are about to start a new business, organization or company, you should definitely have an idea about payroll tax, how to do calculations and why they are important in the USA. Payroll taxes are a major source of tax revenue for state and federal governments, generating funds for unemployment and welfare checks.

Pay roll tax is the Federal and state taxes that an employer is required to deduct and pay to the government on behalf of employees. These include state and federal income taxes, social securities and Medicare taxes that are withheld from the wages of an employee. The employer has to contribute to these taxes, the same amount that is deducted from the employees. Payroll tax also includes the state and federal unemployment taxes paid by a company to the government; this means employers have to pay the State and Federal unemployment tax.

In the United States, payroll taxes pay for two insurance systems namely Social Security and Medicare. Social security that comes under payroll tax includes insurance policies for retirement, disability, hospital, workers’ compensation and many more. Medicare is the insurance policy that covers elderly people, mostly above 65 years of age. Being a regressive tax, it is much more expensive that income taxes. Like any regressive tax, the payroll tax takes a large proportion of income from those who draw low incomes.

The important feature of payroll tax is that it requires the employer to contribute. For example, if 7 percentage of an employee’s income is withheld for social security, the same amount has to be put in by the employer for the payroll tax. This means that self-employed people will have to bear the burden of the entire tax. These are calculated and deducted according to state and Federal tax structures.

If the tax you owe is less than the total of the amount of refundable tax credits that you can claim and the amount of the withholding that you paid, then you can expect a tax refund. Why? The most recent tax law provided for a new 10% tax bracket. This means that, depending on your tax category, the first $6,000 to $12,000 of your earnings will be taxed at 10 percent instead of 15 percent. To a lot of Americans, this seems like good news. But is it really?

Many financial experts are quick to interpret the tax refund as a loan that the government borrowed from you – a loan that it is now paying back to you, interest-free. For this reason, some people see tax refunds as an inadequate premium. It is nothing more than excess money you paid, which the government used, and is now giving back to you with no interest.

For a greater majority, however, tax refunds are mere ‘savings’ – money that the government kept for you that you are now going to get back for use in other things. Many Americans are pleasantly surprised to receive tax refunds each year. Most people use the money to pay off debts, beef up savings accounts, and even go on vacations.

To get your tax refund you have three options. You can either let the government directly deposit your tax refund into your bank account, have a check mailed to you, or apply your refund to next year's income tax.

Bank of America, Wells Fargo, and other major banks have a routing number exclusively for direct deposits, which can make your life easier. However, if your account is with a credit union or other type of financial institutions, your tax refund may be rerouted to another institution. Be sure to verify the routing number with your credit union, because it is not always correct on the check. Also, remember that the IRS will not advise you or your bank that your tax refund has been deposited, so it’s your job to do follow-up work.