Archive for April, 2010
IRS is a governmental organization that taxes the income of individuals whose gross earning meets a specified minimum requirement. Usually, the taxes of an employee are cut from the basic pay by the company itself; however it is mandatory for every individual to file a tax return each year in the month of April. Depending on the status of the filing and the total earning for that particular financial year, each tax payer will be classified under two categories, overpayment or underpayment of taxes. Underpayment as the name implies indicates tax liabilities left un-paid for, in such a case individuals are required to make an additional payment to the IRS. When the situation of overpayment of taxes arises, the IRS sends a refund check back to the individual. Failure to pay taxes on time can lead to the imposing of fines or sometimes even imprisonment.
IRS is responsible for collection of taxes from business organizations as well. The businesses are just as responsible to the IRS as individuals are. Businesses are supposed to indicate the amount of earnings per year correctly so that the proper amount of tax can be collected.
There are a lot of differences between an individual tax payer and a business; therefore most corporations go in for a professional tax payer, who helps them to put their information in order. Utilizing the services of a professional tax payer leads to the right amount of income being taxed, without which a business can look forward to surprise audit by the IRS to cross examine all the financial records.
The process of taxation of a business or an individual involves the application of a number of codes and systems based on parameters like income, expense, number of dependents, age. There are separate codes for married couples as well as singles not to mention a separate code for filing a tax return as the head of the household. Most of the tax codes are confusing and complex in nature; nonetheless these go a long way deterring the correct share of taxes that need to be paid. Deductions are offered to those with children, businesses bearing depreciation expenses of equipment and advertisement, ongoing medical costs. These are designed so as to reduce the burden of tax on individuals and company.
The IRS taxes an individual in areas other than income. These are referred to as federal taxes. These include taxes on gasoline, estate taxes and fees for universal telephone services. Most individuals hate taxes as they do not like to part with their hard earned money, but it necessary to understand that it a vital part of life which aids in the growth of one’s own country.
Abhishek Agarwal
http://www.articlesbase.com/taxes-articles/learn-about-irs-taxes-for-individuals-and-businesspersons-708525.html
Tax returns don’t always have to be a nightmare – try this:
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1. Accuracy – saving you time and money
If you are a business owner and employer, then you are most likely aware of the importance of the payment of your payroll taxes. However, there are many business owners who are not aware of how necessary it is to utilise the correct method to calculate payroll taxes. In the event of an error, companies could be faced with costs running into thousands, if not millions, of dollars. The Internal Revenue Service, or IRS, is notoriously exacting with regard to the taxes paid over to them and consequently, is a stickler for accuracy and transparency. Accordingly, it is incumbent upon you to ensure that whatever means you utilise to calculate payroll taxes produces results that are accurate and true. There are several ways in which this can be done.
2. Man or machine? – you decide
Two of the most effective means a business owner has at his disposal to calculate payroll taxes are by making use of the services of an accountant, or by incorporating a software program into the business model. Either option is viable, but the most effective method will be determined by the size of the organisation. Larger organisations would invariably make use of both methods, as larger numbers of employees can increase the likelihood of errors being made. For smaller companies, either a software program or the use of an accountant will be suitable. However, in a small business consisting of a limited number of employees, the most efficient and cost-effective way to calculate payroll taxes would be by making use of a computer software program.
3. A well-oiled machine needs a little elbow grease
The ultimate decision as to which method is most suitable vests with the business owner. However, irrespective of which method is selected, you, as the business owner, will be required to lay some essential groundwork before you are in a position to actually calculate payroll taxes. Part of standard operating procedure involves the completion of a W-4 form by each employee prior to their commencing their employment. This form will denote certain critical data required by the company to calculate payroll taxes. For example, the marital status of an employee, or whether or not they have dependants, is relevant in terms of the amount of taxes you are required to deduct from their pay.
4. Paying your dues – the company commitment
Aside from the monies which are deducted from each employee’s payroll, the company itself is also responsible for a portion of the payroll taxes. In other words, the employee’s deductions only form part of what is owed to the IRS. The balance is paid by the company. It is of the utmost importance that this is borne in mind when you calculate payroll taxes, so that the company can allocate a portion of funds for this purpose. In this way, a company can ensure that they are prepared for the financial implications of the tax period and that their payroll taxes are well-covered.
The guidelines above should give you a better understanding of what is involved for you when you calculate payroll taxes, and allow you to be better equipped for this aspect of your business.
Abhishek Agarwal
http://www.articlesbase.com/taxes-articles/a-4step-guide-to-calculate-payroll-taxes-correctly-708559.html
A Tax is an enforced contribution which helps the government in various services such schools, utilities, public health care units and laying of roads. Taxes, which are levied by various entities of government, are present in different forms. The most common among them are indirect and direct taxes. Direct taxes are those that are paid to government directly through income taxes which are paid yearly. Indirect taxes refer to those which come from purchase of goods from retail revenues. There are different rates of taxation fixed by the Federal government; but the counties and states can fix their own tax rates depending on the various public works that need to be done in the state.
The history of taxation takes us to prehistoric times. It’s known that the ancient Egyptians were the first to introduce a tax system .Livestock and goods were the modes of tax as currency was not widely used. Tax were given based on their type of work and individuals who were unable or refused to pay, were punished. References to taxes also date back to European history where every product from window to even bread was taxed. These taxes helped the soldiers in gaining victory in wars by affording the expenses spent to buy weapons.
Taxes are always paid in the form of percentage though there are many other methods followed. These percentages vary according to the entity that decides them. Indirect taxes reach the government more quickly as people pay the tax along with the purchase of the goods. The retailer, on calculating the amount of tax payable to state and federal government, pays them to appropriate office of revenue. Taxes related to real estates and other property is paid on yearly basis. Individuals and retailers who don’t pay taxes are viable for imprisonment and stiff fines by the government.
Taxes have proven to be an important part in the history of the world. There is almost no country in the world that doesn’t have a contention with their current tax system’s and when this controversy over tax system occurs ,the people protest saying that the tax rate is very high or question as to whether these taxes are utilized properly. As a matter of fact, it was the taxation of tea which lit the fuse for America in gaining independence. In addition to that, these taxation issues have served to be the most sorted topic for politicians. Whether or not taxes are helpful, large amount of things depend on these tax systems. It is this intricately structured tax system that helps the citizens to get the basic needs provided by the government.
Abhishek Agarwal
http://www.articlesbase.com/taxes-articles/taxes-fundamentals-and-basics-708552.html