1. The marriage penalty tax starts kicking in after couples make much more than $100,000 a year.
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Income Tax Deductions FY 2016-17. Income Tax Exemptions Benefits Rebates for FY 2016-17 AY 2017-18.Section 80C limit,80CCD,80D,24(b),80E,80G,80EE,87A,80TTA.

A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax.

LLC Tax Benefits & Deductions: 1. Tax Tips To Know. The “Limited Liability” of Both Entities. The owners of a sole proprietorship or general partners of a partnership are not protected from the judgments against and liabilities of the business or from the acts of their business partners. The stockholders of Corporations and members owning units in Limited Liability Companies (LLCs), on the other hand, benefit from “limited liability.” In other words, their liability is limited to their investment in the stock of the Corporation or in the units of the LLC. Why Choose an LLC?

The LLC operating agreement includes management provisions and buy- sell provisions, making the LLC a popular entity to own real estate, boats, and airplane, and a popular entity for foreign citizens to render services or sell products. A one- member LLC starts out being taxed as a sole proprietorship. All income and expenses “pass through” to be reported on schedule C of the individual tax return of the member. No EIN (Employer Identification Number) is necessary. A multi- member LLC starts out being taxed as a partnership that needs to apply for an EIN on Form SS- 4. Each year, a Form 1.

Partnership Return needs to be filed with a Form K- 1 for each member listing the income or losses to be reported by each member. The main disadvantage for owners of an LLC that is taxed as a sole proprietorship or partnership is that all taxable income, which passes through to the owners, is treated as “earned income” and is subject to employment taxes. Therefore, the 1.

Social Security- Medicare rate applies to the first $9. Medicare rate applies to all earned income over $9. Download Stick Figures On Crack 5 Ladybug. To avoid this disadvantage, an LLC can make a Subchapter “S” Election by applying for an EIN on Form SS- 4 and filing a Form 2. Note: only U. S. After deducting reasonable compensation and other business expenses, the LLC’s taxable income is then reported by the member(s) as passive income, rather than earned income subject to Social Security and Medicare contributions.

After making the “S” election, the LLC would need to file a Form 1. S Corporation Income Tax Return each year. An LLC may elect to be taxed as a Corporation (a.

After deducting reasonable compensation and other business expenses, the LLC’s taxable income is taxed at the Corporation tax rates on a Form 1. Adobe Robohelp 8 Update 2010 Macbook. Corporation Tax Return to be filed each year. This low rate is only available to LLCs that render personal services, and if a person who is not employed by the LLC owns at least 6% of the units (ownership interest). Otherwise, the top personal tax rate would apply to the taxable income from personal services in the LLC that elected to be taxed as a Corporation (“C” Corporation). Why Choose a Corporation? Simple Corporation Tax & Legal Explanation.

A Corporation is controlled by a majority of its stockholders. A Corporation needs to obtain an Employer Identification Number (EIN) and file a U. S. Corporation Income Tax Return each year. A Corporation starts out as a “C” Corporation for tax purposes. This means that the taxable income (after deductions for salary, business expenses, and depreciation on furniture and equipment) is taxable to the Corporation. The Corporation would only be taxed on income “effectively connected with the United States.” The beginning corporate tax rate of 1. Corporation taxable income each year.

The low 1. 5% tax rate is only available to a Corporation rendering personal services if a person who is not employed by the Corporation owns at least 6% of the issued stock of the Corporation. Otherwise, the top personal tax rate would apply to the taxable income from personal services in the Corporation. A Corporation owned by one or more U. S. The “S” Election will cause the taxable income of the Corporation to be passed through to be taxed to the Corporation’s stockholders in proportion to their stock ownership.

The advantage of the “S” Election for Corporations that render personal services is that the profits distributed as “S” Corporation dividends are treated as passive income, and therefore, not subject to employment taxes. After reasonable salaries are paid for the personal services, the 1. Social Security Tax and 2. Medicare Tax would not have to be paid on the “S” Corporation’s dividends. The disadvantage of the “S” Election is that deductions for health insurance, disability insurance, automobile, and medical, drug and dental plan reimbursements would be taxable to the “S” Corporation stockholders for whom they are paid.

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