| Taxation of Personal Service Corporations |
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| Although most corporations are entitled to calculate their tax using graduated rates, there is an exception for "qualified personal service" corporations, which are subject to a flat tax rate of 35 percent. A corporation is a qualified personal service corporation if it meets certain tests. More... |
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| Educator Expense Deduction |
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| Eligible educators are entitled to deduct up to $250 from gross income for unreimbursed out-of-pocket expenses incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials used in the classroom. If the educator teaches courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics. More... |
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| Section 527 Political Groups |
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| A political organization subject to Section 527 of the Internal Revenue Code (usually called a 527 organization) is a party, committee, association, fund, or any other type of organization run primarily to directly or indirectly accept contributions and/or make expenditures for an exempt function. The exempt function of a political organization is influencing or attempting to influence the nomination, election, or any other type of selection of an individual to any public office or to an office in a political organization. More... |
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| Deductibility of Non-Business Legal Expenses |
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| If a taxpayer incurs legal expenses for the production or collection of income or for the management, conservation, or maintenance of income-producing property, those expenses are deductible. In general, legal expenses paid to recover investment property and amounts of income includible in gross income are deductible. However, one court strictly interpreted the law and concluded that legal expenses incurred in recovering certain shares of stock were deductible only to the extent that the taxpayer could allocate them to the recovery of interest and dividends generated by the stock. More... |
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| What is an S Corporation |
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| An S corporation is a hybrid entity. It is a type of a corporation, but it is taxed like a partnership. Usually, an S corporation does not pay federal income tax. Similar to a partnership, income or loss is passed through to the shareholders in proportion to their ownership interests, and the shareholders report the income or loss on their federal income tax returns. In addition, the S corporation is a conduit to the shareholders for gains and losses, charitable contributions, dividends, and tax-exempt interest. More... |
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